# EDGAR Filing Document

**Accession Number:** 0001817740
**File Stem:** 0001062993-23-006994
**Filing Date:** 2023-3
**Character Count:** 161821
**Document Hash:** 630d81d61afd5e2638ba84e3eec09d2e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001062993-23-006994.hdr.sgml**: 20230316

**ACCESSION NUMBER**: 0001062993-23-006994

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 8

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230316

**DATE AS OF CHANGE**: 20230316

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Austin Gold Corp.
- **CENTRAL INDEX KEY:** 0001817740
- **STANDARD INDUSTRIAL CLASSIFICATION:** GOLD & SILVER ORES [1040]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** A1
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41373
- **FILM NUMBER:** 23737485

**BUSINESS ADDRESS:**
- **STREET 1:** 4520 WEST 5TH AVENUE
- **CITY:** VANCOUVER
- **STATE:** A1
- **ZIP:** V6R 1S7
- **BUSINESS PHONE:** 604-644-6579

**MAIL ADDRESS:**
- **STREET 1:** 4520 WEST 5TH AVENUE
- **CITY:** VANCOUVER
- **STATE:** A1
- **ZIP:** V6R 1S7

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**UNITED STATES**<br>**SECURITIES AND EXCHANGE COMMISSION**<br>Washington, D.C. 20549

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16**<br>**UNDER THE SECURITIES EXCHANGE ACT OF 1934**

For the month of <u>**March 2023**</u>

Commission File Number: <u>**001-41373**</u>

**<u>AUSTIN GOLD CORP.</u>**<br>(Translation of registrant's name into English)

**1021 West Hastings Street, 9<sup>th</sup>** **Floor**<br><u>**Vancouver, British Columbia, Canada, V6E 0C3**</u><br>(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

☒ Form 20-F ☐ Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

<u>**SUBMITTED HEREWITH**</u>

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| | |
|:---|:---|
| <u>Exhibits</u> |  |
| [99.1](exhibit99-1.htm) | [Consolidated Financial Statements for the Years Ended December 31, 2022 and 2021](exhibit99-1.htm) |
| [99.2](exhibit99-2.htm) | [Management's Discussion and Analysis for the Years Ended December 31, 2022 and 2021](exhibit99-2.htm) |

---

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<u>**SIGNATURES**</u>

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **Austin Gold Corp.** | **Austin Gold Corp.** |
|  | (Registrant) | (Registrant) |
| Date: March 15, 2023 | By: | */s/ Dennis Higgs* |
|  | Name: | Dennis Higgs |
|  | Title: | President |

---

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## Exhibit 99.1

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![](exhibit99-1x001.jpg)

**AUSTIN GOLD CORP.**

**CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

*(Expressed in United States dollars)*

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**To the shareholders of Austin Gold Corp.** 

The accompanying consolidated financial statements of Austin Gold Corp. have been prepared by management which is responsible for the integrity and fairness of the information presented, including responsibility for significant accounting estimates and judgments. These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

In fulfilling its responsibilities, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are properly maintained to provide reliable information for the preparation of these consolidated financial statements.

The Board of Directors oversees the responsibilities of management for financial reporting through an Audit Committee, which is composed entirely of independent directors. The Audit Committee reviews the consolidated financial statements and recommends them to the Board of Directors for approval. The Audit Committee meets regularly with management to review internal control procedures and advise directors on auditing and financial reporting matters.

The consolidated financial statements have been audited by Manning Elliott LLP on behalf of the shareholders and their report follows.

---

| | |
|:---|:---|
| &nbsp;&nbsp; *"Dennis Higgs"* | &nbsp;&nbsp; *"Grant Bond"* |
| &nbsp;&nbsp; **Dennis Higgs** | &nbsp;&nbsp; **Grant Bond** |
| &nbsp;&nbsp; President | &nbsp;&nbsp; Chief Financial Officer |

---

March 15, 2023

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![](exhibit99-1xu001.jpg)<br>

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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To the Shareholders and the Board of Directors of Austin Gold Corp.

**Opinion on the Consolidated Financial Statements** 

We have audited the accompanying consolidated statements of financial position of Austin Gold Corp. and its subsidiary (the "Company"), as of December 31, 2022, December 31, 2021 and January 1, 2021, the related consolidated statements of loss and comprehensive loss, cash flows and changes in shareholders' equity for the years ended December 31, 2022 and 2021, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, December 31, 2021 and January 1, 2021, and the results of its operations and its cash flows for the years ended December 31, 2022 and 2021 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

**Explanatory Paragraph - Change in Presentation Currency**

As discussed in Note 3(b) to the consolidated financial statements, the Company has elected to change the presentation currency used in preparing the consolidated financial statements.

**Basis for Opinion** 

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated 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 the 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 audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

*/S/ Manning Elliott LLP*

Chartered Professional Accountants

Vancouver, Canada

March 15, 2023

We have served as the Company's auditor since 2020.

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| |
|:---|
| **AUSTIN GOLD CORP.** |
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
| Expressed in United States dollars |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | *Restated (Note 3b)* | *Restated (Note 3b)* |
|  | Note | December 31, | December 31, | January 1, |
|  | Note | 2022 | 2021 | 2021 |
| **ASSETS** |  |  |  |  |
| **Current assets** |  |  |  |  |
| Cash and cash equivalents |  | $630623 | $1094550 | $1902133 |
| Short-term investments | 6 | 11649079 |  |  |
| Receivables and other | 7 | 211285 | 12737 | 2952 |
|  |  | 12490987 | 1107287 | 1905085 |
| **Non-current assets** |  |  |  |  |
| Marketable securities | 8 | 16473 | 196847 | 334676 |
| Exploration and evaluation ("E&E") assets | 9 | 2369034 | 1286156 | 686737 |
| Property and equipment | 10 | 1181 | 1803 | 2564 |
| **Total assets** |  | $14877675 | $2592093 | $2929062 |
| **LIABILITIES** |  |  |  |  |
| **Current liabilities** |  |  |  |  |
| Accounts payable and accrued liabilities | 11 | $97825 | $60773 | $29800 |
|  |  | 97825 | 60773 | 29800 |
| **SHAREHOLDERS' EQUITY** |  |  |  |  |
| Share capital | 12 | 16329958 | 2714755 | 2703053 |
| Other reserves | 12 | 2044692 | 1624053 | 1624053 |
| Accumulated other comprehensive income (loss) ("AOCI") |  | (574949) | 143972 | 122511 |
| Deficit |  | (3019851) | (1951460) | (1550355) |
|  |  | 14779850 | 2531320 | 2899262 |
| **Total liabilities and shareholders' equity** |  | $14877675 | $2592093 | $2929062 |
| Nature of operations and going concern | 1 |  |  |  |
| Commitments | 17 |  |  |  |

---

Approved on behalf of the Board of Directors:

<u> *"Benjamin D. Leboe"* </u> <u> *"Joseph J. Ovsenek"* </u> <br> Benjamin D. Leboe Joseph J. Ovsenek <br> Chair of the Audit Committee and Director Chairman and Director

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

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| |
|:---|
| **AUSTIN GOLD CORP.** |
| CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS |
| Expressed in United States dollars, except for share data |

---

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| | | | |
|:---|:---|:---|:---|
|  | Note | December 31,<br>2022 | For the year ended<br>December 31,<br>2021<br>*Restated (Note 3b)* |
| Administrative expenses |  |  |  |
| Management and consulting fees |  | $634169 | $18350 |
| Professional fees |  | 295193 | 236149 |
| Insurance |  | 262315 | 7397 |
| Listing and filing fees |  | 164837 | 9061 |
| Share-based compensation | 12 | 162628 |  |
| Marketing |  | 139655 | 2607 |
| Investor relations |  | 34294 | 2073 |
| General and administrative |  | 12299 | 12851 |
| Travel expenses |  | 11377 |  |
| Depreciation | 10 | 527 | 780 |
| **Operating loss** |  | (1717294) | (289268) |
| Unrealized fair value loss on marketable securities | 8 | (174634) | (108653) |
| Realized gain on marketable securities | 8 |  | 6443 |
| Interest and finance income |  | 183213 |  |
| Foreign exchange gain (loss) |  | 640324 | (9627) |
| **Net loss for the year** |  | $(1068391) | $(401105) |
| **Other comprehensive income (loss), net of tax** |  |  |  |
| Items that may be subsequently reclassified to earnings or loss: |  |  |  |
| Currency translation adjustments |  | (718921) | 21461 |
| **Comprehensive loss for the year** |  | $(1787312) | $(379644) |
| Loss per share - basic and diluted |  | $(0.09) | $(0.04) |
| Weighted average number of shares |  | 11985877 | 9516560 |

---

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

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| |
|:---|
| **AUSTIN GOLD CORP.** |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| Expressed in United States dollars |

---

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| | | | |
|:---|:---|:---|:---|
|  | Note | December 31,<br>2022 | For the year ended<br>December 31,<br>2021<br>*Restated (Note 3b)* |
| **Cash flows used in operating activities** |  |  |  |
| Net loss for the year |  | $(1068391) | $(401105) |
| Items not affecting cash: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 10 | 527 | 780 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and finance income |  | (183213) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation | 12 | 162628 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized gain on marketable securities | 8 |  | (6443) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized foreign exchange gain |  | (678210) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized fair value loss on marketable securities | 8 | 174634 | 108653 |
| Changes in non-cash working capital items: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables and other |  | (207210) | (9867) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities |  | 7423 | 31283 |
| Net cash used in operating activities |  | (1791812) | (276699) |
| **Cash flows used in investing activities** |  |  |  |
| Expenditures on E&E assets |  | (1066431) | (586923) |
| Interest received |  | 49156 |  |
| Proceeds from sale of marketable securities | 8 |  | 38632 |
| Purchase of short-term investments |  | (14000000) |  |
| Redemption of short-term investments |  | 2500000 |  |
| Net cash used in investing activities |  | (12517275) | (548291) |
| **Cash flows generated by financing activities** |  |  |  |
| Proceeds from initial public offering ("IPO") | 12 | 15019000 |  |
| Share issuance costs | 12 | (1165580) |  |
| Net cash generated by financing activities |  | 13853420 |  |
| **Decrease in cash and cash equivalents for the year** |  | (455667) | (824990) |
| Cash and cash equivalents, beginning of year |  | 1094550 | 1902133 |
| Effect of foreign exchange rate changes on cash and cash equivalents |  | (8260) | 17407 |
| **Cash and cash equivalents, end of year** |  | $630623 | $1094550 |
| Supplemental cash flow information | 14 |  |  |

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

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| |
|:---|
| **AUSTIN GOLD CORP.** |
| CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY |
| Expressed in United States dollars, except for share data |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Note | Number of<br>common<br>shares | Share <br>capital | Other<br>reserves | AOCI | Deficit | Total |
| Balance - December 31, 2020<br>*Restated (Note 3b)* |  | 9512000 | $2703053 | $1624053 | $122511 | $(1550355) | $2899262 |
| Shares issued for property option payments | 12 | 5000 | 11702 |  |  |  | 11702 |
| Currency translation adjustments |  |  |  |  | 21461 |  | 21461 |
| Loss for the year |  |  |  |  |  | (401105) | (401105) |
| Balance - December 31, 2021<br>Restated (Note 3b) |  | 9517000 | $2714755 | $1624053 | $143972 | $(1951460) | $2531320 |
| Shares issued pursuant to IPO | 12 | 3754750 | 15019000 |  |  |  | 15019000 |
| Share issuance costs | 12 |  | (1403797) | 238217 |  |  | (1165580) |
| Value assigned to share options and warrants vested | 12 |  |  | 182422 |  |  | 182422 |
| Currency translation adjustments |  |  |  |  | (718921) |  | (718921) |
| Loss for the year |  |  |  |  |  | (1068391) | (1068391) |
| Balance - December 31, 2022 |  | 13271750 | $16329958 | $2044692 | $(574949) | $(3019851) | $14779850 |

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

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**1. NATURE OF OPERATIONS AND GOING CONCERN**

**(a) Nature of operations**

Austin Gold Corp. (the "Company") was incorporated on April 21, 2020, in British Columbia ("BC"), Canada. The Company is a reporting issuer in BC and its common shares are traded on the NYSE American stock exchange under the symbol "AUST". The Company's registered office is the 9th Floor, 1021 West Hastings Street, Vancouver, BC, Canada, V6E 0C3.

The Company is focused on the acquisition, exploration and development of mineral resource properties primarily in the western United States of America ("USA").

The Company has not yet determined whether its mineral resource properties contain mineral reserves that are economically recoverable. The continued operation of the Company is dependent upon the preservation of its interest in its properties, the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of such properties and upon future profitable production or proceeds from the disposition of such properties.

**(b) Going concern assumption**

These consolidated financial statements are prepared on a going concern basis, which contemplates that the Company will be able to meet its commitments, continue operations and realize its assets and discharge its liabilities in the normal course of business for at least twelve months from December 31, 2022. The Company has incurred ongoing losses and expects to incur further losses in the advancement of its business activities. For the year ended December 31, 2022, the Company incurred a net loss of $1,068,391 and used cash in operating activities of $1,791,812. As at December 31, 2022, the Company had cash and cash equivalents of $630,623, a working capital (current assets less current liabilities) surplus of $12,393,162 and an accumulated deficit of $3,019,851.

The operations of the Company have primarily been funded by the issuance of common shares. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

Management estimates its current working capital will be sufficient to fund its current level of activities for at least the next twelve months.

**2. BASIS OF PREPARATION**

**Statement of compliance and basis of presentation**

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as fair value through profit or loss ("FVTPL"), which are stated at their fair value.

These consolidated financial statements were authorized for issue by the Board of Directors on March 15, 2023.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**3. SIGNIFICANT ACCOUNTING POLICIES**

**(a) Basis of consolidation**

These consolidated financial statements include the financial statements of the Company and the entity controlled by the Company, its subsidiary, listed in the following table:

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| | | | |
|:---|:---|:---|:---|
| **Name of subsidiary** | **Place of<br>incorporation** | **Proportion of <br>ownership interest** | **Principal activity** |
| Austin American Corporation ("Austin NV") | &nbsp;&nbsp; Nevada, USA | &nbsp;&nbsp; 100% | Holds interests in exploration projects |

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Control is defined as the exposure, or rights, to variable returns from involvement with an investee and the ability to affect those returns through power over the investee. Power over an investee exists when the Company has existing rights that give the Company the ability to direct the activities that significantly affect the investee's returns. This control is generally evidenced through owning more than 50% of the voting rights or currently exercisable potential voting rights of a subsidiary's share capital. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Intercompany balances and transactions, including any unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements.

**(b) Foreign currency translation**

*Functional currency*

Items included in the financial statements of each consolidated entity are measured using the currency of the primary economic environment in which the entity operates (the "functional currency").

For the parent entity, with the completion of the IPO on the NYSE American stock exchange, future equity financings are expected to generate proceeds denominated in United States dollars ("USD"). In addition, E&E expenditures and administrative costs incurred to conduct business activities are primarily denominated in USD. As a result of these changes in underlying transactions, events and circumstances, the functional currency of the parent entity was reassessed. The functional currency of the parent entity changed from the Canadian dollar ("CAD" or "C$") to the USD commencing on December 31, 2022. The change in functional currency was accounted for on a prospective basis, with no impact of this change on prior year comparative information.

The functional currency of the Company's subsidiary remains the USD.

*Presentation currency*

On December 31, 2022, the Company elected to change its presentation currency from CAD to USD. The change in presentation currency is to better reflect the Company's business activities and to improve investors' ability to compare the Company's financial results with other USA listed businesses in the mining industry. The Company applied the change to USD presentation currency retrospectively and restated the comparative financial information as if the new presentation currency had always been the Company's presentation currency.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**3. SIGNIFICANT ACCOUNTING POLICIES (Continued)**

From December 31, 2022, the USD presentation currency is consistent with the functional currency of the Company. For periods prior to December 31, 2022, the statements of financial position for each period presented have been translated from the CAD functional currency to the USD presentation currency at the rate of exchange prevailing at the respective financial position date with the exception of equity items which have been translated at accumulated historical rates from the Company's date of incorporation in 2020. The statements of loss and comprehensive loss were translated at the average exchange rates for the reporting period, or at the exchange rate prevailing at the date of transactions. Exchange differences arising on translation from the CAD functional currency to the USD presentation currency prior to the change in functional currency to USD, have been recognized in other comprehensive income (loss) and accumulated as a separate component of equity.

*Transactions and balances*

Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses result from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in currencies other than an entity's functional currency. These gains (losses) are recognized in the statement of loss and comprehensive loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the date of the initial transactions.

**(c) Financial instruments**

*Financial instruments - Classification*

Financial assets are classified at initial recognition as either: measured at amortized cost, FVTPL or fair value through other comprehensive income ("FVOCI"). The classification depends on the Company's business model for managing the financial assets and the contractual terms which give rise to the cash flows.

For assets measured at fair value, gains (losses) will either be recorded in earnings (loss) or other comprehensive income ("OCI"). For investments in debt instruments, this will depend on the business model for which the investment is held. For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at FVOCI.

The Company reclassifies debt investments when, and only when, its business model for managing those assets changes.

*Financial instruments - Measurement*

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in the statement of loss and comprehensive loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**3. SIGNIFICANT ACCOUNTING POLICIES (Continued)**

Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:

* Amortized cost - Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in earnings (loss) when the asset is derecognized or impaired. Interest income from these financial assets is included in interest and finance income using the effective interest rate method.

* FVOCI - Assets that are held for collection of contractual cash flows and for selling the financial assets, where those cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognized in earnings (loss). When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to earnings (loss) and recognized in other gains (losses). Interest income from these financial assets is included in interest and finance expense using the effective interest rate method. Foreign exchange gains and losses are presented in foreign exchange gain (loss) and impairment expenses in other expenses.

* FVTPL - Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL and is not part of a hedging relationship is recognized in earnings (loss) and presented net in the statement of loss and comprehensive loss within other gains (losses) in the period in which it arises.

Changes in the fair value of financial assets at FVTPL are recognized in gain (loss) on change in fair value of financial instruments in the statement of loss and comprehensive loss as applicable.

*Financial instruments - Impairment*

An expected credit loss ("ECL") impairment model applies which requires a loss allowance to be recognized based on ECLs. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in earnings (loss) for the period.

In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through earnings (loss) to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**3. SIGNIFICANT ACCOUNTING POLICIES (Continued)**

*Financial instruments - Derecognition*

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the consolidated statements of loss and comprehensive loss.

*Cash and cash equivalents*

Cash and cash equivalents comprise cash holdings in business and savings accounts held at major financial institutions with an original maturity date of three months or less. Cash and cash equivalents are classified at amortized cost. Interest and finance income is recognized by applying the effective interest rate method.

*Short-term investments*

Short-term investments comprise term deposits and redeemable short-term investment certificates ("RSTICs") held at major financial institutions with an original maturity date between three and twelve months. Short-term investments are classified at amortized cost. Interest and finance income is recognized by applying the effective interest rate method.

*Marketable securities*

Marketable securities comprise of common shares of publicly traded companies. Marketable securities are recorded at FVTPL and, accordingly, are recorded on the statement of financial position at fair value. Changes in fair value at each reporting date are included in the statement of loss and comprehensive loss as gain (loss) on marketable securities.

*Accounts payable and accrued liabilities*

Accounts payable and accrued liabilities are recognized initially at fair value, net of any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are held at amortized cost using the effective interest method.

*Derivative liabilities*

Derivative instruments, including embedded derivatives in financial liabilities or non-financial contracts are recorded at FVTPL and, accordingly, are recorded on the statement of financial position at fair value. Fair values for derivative instruments are determined using valuation techniques, with assumptions based on market conditions existing at the statement of financial position date. Changes in fair value at each reporting date are included in the statement of loss and comprehensive loss as gain (loss) on change in fair value of derivative liability.

**(d) Property and equipment**

Property and equipment is measured at cost less accumulated depreciation and accumulated impairment losses. The initial cost of an asset is comprised of its purchase price or construction cost, any costs directly attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the estimated future cost of dismantling and removing the asset at the end of its useful life. The purchase price or construction cost is the fair value of consideration to acquire the asset.

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**3. SIGNIFICANT ACCOUNTING POLICIES (Continued)**

Depreciation of property and equipment commences when the asset has been fully commissioned and is available for its intended use. Depreciation is calculated using declining balance rates ranging from 15% to 30% per annum or the straight-line method to allocate cost over the estimated useful lives. Depreciation on assets that are directly related to E&E assets are allocated to that E&E asset.

Depreciation methods and estimated useful lives and residual values are reviewed annually and when facts and circumstances indicate that a review should be performed. Changes in estimates are accounted for prospectively.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain (loss) arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in the statement of loss and comprehensive loss.

**(e) Mineral properties**

Mineral properties are measured at cost less accumulated depletion and accumulated impairment losses. Mineral properties include the fair value attributable to mineral reserves and mineral resources acquired in a business combination or asset acquisition, mine development costs and previously capitalized E&E expenditures. Upon commencement of production, a mineral property is depleted using the unit-of-production method. Unit-of-production depletion rates are determined using mineral units mined over the estimated proven and probable mineral reserves of the mine.

**(f) E&E assets**

All E&E expenditures are capitalized, including the costs of acquiring exploration stage properties, except for E&E expenditures incurred before the Company has obtained legal rights to explore an area, which are expensed.

Exploration expenditures are costs incurred in the initial search for mineral deposits with economic potential or in the process of obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, drilling and other work involved in searching for Mineral Resources, as defined by Canadian National Instrument 43-101 - *Standards of Disclosure for Mineral Projects* ("NI 43-101").

Evaluation expenditures are the costs incurred to establish the technical feasibility and commercial viability of developing mineral deposits identified through exploration activities, business combinations or asset acquisitions. Evaluation expenditures include the cost of: (i) further defining the volume and grade of deposits through drilling of core samples and other sampling techniques, trenching and sampling activities in an ore body or other forms or data acquisition; (ii) determining the optimal methods of extraction and metallurgical and treatment processes; (iii) studies related to surveying, transportation and infrastructure requirements; (iv) permitting activities; and (v) economic evaluations to determine whether development or mineralized material is commercially justified including preliminary economic assessments ("PEA"), pre-feasibility and final feasibility studies.

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**3. SIGNIFICANT ACCOUNTING POLICIES (Continued)**

Once the technical feasibility and commercial viability of the extraction of mineral reserves or mineral resources from a particular mineral property has been determined, expenditures are tested for impairment and reclassified to mineral properties.

The establishment of technical feasibility and commercial viability of a mineral property is assessed based on a combination of factors, including:

* The extent to which mineral reserves and mineral resources as defined by NI 43-101 have been identified through a feasibility study or similar document;

* The results of optimization studies and further technical evaluation carried out to mitigate project risks identified in the feasibility study;

* The status of environmental permits; and

* The status of mining leases or permits.

**(g) Impairment of non-financial assets**

The carrying amounts of assets included in E&E assets and property and equipment are assessed for impairment at the end of each reporting period or whenever facts and circumstances suggest that the carrying amounts may not be recoverable. If there are indicators of impairment, the recoverable amount of the asset is estimated in order to determine the extent of any impairment. Where the asset does not generate cash flows that are independent from other assets, the recoverable amount of the cash generating unit ("CGU") to which the asset belongs is determined. The recoverable amount of an asset or CGU is determined as the higher of its fair value less costs of disposal and its value in use. An impairment loss exists if the asset's or CGU's carrying amount exceeds the recoverable amount and is recorded as an expense immediately.

Fair value is the price that would be received from selling an asset in an orderly transaction between market participants at the measurement date. Costs of disposal are incremental costs directly attributable to the disposal of an asset. Future cash flows are estimated using the following significant assumptions: mineral reserves and mineral resources, production profile, operating costs, capital costs, commodity prices, foreign exchange rates and discount rates. All inputs used are those that an independent market participant would consider appropriate.

Value in use is determined as the present value of the future cash flows expected to be derived from continuing use of an asset or cash generating unit in its present form. These 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 or cash generating unit for which estimates of future cash flows have not been adjusted.

Tangible assets that have been impaired in prior periods are tested for possible reversal of impairment whenever events or changes in circumstances indicate that the impairment has reversed. If the impairment has reversed, the carrying amount of the asset is increased to its recoverable amount, but not beyond the carrying amount that would have been determined had no impairment loss been recognized for the asset in the prior periods. A reversal of an impairment loss is recognized into earnings (loss) immediately.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**3. SIGNIFICANT ACCOUNTING POLICIES (Continued)**

**(h) Decommissioning and restoration provision**

Decommissioning and restoration provisions are recognized when there is a significant disturbance to the areas in which E&E activities have occurred and when the provision can be estimated reliably.

Decommissioning and restoration costs are estimated and discounted to their net present value and capitalized to the carrying amount of the related asset along with the recording of a corresponding liability, as soon as the obligation to incur such costs arises. The discount rate used to calculate the net present value is a pre-tax rate of similar maturity that reflects current market assessments of time value of money and the risks specific to the liability.

Each period, the Company reviews cost estimates and other assumptions used in the valuation of the provision to reflect events, changes in circumstances and new information available. The liability is adjusted each reporting period for the unwinding of the discount, changes to the current market-based discount rate and for the amount or timing of the underlying cash flows needed to settle the provision.

**(i) Income taxes**

Income tax is recognized in the statement of loss and comprehensive loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Deferred tax is provided 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 the initial recognition of assets or liabilities that affect neither accounting nor taxable earnings. 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 at the end of the reporting year applicable to the year of expected realization.

A deferred tax asset is recognized only to the extent that it is probable that future taxable earnings will be available against which the asset can be utilized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, when they relate to income taxes levied by the same taxation authority and when the Company intends to settle its current tax assets and liabilities on a net basis.

**(j) Share capital**

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

If common shares are issued as consideration for the acquisition of a mineral project, the common shares are measured at their fair value based on the quoted share price of the Company on the date the transaction is executed.

The Company applies the residual value method with respect to the measurement of common shares and warrants issued as a unit for a private placement. The residual value method first allocates value to the more easily measurable component based on fair value (i.e. common shares) and then the residual value, if any, to the less measurable component (i.e. warrants). Any value attributed to the warrants is recorded to other reserves in equity.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**3. SIGNIFICANT ACCOUNTING POLICIES (Continued)**

**(k) Share-based payment transactions**

Share options granted under the Company's equity settled share-based option plan are measured at fair value at the date of grant and recognized as an expense with a corresponding increase to other reserves in equity. An individual is classified as an employee when the individual is an employee for legal and tax purposes (direct employee) or provides services similar to those performed by a direct employee. Equity settled share-based payment transactions with non-employees are measured at the fair value of the goods or services received.

However, if the fair value cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instrument granted at the date the non-employee provides the goods or the services.

Fair value is determined using the Black-Scholes option pricing model, which relies on estimates of the risk-free interest rate, expected share price volatility, future dividend payments and the expected average life of the options. The fair value determined at the grant date is recognized as an expense over the vesting period in accordance with the vesting terms and conditions (graded vesting method), with a corresponding increase to other reserves in equity.

When share options are exercised, the applicable amounts of other reserves are transferred to share capital.

**(l) Loss per share**

The Company presents loss per share data, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potentially dilutive common shares, including share options and warrants.

**(m) Related party transactions**

Parties are considered related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered related if they are subject to common control or significant influence. A transaction is considered a related party transaction where there is a transfer of resources or obligations between related parties.

**4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS**

The preparation of financial statements requires the use of accounting estimates. It also requires management to exercise judgment in the process of applying its accounting policies. Estimates and policy judgments are regularly evaluated and are based on management's experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (Continued)**

Significant accounting policy judgments include:

* The determination of functional currency requires judgment where the operations of the Company are changing or currency indicators are mixed. Additionally, the timing of a change in functional currency is a judgment as the balance of currency indicators may change over time. For the impact on the consolidated results from the change in functional currency, refer to Note 3b.

* The assessment of the Company's ability to continue as a going concern which requires judgment related to future funding available to identify new business opportunities and meet working capital requirements, the outcome of which is uncertain (refer to Note 1b); and

* The application of the Company's accounting policy for impairment of E&E assets which requires judgment to determine whether indicators of impairment exist including factors such as the period for which the Company has the right to explore, expected renewals of exploration rights, whether substantive expenditures on further E&E of resource properties are budgeted and evaluation of the results of E&E activities up to the reporting date. Management assessed impairment indicators for the Company's E&E assets and has concluded that no impairment indicators exist as of December 31, 2022.

Significant sources of material estimation uncertainty include:

* The determination of the fair value of warrants held as marketable securities by the Company (refer to Note 8);

* The determination of the fair value of underwriter warrants issued by the Company as part of the IPO (refer to Note 12d); and

* The determination of the fair value of share options and warrants issued by the Company (refer to Note 12c and 12d).

**5. NEW ACCOUNTING STANDARDS AND RECENT PRONOUNCEMENTS**

The following standards, amendments and interpretations have been issued but are not yet effective:

&nbsp;&nbsp;&nbsp;&nbsp;• In January 2020, the IASB issued amendments to International Accounting Standard ("IAS") 1, *Presentation of Financial Statements* to clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if a company has a substantive right to defer settlement for at least twelve months at the end of the reporting period. The amendments are effective January 1, 2023 with early adoption permitted. Retrospective application is required on adoption. This amendment is not expected to have a material impact on the Company.

There are no other IFRS standards or International Financial Reporting Interpretations Committee interpretations that are not yet effective or early adopted that are expected to have any impact on the Company.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**6. SHORT-TERM INVESTMENTS**

---

| | | |
|:---|:---|:---|
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Term deposits | $10144301 | $- |
| RSTICs | 1504778 |  |
|  | $11649079 | $- |

---

The term deposits and RSTICs mature on February 10, 2023 and November 29, 2023, respectively.

**7. RECEIVABLES AND OTHER**

---

| | | |
|:---|:---|:---|
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Prepaid expenses and deposits | $176703 | $9016 |
| Tax receivables | 34582 | 3721 |
|  | $211285 | $12737 |

---

**8. MARKETABLE SECURITIES**

As at December 31, 2022, the Company holds 2,231,000 common shares (2021 - 2,231,000) and 1,250,000 warrants (2021 - 1,250,000) in Nevada Exploration Inc. ("NGE"). A continuity of the marketable securities is as follows:

---

| | | |
|:---|:---|:---|
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Opening balance | $196847 | $334676 |
| Realized gain on sale of marketable securities |  | 6443 |
| Proceeds from disposition of marketable securities |  | (38632) |
| Foreign exchange movements | (5740) | 3013 |
| Unrealized fair value loss on marketable securities | (174634) | (108653) |
| Ending balance | $16473 | $196847 |

---

As at December 31, 2022, the estimated fair value of the warrants in NGE was $1 (2021 - $3,275) determined using the Black-Scholes pricing model using the following assumptions:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | December 31, |  | December 31, |
|  |  | 2022 |  | 2021 |
| Share price | C$ | 0.01 | C$ | 0.11 |
| Exercise price | C$ | 0.50 | C$ | 0.50 |
| Expected life |  | 0.02 years |  | 1.02 years |
| Expected volatility |  | 93.10% |  | 86.99% |
| Risk-free interest rate |  | 4.30% |  | 0.25% |
| Expected dividend yield |  | Nil |  | Nil |

---

Subsequent to December 31, 2022, on January 7, 2023, the warrants in NGE expired in accordance with the terms of the private placement.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**9. E&E ASSETS**

The E&E assets of the Company, by property and nature of expenditure, as of December 31, 2022 and 2021 were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Kelly <br>Creek | Fourmile <br>Basin | Lone <br>Mountain | Miller | Stockade<br>Mountain | Total |
| Balance - December 31, 2020 | $231414 | $346675 | $108648 | $- | $- | $686737 |
| E&E expenditures: |  |  |  |  |  |  |
| Acquisition costs | 50000 | 34242 | 30000 | 61702 |  | 175944 |
| Consulting | 656 | 21300 | 7236 | 2109 |  | 31301 |
| Field work |  | 1843 |  |  |  | 1843 |
| Finders' fees |  |  |  | 10000 |  | 10000 |
| Geophysics |  |  |  | 3188 |  | 3188 |
| Mapping |  | 277 | 188 | 5919 |  | 6384 |
| Mining rights and claim fees | 95958 | 54669 | 80370 | 114919 |  | 345916 |
| Technical reports | 1126 | 6120 | 11285 |  |  | 18531 |
| Travel |  | 4835 |  |  |  | 4835 |
| Total E&E expenditures | 147740 | 123286 | 129079 | 197837 |  | 597942 |
| Movement in foreign exchange |  | 1477 |  |  |  | 1477 |
| Balance - December 31, 2021 | $379154 | $471438 | $237727 | $197837 | $- | $1286156 |
| E&E expenditures: |  |  |  |  |  |  |
| Acquisition costs | 50000 | 54433 | 20000 | 25000 | 25000 | 174433 |
| Assays | 24554 |  |  |  |  | 24554 |
| Consulting | 12693 | 47007 | 7406 | 7956 | 16329 | 91391 |
| Drilling | 327145 | 96993 |  |  |  | 424138 |
| Field supplies | 2121 |  |  |  | 2250 | 4371 |
| Field work | 1500 | 2332 |  |  |  | 3832 |
| Finders' fees |  |  |  | 10000 |  | 10000 |
| Geophysics | 3000 |  |  | 1769 |  | 4769 |
| Mapping | 6375 |  |  | 5250 |  | 11625 |
| Mining rights and claim fees | 96333 | 53095 | 80370 | 49749 | 46666 | 326213 |
| Share-based compensation | 5235 | 5233 | 5235 | 5235 | 5235 | 26173 |
| Travel | 6769 | 4144 |  | 44 | 566 | 11523 |
| Total E&E expenditures | 535725 | 263237 | 113011 | 105003 | 96046 | 1113022 |
| Movement in foreign exchange | - | (30144) | - | - | - | (30144) |
| Balance - December 31, 2022 | $914879 | $704531 | $350738 | $302840 | $96046 | $2369034 |

---

Acquisition costs include pre-production payments, lease payments and advanced royalty payments in accordance with the terms of the property agreements.

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**9. E&E ASSETS (Continued)**

**(a) Kelly Creek Project (Nevada, USA)**

The Company entered into an agreement with Pediment Gold LLC ("Pediment"), a subsidiary of NGE, for an option to earn up to a 70% interest in a joint venture on the Kelly Creek Project. The Company may exercise the option to earn a 51% interest by incurring the following minimum annual E&E expenditures on the project:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; September 1, 2022 | C$750,000<sup>(1)</sup> | Complete |
| &nbsp;&nbsp; June 1, 2023 | C$1,000,000 | In progress |
| &nbsp;&nbsp; June 1, 2024 | C$1,500,000 | In progress |
| &nbsp;&nbsp; June 1, 2025 | C$1,500,000 | In progress |

---

<sup>(1)</sup> $400,000 must be spent on geophysics, geochemistry, drilling or other mutually agreed program.

The Company has the option to increase its participating interest by an additional 19% to a total of 70% by incurring additional annual E&E expenditures in the amount of C$1,500,000 before each of June 1, 2026, June 1, 2027 and June 1, 2028 and by delivering a pre-feasibility study prior to June 1, 2029.

At Pediment's election, within 120 days of the approval by the joint venture of a feasibility study, the Company will be obligated to provide NGE's portion of any debt financing or arrange for third party financing of NGE's portion of any debt financing required to construct a mine on the project in consideration for the transfer by Pediment to the Company an additional 5% interest in the joint venture.

There are minimum annual royalty payments required by the Company as part of two underlying agreements within the Kelly Creek Project including: (i) the Genesis agreement and (ii) the Hot Pot agreement.

Under the Genesis agreement, the joint venture has the option to purchase 100% of the Genesis claims for $1,500,000 (as adjusted for inflation), subject to a 1.5% net smelter return royalty and the following advance royalty payments:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; October 1, 2020 | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; October 1, 2021 | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; October 1, 2022 | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; October 1, 2023<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every year thereafter | &nbsp;&nbsp; $50000<sup>(1)</sup> |  |

---

<sup>(1)</sup> In accordance with the terms of the agreement, the amount will be adjusted for inflation.

Cumulative advanced royalty payments will be credited against royalty payment obligations and the purchase price. The net smelter return royalty can be reduced by 50% to 0.75% upon payment of $750,000 (as adjusted for inflation).

Under the Hot Pot agreement, the Company is subject to the following minimum payments:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; September 16, 2021 | &nbsp;&nbsp; $30000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; September 16, 2022 | &nbsp;&nbsp; $30000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; September 16, 2023<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every year thereafter | &nbsp;&nbsp; $30000 |  |

---

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**9. E&E ASSETS (Continued)**

Any mineral production on the claims is subject to a 3.0% net smelter return royalty which can be reduced to 2.0% upon payment of $2,000,000. The Hot Pot lease and any additional property within 2.5 miles of the original boundary of the claims is also subject to 1.25% net smelter return royalty in favour of Battle Mountain Gold Exploration Corporation.

**(b) Fourmile Basin Property (Nevada, USA)**

The Company entered into a mineral lease agreement with La Cuesta International, Inc. ("LCI") on the Fourmile Basin Property. Under the terms of the agreement, the Company is subject to the following pre-production payments:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; June 18, 2020 | &nbsp;&nbsp; $25000 | &nbsp;&nbsp; Paid |
|  | &nbsp;&nbsp;33,333 common shares | &nbsp;&nbsp;Issued |
| &nbsp;&nbsp; December 18, 2020 | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; June 18, 2021 | &nbsp;&nbsp; $10000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; December 18, 2021 | &nbsp;&nbsp; $10000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; June 18, 2022 | &nbsp;&nbsp; $15000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; December 18, 2022<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every six months thereafter | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; Paid |

---

In addition, the Company is required to incur the following minimum E&E expenditures on the property:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Year 1<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from date of agreement | &nbsp;&nbsp; $30000 | &nbsp;&nbsp; Complete |
| &nbsp;&nbsp; Year 2 to Year 3<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from date of agreement | &nbsp;&nbsp; $50000 | &nbsp;&nbsp; Complete |

---

The Company is required to pay a production royalty of 2.0% of the net smelter returns for claims 100% owned by LCI and 0.5% of the net smelter returns for third party claims within LCI's area of influence. Payments to LCI totaling $10,000,000 in any combination of pre-production payments, production or minimum royalties will reduce the production royalties by 50% to 1.0% and 0.25%, respectively. Pre-production payments are deductible against future production royalties.

Under the terms of the Fourmile Basin mineral lease agreement, the Company is required to fulfill obligations to NexGen Mining Inc. ("NexGen") which holds certain properties within the Fourmile Basin lease boundary. Under the agreement, the Company is subject to the following cash advanced royalty payments:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; October 24, 2020 | &nbsp;&nbsp; $10000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; October 24, 2021 | &nbsp;&nbsp; $15000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; October 24, 2022 | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; October 24, 2023<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every year thereafter | &nbsp;&nbsp; $25000 |  |

---

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| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**9. E&E ASSETS (Continued)**

The Company is required to incur the following minimum E&E expenditures on the property:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; October 24, 2020 | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Complete |
| &nbsp;&nbsp; October 24, 2021 | &nbsp;&nbsp; $10000 | &nbsp;&nbsp; Complete |
| &nbsp;&nbsp; October 24, 2022 | &nbsp;&nbsp; $15000 | &nbsp;&nbsp; Complete |
| &nbsp;&nbsp; October 24, 2023 | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; October 24, 2024<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every year thereafter | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; In progress |

---

Any mineral production on the NexGen claims is subject to a 2.0% net smelter return royalty. The net smelter return royalty can be reduced by 1.0% for $250,000 and the remaining 1.0% for $500,000.

**(c) Lone Mountain Property (Nevada, USA)**

The Company entered into a mineral lease agreement with option to purchase the Lone Mountain Project with NAMMCO. Under the terms of the agreement, the Company is subject to the following pre-production payments:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Signing of the lease | &nbsp;&nbsp; $80000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; November 1, 2021 | &nbsp;&nbsp; $30000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; November 1, 2022 | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; November 1, 2023 | &nbsp;&nbsp; $20000 |  |
| &nbsp;&nbsp; November 1, 2024 | &nbsp;&nbsp; $30000 |  |
| &nbsp;&nbsp; November 1, 2025<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every year thereafter<sup>(1)</sup> | &nbsp;&nbsp; $30000 |  |

---

<sup>(1)</sup> Pre-production payments increase by $10,000 every year after November 1, 2025 to a maximum of $200,000.

The Company is required to incur the following minimum E&E expenditures on the property:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp; September 1, 2024 | &nbsp;&nbsp; $150000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2025 | &nbsp;&nbsp; $250000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2026 | &nbsp;&nbsp; $300000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2027 | &nbsp;&nbsp; $300000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2028 | &nbsp;&nbsp; $400000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2029<sup>(1)</sup> | &nbsp;&nbsp; $400000 | &nbsp;&nbsp; In progress |

---

<sup>(1)</sup> The work commitment terminates when $1,800,000 has been spent on the property.

Any mineral production on the claims is subject to a 3.0% net smelter return royalty. The net smelter return royalty can be reduced by 0.5% to 2.5% for $2,000,000. The Company has the option to purchase the entire interest in the project, except for the royalty, once there is a discovery of at least 500,000 ounces of gold (or equivalent in other metals) or a pre-feasibility study has been completed. The Company may exercise this option by payment of $2,000,000, reduced by the pre-production payments paid to the date of purchase.

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**9. E&E ASSETS (Continued)**

**(d) Miller Project (Nevada, USA)**

The Company entered into a mineral lease agreement with the option to purchase the Miller Project with Shea Clark Smith and Gregory B. Maynard on February 1, 2021. Under the terms of the agreement, the Company is subject to the following annual lease payments:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Signing of the lease | &nbsp;&nbsp; $50000 | &nbsp;&nbsp; Paid |
|  | &nbsp;&nbsp;5,000 common shares | &nbsp;&nbsp;Issued |
| &nbsp;&nbsp; February 1, 2022 | &nbsp;&nbsp; $25000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; February 1, 2023 | &nbsp;&nbsp; $25000 | &nbsp;&nbsp; Paid<sup>(1)</sup> |
| &nbsp;&nbsp; February 1, 2024<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every year thereafter | &nbsp;&nbsp; $30000<sup>(2)</sup> |  |

---

<sup>(1)</sup> The amount was paid subsequent to December 31, 2022.

<sup>(2)</sup> Lease payments of $30,000 are required every year after February 1, 2024, until a total of $500,000 has been paid.

The Company is required to drill 2,000 meters by November 4, 2023 and an additional 3,000 meters by May 4, 2025.

The Company has the option to purchase the lease outright at any time for $500,000 less cumulative lease payments to the date of purchase. Any mineral production on the claims is subject to a 2.0% net smelter return royalty and third-party claims acquired within the area of influence are subject to a 0.5% net smelter return royalty. The 2.0% net smelter return royalty can be reduced by 50% to 1.0% for $2,000,000.

The Miller Project was recommended to the Company by Bull Mountain Resources, LLC ("BMR"). As a result, the Company is required to make finders' fee payments in accordance with the introductory agent agreement (refer to Note 17).

The Miller Project consists of 117 claims in the original lease agreement and an additional 164 claims which were staked in January 2021 for a total of 281 unpatented lode mining claims covering approximately 23.5 km<sup>2</sup>. Although the Company had filed the required documentation with the Bureau of Land Management ("BLM") and county officials as required, there was a dispute regarding ownership of 134 newly staked claims and 36 original claims. Management has been monitoring the BLM and county registration sites to confirm whether property maintenance fees were paid on the disputed claims by the contending party. The contending party did not pay the property maintenance fees on the disputed claims when they were due on September 1, 2022.

The Company believes it is probable that a future economic benefit will flow to the Company from this property. As at December 31, 2022, the carrying value of the Miller Project is $302,840.

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**9. E&E ASSETS (Continued)**

**(e) Stockade Mountain Property (Oregon, USA)**

The Company entered into a mineral lease and option agreement with BMR to lease a 100% interest in the Stockade Mountain Property. Under the terms of the agreement, the Company is subject to the following pre-production payments:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; May 16, 2022 | &nbsp;&nbsp; $15000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; November 16, 2022 | &nbsp;&nbsp; $10000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; May 16, 2023 | &nbsp;&nbsp; $10000 |  |
| &nbsp;&nbsp; November 16, 2023 | &nbsp;&nbsp; $15000 |  |
| &nbsp;&nbsp; May 16, 2024 | &nbsp;&nbsp; $15000 |  |
| &nbsp;&nbsp; November 16, 2024<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every six months thereafter | &nbsp;&nbsp; $25000 |  |

---

The Company is required to incur the following minimum E&E expenditures on the property:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; May 16, 2023 | &nbsp;&nbsp; $30000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; May 16, 2024 | &nbsp;&nbsp; 2,000 meters of drilling | &nbsp;&nbsp; In progress |

---

BMR will retain a 2.0% net smelter return royalty on claims owned by BMR and 0.25% net smelter return royalty on third-party claims acquired within the area of influence around the property. Payments to BMR totaling $10,000,000 in any combination of pre-production payments, production or minimum royalties will reduce the production royalties on wholly owned claims by 50% to 1.0%.

**10. PROPERTY AND EQUIPMENT**

---

| | |
|:---|:---|
|  | Computer<br>equipment |
| Net book value - December 31, 2020 | $2564 |
| Depreciation | (780) |
| Movement in foreign exchange | 19 |
| **Net book value - December 31, 2021** | **1803** |
| Depreciation | (527) |
| Movement in foreign exchange | (95) |
| **Net book value - December 31, 2022** | **1181** |

---

**11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES**

---

| | | |
|:---|:---|:---|
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Trade payables | $64600 | $38740 |
| Accrued liabilities | 33225 | 22033 |
|  | $97825 | $60773 |

---

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**12. SHARE CAPITAL AND OTHER RESERVES**

**(a) Share capital**

At December 31, 2022, the authorized share capital of the Company consisted of an unlimited number of common shares without par value and an unlimited number of preferred shares without par value.

On May 6, 2022, the Company issued 3,754,750 shares at $4.00 pursuant to the closing of the Company's IPO for gross proceeds of $15,019,000. Total share issuance costs were $1,165,580. The Company also issued 262,833 underwriter warrants relating to the IPO (refer to Note 12d).

On February 2, 2021, the Company issued 5,000 common shares with a fair value in the amount of $11,702 related to obligations under a mineral lease agreement.

**(b) Other reserves**

The Company's other reserves consisted of the following:

---

| | | |
|:---|:---|:---|
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Other reserve - Share options | $1781096 | $1624053 |
| Other reserve - Warrants | 263596 |  |
|  | $2044692 | $1624053 |

---

**(c) Share options**

The Company has adopted an incentive share option plan which provides that the Board of Directors of the Company may from time to time, in their discretion, grant to its directors, officers, employees and consultants of the Company, non-transferable options to purchase common shares, provided that the number of common shares reserved for issue does not exceed 10% of the number of then outstanding common shares. The term of each share option is set by the Board of Directors at the time of grant but cannot exceed a maximum term of ten years from the date of grant. The exercise price of each share option is set by the Board of Directors at the time of grant but cannot be less than the then market price of common shares.

The following table summarizes the changes in share options for the year ended December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2021 | 2021 |
|  | Number of<br>share options | Weighted<br>average<br>exercise price | Number of<br>share options | Weighted<br>average<br>exercise price |
| Outstanding, January 1, | 716663 | $2.37 | 716663 | $2.36 |
| Granted | 460003 | 0.92 |  |  |
| Expired | (83333) | 2.36 |  |  |
| Outstanding, December 31, | 1093333 | $1.67 | 716663 | $2.37 |

---

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**12. SHARE CAPITAL AND OTHER RESERVES (Continued)**

The following table summarizes information about share options outstanding and exercisable at December 31, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Share options outstanding | Share options outstanding | Share options exercisable | Share options exercisable |
| Exercise prices | Number of <br>share options <br>outstanding | Weighted <br>average years <br>to expiry | Number of <br>share options <br>exercisable | Weighted <br>average <br>exercise price |
| $0.50 - $1.00 | 460003 | 4.82 | 114994 | 0.92 |
| $2.01 - $2.50 | 633330 | 7.20 | 633330 | $2.22 |
|  | 1093333 | 6.20 | 748324 | $2.02 |

---

The total share-based compensation expense for the year ended December 31, 2022 was $157,043 (2021 - nil) of which $130,870 has been expensed in the statement of loss and comprehensive loss and $26,173 has been capitalized to E&E assets.

The following are the weighted average assumptions used to estimate the fair value of share options granted for the years ended December 31, 2022 and 2021 using the Black-Scholes pricing model:

---

| | | |
|:---|:---|:---|
|  |  | For the year ended |
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Expected life | 5.00 years | N/A |
| Expected volatility | 143.18% | N/A |
| Risk-free interest rate | 4.09% | N/A |
| Expected dividend yield |  | N/A |
| Forfeiture rate |  | N/A |

---

Option pricing models require the input of subjective assumptions including the expected price volatility and expected share option life. Changes in these assumptions would have a significant impact on the fair value calculation.

**(d) Warrants**

The following table summarizes the changes in warrants for the year ended December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2021 | 2021 |
|  | Number of<br>warrants | Warrant <br>reserve | Number of<br>warrants | Warrant <br>reserve |
| Outstanding, January 1, |  | $- |  | $- |
| Transactions during the year: |  |  |  |  |
| Warrants issued - IPO | 262833 | 238217 |  |  |
| Warrants issued - consultants | 100000 | 25379 |  |  |
| Outstanding, December 31, | 362833 | $263596 | - | $- |

---

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**12. SHARE CAPITAL AND OTHER RESERVES (Continued)**

On May 6, 2022, the Company issued 262,833 warrants to the underwriters in connection with the IPO. The warrants are exercisable at a price of $4.40 or on a cashless basis for shares at the option of the holder. The underwriter warrants expire on November 6, 2023. At issuance, the underwriter warrants were valued at $238,217 using the Black-Scholes pricing model and were recorded as a share issuance cost.

On November 1, 2022, the Company issued 100,000 warrants to an investor relations consultant. The warrants vest over tranches at an exercise price of $0.81. The warrants expire on November 1, 2025. The total share-based compensation expense for the year ended December 31, 2022 was $26,480 which was expensed in the statement of loss and comprehensive loss.

The following are the weighted average assumptions used to estimate the fair value of warrants issued for the years ended December 31, 2022 and 2021 using the Black-Scholes pricing model:

---

| | | |
|:---|:---|:---|
|  | For the year ended | For the year ended |
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Expected life | 1.91 years | N/A |
| Expected volatility | 109.94% | N/A |
| Risk-free interest rate | 1.42% | N/A |
| Expected dividend yield |  | N/A |
| Forfeiture rate |  | N/A |

---

Warrant pricing models require the input of subjective assumptions including the expected price volatility and expected share option life. Changes in these assumptions would have a significant impact on the fair value calculation.

**13. RELATED PARTY TRANSACTIONS AND BALANCES**

Key management includes the Company's directors and officers including its President, Corporate Secretary and Chief Financial Officer ("CFO").

Directors and key management compensation:

---

| | | |
|:---|:---|:---|
|  | For the year ended | For the year ended |
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Management and consulting fees | $559591 | $12206 |
| Share-based compensation | 136148 |  |
| Directors' fees | 44380 |  |
|  | $740119 | $12206 |

---

For the year ended December 31, 2022, the Company's officers incurred $50,359 (2021 - $11,266) of administration expenses in the normal course of business on behalf of the Company.

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**13. RELATED PARTY TRANSACTIONS AND BALANCES (Continued)**

For the year ended December 31, 2022, the Company incurred $21,149 (2021 - nil) with P2 Gold Inc., a related party of the Company, under a CFO shared-services agreement. These expenditures were expensed under management and consulting fees in the statement of loss and comprehensive loss.

As at December 31, 2022, accounts payable and accrued liabilities include $7,568 (2021 - nil) owed to related parties of the Company for transactions incurred in the normal course of business.

The Company entered into a joint venture agreement with Pediment, a subsidiary of NGE, for the Kelly Creek Project (refer to Note 9) and owns 2,231,000 common shares of NGE (refer to Note 8). The President of the Company served as the non-executive chairman and director of NGE until October 1, 2022. As of December 31, 2022, the Corporate Secretary and a director of the Company were directors of NGE.

**14. SUPPLEMENTAL CASH FLOW INFORMATION**

The net change in non-cash working capital items included in E&E assets were as follows:

---

| | | |
|:---|:---|:---|
|  | For the year ended | For the year ended |
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Accounts payable and accrued liabilities | $(37130) | $- |
| Share-based compensation | 26173 |  |
| Common shares issued |  | 11702 |
|  | $(10957) | $11702 |

---

**15. FINANCIAL RISK MANAGEMENT**

The Company has exposure to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk from its use of financial instruments.

This note presents information about the Company's exposure to each of these risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital. Risk management is the responsibility of management and is carried out under the oversight of and policies approved by the Board of Directors. Material risks are monitored and are regularly discussed with the Audit Committee and the Board of Directors.

**(a) Market risk**

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company's cash flows or value of its financial instruments.

&nbsp;&nbsp;&nbsp;&nbsp;*(i) Currency risk*

The Company is subject to currency risk on financial instruments that are denominated in currencies that are not the same as the functional currency of the entity that holds them. Exchange gains and losses would impact the statement of loss and comprehensive loss. The Company does not use any hedging instruments to reduce exposure to fluctuations in foreign currency rates.

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**15. FINANCIAL RISK MANAGEMENT (Continued)**

The Company is exposed to currency risk through cash and cash equivalents, receivables and other, marketable securities and accounts payable and accrued liabilities held in the parent entity which are denominated in CAD.

The following table shows the impact on pre-tax loss of a 10% change in the USD:CAD exchange rate on financial assets and liabilities denominated in CAD, as of December 31, 2022, with all other variables held constant:

---

| | | |
|:---|:---|:---|
| Impact of currency rate change on pre-tax loss | Impact of currency rate change on pre-tax loss | Impact of currency rate change on pre-tax loss |
|  | 10% increase | 10% decrease |
| Cash and cash equivalents | $11629 | $(11629) |
| Receivables and other | 16098 | (16098) |
| Marketable securities | 1647 | (1647) |
| Accounts payable and accrued liabilities | (5234) | 5234 |

---

&nbsp;&nbsp;&nbsp;&nbsp;*(ii) Interest rate risk*

The Company is subject to interest rate risk with respect to its investments in cash and cash equivalents and short-term investments. The Company's current policy is to invest cash at variable and fixed rates of interest with cash reserves to be maintained in cash and cash equivalents in order to maintain liquidity. Fluctuations in interest rates when cash and cash equivalents and short-term investments mature impact interest and finance income earned.

The impact on pre-tax loss of a 1% change in variable interest rates on financial assets and liabilities as of December 31, 2022, with all other variables held constant, would be nominal.

**(b) Credit risk**

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its financial assets including cash and cash equivalents and short-term investments.

The carrying amount of financial assets represents the maximum credit exposure:

---

| | | |
|:---|:---|:---|
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Cash and cash equivalents | $630623 | $1094550 |
| Short-term investments | 11649079 |  |
|  | $12279702 | $1094550 |

---

The Company mitigates its exposure to credit risk on financial assets through investing its cash and cash equivalents and short-term investments with high-credit quality financial institutions. Management believes there is a nominal expected credit loss associated with its financial assets.

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**15. FINANCIAL RISK MANAGEMENT (Continued)**

**(c) Liquidity risk**

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities.

The Company has issued surety bonds to support future decommissioning and restoration provisions.

Contractual undiscounted cash flow requirements for contractual obligations as at December 31, 2022 are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Carrying<br>amount | Contractual<br>cash flows | Due within <br>1 year | Due within <br>2 years | Due within <br>3 years |
| Accounts payable and accrued liabilities | $97825 | $97825 | $97825 | $- | $- |
|  | $97825 | $97825 | $97825 | $- | $- |

---

**(d) Capital management**

The Company's objectives in managing capital are to safeguard the ability to continue as a going concern and provide financial capacity to meet its strategic objectives. Management monitors the amount of cash and cash equivalents and equity in the capital structure and adjusts the capital structure, as necessary, to continue as a going concern and to support the acquisition, exploration and development of its mineral projects.

The capital structure of the Company consists of equity attributable to common shareholders, comprising of issued share capital, other reserves, AOCI and deficit.

To maintain or adjust the capital structure, the Company may issue new shares, issue new debt, acquire or dispose of mineral projects to facilitate the management of its capital requirements.

The Company prepares annual expenditure budgets that are reviewed by the Board of Directors. Forecasts are regularly reviewed and updated for changes in circumstances so that appropriate capital allocation, investment and financing decisions are made for the Company.

**(e) Fair value estimation**

The Company's financial assets and liabilities are initially measured and recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

The three levels of fair value hierarchy are as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp; Level 1: | &nbsp;&nbsp; Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. |
| &nbsp;&nbsp; Level 2: | &nbsp;&nbsp; Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). |
| &nbsp;&nbsp; Level 3: | &nbsp;&nbsp; Inputs for the asset or liability that are not based on observable market data. |

---

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**15. FINANCIAL RISK MANAGEMENT (Continued)**

The Company's financial instruments consisting of cash and cash equivalents, short-term investments and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of these financial instruments.

Marketable securities are fair valued at each reporting period using NGE's share price on the TSX Venture Exchange and assumptions used in the Black-Scholes pricing model.

The following tables present the Company's financial assets and liabilities by level within the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2022** | **Carrying value** | **Carrying value** | **Fair value** | **Fair value** | **Fair value** |
|  | FVTPL | Amortized <br>cost | Level 1 | Level 2 | Level 3 |
| **Financial assets** |  |  |  |  |  |
| Cash and cash equivalents | $- | $630623 | $- | $- | $- |
| Short-term investments |  | 11649079 |  |  |  |
| Marketable securities | 16473 |  | 16472 |  | 1 |
|  | $16473 | $12279702 | $16472 | $- | $1 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2021** | **Carrying value** | **Carrying value** | **Fair value** | **Fair value** | **Fair value** |
|  | FVTPL | Amortized <br>cost | Level 1 | Level 2 | Level 3 |
| **Financial assets** |  |  |  |  |  |
| Cash and cash equivalents | $- | $1094550 | $- | $- | $- |
| Marketable securities | 196847 |  | 193572 |  | 3275 |
|  | $196847 | $1094550 | $193572 | $- | $3275 |

---

**16. TAXATION**

**(a) Deferred income taxes**

The tax effects of temporary differences between the amounts recorded in the Company's accounts and the corresponding amounts as computed for income tax purposes give rise to deferred income taxes as follows:

---

| | | |
|:---|:---|:---|
|  |  | For the year ended |
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Tax loss carry forwards | $332184 | $99672 |
| Share issuance costs | 288230 |  |
| Marketable securities and other | 74568 | 41908 |
| Deferred income taxes not recognized | (694982) | (141580) |
|  | $- | $- |

---

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

---

**16. TAXATION (Continued)**

The Company has tax losses in Canada of approximately $1,191,205 (2021 - $375,315) expiring in various amounts from 2040 to 2042. The other temporary differences do not expire under current legislation. A deferred tax asset has not been recognized in respect of the temporary differences, as it is not probable that sufficient future taxable earnings will be available in the periods when deductions from such potential assets will be realized.

**(b) Income tax expense (recovery)**

The provision for income taxes differs from the amount calculated using the Canadian federal and provincial statutory income tax rates of 27.0% (2021 - 27.0%) as follows:

---

| | | |
|:---|:---|:---|
|  |  | For the year ended |
|  | December 31, | December 31, |
|  | 2022 | 2021 |
| Expected income tax recovery | $(288466) | $(108298) |
| Share issuance costs | (298176) |  |
| Impact of difference in tax rates and other | (10670) | 21425 |
| Share-based compensation | 43910 |  |
| Deferred income taxes not recognized | 553402 | 86873 |
|  | $- | $- |

---

For the Company's subsidiary, the USA statutory income tax rate is 21.0% (2021 - 21.0%) and the Nevada state statutory income tax rate is nil (2021 - nil).

**17. COMMITMENTS**

The Company executed an introductory agent agreement with BMR (the "BMR Agreement"). Under the BMR Agreement, should a mineral property recommended by BMR be acquired by the Company, the Company shall pay an introductory agent fee. The BMR Agreement is currently in effect for the Miller Project, as of February 1, 2021, with the introductory agent fee commitment as follows:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Within 15 days of acquisition | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; 6 months after acquisition | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; 12 months after acquisition | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; 18 months after acquisition | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; 24 months after acquisition | &nbsp;&nbsp; $7500 | &nbsp;&nbsp; Paid<sup>(1)</sup> |
| &nbsp;&nbsp; 30 months after acquisition | &nbsp;&nbsp; $7500 |  |
| &nbsp;&nbsp; 36 months after acquisition | &nbsp;&nbsp; $10000 |  |
| &nbsp;&nbsp; 42 months after acquisition | &nbsp;&nbsp; $10000 |  |
| &nbsp;&nbsp; 48 months after acquisition<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every six months thereafter | &nbsp;&nbsp; $15000 |  |

---

<sup>(1)</sup> The amount was paid subsequent to December 31, 2022.

If commercial production is achieved on a property recommended by BMR, the Company shall pay a 0.5% net smelter return royalty on all mineral interests acquired within the area of influence of the mineral property. Introductory agent fees and net smelter return royalty payments totaling $1,000,000 paid by the Company will reduce the net smelter return royalty by 50% to 0.25%.

------

---

| | |
|:---|:---|
| ![](exhibit99-1xu002.jpg) | **AUSTIN GOLD CORP.**<br>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br>For the years ended December 31, 2022 and 2021<br>Expressed in United States dollars, except for share data |

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**18. SEGMENTED INFORMATION**

Exploration and development of mineral projects is considered the Company's single business segment. All of the Company's E&E assets are located in the USA.

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## Exhibit 99.2

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![](exhibit99-2x001.jpg)

**AUSTIN GOLD CORP.**

**MANAGEMENT'S DISCUSSION AND ANALYSIS**

**FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021**

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![](exhibit99-2xu001.jpg)

**MANAGEMENT'S DISCUSSION AND ANALYSIS**

This Management's Discussion and Analysis ("MD&A") for Austin Gold Corp., ("Austin Gold", "we", "us", "our" or the "Company") provides information about our performance, financial condition, and future prospects.

This MD&A should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2022 and 2021 as publicly filed in Canada on the System for Electronic Document Analysis and Retrieval ("SEDAR") website, and in the United States ("US") on the EDGAR section of the Securities and Exchange Commission ("SEC") website.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

Effective December 31, 2022, the Company elected to change its presentation currency from the Canadian dollar ("C$" or "CAD") to the US dollar ("$" or "USD"). The Company applied the change to USD presentation currency retrospectively and restated the comparative financial information as if the new presentation currency had always been the Company's presentation currency. The functional currency of the parent entity was reassessed and the functional currency changed from CAD to USD, commencing on December 31, 2022. Refer to the "*Changes in Accounting Policies*" section of this MD&A. The functional currency of the Company's subsidiary remains the USD. All dollar amounts in this MD&A are expressed in USD, unless otherwise noted or the context otherwise provides.

This MD&A is prepared as of March 15, 2023 and includes certain statements that may be deemed "forward-looking information", "forward-looking statements", and "financial outlook". We direct readers to the "*Caution Regarding Forward-Looking Statements*" section included within this MD&A.

The Company filed a prospectus in Form 41-101F1 with the British Columbia Securities Commission ("BCSC") in British Columbia ("BC") (the "Prospectus"), and a registration statement in Form S-1 with the SEC in the United States of America ("USA") (the "S-1 Statement"). Concurrently, the Company applied to list its common shares on the NYSE American LLC ("NYSE American"). On May 3, 2022, the Company received the receipt for the Prospectus from the BCSC, the S-1 Statement was declared effective by the SEC and the common shares were authorized for trading on the NYSE American.

In connection therewith, the Company conducted its initial public offering ("IPO") of its common shares pursuant to the S-1 Statement and the common shares began trading on the NYSE American under the symbol "AUST" on May 4, 2022.

Any capitalized terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Prospectus, available under the Company's profile in Canada on the SEDAR website at <u>www.sedar.com</u> and in the USA, on the EDGAR section of the SEC website at <u>www.sec.gov</u>.

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**OUR BUSINESS**

Austin Gold, together with its subsidiary Austin American Corporation ("Austin NV"), is focused on the exploration of mineral property interests in the southwestern-Great Basin area of the USA.

The Company's registered office is the 9th Floor, 1021 West Hastings Street, Vancouver, BC, Canada, V6E 0C3.

**OVERVIEW**

On April 21, 2020, the Company was incorporated in BC, Canada. The wholly-owned subsidiary, Austin NV, was incorporated in Nevada, USA in June 2020.

From the date of incorporation, through to December 31, 2022 and the current date, the Company has appointed directors and officers, completed several private placements and entered into mineral lease and option agreements and a joint venture agreement for its mineral projects. The Company became a reporting issuer in Canada and in the USA on May 3, 2022.

For more information about the Company's directors and management team, refer to the Company website at <u>www.austin.gold</u>.

**SIGNIFICANT EVENTS AND HIGHLIGHTS**

* On May 3, 2022, the Company announced the pricing of its IPO of 3,265,000 of its common shares at a price of $4.00 per share. The Company also granted the underwriters a 30-day option to acquire an additional 489,750 shares to cover overallotments in connection with the offering.

* On May 3, 2022, the Company received a receipt from the BCSC for its final non-offering prospectus to become a reporting issuer in BC.

* On May 4, 2022, the Company's shares commenced trading on the NYSE American under the symbol "AUST".

* On May 6, 2022, the Company announced the closing of its IPO of 3,265,000 common shares at a price of $4.00 per share. The underwriters also exercised their option to acquire an additional 489,750 shares. After the underwriting discount and estimated offering expenses payable by the Company, the Company received net proceeds of $13,853,420.

* On May 16, 2022, the Company entered into a mineral lease and option agreement with Bull Mountain Resources LLC ("BMR") through Austin NV, to lease a 100% interest in the Stockade Mountain Property located in Malheur County, Oregon.

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* On August 3, 2022, the Company signed a second amendment to the Lone Mountain agreement. Pursuant to the agreement, the pre-production payments were amended as follows:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Signing of the lease | &nbsp;&nbsp; $80000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; November 1, 2021 | &nbsp;&nbsp; $30000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; November 1, 2022 | &nbsp;&nbsp; $20000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; November 1, 2023 | &nbsp;&nbsp; $20000 |  |
| &nbsp;&nbsp; November 1, 2024 | &nbsp;&nbsp; $30000 |  |
| &nbsp;&nbsp; November 1, 2025<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and each year thereafter | &nbsp;&nbsp; $30,000\* |  |

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*\* Pre-production payments increase by $10,000 each year after November 1, 2025 to a maximum of $200,000.*

The work commitments have also been amended as follows:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp; September 1, 2024 | &nbsp;&nbsp; $150000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2025 | &nbsp;&nbsp; $250000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2026 | &nbsp;&nbsp; $300000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2027 | &nbsp;&nbsp; $300000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2028 | &nbsp;&nbsp; $400000 | &nbsp;&nbsp; In progress |
| &nbsp;&nbsp; September 1, 2029 | &nbsp;&nbsp; $400000 | &nbsp;&nbsp; In progress |

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* On October 1, 2022, the Company appointed Grant Bond as Chief Financial Officer ("CFO").

* On October 3, 2022, the Company announced the results of its 3,485 foot (1,062 meter) rotary reverse-circulation ("RC") drill program at the Kelly Creek Project. For further details, refer to the "*Mineral Projects*" section of the MD&A.

* On October 27, 2022, the Company granted stock options to directors, officers and consultants of the Company to purchase an aggregate of 460,003 common shares in the capital of the Company at an exercise price of $0.9161 per share, which expire on October 27, 2027.

* On November 1, 2022, the Company issued warrants to an investor relations consultant of the Company to purchase 100,000 common shares in the capital of the Company at an exercise price of $0.81 per share, which expire on November 1, 2025.

* On December 22, 2022, the Company provided an update on the drilling and permitting status of several of its mineral projects. For further details, refer to the "Mineral Projects" section of this MD&A.

* Subsequent to December 31, 2022, on March 2, 2023, the Company provided the results of its initial drill program at the Fourmile Basin Project and an update on the permitting status of several of its mineral projects. For further details, refer to the "Mineral Projects" section of this MD&A.

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![](exhibit99-2xu001.jpg)

**MINERAL PROJECTS**

The Company is focused on the acquisition, exploration and development of mineral resource properties primarily in the western USA. The Company has an option to joint venture the Kelly Creek Project in Humboldt County, Nevada, and has leases on the Lone Mountain Project, the Miller Project, and the Fourmile Basin Projects in Nevada, and the Stockade Mountain Property in Oregon.

The Company engaged Robert M. Hatch (SME-Registered Member) of Volcanic Gold & Silver LLC, 80 Bitterbrush Road, Reno, Nevada, as an independent consulting geologist and Qualified Person ("QP") under National Instrument 43-101 - *Standards of Disclosure for Mineral Projects* ("NI 43-101") and sub-part 1300 of Regulation S-K ("SK 1300") under the US Securities Exchange Act of 1934, as amended, to oversee the operations and disclosure for all of the Company's mineral projects.

Below are brief descriptions of the properties. For additional information about the financial terms of the agreements, refer to Note 9 of our annual consolidated financial statements for the years ended December 31, 2022 and 2021.

**Kelly Creek Project, Nevada, USA**

The Company has an Exploration and Option to Enter Joint Venture Agreement on the Kelly Creek Project, through its subsidiary Austin NV, with Pediment Gold LLC, a subsidiary of Nevada Exploration Inc. ("NGE"), whereby Austin NV may earn up to a 70% interest in the Kelly Creek Project. The project is located in Humboldt County, Nevada, and is primarily situated on public lands administered by the US Department of the Interior Bureau of Land Management ("BLM") with a portion on private lands. Barbara Carroll, C.P.G., as an independent consultant and QP, completed the Kelly Creek Technical Report which is available on SEDAR at <u>www.sedar.com</u>.

The Kelly Creek Basin is situated along the Battle Mountain - Eureka Gold Trend and is bounded by multi-million-ounce gold deposits to the north (Twin Creeks, Getchell, Turquoise Ridge, and Pinson) and south (Lone Tree, Marigold, Trenton Canyon, Converse, Buffalo Valley, Copper Basin, and Phoenix), together representing more than 70 million ounces of gold along the periphery of the Basin. Despite its proximity to significant mineralization, the interior of the Kelly Creek Basin has seen limited systematic exploration activity to date because its bedrock is largely covered by post-mineral volcanic units and post-mineral alluvium.

An area in the southern portion of the Kelly Creek Project lies within and under the Humboldt River and its floodplain, much of which is part of the National Wetlands Inventory managed by the US Fish and Wildlife Service. The full impact of this wetlands designation for this part of the Kelly Creek Project is unknown. A preliminary review of permitting issues on the southern portion of the Kelly Creek Project indicates that there may be some additional challenges to permit development near the Humboldt River and its associated floodplain.

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![](exhibit99-2xu001.jpg)

The northern portion of the Kelly Creek project is a "checkerboard" pattern of land ownership consisting of alternating privately-owned and BLM sections. It has come to the attention of the Company that there is a solar generating facility planned for the privately-owned sections of this checkerboard that intermingles with the Company's lode mining claims. That solar facility may hinder access and opportunities for acquisition of these parcels for exploration, development, and mining on the Company's claims in this area.

The Company has engaged professionals to review the geophysical data, the environmental mine permit issues, and to provide target evaluations for the Kelly Creek Project. Exploration work by the Company has included review of technical data, compilation of the exploration data in geographic information system ("GIS") and three dimensional ("3D") programs, review of environmental issues affecting the project, writing of the NI 43-101 report, evaluation of targets, logistical planning of the drilling program, and permitting of drill sites with the BLM.

During the third quarter of 2022, the Company conducted a limited drill program at the Kelly Creek Project to drill test beneath anomalous gold values encountered in shallow historical drill holes in an area of thin Quaternary alluvium cover. The program consisted of a total of 3,485 feet (1,062 meters) of rotary-RC drilling in four holes. Difficult drilling conditions, including large inflows of groundwater, prevented the holes from achieving a targeted depth of 1,500 feet (457 meters). All holes intersected rocks that may host gold mineralization similar to the deposits at the nearby Marigold and Lone Tree Mines. The highest gold values returned were 0.087 grams per tonne ("g/t") and 0.056 g/t. The Company is compiling and interpreting this information to determine its next steps at Kelly Creek.

**Fourmile Basin Project, Nevada, USA**

The Company has a mineral lease agreement with La Cuesta International, Inc. ("LCI") for exploration and mining rights on unpatented lode mining claims comprising the Fourmile Basin Project situated in Nye County, Nevada.

The project is an epithermal, gold-silver exploration project located about 30 miles (48 kilometers) east-northeast of the historic mining district and town of Tonopah. The exceptionally large Round Mountain Mine is located about 35 miles (57 kilometers) northwest of Fourmile Basin. The property has excellent access and is situated in a favorable jurisdiction for mining.

The primary exploration concept at Fourmile Basin is to find the source of the float and boulders of the East Basin Zone. The Company and LCI geologists believe that the boulders may be sourced from veins and silicification associated with a major structural break that is now covered by alluvium and post-mineral volcanic rocks. Calcite replacement textures in the veins suggest a boiling epithermal system and the style of silicification as well as the geochemistry indicates that the rocks are derived from the upper levels of an epithermal gold-silver mineral system. These geologic features all suggest that a robust and potentially high-grade vein system may be preserved beneath the alluvium of Fourmile Basin.

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![](exhibit99-2xu001.jpg)

Additional vein and disseminated gold-silver drill targets are being explored north of the East Basin Zone at the MM-11 Zone where LCI sampled epithermal veins in a large area of altered volcanic rocks. The CP and NS claims were located to cover ground with prospective hydrothermal alteration. Minimal work has been done on the CP claims.

Permitting for exploration work is through the BLM at the southern end of the East Zone, whereas the rest of the property is on US Forest Service lands.

The Company, in coordination with its consultants, has conducted numerous activities for its exploration program on the Fourmile Basin Project. These activities included review of technical data, compilation of the data in GIS and 3D programs, field reviews and mapping of the project areas, designing of the drill program and field-checking of proposed access and drill sites, drafting and ongoing updating of the Plan of Operations submitted to the US Forest Service, review of geophysical data, engaging archaeologists to review the cultural resources, arranging the biology surveys, and completion of confirmation rock chip sampling.

Targets at Fourmile Basin are high-grade feeder veins that may not have been adequately tested by prior operators. The CP and NS claims may be mapped and sampled to determine what further work is recommended.

During the fourth quarter of 2022, the Company received approval from the BLM to drill exploration holes in the southern portion of the project area. The exploration target was the hypothesized buried source of gold and silver mineralized boulders and float that are concentrated in a 5.5 mile (8.9 kilometer) long zone along the east side of Fourmile Basin. The Company completed its initial drilling program in January 2023 which consisted of five holes totaling 4,580 feet (1,396 meters). Analytical results for gold were recently received, with high values being 0.106 and 0.065 g/t gold. Analysis of the data is ongoing to determine the next course of action for the property.

The Company is in the process of permitting its planned exploration program in the northern part of the project area with the US Forest Service. This program will be contingent on results from the drilling program just completed on the BLM lands.

**Lone Mountain Project, Nevada, USA**

The Company has a mineral lease agreement with NAMMCO, a Wyoming General Partnership, for exploration and mining rights on 454 unpatented lode mining claims that comprise the Lone Mountain Property, Elko County, Nevada.

The project is located approximately 25 miles (40 kilometers) northwest of Elko, Nevada at the southern end of the Independence Mountains. The property is within one of the major gold mining centers of Nevada, as it is located 22 miles (35 kilometers) northeast of the Carlin and 19 miles (30 kilometers) south of the Jerritt Canyon deposits. Lone Mountain is accessible from the large regional mining hub of Elko by 31 miles (50 kilometers) of highway and 3 miles (5 kilometers) of gravel road.

Modern gold exploration began in 1965 around the time of the original Carlin discovery when Newmont drilled several shallow holes into gold-bearing jasperoids (silica-replaced limestone) on the north flank of Lone Mountain. Beginning in the 1960s, the Lone Mountain property position was assembled by Kirkwood and Huber (principals of NAMMCO) and then leased to several mining companies over the years.

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![](exhibit99-2xu001.jpg)

The Lone Mountain Project is comprised of a broadly folded sequence of Paleozoic lithologies that are intruded by a Tertiary age (36-42 Ma) multi-phase intrusive complex. Silurian to Devonian shelf carbonates form the lower plate and Ordovician off-shelf siliciclastic rocks form the upper plate of the low angle Roberts Mountains thrust fault.

Erosion plus basin and range block faulting has created the "Lone Mountain window", which is now a broad, west-plunging antiform with an east-west trending axis. This window is similar to other gold mineralized windows in Nevada such as the Carlin Window - *Gold Quarry Mine*; Lynn Window - *Carlin Mine*; Bootstrap Window - *Gold Strike Deposit*; and Cortez Window - *Cortez Hills*. It is the lower plate carbonate rocks exposed in the windows that host significant "Carlin-Type" mineralization in these districts. The most intense and potentially most economically significant alteration occurs as jasperoid. Skarn and gossan alteration and mineralization occur close to the intrusive, typically with gold as well as silver and base metals in rocks and soils. The widespread jasperoid development is outboard from the intrusive and commonly is associated with gold and elements typical of Carlin-type sediment-hosted gold deposits (Sb, As, Zn) in the rocks and soils. This district-scale alteration zonation is typical of the Carlin-type districts in Nevada.

Significant data collected by a number of exploration companies over the past sixty years suggest potential for significant resources and provide guidelines for future exploration. The Company, in coordination with its consultants, conducted numerous activities to design an initial exploration program for the Lone Mountain Project. These activities included a review of historical technical reports, compilation of exploration data, drafting of property maps and workup of the GIS data, and strategic planning for a forthcoming exploration program.

**Miller Project, Nevada, USA**

The company has a mineral lease agreement with Shea Clark Smith (trustee) and Gregory B. Maynard (trustee) for exploration and mining rights on unpatented lode mining claims comprising the Miller Project situated in Elko County, Nevada.

The project is located approximately 30 miles (50 kilometers) south-southwest of Elko, Nevada on the eastern flank of the Pinion Range and is situated at the southern end of the Carlin Gold Trend. Contact Gold's Pony Creek deposit is immediately to the northwest and Gold Standard Ventures' Railroad District is further to the northwest. The Miller Project is accessible from the regional mining hub of Elko by approximately 30 miles (50 kilometers) of paved road (State Route 228), followed by approximately 8 miles (13 kilometers) of gravel road.

The Miller Project consists of 117 claims in the original lease agreement, and an additional 164 claims which were staked in January 2021 for a total of 281 unpatented lode mining claims covering approximately 23.5 km<sup>2</sup> on land administered by the BLM. Although the Company had filed the required documentation with the BLM and county recorder as required, there was a dispute on the ownership of 134 of the newly staked claims and on 36 of the original claims. The contending party did not pay the property maintenance fees on the disputed claims when they were due on September 1, 2022. Management believes that this situation has been resolved in favor of the Company.

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![](exhibit99-2xu001.jpg)

The Miller Project is at the greenfields stage of exploration. The project comprises a large area of pediment with post-mineral cover, and available biogeochemical, geophysical, and geological data in this area support the potential for a district-scale gold discovery under that cover. Historical information received from the property vendors indicates that up to seven historical drill holes were drilled in the western-most part of the property in 1997 and 1998. However, these holes are not in the area of the biogeochemical anomalies that are of interest to the Company.

The Company has conducted activities for an initial exploration program on the Miller Project, which included compilation of exploration data in GIS software, reviewing and digitizing biogeochemical, geological and drill hole compilations, and engaging a geophysics consultant for data review and future program planning. The Company has prepared a "Notice" for submission to the BLM for initial exploration drilling that is designed to test for the depth to prospective host rocks under the project area.

**Stockade Mountain Property, Oregon, USA**

The Company has a mineral lease agreement with BMR for exploration and mining rights on unpatented lode mining claims that comprise the Stockade Mountain Property situated in Malheur County, Oregon.

The property is located approximately 50 miles (80 kilometers) southeast of Burns, Oregon and 90 miles (145 kilometers) southwest of Boise, Idaho in a rural area used extensively for ranching and farming. The high-grade gold/silver Grassy Mountain Gold project, which is currently undergoing permitting for an underground mine and adjacent milling operation, is located in Malheur County about 40 miles (64 kilometers) northeast of Stockade Mountain. The nearby community of Burns, Oregon is a commercial center for ranching and farming and can supply the necessary accommodation, food, fuels, supplies, and some of the contractors and workforce for exploration and development.

Historical data generated within the project demonstrates the discovery potential for significant high-grade gold/silver mineralization occurring at shallow depth that may be amenable to underground mining. Stockade Mountain exhibits a classic large gold- and silver-bearing low-sulfidation "hot springs" hydrothermal system associated with rhyolite intrusion and doming that formed along a major NW-trending structural corridor. Gold/silver and high-level mercury mineralization at Stockade is associated with widespread silicification and argillization in a near-surface paleo-hot springs environment. This hydrothermal alteration and mineralization formed in and around rhyolite domes that have intruded gently dipping felsic tuffs. Erosion into the hydrothermal system has been minimal, resulting in the local exposure of probable hydrothermal craters and vents that indicate the paleosurface at the time of hot springs activity. Gold and silver, along with associated elements arsenic, antimony, and mercury, are all strongly anomalous at the surface, however, historical drilling shows that gold and silver values, and their extent, increase significantly with depth below the paleosurface. This is a common characteristic of high-grade gold/silver deposits in similar geological environments, including the previously mentioned nearby Grassy Mountain deposit in Oregon, the Midas, Sleeper, Hollister, National, and Fire Creek mines in Nevada, and numerous analogous deposits elsewhere in the world. The gold/silver veins being targeted at Stockade Mountain would have formed within the vertical zone of vigorous boiling of the hydrothermal fluids, and this is interpreted to have occurred approximately 600 to 1,200 feet (183 to 366 meters) below the surface.

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Exploration programs conducted by BHP, Phelps Dodge and Placer Dome in the 1980s and 90s included shallow exploration holes that were drilled for bulk tonnage, open-pit potential, with no efforts to target deeper high-grade gold/silver vein deposits. Many of these short drill holes returned significant lengths of strongly anomalous gold mineralization, including long intercepts of >0.2 g/t of gold. Four holes drilled higher-grade intercepts of:

* 10 feet (3 meters) averaging 1.1 g/t gold;

* 5 feet (1.5 meters) @1.14 g/t gold;

* 15 feet (4.6 meters) averaging 1.1 g/t gold; and

* 15 feet (4.6 meters) that averaged 1.385 g/t gold.

The property had been dormant since the mid-1990s and was rediscovered by BMR during an eastern Oregon reconnaissance exploration program. There has been a considerable amount of work done on the property in the past and BMR has compiled a large amount of data for Stockade Mountain including:

* assays for over 1,000 rock samples (includes 128 collected by the vendors and 230 collected by a previous exploration company);

* approximately 1,000 soil samples (historical data);

* information for 40 RC drill holes completed by Phelps Dodge, BHP-Utah, Placer Dome, and Carlin Gold;

* recently completed ground and airborne geophysical surveys; and

* a largely completed NI 43-101 Technical Report.

The project is an exploration stage project, and there are no known mineral resources or reserves on the project at this time. The Company plans to initiate a systematic exploration program to include drilling beneath the known high-level gold/silver-bearing stockworks mineralization that will target high grade vein deposits formed deeper into the hydrothermal boiling zone along feeder conduits. Similar to the Company's other projects, Robert M. Hatch has conducted data compilation, field review, permitting, and other activities associated with exploration of the Stockade Mountain Project.

During the fourth quarter of 2022, the Company received approval from the BLM to build access roads and drill exploration holes to test the above-described targets. Permitting with the Oregon Department of Geology and Mineral Industries for the drilling program, a necessary step in Oregon, continues through the review process.

**FINANCIAL POSITION**

**Total assets**

As at December 31, 2022, total assets were $14,877,675, an increase of $12,285,582 compared to December 31, 2021. The increase was predominantly due to higher short-term investments in the amount of $11,649,079 resulting from the Company's completed IPO and an increase in exploration and evaluation ("E&E") assets in the amount of $1,082,878 from spending on its mineral projects. This was partially offset by a decrease in cash and cash equivalents in the amount of $463,927 used for E&E expenditures and corporate administrative costs.

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**Total liabilities**

As at December 31, 2022, total liabilities were $97,825, an increase of $37,052 compared to December 31, 2021. The increase in liabilities was predominantly due to higher trade payables due to the timing of E&E activities on the Company's mineral projects and corporate administrative costs.

**Total shareholders' equity**

Total shareholders' equity was $14,779,850, an increase of $12,248,530 compared to December 31, 2021. Higher shareholders' equity was due to the Company's completed IPO partially offset by an increase in accumulated other comprehensive income (loss) resulting from the change in presentation currency and in deficit related to the Company's corporate administrative expenses and other items.

**FINANCIAL RESULTS OF OPERATIONS**

**Administrative expenses**

For the three months and year ended December 31, 2022, total administrative expenses were $587,903 and $1,717,294, respectively, an increase of $484,229 and $1,428,026, respectively, compared to the comparable period in 2021.

*Consulting and management fees*

For the three months and year ended December 31, 2022, consulting and management fees were $128,685 and $634,169, respectively, an increase of $124,649 and $615,819, respectively, compared to the comparable period in 2021. The increase was primarily due to bonuses paid upon completion of the Company's IPO and corporate employees management fees which commenced in the second quarter of 2022. Refer to the "*Related Party Transactions and Balances*" section of this MD&A.

*Insurance*

For the three months and year ended December 31, 2022, insurance costs were $96,579 and $262,315, respectively, an increase of $94,352 and $254,918, respectively compared to the comparable period in 2021. The increase was due to the directors and officers insurance premium.

*Share-based compensation*

For the three months and year ended December 31, 2022, share-based compensation expense was $162,628. The movement in share-based compensation expense is the result of the timing and number of share options granted during the periods and the vesting conditions and fair value attributed to those options.

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*Listing and filing fees*

For the three months and year ended December 31, 2022, listing and filing fees were $63,283 and $164,837 respectively, an increase of $54,410 and $155,776, respectively, compared to the comparable period in 2021. The increase was due to fees associated with the Company's IPO and NYSE American listing.

*Marketing*

For the three months and year ended December 31, 2022, marketing costs were $15,421 and $139,655, respectively, an increase of $15,066 and $137,048, respectively, compared to the comparable period in 2021. The increase was due to increased promotion and marketing of the Company and attendance at investor conferences.

**Unrealized loss on marketable securities**

For the three months and year ended December 31, 2022, unrealized loss on marketable securities was $14,873 and $174,634, respectively, an increase of $23,121 and $65,981, respectively, compared to the comparable period in 2021. The increase was due to the continued decline in the share price of NGE in which the Company holds 2,231,000 common shares.

**Interest and finance income**

For the three months and year ended December 31, 2022, interest and finance income was $66,392 and $183,213 respectively compared to nil in the comparable periods in 2021. The increase was primarily from the investment in short-term investments at fixed interest rates using the proceeds generated by the Company's IPO.

**Foreign exchange gain**

For the year ended December 31, 2022, the foreign exchange gain was $640,324, an increase of $649,951 compared to the comparable period in 2021. The increase in the foreign exchange gain was primarily related to the translation of the US denominated short-term investments as the CAD weakened against the US dollar. Short-term investments were purchased with proceeds from the Company's IPO. As the Company has changed its functional and presentation currency, management expects foreign exchange fluctuations to be minimized as the Company maintains most of its funds in USD.

**Net loss and comprehensive loss**

For the three months and year ended December 31, 2022, net loss was $705,537 and $1,068,391 respectively, an increase of $608,108 and $667,286, respectively, compared to the comparable period in 2021. The increase was primarily driven by higher administrative expenses and the unrealized loss on marketable securities partially offset by the foreign exchange gain from translation of short-term investments.

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![](exhibit99-2xu001.jpg)

Net comprehensive loss was impacted by the same reasons noted above for net loss and the currency translation adjustment for translation of the Company's parent financial results into the presentation currency. The translation adjustment was impacted during the year ended December 31, 2022 due to the weakening of the CAD compared to the USD.

**LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN**

**Cash flows**

For the three months and year ended December 31, 2022, cash flows used in operating activities were $416,810 and $1,791,812 respectively, an increase of $263,599 and $1,515,113 respectively compared to the comparable period in 2021. The increase was primarily due to higher corporate administrative costs related to the completion of the IPO.

For the three months ended December 31, 2022, cash flows generated by investing activities were $659,497, an increase of $733,983 compared to the comparable period in 2021. The increase was due to the redemption of short-term investments of $2,500,000 partially offset by the purchase of short-term investments of $1,500,000 and E&E expenditures of $397,796.

For the year ended December 31, 2022, cash flows used in investing activities were $12,517,275, an increase of $11,968,984 compared to the comparable period in 2021. The increase was due to the purchase of short-term investments of $14,000,000 and E&E expenditures of $1,066,431 partially offset by the redemption of short-term investments of $2,500,000.

For the year ended December 31, 2022, cash flows generated by financing activities were $13,853,420 compared to nil in the comparable period in 2021. The increase was related to the proceeds from the IPO in the amount of $15,019,000 offset by cash share issuance costs of $1,165,580.

**Liquidity, capital resources and going concern**

The Company has not generated revenue or cash flows from its operations to date. As at December 31, 2022, the Company has an accumulated deficit of $3,019,851 since inception and has a working capital (current assets less current liabilities) surplus of $12,393,162 (December 31, 2021 - $1,046,514). The operations of the Company have primarily been funded by the issuance of common shares.

The continuing operations of the Company are dependent upon obtaining necessary financing to meet the Company's commitments as they come due and to finance future exploration and development of mineral interests, secure and maintain title to properties, and upon future profitable production.

Management regularly reviews the current Company capital structure and updates its expenditure budgets and forecasts as necessary, to determine whether or not new financing will need to be obtained, and what type of financing is appropriate given the changing market conditions.

Management estimates its current working capital will be sufficient to fund its current level of activities for at least the next twelve months.

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![](exhibit99-2xu001.jpg)

**COMMITMENTS**

The Company is required to make pre-production, lease and/or advanced royalty payments and incur E&E expenditures (i.e. work commitments) on each of its projects to keep the agreements in good standing. For details of these commitments, refer to Note 9 of the consolidated financial statements.

**Introductory Agent Agreement**

The Company executed an introductory agent agreement with BMR (the "BMR Agreement"). Under the BMR Agreement, should a mineral property recommended by BMR be acquired by the Company, the Company shall pay an introductory agent fee. The BMR Agreement is currently in effect for the Miller Project, as of February 1, 2021, with the introductory agent fee commitment as follows:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Within 15 days of acquisition | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; 6 months after acquisition | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; 12 months after acquisition | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; 18 months after acquisition | &nbsp;&nbsp; $5000 | &nbsp;&nbsp; Paid |
| &nbsp;&nbsp; 24 months after acquisition | &nbsp;&nbsp; $7500 | &nbsp;&nbsp; Paid<sup>(1)</sup> |
| &nbsp;&nbsp; 30 months after acquisition | &nbsp;&nbsp; $7500 |  |
| &nbsp;&nbsp; 36 months after acquisition | &nbsp;&nbsp; $10000 |  |
| &nbsp;&nbsp; 42 months after acquisition | &nbsp;&nbsp; $10000 |  |
| &nbsp;&nbsp; 48 months after acquisition<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and every six months thereafter | &nbsp;&nbsp; $15000 |  |

---

<sup>(1)</sup> The amount was paid subsequent to December 31, 2022.

If commercial production is achieved on a property recommended by BMR, the Company shall pay a 0.5% net smelter return royalty on all mineral interests acquired within the area of influence of the mineral property. Introductory agent fees and net smelter return royalty payments totaling $1,000,000 paid by the Company will reduce the net smelter return royalty by 50% to 0.25%.

**Source of funds**

The net proceeds of the Company's IPO, together with the Company's working capital balance represent the expected source of funds to meet these capital expenditure commitments.

**OFF-BALANCE SHEET ARRANGEMENTS**

The Company does not have any off-balance sheet arrangements.

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![](exhibit99-2xu001.jpg)

**OUTSTANDING SHARE DATA**

As at March 15, 2023, the Company had the following number of securities outstanding:

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| | | | |
|:---|:---|:---|:---|
|  | Number of <br>securities | Exercise <br>price ($) | Weighted average <br>remaining life (years) |
| Common shares | 13271750 |  |  |
| Share options | 1093333 | $0.92 - $2.19 | 6.00 |
| Warrants | 362833 | $0.81 - $4.40 | 1.19 |
|  | 14727916 |  |  |

---

**SUMMARY OF ANNUAL RESULTS**

The following table contains selected annual financial information derived from our audited consolidated financial statements, which are reported under IFRS.

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| | | | |
|:---|:---|:---|:---|
|  | For the year ended | For the year ended | For the period ended |
|  | December 31, | December 31, | December 31, |
|  | 2022 | 2021 | 2020 |
| Revenue | $- | $- | $- |
| Net loss | (1068391) | (401105) | (1550355) |
| Net comprehensive loss | (1787312) | (379644) | (1427844) |
| Loss per share - basic and diluted | (0.09) | (0.04) | (0.18) |
| Cash and cash equivalents | 630623 | 1094550 | 1902133 |
| E&E assets | 2369034 | 1286156 | 686737 |
| Total assets | 14877675 | 2592093 | 2929062 |
| Total liabilities | 97825 | 60773 | 29800 |
| Cash dividends | $- | $- | $- |

---

The increase in total assets in 2022 compared to the comparable period in 2021 and 2020 was the result of the Company's IPO and increased E&E expenditures on its mineral projects.

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![](exhibit99-2xu001.jpg)

**SELECTED QUARTERLY FINANCIAL INFORMATION**

The following table contains selected quarterly financial information derived from our unaudited quarterly condensed consolidated interim financial statements, which are reported under IFRS applicable to interim financial reporting.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | **Q3 2022** | **Q2 2022** | **Q1 2022** | **Q4 2021** | **Q3 2021** | **Q2 2021** | **Q1 2021** |
| Revenue | $- | $- | $- | $- | $- | $- | $- | $- |
| Net earnings (loss) | (705537) | 455014 | (667236) | (150632) | (97429) | (128934) | (195129) | 20387 |
| Net comprehensive <br>&nbsp;&nbsp;&nbsp;&nbsp; income (loss) | (518779) | (436844) | (703431) | (128258) | (84104) | (187221) | (160607) | 52288 |
| Earnings (loss) per share - <br>&nbsp;&nbsp;&nbsp;&nbsp; basic and diluted | (0.05) | 0.03 | (0.06) | (0.02) | (0.01) | (0.01) | (0.02) |  |
| Cash and <br>&nbsp;&nbsp;&nbsp;&nbsp; cash equivalents | 630623 | 418540 | 1457364 | 983611 | 1094550 | 1314185 | 1691182 | 1750224 |
| E&E assets | 2369034 | 2102270 | 1358811 | 1329480 | 1286156 | 1207480 | 878487 | 855458 |
| Total assets | 14877675 | 15418592 | 15788439 | 2449423 | 2592093 | 2725274 | 2869868 | 3021292 |
| Total liabilities | 97825 | 302387 | 235389 | 46362 | 60773 | 109851 | 67223 | 58040 |
| Cash dividends | $- | $- | $- | $- | $- | $- | $- | $- |

---

**EVENTS AFTER THE REPORTING DATE**

Other than disclosed elsewhere in this MD&A, the Company does not have any material events after the reporting date to disclose.

**RELATED PARTY TRANSACTIONS AND BALANCES**

Key management includes the Company's directors and officers, including its President, Corporate Secretary and CFO.

Directors and key management compensation:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | For the three months ended | For the three months ended | For the year ended | For the year ended |
|  | December 31, | December 31, | December 31, | December 31, |
|  | 2022 | 2021 | 2022 | 2021 |
| Management and consulting fees | $185118 | $8610 | $559591 | $12206 |
| Share-based compensation | 136148 |  | 136148 |  |
| Directors' fees | 44380 |  | 44380 |  |
|  | 365646 | $8610 | $740119 | $12206 |

---

For the year ended December 31, 2022, the Company's officers incurred $50,359 (2021 - $11,266) of administration expenses in the normal course of business on behalf of the Company.

For the year ended December 31, 2022, the Company incurred $21,149 (2021 - nil) with P2 Gold Inc. ("P2 Gold"), a related party of the Company, under a CFO shared-services agreement. These expenditures were expensed under management and consulting fees in the statement of loss and comprehensive loss.

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![](exhibit99-2xu001.jpg)

As at December 31, 2022, accounts payable and accrued liabilities include $7,568 (2021 - nil) owed to related parties of the Company for transactions incurred in the normal course of business.

The Company entered into a joint venture agreement with Pediment, a subsidiary of NGE, for the Kelly Creek Project and owns 2,231,000 common shares of NGE. The President of the Company served as the non-executive chairman and director of NGE until October 1, 2022. As of December 31, 2022, the Corporate Secretary and a director of the Company were directors of NGE.

**ADDITIONAL DISCLOSURE RELATED TO OFFICERS AND DIRECTORS**

* In January 2022, Darcy Higgs, the Company's Corporate Secretary, became a director of NGE;

* On February 8, 2022, Sandra MacKay resigned as a director of the Company and pursuant to the Company's stock option plan, her options expired on May 8, 2022;

* On October 1, 2022, Dennis Higgs, President and Director of the Company, resigned as non-executive chairman and director of NGE; and

* On October 1, 2022, Grant Bond was appointed the Company's CFO. He is also the CFO of P2 Gold and Dynavat Gold Mining Technologies Inc.

**CHANGES IN ACCOUNTING POLICIES**

Our significant accounting policies are presented in Note 3 to the audited consolidated financial statements for the years ended December 31, 2022 and 2021. Changes in accounting policies include the change in the Company's approach to foreign currency translation.

*Functional currency*

Items included in the financial statements of each consolidated entity are measured using the currency of the primary economic environment in which the entity operates (the "functional currency").

For the parent entity, with the completion of the IPO on the NYSE American stock exchange, future equity financings are expected to generate proceeds denominated in USD. In addition, E&E expenditures and administrative costs incurred to conduct business activities are primarily denominated in USD. As a result of these changes in underlying transactions, events and circumstances, the functional currency of the parent entity was reassessed. The functional currency of the parent entity changed from CAD to USD commencing on December 31, 2022. The change in functional currency was accounted for on a prospective basis, with no impact of this change on prior year comparative information. The functional currency of the Company's subsidiary remains the USD.

*Presentation currency*

On December 31, 2022, the Company elected to change its presentation currency from CAD to USD. The change in presentation currency is to better reflect the Company's business activities and to improve investors' ability to compare the Company's financial results with other USA listed businesses in the mining industry. The Company applied the change to USD presentation currency retrospectively and restated the comparative financial information as if the new presentation currency had always been the Company's presentation currency.

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![](exhibit99-2xu001.jpg)

From December 31, 2022, the USD presentation currency is consistent with the functional currency of the Company. For periods prior to December 31, 2022, the statements of financial position for each period presented have been translated from the CAD functional currency to the USD presentation currency at the rate of exchange prevailing at the respective financial position date with the exception of equity items which have been translated at accumulated historical rates from the Company's date of incorporation in 2020. The statements of loss and comprehensive loss were translated at the average exchange rates for the reporting period, or at the exchange rate prevailing at the date of transactions. Exchange differences arising on translation from the CAD functional currency to the USD presentation currency prior to the change in functional currency to USD, have been recognized in other comprehensive income (loss) and accumulated as a separate component of equity.

**NEW ACCOUNTING POLICIES**

There were no new accounting policies adopted during the year ended December 31, 2022.

**NEW ACCOUNTING STANDARDS AND RECENT PRONOUNCEMENTS**

The following standards, amendments and interpretations have been issued but are not yet effective:

* In January 2020, the IASB issued amendments to International Accounting Standard ("IAS") 1, Presentation of Financial Statements to clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if a company has a substantive right to defer settlement for at least twelve months at the end of the reporting period. The amendments are effective January 1, 2023 with early adoption permitted. Retrospective application is required on adoption. This amendment is not expected to have a material impact on the Company.

There are no other IFRS standards or International Financial Reporting Interpretations Committee interpretations that are not yet effective or early adopted that are expected to have any impact on the Company.

**SIGNFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS**

The preparation of financial statements requires the use of accounting estimates. It also requires management to exercise judgment in the process of applying its accounting policies. Estimates and policy judgments are regularly evaluated and are based on management's experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

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![](exhibit99-2xu001.jpg)

Significant accounting policy judgments include:

* The determination of functional currency requires judgment where the operations of the Company are changing or currency indicators are mixed. Additionally, the timing of a change in functional currency is a judgment as the balance of currency indicators may change over time. For the impact on the consolidated results from the change in functional currency, refer to the "*Changes in Accounting Policies*" section of this MD&A.

* The assessment of the Company's ability to continue as a going concern which requires judgment related to future funding available to identify new business opportunities and meet working capital requirements, the outcome of which is uncertain; and

* The application of the Company's accounting policy for impairment of E&E assets which requires judgment to determine whether indicators of impairment exist including factors such as the period for which the Company has the right to explore, expected renewals of exploration rights, whether substantive expenditures on further E&E of resource properties are budgeted and evaluation of the results of E&E activities up to the reporting date. Management assessed impairment indicators for the Company's E&E assets and has concluded that no impairment indicators exist as of December 31, 2022.

Significant sources of material estimation uncertainty include:

* The determination of the fair value of warrants held as marketable securities by the Company;

* The determination of the fair value of underwriter warrants issued by the Company as part of the IPO; and

* The determination of the fair value of the share options and warrants issued by the Company.

**FINANCIAL INSTRUMENT RISK**

The Company's financial instruments consist of cash and cash equivalents, short-term investments, marketable securities, and accounts payable and accrued liabilities.

The Company has exposure to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk from its use of financial instruments.

**(a) Market risk**

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company's cash flows or value of its financial instruments.

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![](exhibit99-2xu001.jpg)

*(i) Currency risk*

The Company is subject to currency risk on financial instruments that are denominated in currencies that are not the same as the functional currency of the entity that holds them. Exchange gains and losses would impact the statement of loss and comprehensive loss. The Company does not use any hedging instruments to reduce exposure to fluctuations in foreign currency rates.

The Company is exposed to currency risk through cash and cash equivalents, receivables and other, marketable securities and accounts payable and accrued liabilities held in the parent entity which are denominated in CAD.

*(ii) Interest rate risk*

The Company is subject to interest rate risk with respect to its investments in cash and cash equivalents and short-term investments. The Company's current policy is to invest cash at variable and fixed rates of interest with cash reserves to be maintained in cash and cash equivalents in order to maintain liquidity. Fluctuations in interest rates when cash and cash equivalents and short-term investments mature impact interest and finance income earned.

**(b) Credit risk**

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its financial assets including cash and cash equivalents and short-term investments.

The Company mitigates its exposure to credit risk on financial assets through investing its cash and cash equivalents and short-term investments with high-credit quality financial institutions. Management believes there is a nominal expected credit loss associated with its financial assets.

**(c) Liquidity risk**

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities.

The Company has issued surety bonds to support future decommissioning and restoration provisions.

Contractual undiscounted cash flow requirements for contractual obligations as at December 31, 2022 are as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Carrying <br>amount | Contractual <br>cash flows | Due within <br>1 year |  | Due within <br>3 years |
| Accounts payable and accrued liabilities | $97825 | $97825 | $97825 | $– $|  |
|  | $97825 | $97825 | $97825 | $– $|  |

---

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![](exhibit99-2xu001.jpg)

**(d) Fair value estimation**

The Company's financial assets and liabilities are initially measured and recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

The three levels of fair value hierarchy are as follows:

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| | |
|:---|:---|
| Level 1: | Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. |
| Level 2: | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). |
| Level 3: | Inputs for the asset or liability that are not based on observable market data. |

---

The Company's financial instruments consisting of cash and cash equivalents, short-term investments and accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of these financial instruments.

Marketable securities are fair valued at each reporting period using NGE's share price on the TSX Venture Exchange and assumptions used in the Black-Scholes pricing model.

The following tables present the Company's financial assets and liabilities by level within the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2022** | **Carrying value** | **Carrying value** | **Fair value** | **Fair value** | **Fair value** |
|  | FVTPL | Amortized <br>cost | Level 1 | Level 2 | Level 3 |
| **Financial assets** |  |  |  |  |  |
| Cash and cash equivalents | $- | $630623 | $- | $- | $- |
| Short-term investments |  | 11649079 |  |  |  |
| Marketable securities | 16473 |  | 16472 |  | 1 |
|  | $16473 | $12279702 | $16472 | $- | $1 |

---

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2021** | **Carrying value** | **Carrying value** | **Fair value** | **Fair value** | **Fair value** |
|  | FVTPL | Amortized <br>cost | Level 1 | Level 2 | Level 3 |
| **Financial assets** |  |  |  |  |  |
| Cash and cash equivalents | $- | $1094550 | $- | $- | $- |
| Marketable securities | 196847 |  | 193572 |  | 3275 |
|  | $196847 | $1094550 | $193572 | $- | $3275 |

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![](exhibit99-2xu001.jpg)

**INTERNAL CONTROL OVER FINANCIAL REPORTING AND DISCLOSURE CONTROLS AND PROCEDURES**

Management, with the participation of the President and the CFO, is responsible for establishing and maintaining adequate internal control over financial reporting as that term is defined in National Instrument 52-109 - *Certification of Disclosure in Issuers' Annual and Interim Filings* ("ICFR"). The Company's ICFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Any system of ICFR, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance with respect to financial statement preparation and presentation.

Upon completion of the Company's IPO, management, with the participation of the President and the CFO, assessed the effectiveness of the Company's ICFR as at December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (COSO 2013). Based upon the results of that assessment as at December 31, 2022, management concluded that the Company's ICFR is effective and that there were no material weaknesses relating to the design and operation of the ICFR.

There have been no significant changes in our internal controls during the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Disclosure controls and procedures**

Management, with the participation of the President and the CFO, is responsible for establishing and maintaining the Company's disclosure controls and procedures as that term is defined in National Instrument 52-109 - *Certification of Disclosure in Issuers' Annual and Interim Filings* ("DC&P") and have assessed the effectiveness of such DC&Ps as of December 31, 2022. Based upon the results of that evaluation, the President and the CFO concluded that: (a) the Company's DC&Ps were effective: (i) in providing reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in the securities legislation; (ii) in ensuring that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted under securities legislation is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure; and (iii) that there were no material weaknesses relating to the design and operation of the DC&Ps.

**RISK FACTORS**

In addition to the risks described herein, reference is made to the risks and uncertainties set forth under the section entitled "Risk Factors" in the Prospectus filed under the Company's profile in Canada on the SEDAR website at <u>www.sedar.com</u> and in the USA, on the EDGAR section of the SEC website at <u>www.sec.gov</u>, which risks and uncertainties are incorporated herein by reference. The risks described therein and herein are not the only risks faced by the Company and security holders of the Company. Additional risks and uncertainties not currently known to the Company, or that the Company currently deems immaterial, may also materially and adversely affect its business. The business and financial condition of the Company could be materially adversely affected by any of the risks set forth in this MD&A, in the Prospectus, or such other risks. The trading price of the common shares of the Company could decline due to any of these risks and investors could lose all or part of their investment. This MD&A contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by the Company described in this MD&A. No inference should be drawn, nor should an investor place undue importance on, the risk factors that are included in this MD&A as compared to those included in the Prospectus, as all risk factors are important and should be carefully considered by a potential investor.

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![](exhibit99-2xu001.jpg)

**CAUTION REGARDING FORWARD-LOOKING STATEMENTS**

Certain statements in this MD&A are forward-looking statements or information (collectively "forward-looking statements"). Forward-looking statements may include, but are not limited to, statements with respect to the future financial or operating performance of the Company and its subsidiary and its mineral projects, the future price of metals, test work and confirming results from work performed to date, the estimation of mineral resources and mineral reserves, the realization of mineral resource and mineral reserve estimates, the timing and amount of estimated future capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, and limitations of insurance coverage. The Company is hereby providing cautionary statements identifying important factors that could cause the actual results of the Company to differ materially from those projected in the forward-looking statements. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "may", "is expected to", "anticipates", "estimates", "intends", "plans", "projection", "could", "vision", "goals", "objective" and "outlook") are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

By their nature, forward-looking statements involve numerous assumptions, inherent risks, and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes may not occur or may be delayed. The risks, uncertainties, and other factors, many of which are beyond the control of the Company, that could influence actual results include, but are not limited to:

* continued trading of the Company's common shares on the NYSE American;

* our ability to successfully execute our overall strategy and goals;

* execution of our exploration and development plans for our mineral projects;

* our ability to carry out our current planned exploration programs and development plans with our current financial resources;

* we have a limited operating history and negative operating cash flows;

* the market price for gold and other minerals may not be sufficiently high to ensure that our planned exploration expenditures will be funded;

* we may not be able to demonstrate that any of our mineral projects warrant commercial development;

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![](exhibit99-2xu001.jpg)

* we may not be able to access sufficient capital to carry out our business plans, exploration and development plans;

* our exploration and development costs may be higher than anticipated;

* our ability to obtain and comply with all required permits, licenses and regulatory requirements in carrying out our exploration and development plans;

* even if we are successful in demonstrating reserves on any of our properties, our mining projects may not achieve projected rates of production, cash flows, internal rates of return, payback periods or net present values;

* there may be lack of adequate infrastructure to support our mineral projects;

* employee recruitment and retention;

* the risk that title to our material properties may be impugned;

* environmental risks, including risks associated with compliance with environmental laws and the completion of any required environmental impact assessments or reclamation obligations;

* economic uncertainties, including changes and volatility in global capital, currency and commodity markets which may impact our ability to raise capital to execute our business, exploration and development plans and the demand for our planned mineral projects;

* the novel coronavirus ("COVID-19") pandemic;

* the effects of commodity price fluctuations as a result of the Russian-Ukraine conflict;

* competition from other mineral exploration and mining businesses;

* we have not demonstrated that any of our mineral properties contain mineral resources and, even if demonstrated, there is no assurance that any mineral resource estimates will be accurate as to exploration potential and mineral grades;

* any required change in mineral resource or mineral reserve estimation methodology;

* changes in the assumptions underlying the mineral resource estimates, which may result in a different (smaller) mineral resource estimate and other related matters;

* changes in laws and regulations;

* we may be subject to claims or legal proceedings;

* the possibility of a conflict of interest arising for certain of our directors and officers;

* volatility in the market price of the Common Shares;

* future sales or issuances of equity securities could decrease the value of the Common Shares, dilute shareholders' voting power and reduce future potential earnings per Share;

* we intend to retain earnings, if any, to finance the growth and development of our business and do not intend to pay cash dividends on the Common Shares in the foreseeable future;

* general business, economic, competitive, political and social uncertainties;

* the actual results of current and future exploration activities differing from projected results;

* the inability to meet various expected cost estimates;

* changes or downgrades in project parameters and/or economic assessments as plans continue to be refined;

* fluctuations in the future prices of metals;

* possible variations of mineral grade or recovery rates below those that are expected;

* the risk that actual costs may exceed estimated costs;

* failure of equipment or processes to operate as anticipated;

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![](exhibit99-2xu001.jpg)

* accidents, labor disputes and other risks of the mining industry;

* political instability;

* delays in obtaining governmental approvals or financing or in the completion of development or construction activities; and

* global economic risks, including the occurrence of unforeseen or catastrophic events, such as political unrest, wars, or the emergence of a pandemic or other widespread health emergency, which could create economic and financial disruptions and require us to reduce or cease operations at some or all of our facilities for an indeterminate period of time, and which could have a material impact on our business, operations, personnel, and financial condition.

Such forward-looking information is necessarily based upon a number of factors and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The assumptions underlying the forward-looking information in this MD&A, which may prove to be incorrect, include, but are not limited to, assumptions relating to:

* future business and property integrations remaining successful;

* favorable and stable general macroeconomic conditions;

* securities markets;

* spot and forward prices of gold, silver, base metals and certain other commodities;

* currency markets (such as the CAD to USD exchange rate);

* no materially adverse changes in national and local government, legislation, taxation, controls, regulations and political or economic developments;

* that various risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding) will not materialize;

* the ability to complete planned exploration programs;

* the ability to continue raising the necessary capital to finance operations;

* the ability to obtain adequate insurance to cover risks and hazards on favorable terms;

* that changes to laws and regulations will not impose greater or adverse restrictions on mineral exploration or mining activities;

* the continued stability of employee relations;

* relationships with local communities and indigenous populations;

* that costs associated with mining inputs and labor will not materially increase;

* that mineral exploration and development activities (including obtaining necessary licenses, permits and approvals from government authorities) will be successful;

* no escalation in the severity of the COVID-19 pandemic;

* no disruptions or delays due to a USA government shutdown; and

* the continued validity and ownership of title to properties.

Should one or more of the underlying assumptions prove incorrect, or should the risks and uncertainties materialize, actual results may vary materially from those described in the forward-looking statements.

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![](exhibit99-2xu001.jpg)

Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors and to assess in advance the impact of each such factor on the business of the Company or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

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