More annual reports from Mirasol Resources Ltd.:
2023 ReportMIRASOL RESOURCES LTD. CONSOLIDATED FINANCIAL STATEMENTS For the years ended June 30, 2022 and 2021 (Expressed in Canadian Dollars) INDEPENDENT AUDITOR’S REPORT To the Shareholders of Mirasol Resources Ltd. Opinion We have audited the accompanying consolidated financial statements of Mirasol Resources Ltd. (the “Company”), which comprise the consolidated statements of financial position as at June 30, 2022 and 2021, and the consolidated statements of loss and comprehensive loss, changes in equity, and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”). Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion. Other Information Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. The engagement partner on the audit resulting in this independent auditor’s report is Stephen Hawkshaw. Vancouver, Canada October 27, 2022 Chartered Professional Accountants Mirasol Resources Ltd. Consolidated Statements of Financial Position As of June 30, 2022, and June 30, 2021 (Expressed in Canadian Funds, except where indicated) ASSETS Current Assets Cash and cash equivalents (Note 6) Receivables and advances (Note 7) Current portion of lease receivable (Note 11) Due from JV partner (Note 12m) Marketable securities (Note 8) Non-Current Assets Equipment (Note 9) Right-of-use assets (Note 10) Non-current portion of lease receivable (Note 11) Exploration and evaluation assets (Note 12) Total Assets LIABILITIES Current Liabilities Accounts payable and accrued liabilities (Note 13) Current portion of lease liabilities (Note 11) Long-Term Liabilities Non-current portion of lease liabilities (Note 11) Total Liabilities EQUITY Share Capital (Note 14) Reserves (Note 14) Accumulated Other Comprehensive Loss Deficit $ June 30, 2022 June 30, 2021 5,698,539 $ 112,258 35,684 219,051 726,456 6,791,988 143,059 70,194 49,514 1,419,519 1,682,286 10,023,402 165,755 - 46,090 1,179,087 11,414,334 148,613 206,142 - 1,706,579 2,061,334 $ 8,474,274 $ 13,475,668 $ 475,242 $ 82,140 557,382 115,048 899,176 81,030 980,206 163,642 $ $ 672,430 $ 1,143,848 57,502,177 $ 18,362,103 (24,558) (68,037,878) 57,477,459 17,828,859 (17,633) (62,956,865) 7,801,844 12,331,820 Total Liabilities and Equity $ 8,474,274 $ 13,475,668 Nature of business (Note 1) Commitment (Note 17) Subsequent events (Note 19) On Behalf of the Board: “ Patrick Evans ” “ Nick DeMare ” , , Director Director The accompanying notes are an integral part of these consolidated financial statements Page 5 Mirasol Resources Ltd. Consolidated Statements of Loss and Comprehensive Loss For the Years Ended June 30 (Expressed in Canadian Funds, except where indicated) Income Option income (Notes 12b and 12c) Management fees income (Note 12g) Expenses Exploration expenditures (Notes 12 and 13) Business development (Note 13b ii) Marketing and investor communications Management fees (Note 13a) Office and miscellaneous Share-based payments (Note 13 ii,14c ii,14d) Professional fees (Note 13b) Director fees (Note 13a) Travel Transfer agent and filing fees Depreciation (Notes 9 and 10) 2022 2021 $ 343,397 $ 153,300 496,697 750,719 162,198 912,917 3,738,706 141,167 91,886 441,497 186,602 578,477 149,246 95,550 40,668 26,041 96,752 (5,586,592) 4,848,726 181,611 94,423 613,329 202,148 (25,968) 137,473 83,815 172 31,988 106,237 (6,273,954) Loss before other items (5,089,895) (5,361,037) Interest income Interest expense (Note 11) Foreign exchange gain (loss) Gain on sale of subsidiaries (Note 18) Unrealized loss on marketable securities fair value (Note 8) Other income (expense) 523,497 (33,546) 249,022 - (739,691) 9,600 614,748 (39,629) (1,075,835) 66,031 (149,586) (17,276) 8,882 (601,547) Loss for the Year $ (5,081,013) $ (5,962,584) Other Comprehensive Loss Items that will not be reclassified to profit and loss: Exchange differences on translation of foreign operations (6,925) 17,127 Loss and Comprehensive Loss for the Year Loss per Share (Basic and Diluted) $ $ (5,087,938) $ (5,945,457) (0.09) $ (0.11) Weighted Average Number of Shares Outstanding (Basic and Diluted) 53,959,279 54,107,286 The accompanying notes are an integral part of these consolidated financial statements Page 6 Mirasol Resources Ltd. Consolidated Statement of Changes in Equity For the Years Ended June 30 (Expressed in Canadian Funds, except where indicated) Share Capital Number of Common Shares Common Shares Amount Balance – June 30, 2020 Treasury shares cancelled (Note 14) Share issue costs (Note 14) Share-based payments (Note 14) Foreign currency translation adjustment Loss for the year 54,148,878 (280,500) - 26,665 - - $57,767,690 (298,910) (1,454) 10,133 - - Accumulated Other Comprehensive Loss $(34,760) - - - 17,127 - Reserves $17,690,529 174,431 - (36,101) - - Deficit $(56,994,281) - - - - (5,962,584) Total Equity $18,429,178 (124,479) (1,454) (25,968) 17,127 (5,962,584) Balance – June 30, 2021 53,895,043 $57,477,459 $17,828,859 $(17,633) $(62,956,865) $12,331,820 Treasury shares cancelled (Note 14) Share issue costs (Note 14) Share-based payments (Note 14) Foreign currency translation adjustment Loss for the year Balance – June 30, 2022 (45,000) - 165,000 - - 54,015,043 (48,002) (705) 73,425 - - $57,502,177 28,192 - 505,052 - - $18,362,103 - - - (6,925) - $(24,558) - - - - (5,081,013) $(68,037,878) (19,810) (705) 578,477 (6,925) (5,081,013) $7,801,844 The accompanying notes are an integral part of these consolidated financial statements Page 7 Mirasol Resources Ltd. Consolidated Statement of Changes in Cash Flows For the Years Ended June 30 (Expressed in Canadian Funds, except where indicated) Operating Activities Loss for the year Adjustments for: Interest income Interest expense Depreciation Gain on sale of subsidiaries Other expense Share-based payments Write off of exploration and evaluation assets Unrealized loss on marketable securities fair value Unrealized foreign exchange Changes in non-cash working capital items: Receivables and advances Accounts payable and accrued liabilities Due from joint venture partner Cash used in operating activities Investing Activities Redemption of short-term investments, net Purchase of exploration and evaluation assets Proceeds from sale of subsidiaries, net of cash disposed Purchase of equipment Interest received Cash provided by investing activities Financing Activity Lease payments Shares repurchase costs Treasury shares repurchased Cash used in financing activities 2022 2021 $ (5,081,013) $ (5,962,584) (526,829) 33,546 96,752 - 5,047 578,477 - 739,691 (344,053) (614,748) 39,629 106,237 (66,031) 17,276 (25,968) 64,398 149,586 773,684 (4,498,382) (5,518,521) 46,646 (423,934) (172,961) (45,604) 376,321 (46,090) (5,048,631) (5,233,894) - - - (45,918) 525,301 479,383 (72,228) (705) (19,810) (92,743) 6,707,866 (100,188) 64,700 (47,070) 703,457 7,328,765 (75,480) (1,454) (124,479) (201,413) Effect of Exchange Rate Change on Cash and Cash Equivalents 337,128 (756,557) Change in Cash and Cash Equivalents Cash and Cash Equivalents - Beginning of Year (4,324,863) 10,023,402 1,136,901 8,886,501 Cash and Cash Equivalents - End of Year $ 5,698,539 $ 10,023,402 Cash and Cash Equivalents Consist of: Cash Cash equivalents Supplemental Schedule of Non-Cash Investing and Financing Transactions: Marketable securities received as recovery of exploration and evaluation assets Recognition of sublease receivable Cash paid during the year for interest Cash paid during the year for income taxes $ $ $ $ 1,154,889 4,543,650 5,698,539 $ $ 2,175,222 7,848,180 10,023,402 287,060 90,668 33,546 - $ $ 673,251 - 39,629 - The accompanying notes are an integral part of these consolidated financial statements Page 8 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 1. Nature of Business Mirasol Resources Ltd. (“Mirasol” or the “Company”) is incorporated under the laws of the Province of British Columbia, Canada. The Company’s corporate registered and records office is located at 700 – 1199 Hastings Street, Vancouver, British Columbia and the head office is located at 1150-355 Burrard Street, Vancouver, British Columbia. Mirasol engages in the acquisition and exploration of mineral properties, principally located in Chile and Argentina, with the objective of identifying mineralized deposits economically worthy of subsequent development, mining or sale. The business of mining and exploration involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The Company has no source of revenue and has significant cash requirements to meet its administrative overhead and maintain its exploration and evaluation assets. The recovery of the Company’s exploration and evaluation assets is dependent on the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of exploration and evaluation assets. While the Company has been successful in the past with its financing efforts, there can be no assurance that it will be able to do so in the future. COVID-19 In March 2020, the World Health organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to economic uncertainty. Since COVID-19 vaccination programs began in early 2021, the Company implemented plans to minimize the risks of the COVID-19 virus, is following government health protocols, and is closely monitoring the pandemic with local health authorities. The Company’s operations have generally returned to normal, however, due to the current development of the new COVID19 variants, it is not possible for the Company to predict the duration or magnitude of the potential adverse results of the outbreak and its effects on the Company’s business, results of operations, or its ability to raise funds. Management estimates that the Company has sufficient working capital to maintain its operations and activities for at least the next twelve months. 2. Basis of Presentation Statement of compliance The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). The policies presented in Note 3 were consistently applied to all years presented. The Board of Directors approved the consolidated financial statements on October 27th, 2022. Basis of measurement These consolidated financial statements have been prepared on a historical cost basis. Financial instruments classified as financial instruments at fair value through profit or loss are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for the cash flow information. Page 9 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 3. Significant Accounting Policies a) Consolidation These consolidated financial statements include the accounts of the Company (the “Parent”) and its subsidiaries. The principal subsidiaries of the Company, their activities, and their geographic locations as of June 30, 2022, were as follows: Subsidiary Principal activity Location Minera Mirasol Chile Limitada Cabo Sur S.A. Australis S.A. Minera Del Sol S.A. Nueva Gran Victoria S.A. Recursos Mirasol Holdings Ltd. MDS Property Holdings Ltd. Mineral exploration Mineral exploration Mineral exploration Mineral exploration Mineral exploration Holding company Holding company Chile Argentina Argentina Argentina Argentina British Virgin Islands British Virgin Islands Proportion of interest held by the Company 100% 100% 100% 100% 100% 100% 100% Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition or control and up to the effective date of disposition or loss of control. Control is achieved when the Company has power over the investee, is exposed to or has rights to variable returns from its involvement with an investee and has the ability to affect those returns through its power over the investee. The transactions among the entities in the consolidated group pertain to the transfer of funds and payment of third-party costs. All inter-group transactions and balances have been eliminated upon consolidation. b) Significant Accounting Estimates and Judgments The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, profit, and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. Significant accounting estimates and judgments are related to, but are not limited to, the following: a) Impairment of exploration and evaluation assets: The capitalized carrying value of each property group is reviewed regularly for conditions that are indicators of impairment. This review requires significant judgment as the Company does not have any proven and probable reserves that enable future cash flows to be compared to the carrying values. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the claims’ value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the claims’ acquisition, or cost of holding; whether exploration activities produced results that are not promising such that no more Page 10 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 3. Significant Accounting Policies (Cont’d…) b) Significant Accounting Estimates and Judgments (Cont’d…) work is being planned in the foreseeable future; and whether the Company has the necessary funds to be able to maintain its interest in the mineral claims. The Company has concluded that impairment conditions do not exist for its exploration and evaluation assets hold as of June 30, 2022. Ownership of exploration and evaluation assets involves certain risks due to the difficulties of determining and obtaining clear title to claims as well as the potential for problems arising from the frequently ambiguous conveyance history characteristics of many exploration and evaluation assets. The Company has investigated ownership of its exploration and evaluation assets, and, to the best of its knowledge, ownership of its interests is in good standing. b) Valuation of share purchase options: The Company provides compensation benefits to its employees, directors and officers through a stock option plan. The fair value of each option award is estimated on the date of the grant using the Black-Scholes option pricing model. Expected volatility assumption used in the model is based on the historical volatility of the Company’s share price. The Company uses historical data to estimate the period of option exercises and their forfeiture rates for use in the valuation model. The risk-free interest rate for the expected term of the option is based on the yields of government bonds. Changes in these assumptions, especially the volatility and the expected life determination could have a material impact on the Company’s profit or loss. All estimates used in the model are based on historical data which may not be representative of future results. c) Income taxes: The Company is subject to income taxes in numerous jurisdictions. Uncertainties exist with respect to interpretations of tax regulations. Judgment is required in determining whether deferred tax assets are recognized on the statement of financial position. The recognition of deferred tax assets requires management to assess the likelihood that the Company will generate taxable income in future periods to utilize the deferred tax assets. Due to a history of losses deferred tax assets have not been recognized. d) Functional currencies: The functional currency of an entity is the currency of the primary economic environment in which an entity operates. The determination of an entity’s functional currency requires judgment based on analysis of relevant factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates (“IAS 21”). Except for the Company’s subsidiaries in the British Virgin Islands (Note 3a), the Company has determined that its subsidiaries in Chile and Argentina incur costs in United States Dollars, Canadian Dollars, as well as the Chilean and Argentine Pesos and therefore do not indicate a single primary currency for operating in these jurisdictions. These subsidiaries are financed entirely by its Canadian Parent and therefore act as its extension. The Company has therefore determined that the functional currency of all of its subsidiaries in Chile and Argentina is the Canadian Dollar, similar to the Parent. Page 11 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 3. Significant Accounting Policies (Cont’d…) c) Foreign Currencies The functional currency of the Company and its operating subsidiaries, Minera Del Sol S.A., Australis S.A., Nueva Gran Victoria S.A., Cabo Sur S.A., and Minera Mirasol Chile Limitada, is the Canadian Dollar (“$”). The functional currency of its holding subsidiaries, Recursos Mirasol Holdings Ltd., and MDS Property Holdings Ltd. is the United States Dollar. Any transactions in currencies other than the functional currency have been translated to the Canadian Dollar in accordance with IAS 21. Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on dates of transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non- monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at rates prevailing at the date when the fair value was determined. All gains and losses on translation of these foreign currency transactions are included in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Assets and liabilities of entities with a functional currency other than the Canadian Dollar are translated at the period end rates of exchange, and the results of their operations are translated at average rates of exchange for the period. The resulting changes are recognized in accumulated other comprehensive income (loss) (“AOCI”) in equity as a foreign currency translation adjustment. The Company’s presentation currency is the Canadian Dollar. d) Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit with banks and short-term redeemable interest-bearing investments with maturities of three months at the purchase date. Deposits with banks and short-term interest- bearing investments with original term to maturity greater than three months but less than one year are presented as short-term investments. e) Financial Instruments Classification Financial assets are classified at initial recognition as either: amortized cost, fair value through profit or loss (“FVTPL”), or fair value through other comprehensive income ("FVTOCI"). The classification depends on the Company’s business model for managing the financial assets and the contractual cash flow characteristics. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. Fair value through profit or loss (“FVTPL”) – Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in profit or loss in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges. Fair value through other comprehensive income (“FVTOCI”) - Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently, they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Financial assets at amortized cost - A financial asset is measured at amortized cost if the objective of the business model is to hold the financial asset for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest. They are classified as current assets or non-current assets based on their maturity date and are initially recognized at fair value and subsequently carried at amortized cost less any impairment. Page 12 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 3. Significant Accounting Policies (Cont’d…) e) Financial Instruments (Cont’d…) Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL or the Company has opted to measure at FVTPL. The Company classifies its financial instruments as follows: Cash and cash equivalents Marketable securities Receivables Accounts payable and accrued liabilities Advances to/from JV partner Measurement FVTPL FVTPL Amortized cost Amortized cost Amortized cost Financial assets and liabilities at FVTPL are initially recognized at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets or liabilities held at FVTPL are included in profit or loss in the period in which they arise. Where the Company has opted to designate a financial liability at FVTPL, any changes associated with the Company's credit risk will be recognized in OCI. Financial assets and liabilities at amortized cost are initially recognized at fair value, and subsequently carried at amortized cost less any impairment. Impairment The Company assesses on a forward-looking basis the expected credit loss ("ECL") associated with financial assets measured at amortized cost, contract assets and debt instruments carried at FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against receivables. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss. f) Impairment of Non-Financial Assets The carrying amounts of non-financial assets are reviewed for impairment 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. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (“cash-generating units” or “CGUs”). The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Page 13 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 3. Significant Accounting Policies (Cont’d…) f) Impairment of Non-Financial Assets (Cont’d…) Non-financial 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 in profit or loss in the period of such reversal. g) Equipment Equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. The Company provides for depreciation as follows: • Exploration equipment: 30% declining balance; and • Computer hardware: 30% declining balance. The Company allocates the amount initially recognized to each asset’s significant components and depreciates each component separately. Residual values, depreciation methods and useful lives of the assets are reviewed periodically and adjusted on a prospective basis as required. h) Exploration and Evaluation Assets The Company capitalizes the direct costs of acquiring mineral property interests as exploration and evaluation assets. Option payments are considered acquisition costs if the Company has the intention of exercising the underlying option. Exploration and evaluation costs are charged to operations in the period incurred until such time as it has been determined that a property has economically recoverable reserves, and is technically feasible, in which case the balance is tested for impairment and subsequent development costs are capitalized. Exploration costs include value-added taxes because the recoverability of these amounts is uncertain. The receipt of option payments from the Company’s joint venture partners are applied first towards the capitalized cost for the acquisition of pertinent mineral property interests. Option payments in excess of the capitalized acquisition costs are netted against the exploration costs for the period. JV management fees are included in exploration expenditures on the statement of loss and comprehensive loss. i) Lease liability At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company assesses whether the contract involves the use of an identified asset, whether the right to obtain substantially all of the economic benefits from use of the asset during the term of the arrangement exists, and if the Company has the right to direct the use of the asset. At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative standalone prices. As a lessee, the Company recognizes a right-of-use asset and a lease liability at the commencement date of a lease. The right-of-use asset is initially measured at cost, which is comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any decommissioning and restoration costs, less any lease incentives received. The right-of-use asset is subsequently depreciated from the commencement date to the earlier of the end of the lease term, or the end of the useful life of the asset. In addition, the right-of-use asset may be reduced due to impairment losses, if any, and adjusted for certain remeasurements of the lease liability. Page 14 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 3. Significant Accounting Policies (Cont’d…) i) Lease liability (Cont’d…) A lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by the interest rate implicit in the lease, or if that rate cannot be readily determined, the incremental borrowing rate. Lease payments included in the measurement of the lease liability are comprised of: fixed payments, including in-substance fixed payments, less any lease incentives receivable; a) b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; c) amounts expected to be payable under a residual value guarantee; d) exercise prices of purchase options if the Company is reasonably certain to exercise that option; and e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, or if there is a change in the estimate or assessment of the expected amount payable under a residual value guarantee, purchase, extension or termination option. Variable lease payments not included in the initial measurement of the lease liability are charged directly to profit or loss. j) Lease receivable At the commencement of a lease, the Company, if acting in capacity as a lessor, will classify the lease as a finance lease and recognize a lease receivable at an amount equal to the net investment in the lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset or if the lease is a sublease, by reference to the ROU asset arising from the original lease (the “head lease”). A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset or the lease is a short-term lease. Cash received from an operating lease is included in other income in the Company’s consolidated statement of profit and loss on a straight-line basis over the period the lease. The lease receivable is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease receivables arising from a change in an index or rate, or if there is a change in the estimate or assessment of the expected amount receivable under a residual value guarantee, purchase, extension or termination option. Variable lease receivables not included in the initial measurement of the lease receivable are charged directly to profit or loss. k) Provisions (i) Decommissioning and restoration provision: Future obligations to retire an asset, including dismantling, remediation and ongoing treatment and monitoring of the site related to normal operations are initially recognized and recorded as a liability based on estimated future cash flows discounted at a risk free rate. The decommissioning and restoration provision is adjusted at each reporting period for changes to factors including the expected amount of cash flows required to discharge the liability, the timing of such cash flows and the pre-tax rate for risk specific to the liability. The liability is also accreted to full value over time through periodic charges to profit or loss. This unwinding of the discount is charged to financing expense in profit or loss. The amount of the decommissioning and restoration provision initially recognized is capitalized as part of the related asset’s carrying value and depreciated to profit or loss. The method of depreciation follows that of the underlying asset. The costs related to a decommissioning and restoration provision are only capitalized to the extent that the amount meets the definition of an asset and can bring about future economic benefit. Page 15 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 3. Significant Accounting Policies (Cont’d…) k) Provisions (Cont’d…) For the years presented, the Company does not have any decommissioning or restoration provisions. (ii) Other provisions: Provisions are recognized when a current legal or constructive obligation exists, as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation. Where the effect is material, the provision is discounted using an appropriate pre-tax rate for risk specific to the liability. l) Income Taxes Income tax expense (recovery) is comprised of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case the income tax is also recognized directly in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years. In general, deferred tax is recognized in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the date of statement of financial position and are expected to apply when the deferred tax asset or liability is settled. Deferred tax assets are recognized to the extent that it is probable that the assets can be recovered. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except, in the case of subsidiaries, where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities are presented as non-current. 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. m) Share-based Payments The Company grants share options to buy common shares of the Company to directors, officers, employees, and service providers. The Company recognizes share-based payment expense based on the estimated fair value of the options. A fair value measurement is made for each vesting instalment within each option grant and is determined using the Black-Scholes option-pricing model. The fair value of the options is recognized over the vesting period of the options granted as both share-based payment expense and reserves. This includes a forfeiture estimate, which is revised for actual forfeitures in subsequent periods. The reserves account is subsequently reduced if the options are exercised, and the amount initially recorded is then credited to share capital. In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the equity instruments issued. Otherwise, such share-based payments are measured at the fair value of goods or services received. Page 16 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 3. Significant Accounting Policies (Cont’d…) m) Share-based Payments (Cont’d…) The Company grants to employees, officers, directors and consultants, Restricted Share Units (“RSUs”) in such numbers and for such terms as may be determined by the Board. RSUs granted under the RSU Plan are exercisable into common shares for no additional consideration after the vesting conditions, as specified by the Board, are met. The Company intends to settle each RSU with one common share of the Company and therefore RSUs are accounted for as equity-settled instruments. RSUs are measured at fair value on the date of grant and the corresponding share-based compensation is recognized over the vesting period in profit or loss. n) Loss per Share Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding during the year. The computation of diluted loss per share assumes the conversion, exercise, or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on the loss per share. The dilutive effect of convertible securities is reflected in the diluted loss per share by application of the "if converted" method. For the year presented, this calculation proved to be anti-dilutive. o) Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss) and represents the change in equity which results from transactions and events from sources other than the Company’s shareholders. The Company’s translation of its subsidiaries which have a functional currency other than the Canadian Dollar is the only item affecting comprehensive income (loss) for the years presented. p) Share Capital Common shares of the Company are classified as equity. Transactions costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effect. The Company uses the residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. The fair value of the common shares issued in the private placements was determined to be the more easily measurable component and were valued at their fair value, as determined by the quoted bid price on the issuance date. The balance, if material, was allocated to the attached warrants. Any fair value attributed to the warrants on exercise is recorded as equity. If the warrants are exercised the related reserves are reclassified from reserves to share capital. Page 17 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 4. Recent Accounting Pronouncements and Adoptions New accounting standards issued but not yet in effect Classification of liabilities as current or non-current (Amendments to IAS 1) The IASB has published Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) which clarified the guidance on whether a liability should be classified as either current or non-current. The amendments: (i) Clarify that the classification of liabilities as current or non-current should only be based on rights that are in place “at the end of the reporting period”; (ii) Clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and (iii) Make clear that settlement includes transfers to the counterparty of cash, equity instruments, other assets or services that result in extinguishment of the liability. This amendment is effective for annual periods beginning on or after January 1, 2023. Earlier application is permitted. The extent of the impact of adoption of this amendment has not yet been determined. Insurance contracts IFRS 17 IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a more uniform measurement and presentation approach for all insurance contracts. These requirements are designed to achieve the goal of a consistent, principle-based accounting for insurance contracts. IFRS 17 supersedes IFRS 4 and applies to annual reporting periods beginning on or after 1 January 2023. The extent of the impact of adoption of this amendment has not yet been determined. 5. Financial Instruments Categories of financial instruments Financial assets Fair Value Through Profit or Loss Cash and cash equivalents Marketable securities Amortized Cost Receivables and advances Due from JV Partner Financial liabilities Amortized Cost Accounts payable and accrued liabilities a) Fair Value June 30, 2022 June 30, 2021 $ 5,698,539 $ 726,456 10,023,402 1,179,087 112,258 219,051 165,755 46,090 $ 6,756,304 $ 11,414,334 $ 475,242 475,242 $ 899,176 899,176 Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are: Page 18 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 5. Financial Instruments (Cont’d…) a) Fair Value (Cont’d…) Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities; Level 2 – Inputs other than quoted prices that are directly or indirectly observable for the asset or liability; and, Level 3 – Inputs that are not based on observable market data; Level 1 Cash and cash equivalents Marketable securities June 30, 2022 June 30, 2021 $ $ 5,698,539 $ 726,456 $ 10,023,402 1,179,087 The fair values of the Company’s other financial instruments approximate their carrying values because of the short-term nature of these instruments. b) Management of Capital Risk The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern to pursue the development of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes the components of equity. The Company manages the capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, acquire or dispose of assets, enter into joint ventures or obtain debt financing. In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. To maximize ongoing exploration, the Company does not pay out dividends. The Company’s investment policy is to invest its cash in highly liquid short-term redeemable interest-bearing investments with maturities of twelve months or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations. The Company is not subject to externally imposed capital requirements. There were no changes to the Company’s approach to capital management during the year. c) Management of Financial Risk The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company's financial instruments are summarized below. (i) Currency risk The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company operates in Canada, Argentina and Chile and a portion of its expenses are incurred in United States (“US”) dollars, Australian dollars and in Argentine and Chilean Pesos. A significant change in the currency exchange rates between the US and Australian dollar relative to the Canadian dollar and the Argentine and Chilean Peso to the Canadian dollar could have an effect on the Company’s results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations. At June 30, 2022, the Company is exposed to currency risk through the following assets and liabilities denominated in US and Australian dollars, and Argentine and Chilean Pesos: Page 19 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 5. Financial Instruments (Cont’d…) c) Management of Financial Risk (Cont’d…) Cash and cash equivalents Receivables and advances Accounts payable and accrued liabilities US Dollars 3,077,951 118,862 (41,165) Australian Dollars 569,069 - (4,356) Argentine Peso 3,931,165 1,558,834 (21,788,585) Chilean Peso 71,483,741 14,939,367 (41,885,835) Based on the net exposures as at June 30, 2022, and assuming that all other variables remain constant, a 10% depreciation or appreciation of the Canadian dollar against the US and Australian dollar would result in an increase/decrease of $406,637 and $50,214, respectively in the Company’s comprehensive loss. Likewise, a 10% depreciation or appreciation of the Canadian dollar against the Argentine and Chilean Peso would result in an increase/decrease of $(16,788) and $6,235, respectively in the Company’s comprehensive loss. (ii) Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s cash and cash equivalents are held through large financial institutions. The Company’s receivables primarily consist of interest receivable due from major financial institutions on short term investments. Management believes that credit risk concentration with respect to receivables is remote. (iii) 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 through the management of its capital structure and financial leverage as outlined above. As at June 30, 2022, the Company’s financial liabilities consist of accounts payable and accrued liabilities. All of the Company’s current obligations are expected to be paid within one year. Management believes the Company has sufficient funds to meet its liabilities as they become due. (iv) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the Company’s cash and cash equivalents is limited because these investments are generally held to maturity. The applicable rates of interest on such investments range between 0.12% and 1.50%. (v) Price risk Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk, foreign currency risk and equity price risk. As at June 30, 2022, with other variables unchanged, a 10% decrease in the market value of the Company’s marketable securities would result in an increase of the Company’s loss and comprehensive loss of $72,646. Page 20 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 6. Cash and Cash Equivalents Cash and cash equivalents comprise of cash and short-term redeemable Guaranteed Investment Certificates (“GIC”) placed with major Canadian financial institutions. Maturity dates of these GIC’s are within one year. 7. Receivables and Advances Goods and services tax receivable Interest receivable Prepaid expenses and advances 8. Marketable Securities Common shares: Balance June 30, 2020 Additions Balance June 30, 2021 Additions Balance June 30, 2022 Fair value change: At June 30, 2020 Additions Fair value change At June 30, 2021 Additions Fair value change At June 30, 2022 June 30, 2022 6,094 2,599 103,565 $ 112,258 $ June 30, 2021 5,695 6,347 153,713 165,755 $ $ 3,745,269 2,805,212 6,550,481 3,827,462 10,377,943 $ 655,422 673,251 (149,586) 1,179,087 287,060 (739,691) $ 726,456 The Company holds 10,377,943 common shares (June 30, 2021 – 6,550,481) of Silver Sands Resources Corp. (“Silver Sands”) (Note 12g) that were received as partial consideration on an option agreement. During the year ended June 30, 2022, the Company received 3,827,462 common shares (2021- 2,805,212) with a fair value of $0.075 (2021 - $0.24) per common share. The fair value of the common shares received of $287,060 (2021 - $673,251) was recorded as a recovery against the acquisition cost of the property. As at June 30, 2022, the market price of the shares was $0.07 per share (June 30, 2021 - $0.18). Accordingly, the Company recorded an unrealized fair value loss of $739,691 (2021 - $149,586) in the consolidated statement of loss and comprehensive loss. Page 21 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 9. Equipment Cost Balance as at June 30, 2020 Additions for the year Balance as at June 30, 2021 Additions for the year Balance as at June 30, 2022 Accumulated Depreciation Balance as at June 30, 2020 Depreciation for the year Balance as at June 30, 2021 Depreciation for the year Balance as at June 30, 2022 Carrying Amounts As at June 30, 2021 As at June 30, 2022 10. Right-of-Use of Assets Right of Use Assets Cost: At June 30, 2020, and 2021 Sublease deduction (note 11) At June 30, 2022 Depreciation: At June 30, 2020 Charge for the year At June 30, 2021 Charge for the year At June 30, 2022 Net Book Value: At June 30, 2021 At June 30, 2022 Exploration Equipment Computer Hardware Total $ $ $ $ $ $ $ $ 643,398 $ 47,414 690,812 $ 45,918 736,730 $ 508,083 $ 48,190 556,273 $ 47,250 603,523 $ 93,079 $ (344) 92,735 $ - 92,735 $ 73,246 $ 5,415 78,661 $ 4,222 82,883 $ 736,477 47,070 783,547 45,918 829,465 581,329 53,605 634,934 51,472 686,406 134,539 $ 133,207 $ 14,074 $ 9,852 $ 148,613 143,059 $ 311,407 (90,668) $ 220,739 $ 52,633 52,632 105,265 45,280 $ 150,545 $ 206,142 $ 70,194 Depreciation of right-of-use assets is calculated using the straight-line method over the remaining lease term. Page 22 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 11. Lease Liabilities and lease receivable Lease Liabilities Beginning balance Lease payments made Interest expense Less: current portion Non-current portion June 30, 2022 244,672 (81,030) 33,546 $ June 30, 2021 280,523 (75,480) 39,629 197,188 $ 244,672 (82,140) (81,030) 115,048 $ 163,642 $ $ $ The following are the minimum lease payments for the next four years: Period In 1 year Second year Third year Fourth year Lease receivable Beginning balance Additions (note 10) Lease payments made Interest income Less: current portion Non-current portion Amount Payable $82,140 $87,690 $74,000 - June 30, 2022 - 90,668 (8,802) 3,332 $ June 30, 2021 - - - - 85,198 $ (35,684) 49,514 $ - - - $ $ $ The following are the minimum lease receivable for the next four years: Period In 1 year Second year Third year Fourth year Amount Receivable $35,684 $38,064 $31,720 - Page 23 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 12. Exploration and Evaluation Assets The Company owns 100% of the mineral exploration rights to a large portfolio of properties focused in two mining regions, namely the Atacama region in northern Chile and the Santa Cruz Province in southern Argentina. As well, the Company holds several other properties in the San Juan and Catamarca provinces of northern Argentina. The Company also focuses on generative exploration to identify and acquire new prospects. A reconciliation of capitalized acquisition costs is as follows: 171,777 - 1,024,549 203,027 20,166 1,419,519 Acquisition Costs Chile Gorbea belt Zeus Argentina Balance at June 30, 2021 Cost Write-offs and Recoveries Balance at June 30, 2022 $ 171,777 $ - - $ - - - $ Santa Rita and Virginia Sascha-Marcelina Pipeline projects 1,311,609 203,027 20,166 - - - (287,060) - - $ 1,706,579 $ - $ (287,060) $ Balance at June 30, 2020 Cost Recoveries Balance at June 30, 2021 Chile Gorbea belt Zeus Argentina $ 171,777 $ 64,398 - $ - - (64,398) $ Santa Rita and Virginia Sascha-Marcelina Pipeline projects 1,984,860 102,839 20,166 - 100,188 - (673,251) - - $ 2,344,040 $ 100,188 $ (737,649) $ 171,777 - 1,311,609 203,027 20,166 1,706,579 Chile a) Gorbea option to joint venture The Company owns a 100% interest in certain mineral claims located in northern Chile and referred to as the Gorbea Gold Project (“Gorbea”). On January 28, 2019, the Company signed an agreement with NCM, whereby NCM has been granted the option to acquire up to a 75% interest in Gorbea, exercisable in stages over a nine-year, or shorter, earn-in period. The agreement requires NCM to fund US$4 million in exploration expenditures and make a US$100,000 option payment (received) in the first 18 months of the option. NCM will be the operator of the exploration program and will receive a 5% management fee. In December 2020, the Company and NCM agreed to amend the agreement allowing NCM to exercise its option to enter the farm-in phase of the Agreement by making a US$500,000 payment to Mirasol (received and recorded as option income in the Company’s consolidated statements of loss and comprehensive loss). In August 2022, NCM terminated the option agreement. Page 24 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 12. Exploration and Evaluation Assets (Cont’d…) b) Coronación option to joint venture: On September 24, 2019, the Company entered into a definitive agreement with First Quantum Minerals (“FQM”) for the Company’s Coronación Copper/Gold Project in northern Chile. On February 8, 2022, the Company and FQM amended the agreement, and granted to FQM the option to earn-in 80% of the project over 7 years by: • Making annual cash payments totaling US$875,000: o On signing of definitive agreement: US$50,000 (received) o 1st anniversary: US$50,000 (received) o 2nd anniversary: US$75,000 (received) o 4th anniversary: US$100,000 o 5th anniversary: US$150,000 o 6th anniversary: US$200,000 o 7th anniversary: US$250,000 o Completing at least 10,000 m of drilling; and o Delivering a NI 43-101 compliant Prefeasibility Study Report. During the year ended June 30, 2022, the Company recorded US$75,000 (2021 – US$50,000) as option income in the Company’s consolidated statement of loss and comprehensive loss. As part of the agreement, FQM is committed to completing 3,000 m of drilling and a systematic geophysical program on the project before April 30, 2023. Following this period, FQM is required to spend a minimum of US$500,000 per year over the term of the agreement. FQM is the operator during the option period. Following the completion of the 80% earn-in, FQM will have a one-time option to acquire the remaining 20% on terms to be negotiated between the parties. If this option is not exercised, the parties will form a participating joint venture to further fund the development of the project. c) Nord Property option to joint venture: On September 4, 2020, the Company signed a definitive agreement with Mineria Activa (“Mineria”) for the Company’s 100% owned Nord project in northern Chile. The Company granted to Mineria the option to earn-in 100% of the project over four years by: • Making annual cash payments totaling US$3,000,000: o On signing of definitive agreement: US$50,000 (received) o 1st anniversary: US$200,000 (received) o 2nd anniversary: US$400,000 o 3rd anniversary: US$600,000 o 4th anniversary: US$1,750,000 • Committing to complete at least US$500,000 of exploration expenditures over the first two years of the option period. During the year ended June 30, 2022, the Company recorded US$200,000 (2021 – 50,000) as option income in the Company’s consolidated statement of loss and comprehensive loss. In August 2022, Mineria terminated the option agreement. Page 25 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 12. Exploration and Evaluation Assets (Cont’d…) d) Inca Property option to purchase: On January 7, 2020, the Company signed an option agreement with subsidiaries of Newmont Corporation (“NEM”) to acquire the Inca Gold Project in northern Chile. The Company was granted the option to earn-in 100% of the project, subject to a 1.5% NSR royalty, by drilling 1,000 m on the project over two years and incurring US$3 million in exploration expenditures over five years. The Company can terminate the agreement at any time after the completion of the initial 1,000 m drilling commitment. Upon completion of this option, NEM will have the right to earn back 70% of the project, in two stages, by: • Stage 1: o Making a cash payment of US$3 million to the Company; and o Funding US$6 million in exploration expenditures over three years. If NEM completes Stage 1 but not Stage 2, the Company will retain 100% of the project and NEM will be granted an additional 0.5% NSR royalty which may be bought back by the Company at fair market value. • Stage 2: o Delivering a NI 43-101 compliant Prefeasibility Study reflecting a resource of no less than 2 million ounces of gold-equivalent using agreed upon cut-off grades; or Incurring an additional US$15 million in exploration expenditures over three years. o If NEM completes Stage 2, the Company and NEM will hold 30% and 70%, respectively, in a joint venture company holding the project. The Company will then have the option to either fund its 30% interest or reduce it to a 25% interest in exchange for a loan from NEM to fund the project development to commercial production. e) Rubi Property to joint venture: On June 19, 2020, the Company signed an agreement with Mine Discovery Fund Pty Ltd. (“MDF”), a private Australian company, for the Company’s 100% owned Rubi project in northern Chile. Mirasol has granted MDF the option to earn-in 80% of the project over 8 years. MDF must complete 2,000m of drilling on the project over the later of: • 18 months from execution of the agreement; or • 12 months after receipt of necessary drill permits. Following the completion of the initial commitment, MDF is required to spend a minimum of US$1 million per year in exploration expenditures over the term of the agreement. In order to exercise the option, MDF must also deliver a positive NI 43-101 compliant Prefeasibility Study on the project. Mirasol is the operator of the project during the option period. f) Zeus Property The Company owned a 100% interest in certain mineral claims, which now form part of the Zeus Gold Project located in northern Chile. Page 26 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 12. Exploration and Evaluation Assets (Cont’d…) During the year ended June 30, 2018, the Company entered into an option agreement to acquire a 100% interest in certain other claims of the Zeus Gold Project. The Company can acquire the claims under option by making staged option payments totalling US$2.747 million over five years and incur US$300,000 in exploration expenditures within three years. The property owner retains a 1.5% NSR royalty. The Company has a right to buy 0.5% of the royalty for US$3 million. In October 2020, the Company terminated the option agreement, and wrote-off $64,398 in capitalized costs on the project to exploration expenditures in the consolidated statement of loss and comprehensive loss. Argentina g) Sascha-Marcelina option to purchase The Company owns a 100% interest in certain mineral claims, which now form part of the Sascha-Marcelina Gold Project located in Santa Cruz, Argentina. During the year ended June 30, 2019, the Company entered into an option agreement to acquire a 100% interest in certain other claims now included in the Sascha-Marcelina Project. On January 23, 2022, the option agreement was amended. The Company can acquire the claims under option by making staged option payments totalling US$3.75 million over five years. The Company has a minimum US$300,000 exploration spending commitment during the option period. The property owner retains a 1.5% NSR royalty. Option payments are due as follows: On signing (paid) On or before January 23, 2020 (paid) On or before January 23, 2021 (paid) On or before January 23, 2023 On or before January 23, 2024 On or before January 23, 2025 Total US$25,000 US$50,000 US$75,000 US$50,000 US$100,000 US$3,450,000 US$3,750,000 h) Virginia Property option to joint venture: On May 21, 2020, the Company entered into an option agreement with Silver Sands for the Company’s 100% owned Virginia Silver Project in the Santa Cruz Province of Argentina. Under the agreement, Mirasol granted Silver Sands the option to acquire 100% of the project over three years by: • Making share issuances totalling 19.9% of the shares outstanding (the “S/O”) of Silver Sands upon completion of the option: o On signing of the definitive agreement: 9.9% of the S/O (received) (Note 8) o 1st anniversary: 5% of the S/O (received) (Note 8) o 2nd anniversary: 5% of the S/O (received) (Note 8) o 3rd anniversary: top up to 19.9% of the S/O (inclusive of the previous issuances) Page 27 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 12. Exploration and Evaluation Assets (Cont’d…) • Completing, or funding US$6 million in exploration expenditures: o Year 1: US$1 million (received) o Year 2: US$2 million (received) o Year 3: US$3 million • Mirasol is the operator of the project during the option period and will receive a management fee and recognized $153,300 (2021 - $162,198) in management fees during the year ended June 30, 2022. Upon completion of the option, Silver Sands will have earned a 100% interest in the project and Mirasol will retain a 3% NSR royalty, of which 1% can be bought back by Silver Sands for US$2 million. i) Homenaje On April 15, 2021, the Company signed a definitive agreement with Patagonia Gold Corp (“PGC”) for the Company’s Homenaje project in northern Argentina. The Company granted an option to earn 75% of the project over six years once PGC completes: • An initial work program over 2.5 years of US$1.15 million in exploration expenditures, of which US$400,000 must be spent within the first 18 months, including 2,500 m of drilling; • A NI 43-101 compliant Prefeasibility Study by the end of the option period; and • Spending a minimum of US$400,000 annually, or US$200,000 in any six-month period, thereafter. j) Nico On April 15, 2021, the Company signed a definitive agreement with PGC for the Company’s Nico Project in northern Argentina. Under the agreement, Mirasol will transfer its interest in the Nico property to PGC in return for a 1.5% NSR royalty. Mirasol will have the right to regain full ownership of the property at no cost if production on the property has not commenced by the end of year three. k) Libanesa On October 4, 2021, the Company entered into an option agreement with Golden Arrow Resources Corp (“Golden Arrow”) for the Company’s Libanesa project located in the Santa Cruz Province of Argentina. Under the terms of the agreement, Mirasol will grant Golden Arrow an option to earn 75% of the Libanesa project over six years by: • Making annual cash payments totaling US$1,000,000: o US$100,000 to be paid on the 2nd, 3rd, and 4th anniversaries o US$250,000 on the 5th anniversary; and o US$450,000 on the 6th anniversary. • Incurring, or funding exploration expenditures totalling US$4.0 million o USD $500,000 per year during the first 2 years; and o USD $750,000 per year for the following 4 years. In July 2022, Golden Arrow terminated the option agreement. Page 28 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) l) Pipeline Properties: The Company carries out exploration programs on a number of properties which are prospective for precious and base metals in Chile and Argentina. m) Advances to/from joint venture partners: As at June 30, 2022, the Company has a receivable balance of $219,051 (2021 - $46,090) of overspent exploration advances. 13. Related Party Transactions Details of the transactions between the Company’s related parties are disclosed below. a) Compensation of key management personnel Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The remuneration of management and independent directors was as follows: Management compensation (i) Share-based payments (ii) Director’s fees (iii) Year Ended June 30, $ 2022 525,580 392,329 95,550 $ 1,013,459 2021 317,191 (91,051) 83,815 309,955 $ $ i. Management compensation is included in management fees (2022 - $384,443; 2021 - $62,500) and in exploration expenditures (2022 – $141,137; 2021 - $254,691) in the Company’s consolidated statements of loss and comprehensive loss. ii. Share-based payments are included in the share-based payments expense in the Company’s consolidated statements of loss for the years ended June 30, 2022, and 2021. iii. The independent directors of the Company are paid $2,100 per month (2021 - $1,785 per month). b) Transactions with other related parties Certain of the Company’s officers and directors render services to the Company as sole proprietors or through companies in which they are an officer, director, or partner. The following companies are related parties through association of the Company’s directors and officers: Max Pinsky Personal Law Corporation Chase Management Ltd. Manning Lee Management Ltd. Nature of transactions Legal fees Professional fees CFO services Page 29 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 13. Related Party Transactions (Cont’d…) The Company incurred the following fees and expenses with related parties as follows: Legal fees (i) CFO services (ii) Years Ended June 30, 2022 80,986 15,000 95,986 2021 96,794 30,000 126,794 $ $ $ $ i. Legal fees are included in professional fees (2022 - $39,286; 2021 - $54,508) and in business development (2022 – $41,700; 2021 - $42,286) in the Company’s consolidated statements of loss and comprehensive loss. ii. CFO services are included in management fees in the Company’s consolidated statements of loss for the years ended June 30, 2022, and 2021. Included in accounts payable and accrued liabilities at June 30, 2022, is an amount of $46,819 (2021 - $40,935) owing to directors and officers of the Company and to companies where the directors and officers are principals. 14. Share Capital a) Authorized Share Capital The Company’s authorized share capital consists of an unlimited number of common shares without par value. All issued common shares are fully paid. As at June 30, 2022 the Company had 54,015,043 common shares outstanding. b) Normal Course Issuer Bid On October 19, 2020, the Company filed a normal course issuer bid (the “NCIB”) which authorizes the Company to repurchase for cancellation up to 3,900,000 of its issued and outstanding common shares. The NICB expired on October 21, 2021. On November 25, 2021, the Company announced its intention to renew its NCIB, to purchase for cancellation, up to 3,500,000 of its issued and outstanding common shares. The Bid commenced on December 15, 2021, and will terminate on December 14, 2022, or such earlier time as the Bid is completed or at the option of the Company. During the year ended June 30, 2022, the Company repurchased and cancelled a total of 45,000 (2021 – 280,500) common shares for $19,810 (2021 – $124,479) cash consideration under the NCIB. c) Share Purchase Options (“Options”) The Company has established a share purchase option plan (the “Plan”) whereby the Board of Directors may, from time to time, grant Options to directors, officers, employees, and consultants under the long-term incentive plan. Options granted must be exercised no later than five years from the date of grant or such lesser period as determined by the Company’s Board of Directors. The exercise price of an Option is equal to or greater than the closing market price on the TSX Venture Exchange (“TSXV”) on the day preceding the date of grant. The vesting terms for each grant are set by the Board of Directors. The Plan provides that the aggregate number of shares reserved for issuance shall not exceed 10% of the total number of issued and outstanding shares. At June 30, 2022, a total of 5,401,504 Options were reserved under the Plan with 4,035,000 Options outstanding. Page 30 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 14. Share Capital (Cont’d…) c) Share Purchase Options (“Options”) i. Movements in share purchase options during the year A summary of the Company’s share purchase options and the changes for the year are as follows: Options outstanding as at June 30, 2020 Expired / Forfeited Options outstanding as at June 30, 2021 Granted Expired / Forfeited Options outstanding as at June 30, 2022 Options exercisable as at June 30, 2022 ii. Fair value of share purchase options granted Number of Options 4,425,000 Weighted Average Exercise Price $1.04 (2,850,000) 1,575,000 3,300,000 (840,000) 4,035,000 1,666,250 $1.19 $0.87 $0.37 $0.99 $0.43 $0.52 During the year ended June 30, 2022, the Company recognized share-based compensation expense of $505,052 (2021 – $36,101 net recovery). The net recovery in 2021 was a result of options vesting offset against previously recorded share-based payments associated with unvested options cancelled due to the resignation of the former CEO. On September 14, 2021, and on May 1, 2022 the Company granted 3,100,000 and 200,000 respectively, shares purchase options to directors, management and consultants. The weighted-average fair values of stock options granted, and the assumptions used to calculate the related compensation expense for the year ended June 30, 2022, was estimated using the Black-Scholes Option Pricing Model with the following assumptions: iii. Share purchase options outstanding at the end of the year Expected dividend yield Expected share price volatility Risk-free interest rate Expected life of options Fair value of options granted (per share option) September 30, 2021 0.0% 98.05% 0.79% 4.5years $0.24 May 1, 2022 0.0% 95.43% 2.76% 4.5years $0.57 Page 31 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 14. Share Capital (Cont’d…) c) Share Purchase Options (“Options”) A summary of the Company’s options outstanding as at June 30, 2022 is as follows: Exercise price $ 1.09 0.52 0.40 0.34 0.80 Options Outstanding 200,000 710,000 50,000 2,875,000 200,000 4,035,000 Weighted Average Remaining Life of Options (years) 3.52 Options Exercisable 200,000 560,000 50,000 756,250 100,000 1,666,250 Expiry Date March 14, 2023 November 8, 2023 April 28, 2023 September 14, 2026 May 01, 2027 d) RSU Plan On May 12, 2021, the shareholders approved an RSU Plan (the “RSU Plan”). The RSU Plan was also approved by the Board of Directors on May 25, 2022, and by the TSXV on April 13, 2022. The RSU Plan provides for the issuance of up to 1,000,000 restricted share units (the “RSUs”). Under the RSU Plan, RSUs may be granted to directors, officers, employees and consultants of the Company (excluding investor relations consultants) as partial compensation for the services they provide to the Company. The RSU Plan is a fixed number Plan, and independent of the number of Options available under the Company’s stock option plan. During the year ended June 30, 2022, the Company granted 165,000 RSU’s (2021 – 26,665). During the year ended June 30, 2022, the Company recognized $73,425 (2021 - $10,133) as share-based payments. As of June 30, 2022, no RSU’s were outstanding (2021 – Nil). 15. Segmented Information The Company’s business consists of a single reportable segment being mineral property acquisition and exploration. Details on a geographical basis are as follows: Total Non-Current Assets Canada Argentina Chile $ June 30, 2022 133,245 $ 1,344,912 204,129 June 30, 2021 225,480 1,623,059 212,795 $ 1,682,286 $ 2,061,334 Page 32 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 16. Income Taxes The Company is subject to Canadian federal and provincial tax rates. The Company has no taxable income in Canada. The tax expense at statutory rates for the Company can be reconciled to the reported income taxes per the statement of loss and comprehensive loss as follows: Net loss before income taxes Canadian federal and provincial income tax rates Expected income tax recovery based on the above Non-deductible expenses t Impact of sale of subsidiaries Change in unrecognized deductible temporary differences Foreign exchange and other Total income tax recovery The Company’s unrecognized deferred tax assets are as follows: Unrecognized deferred income tax assets: Non-capital losses Exploration and evaluation assets Share issue costs Other Total unrecognized deferred income tax assets Year Ended June 30, 2022 Year Ended June 30, 2021 $ $ $ (5,081,013) 27.00% (1,372,000) 288,000 $ $ (5,962,584) 27.00% (1,610,000) 503,000 - 1,516,000 1,190,000 (106,000) (1,052,000) 643,000 - $ - June 30, 2022 June 30, 2021 $ $ 3,772,000 3,578,000 - 189,000 7,539,000 $ $ 2,848,000 3,404,000 11,000 86,000 6,349,000 In assessing the recoverability of deferred tax assets other than deferred tax assets resulting from the initial recognition of assets and liabilities that do not affect accounting or taxable profit, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Deductible temporary differences, unused tax losses and unused tax credits: June 30, 2022 June 30, 2021 Expiry date Range Non-capital losses Exploration and evaluation assets Share issue costs Other $ 14,255,000 $ 14,052,000 1,000 1,233,000 See below 10,623,000 13,382,000 Not applicable 2041 to 2045 40,000 479,000 Not applicable Page 33 Mirasol Resources Ltd. Notes to the Consolidated Financial Statements For the Years Ended June 30, 2022, and 2021 (Expressed in Canadian Funds, except where indicated) 16. Income Taxes (Cont’d…) The Company has non-capital loss carry-forwards of approximately $14,255,000 that may be available for tax purposes. The loss carry-forwards are principally in respect of Canadian, Argentine and Chilean operations and expire as follows: 2023 2024 2025 2026 2027 2037 to 2042 No-expiry 17. Commitment $ Canada Argentina - $ - - - - 10,427,000 - 1,000 $ 14,000 196,000 3,078,000 2,000 - - $ 10,427,000 $ 3,291,000 $ Chile - - - - - - 538,000 538,000 On February 6, 2019, the Company signed a lease for its head office located at 1150 - 355 Burrard Street, Vancouver, British Columbia, effective May 1, 2019, to April 30, 2025. The Company has made a security deposit of $20,000. On March 15, 2022, the Company signed a license agreement to share the office space with a Company related virtue of certain directors in common, covering the period April 1, 2022, to April 30, 2025. 18. Sale of Subsidiaries On January 7, 2021, the Company sold its wholly-owned subsidiaries, La Curva Exploraciones SA (“La Curva”) and Oroaustral Exploraciones SA (“Oroasutral”) (the “Subsidiaries”). The sale transaction was effected pursuant to an Agreement for Purchase dated December 29, 2020, by and between the Company and arm’s length third parties (“Purchasers”), as buyer (the “Purchase Agreement”). Pursuant to the Purchase Agreement, the Company sold its 100% interest in the Subsidiaries for total consideration of $64,700. The net liabilities of the Subsidiaries was $1,331 at the date of sale. Accordingly, the Company realized a gain on sale of $66,031 which has been reflected in the Company’s consolidated statements of loss and comprehensive loss. Consideration received Accounts payable Net assets Gain on disposal $ 64,700 1,331 1,331 $ 66,031 19. Subsequent event In July 2022, a total of 50,000 stock options of the Company were exercised for gross proceeds of $17,000. In October 2022, the Company repurchased and cancelled 35,000 common shares, for $13,650 cash consideration under the NCIB. Page 34 Management Discussion and Analysis For Mirasol Resources Ltd. (“Mirasol” or the “Company”) INTRODUCTION The Management Discussion and Analysis (“MD&A”) should be read in conjunction with the Company’s annual audited consolidated financial statements for the year ended June 30, 2022, which are publicly available on SEDAR at www.sedar.com. All financial information, unless otherwise indicated, has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All dollar amounts referenced, unless otherwise indicated, are expressed in Canadian funds. The following discussion of the Company’s financial condition and results of operations should be read in conjunction with its audited consolidated financial statements and related notes for the year ended June 30, 2022. This MD&A is prepared as of October 27, 2022. COVID-19 In March 2020, the World Health organization declared COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, economies and financial markets globally, leading to economic uncertainty. Since COVID-19 vaccination programs began in early 2021, the Company implemented plans to minimize the risks of the COVID-19 virus, is following government health protocols and is closely monitoring the pandemic with local health authorities. The Company’s operations have generally returned to normal, however, due to the current development of the new COVID-19 variants, it is not possible for the Company to predict the duration or magnitude of the potential adverse results of the outbreak and its effects on the Company’s exploration activities and business development initiatives. 1 FORWARD LOOKING INFORMATION This MD&A contains certain forward-looking statements and information relating to Mirasol that are based on the beliefs of its management as well as assumptions made by and information currently available to the Company. When used in this document, the words “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to Mirasol or its management, are intended to identify forward-looking statements. This MD&A may use the terms “Inferred Resource”, “Indicated Resource”, “Measured Resource” and “Mineral Resource”. The Company advises that these terms are recognized by and defined in Canadian securities regulations (under National Instrument 43-101 “Standards of Disclosure for Mineral Projects”). Investors are cautioned not to assume that any part of or all, of the mineral occurrences in these categories will ever be converted into reserves. This MD&A contains forward-looking statements relating to, among other things, the Company’s goals and plans going forward, regulatory compliance, the sufficiency of current working capital, and the estimated cost and availability of funding for the continued exploration and development of the Company’s exploration properties. Such statements reflect the current views of Mirasol with respect to future events and are subject to certain risks, uncertainties and assumptions. The material factors and assumptions used to develop forward-looking information include, but are not limited to, the future prices of gold, silver and copper, success of exploration activities, permitting time lines, currency exchange rate fluctuations, government regulation affecting mining operations and policies linked to pandemics, social and environmental risks, the estimation of mineral resources, capital expenditures, costs and timing of the development of new discoveries, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage, continued availability of capital and financing, and general economic, market or business conditions. Forward looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change, except as may be required by applicable law. Tim Heenan (MAIG), President for the Company, and a “Qualified Person” under National Instrument 43-101 (“NI 43-101”), has reviewed and approved the scientific and technical information in this MD&A. This technical information was prepared by the Qualified Person for the Company at the time of disclosure. 2 CORPORATE AND STRATEGIC OVERVIEW Mirasol (TSXV: MRZ) (OTCPK: MRZLF) is a mineral exploration company targeting gold, silver and copper (“Au”, “Ag” and “Cu”, respectively) deposits, mainly in the Atacama-Puna region of northern Chile and Argentina, and in the Santa Cruz Province of southern Argentina. Both regions are highly prospective and host many large-scale precious and base metal mines, operated by some of the world’s largest mining companies. Mirasol’s business strategy combines the joint venture funding model with self-funded exploration of quality projects. This hybrid strategy was developed to accelerate the drill testing of key projects that potentially host economic discoveries. This year, Mirasol has been advancing three self-funded projects, Sobek and Inca Gold in Chile, and Sascha-Marcelina in Argentina. In addition, Mirasol has four active option agreements across Chile and Argentina. Under these option agreements, Mirasol’s partners are funding all exploration and land holding costs, which allows the Company to focus its available resources on self-funded exploration and business development opportunities, while retaining exposure to potentially significant discoveries. The Inca Gold project is subject to an option agreement where Mirasol is earning into the property owned by Newmont. Mirasol’s Exploration Focus Mirasol’s main geographic focus is in the Atacama-Puna region of northern Chile and Argentina and in Santa Cruz province, southern Argentina, where the Company maintains a high-quality portfolio of exploration properties with the potential for economic discoveries. This portfolio was assembled from Mirasol’s project generation activities, which applies innovative, concept-driven geological techniques combined with follow-up fieldwork. Chile/Argentina: Atacama – Puna Region The Company’s portfolio of properties in the Atacama-Puna region is located on a 1,700 km-long segment of three north-south oriented prolific mineral belts that run through Chile and Argentina. These belts host many world-class Cu-Au mines and occurrences of differing ages, spanning millions of years (“Ma”). From youngest to oldest, these belts are: Miocene to Pliocene (Mio-Pliocene, 23-5 Ma): Targeting high-sulfidation epithermal (“HSE”) Au-Ag and porphyry Cu-Au-Molybdenum (“Mo”) deposits. In this belt, located to the north of the Maricunga Belt, Mirasol controls approximately 103,000 ha of granted exploration claims. The Company also presently holds approximately 30,000 ha of granted exploration claims in the southern part of the Mio-Pliocene aged Cu belt proximal to the border between Chile and Argentina. Middle Eocene to Early Oligocene (Eocene-Oligocene 40-28 Ma): Targeting porphyry Cu-Au-Mo deposits. Mirasol presently holds approximately 21,000 ha of granted exploration claims in this belt. Paleocene to Early Eocene (Paleocene, 66-53 Ma): Targeting low-intermediate-sulfidation epithermal Au-Ag and porphyry Cu-Au-Mo deposits. Mirasol presently controls approximately 18,000 ha of granted exploration claims in this belt. Argentina: Santa Cruz Province The Company’s project portfolio in Argentina is located in Santa Cruz Province which is within the Deseado Massif, a 60,000 km2 region of upper-middle Jurassic age volcanics that are recognized as having a high potential for hosting low- and intermediate-sulfidation epithermal Au-Ag deposits. Mirasol controls approximately 265,000 ha of exploration and mining claims in the province. The Company is monitoring the potential impact of the rapid currency devaluation and changing public policies in Argentina. To date, these issues have not impacted Mirasol’s capacity to operate and Mirasol continues to receive third-party interest for its projects in both countries. 3 JOINT VENTURE, EXPLORATION AND BUSINESS DEVELOPMENT ACTIVITIES On March 19, 2020, Mirasol reported the temporary suspension of field activities at its projects in Chile and Argentina due to the COVID-19 pandemic. In the second half of 2020, the Company restarted its exploration at the Inca Gold project in Chile and at the Virginia project in Argentina and has been able to operate successfully and safely in both countries since that time. Health and safety protocols, which follow local guidelines (provincial in Argentina and national in Chile), have been put in place to protect the Company’s employees, contractors and the communities surrounding the projects. Projects Under Option Agreements Chile Coronación Cu-Au Project, Northern Chile (Operated and funded by First Quantum Minerals Ltd.) On October 7, 2019, Mirasol. announced the signing of a definitive agreement with First Quantum Minerals (“FQM”) for its 1,200 ha Coronación Cu-Au project, located in northern Chile. FQM was granted the option to earn an 80% interest in the project over six years, by making annual cash payments totaling US$875,000, completing at least 10,000m of drilling and delivering a NI 43-101 compliant Prefeasibility Study Report. Following the completion of the 80% earn-in, FQM will have a one-time option to acquire the remaining 20% interest on terms to be negotiated between the parties at that time. If this option is not exercised, the parties will form a participating joint venture to further fund the development of the project. In July 2021, Mirasol and FQM agreed to extend the timeframe for FQM to complete the committed 3,000m of drilling and the option period by nine months to June 30, 2022, and June 30, 2026, respectively. In September 2021, FQM made a US$75,000 payment to Mirasol under the option agreement. To allow further opportunity for engagement with a local community, FQM and Mirasol agreed in February 2022 to amend the agreement to extend to April 30, 2023, the timeline for the completion of the drill commitment. In addition, the schedule of cash payments was adjusted with no payment due in 2022. Exploration Results The project is located on a major northwest structural trend associated with several Andean porphyry Cu deposits. Exploration completed by Mirasol indicates the potential presence of a porphyry/breccia system intruding a layered Miocene aged volcanic sequence of pyroclastic units subsequently intruded domes of dacitic composition. Two distinct areas of alteration have been interpreted with the assistance of Analytical Spectral Device (“ASD”) analysis. The eastern alteration area displays affinities to a HSE system, with the western area displaying a more typical porphyry deposit style of alteration. Geochemical rock and soil sampling has also defined a large 600 by 800m Cu-Mo geochemical anomaly in the western area within an overall 3 by 2.5 km hydrothermal alteration halo (news release October 17, 2019). During the last quarter of 2019, FQM completed an initial exploration program that included surface mapping, geochemical soil and rock chip sampling, IP and Mag magnetic geophysical surveys (“Mag”) and the collection of rock samples for age-dating. This work has outlined an attractive porphyry Cu target that displays characteristics similar to other Miocene age porphyry Au-(Cu) systems in the highly productive Maricunga belt. 4 Rubi Project, Northern Chile (Operated by Mirasol; funded by Mine Discovery Fund) On October 15, 2020, Mirasol announced a definitive option agreement for its Rubi project in Chile with Mine Discovery Fund Pty Ltd (“MDF”), a private Australian company. Mirasol has granted MDF the option to earn an 80% interest in the Project over eight years by funding and delivering a positive NI 43-101 compliant Prefeasibility Study Report. Following the completion of an initial committed 2,000m drill program, MDF is required to spend a minimum of US$1 million per year in exploration expenditures over the term of the agreement. Mirasol serves as the operator during the option period and collects a management fee. Following the completion of the 80% earn-in, MDF will have a one-time option to acquire the remaining 20% interest on terms to be negotiated between the parties. If this option is not exercised, the parties will form a participating joint venture to further fund the development of the project. If either party’s interest in the joint venture is diluted to 10% or below, it will convert to a 1.5% NSR royalty. The non-diluting partner may buy back 0.5% of the NSR royalty for the fair market value as determined by a qualified independent valuator. Exploration Results The 7,543 ha Rubi project is located within the Paleocene age porphyry belt of northern Chile that hosts a number of significant producing porphyry Cu deposits. The project lies at relatively low elevation (1,900-2,100m) within 20 km of the El Salvador and Potrerillos porphyry Cu-Mo-Au mines and has good access to port facilities at Chanaral approximately 80 km to the west. In November 2021, Mirasol reported on the 1,887m drill program completed at Rubi. Drilling was focused on the Lithocap and Zafiro targets, with the results supporting the presence of a large and strong prospective porphyry-style alteration system. Key indicators included the occurrence of porphyritic daci-andesite intrusive rocks and hydrothermal brecciation, which exhibit strong quartz- sericite (phyllic) alteration overprinting a relict K-feldspar alteration that host trace fine pyrite- chalcopyrite-magnetite mineralization. In addition, good ground preparation was observed, which is critical for ore deposit formation, with strong to locally intense fracturing infilled with late gypsum/anhydrite and calcite veining. Importantly, assay results confirmed the presence of anomalous Cu, Mo and locally elevated arsenic (“As”) over substantial intervals of approximately 200m (news release November 8, 2021). MDF has confirmed their continued commitment to the project. A deep-sensing IP and magnetotellurics (“MT”) geophysical program is expected to be completed to better delineate the porphyry Cu target for follow up drilling. Argentina Virginia Ag Project, Santa Cruz (Operated by Mirasol; funded by Silver Sands Resources Corp.) On February 27, 2020, Mirasol announced the signing of a Letter of Intent with Golden Opportunity Resources Corp., later renamed Silver Sands Resources Corp. (“Silver Sands”) for its Virginia Silver project in the Santa Cruz Province of Argentina. The Company signed a definitive agreement on May 20, 2020. Mirasol has granted Silver Sands the option to acquire 100% of the Virginia project over three years by making annual share issuances, which will total 19.9% of the shares outstanding at the time of vesting and completing US$6 million in exploration expenditures. Mirasol is the operator of the project during the option period and receives a management fee. Upon completion of the option in 2023, Silver Sands will have earned a 100% interest in the project and Mirasol will retain a 3% NSR royalty, of which 1% can be bought back by Silver Sands for US$2 million. 5 Exploration Results Mirasol discovered the Virginia Ag deposit in 2009. Virginia hosts a high-grade, intermediate sulfidation epithermal style mineralization hosted in a series of prominent outcropping vein-breccias associated with a rhyolitic volcanic flow dome field. From 2010 to 2012, Mirasol completed a series of drill programs for 23,318m of diamond drilling in 223 holes, designed to test the potential of the mineralized structures to a maximum depth of 266m to establish a resource. In 2016 the Company filed of an amended NI 43-101 Resource Estimate defining seven outcropping bodies of high-grade Ag mineralization, constrained1 within conceptual pits, with an indicated mineral resource of 11.9 million ounces of Ag at 310 g/t Ag and a further inferred mineral resource of 3.1 million ounces of Ag at 207 g/t Ag (see amended NI 43 -101 technical report titled “Amended Technical Report, Virginia Project, Santa Cruz Province, Argentina - Initial Silver Mineral Resource Estimate” prepared by D. Earnest and M. Lechner and filed on SEDAR on February 29, 2016). Later that year, Mirasol reported that preliminary prospecting of new claims had identified quartz vein and vein-breccia rock float scattered along a two km trend. With a strong belief in the exploration potential of the Virginia district, Mirasol further expanded its property holdings in 2017 with an extra 27,017 ha of claims to the south of the limit of the previous drilling. In May 2018, Ag assay results were reported from the additional prospecting of three new target areas, suggesting the potential for unrecognized, shallow soil-covered, high-grade mineralization that would potentially expand the Virginia deposit (news release May 10, 2018). In October 2020, the Company announced the start of the first phase 2,500m partner-funded drill program designed to expand the resource by testing both gaps in and extensions to the principal veins as previously defined at Naty Extension, Ely Central, Martina and Magi veins, as well as newly identified structures at the Margarita, Patricia and Daniela veins. The drill targets were located to the north, south and east of the current Virginia deposit and represented high-potential drill-ready zones within the overall extensive vein field (news release October 29, 2020). In Q1 2021 Mirasol reported the results from the 2,831m Phase I exploration program completed in calendar Q4 2020. The drill holes completed at Martina, Julia South and Ely Central showed the potential for significant new mineralization outside of the current deposit (news release January 21, 2021 and February 23, 2021). Notable intersects from the Phase I drill program include: • Martina: 33.5m at 198.51 g/t Ag, including 17.7m at 316 g/t Ag • Ely Central: 9.25m at 233.54 g/t Ag, including 4.5m at 441.71 g/t Ag • Julia South: 8.50m at 123.43 g/t Ag, including 3.90m at 168.34 g/t Ag • Martina SE: 16.05m at 63.97 g/t Ag including 0.90m at 352.32 g/t Ag In May 2021, Mirasol reported results from the Phase II drill program, which comprised 20 diamond drill holes (3,104m) bringing the total holes drilled to 38 (5,935m). A new high-grade zone was discovered at Ely Central, where drilling has intersected strong and continuous Ag grades in four drill holes over a 200m strike length. Mineralization at Ely Central remained open to expansion both laterally to the north and south, and also to depth. In addition, significant intercepts were encountered at the Ely North, Martina Northwest and Julia South targets, confirming the potential for new mineralized zones at the project (news release May 17, 2021). 1 The Qualified Persons responsible for this amended Technical Report were commissioned by Mirasol Resources Ltd. to review all geologic, geochemical, geophysical, surface trenching, diamond drill core sampling and metallurgical recovery data pertaining to the Virginia Project for the purpose of completing a Mineral Resource estimate in accordance with the guidelines of the Canadian Institute of Mining and Metallurgy (CIMM). For calculating conceptual pits, a Ag price of US$20 per ounce was used. Sensitivity analyses by the Qualified Persons indicate that the Mineral Resources are not particularly sensitive to operating costs or Ag price fluctuations. Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability. 6 Highlighted intercepts from the Phase II program at Ely Central include: • 9.98m at 560 g/t Ag, including 2.87m at 1,578 g/t Ag • 9.60m at 639 g/t Ag • 10.80m at 625 g/t Ag, including 5.70m at 1,110 g/t Ag The results from Phase I and II exploration programs, which included drilling, mechanical trenching, sampling and geophysical surveys, were reviewed for planning the 2,700m Phase III program which was completed in Q4 2021. Phase III of the exploration program comprised of 20 drill holes completed at Virginia and the Santa Rita Prospect, located in the north of the property package. At the main Virginia vein field, high-grade mineralization was discovered on the Margarita vein trend in a single diamond drill hole intersecting 2.63m at 1,456 g/t Ag. This hole was collared to follow up on elevated Ag results in trenches and float-block sampling on surface and represents the first mineralized interval from this new target. This intercept confirms the prospectivity of the Margarita target and opens up a new mineralized trend to be aggressively explored along strike and at depth (news release February 1, 2022). At the Martina Northwest target, two holes were collared to test the depth extent of the mineralized polymictic hydrothermal breccia structure that was previously drilled. A drill hole was targeted at the Martina Northwest structure at 107m below surface and intercepted the same breccia structure. Unfortunately, core recuperation in this drill hole was poor within the mineralized zone (<50%). However, a second drill hole completed at a shallower dip successfully intersected 4.75m at 242 g/t Ag, including 2.45m at 404 g/t Ag, 68m vertically below surface. The results from Martina Norhtwest are very encouraging as these new intersections support the potential to increase the mineral resource along this trend. At Ely, continued drilling returned a broad interval of 33.8m at 88 g/t Ag from 71.3m which successfully closes the gap between the mineralized structure delineated previously at Ely Central and Ely North. In addition, Au mineralization was intercepted with hole EC-DDH-007 which returned 4.55m at 0.33 g/t Au and 30 g/t Ag from 173.65m (including 1.2m at 0.63 g/t Au and 26 g/t Ag). The presence of this Au pulse may indicate the introduction of a stronger and more consistent gold-rich pulse in the deeper parts of the Virginia vein system that could potentially add significant Au credits to the project (news release January 25, 2022). At Santa Rita Central and East, the maiden drilling intercepted encouraging Au and Ag mineralization confirming that the structures mapped and sampled on surface extend to depth, providing vectors for further deeper drilling. The Santa Rita prospects have low sulfidation epithermal mineralization signatures characterized by elevated Au values compared to those returned from the main silver- rich Virginia vein field. The best results were obtained at Santa Rita East where two drill holes collared 50m apart returned 5.65m at 0.68 g/t Au from 35.65m, including 1.35m at 1.87 g/t Au and 5.20m at 0.63 g/t Au and 7 g/t Ag from 35.30m (news release February 10, 2022). In April 2022, Mirasol announced the start of the Phase IV diamond drill program, This program targeted key prospective zones at Ely Central and North, Margarita and Martina to test gaps and potential extensions along these trends. In addition, scout holes were completed at the Patricia and Daniela targets to test below high-grade Ag samples collected on surface and in trenches, and one hole was also completed at the northern most Santa Rita East prospect (news release April 6, 2022). Phase IV of the exploration program included a 12-holes, 1,362-meter campaign (news release July 21, 2022). The drilling was designed to extend mineralization outside the existing Virginia resource by continuing to test the gaps along the main vein structures at Ely and Martina and to define new mineralization at the Margarita trend. Previously untested, outlying targets approximately 1.5 km to the north of the main trend, Patricia and Daniela were also drilled during this campaign. At the Margarita high-grade silver trend, three drill holes successfully extended the mineralized vein by more than 150 meters to the north-west. The system remains open in both directions. The Margarita Vein has similar mineralization to the Julia Vein which hosts most of the current silver 7 resources at Virginia. Margarita hole MR-DDH-004 returned 4.85 meters at 720 g/t Ag, including a discreet intercept of 0.30 meters at 1,775 g/t Ag, exhibiting a strongly banded epithermal vein with fine-grained sulphides and copper oxides. At Ely Central three holes were drilled for a total of 261 meters testing the gaps within the 500-meter- long trend. This newly identified silver-rich vein trend outcrops on surface and has been drilled to 100 meters vertically below surface and remains open to depth. Notable intersections from the Ely Central drill holes include EC-DDH-011 returning 11.95m at 124 g/t Ag, including 1.8m at 192 g/t Ag. One drill hole tested the northern extension of the 200-meter-long anomalous southern end of Ely North vein, which is not currently part of the Ely North conceptual resource pit. The hole intercepted the vein 100 meters vertically below surface returning 5.65 meters at 144.5 g/t Ag, including 0.6 meters at 418 g/t Ag, extending the trend 50 meters to the north. Further infill drilling is required to test the remaining gaps along the Ely Trend. This could potentially connect the Ely Central, Ely South and Ely North conceptual resource pits. Two new holes were drilled at the Martina vein trend. Martina Central drill hole MC-DDH-002 was designed to start testing the gap between the Martina Central and northwest trends and returned Ag intersections of 2.9m at 127 g/t Ag, including 1.45m at 179.5 g/t Ag. Gaps still remain along the Martina structure with the potential for Ag grades to be associated with the notable high chargeability responses. Hole MNW-DDH-0064 (8m at 91 g/t Ag) filled the gap in the Martina Northwest and extended the mineralization along this 200-meter-long trend. One drill hole tested each the Daniela and the Patricia Veins, located approximately 1.5 km to the north of the Ely North Resource conceptual pit. Both of these veins were untested targets hosting the highest-grade surface rock-chip Ag samples. The objective of these holes was to test for downdip extensions of the surface expressions. The Patricia drill hole PA-DDH-001 intersected 1.45 meters at 120 g/t Ag, including 0.5 meters at 198.5 g/t Ag, and another parallel structure with 2.95 meters at 95.7 g/t Ag, including 0.35 meters at 163 g/t Ag. These modest drill results did not replicate the extremely high-grade rock chips from near source float block samples (over 29,000 g/t Ag and 18,800 g/t Ag) from surface. Follow up drilling along strike will be required to understand the significance of these intersections. Subsequent drilling is planned for Q1 2023 to continue to delineate new potential Ag resources at Virginia, with the intention to complete an Updated Resource Estimate prior to the end of 2023. Homenaje Au/Ag Project, Santa Cruz (Operated and funded by Patagonia Gold Corp.) On April 19, 2021, Mirasol announced the signing of a binding agreement with Patagonia Gold Corp. (“Patagonia”) for the Homenaje project. Mirasol granted Patagonia the option to earn a 75% interest in the project over six years by delivering, by the end of the option period, a positive Prefeasibility Study (as defined by NI 43-101) for a resource of no less than 300,000 oz of Au equivalent. In addition, Patagonia must complete a minimum of US$2.55 million in staged exploration expenditures. Upon completion of the option, Mirasol and Patagonia will hold a 25% and 75% interest, respectively, in a participating joint venture that will hold the project. If either party’s equity interest is diluted below 10%, it will convert to a 2% NSR royalty. The exploration activities at Homenaje by Patagonia Gold have been temporarily put on hold while the companies seek clarification from the Santa Cruz provincial authorities to determine the significance of potentially sensitive archaeological sites recently encountered on the property. The companies are currently awaiting clear and definitive guidance from provincial authorities on the protective measures required to resume exploration activities. 8 Exploration Results Exploration to date has been limited to outcropping erosional windows, as more than 90% of the project area is covered by thin post-mineral rocks, including Tertiary plateau basalt and gravels. In these erosional windows, Middle to Upper Jurassic tuffs assigned to La Matilde Formation are exposed and host localized hydrothermal breccias, veinlets and stockworks of chalcedonic quartz. Analysis and interpretation of outcropping alteration and mineralization, together with the structural setting, magnetics and chargeability/resistivity gradient array responses over areas of cover and outcrop have defined four northwest trending prospective structural trends, with similar geologic characteristics to those of the adjacent to Pan American Silver’s COSE and Patagonia Gold’s Cap Oeste mineralized deposits. Initial rock chip sampling of mineralized structures that discontinuously outcrop in a northwest trending corridor, identified in an area of 1,500m x 800m that returned anomalous Au, Ag, As, Sb, Mo, Cu and Pb. Geochemically anomalous samples comprise altered tuff with thin chalcedony veinlets (news release December 30, 2020). Patagonia is seeking the required environmental permits to advance exploration. Once granted, it will complete detailed geological mapping, channel geochemical sampling across exposed structures, ground magnetics and IP geophysics surveys over priority targets, in order to define drill targets. Projects Operated and Funded by Mirasol Chile Sobek Cu Project, Northern Chile In November 2021, Mirasol introduced the Sobek Cu project (“Sobek”). Sobek was staked by Mirasol prior to 2021 based on prospective local structural architecture hosted within a highly prospective and productive geological terrain. An important north-northeast trending mineralized structural corridor encapsulates a large part of the Sobek package and this corridor is crosscut by a series of north-northwest trending deep seated trans-cordilleran lineaments evident through the entire property. In addition, the tenure is host to prospective Miocene/Pliocene aged geological units and intriguing satellite image ASTER alteration responses. The Sobek land position was expanded in 2021 and 2022 following significant results reported by Filo Mining Corp. from its Filo del Sol project located 7 km to the east of Sobek, which included a remarkable intercept of 858m at 1.80% CuEq (including 163m at 5.43% CuEq)2. A new mineralized district is developing in the Sobek area with multiple deposits located in close proximity, including the Josemaria and Los Helados porphyry Cu-Au deposits located 10 km east-northeast and 20 km north of Sobek, respectively. Mirasol controls 11,120 ha of exploration claims in this district in three blocks, the North, Central and South blocks, that are all on the Chilean side of the border with Argentina. In February 2022, Mirasol reported that agreements had been secured with local communities and landowners to access 100% of the Sobek tenure. An extensive field campaign has been completed to evaluate the principal prospects across the entire property package. This field campaign was designed to assess the potential for porphyry Cu-Au and epithermal Au-Ag mineralization with geochemical sampling and detailed geological mapping over priority targets (news release February 28, 2022). This program followed up on a high resolution 2,690 line-km helicopter-supported airborne Mag survey completed in mid-2021. The Mag survey detected multiple highly prospective geophysical 2 Filo Mining Corp. – 05/13/2021 Press Release 9 magnetic targets across the entire Sobek property package. This has improved understanding of the structural architecture of the property and formed an important base for the ongoing field exploration at Sobek (news release November 4, 2021). The maiden field campaign in the Sobek Central Block confirmed the presence of a volcanic complex hosting rhyodacitic and andesite volcanics underlain and flanked by igneous intrusive rocks of dioritic composition. These igneous intrusive rocks host localized zones of strong hydraulic “crackle brecciation” with a gypsum matrix infill, disseminated magnetite/tourmaline and FeOx veinlets. Within the high topographic elevation levels, significant and widespread areas of strong argillic clay alteration have been identified, which were further evaluated during the most recent campaign and will be one of the main areas of focus for this season’s exploration campaigns. All of these geologic features are considered promising and support the exploration model for Sobek. At the Sobek South Block, a scouting campaign identified a large hypabyssal dacitic dome complex emplaced within the older Paleocene-aged granitic to granodioritic host rocks. The margins of this dome commonly display autobrecciation textures and host low temperature silicification and argillized alteration halos. Initial observations suggest these domes occupy a large part of the South Block. The eastern part of this block also hosts a very attractive magnetic low (magnetite destruction) anomaly which sits between the eastern dome edge and the Argentine border. These peripheral areas of the dome are considered highly prospective and will be further evaluated. The Sobek North Block, which was recently expanded and now encompasses 6,961 ha, was also evaluated during the most recent campaign. Several compelling Mag anomalies exist within this block, including both magnetic highs and lows, which were one of the areas of focus. Results of the most recent field campaign are pending. Mirasol is planning and aggressive exploration campaign this season (October 2022 thru April 2023) which will include additional prospecting, geological mapping, detailed soil geochemical sampling, geophysics (both ground mag and IP) to aid in drill targeting. Inca Gold Au-Ag Project, Northern Chile In early 2020 Mirasol announced the signing of an option agreement with subsidiaries of Newmont Mining Corporation (“NEM”) to acquire the Inca Gold project in northern Chile (news release January 13, 2020). Mirasol was granted the option to earn 100% of the project over five years, subject to a 1.5% NSR royalty, by drilling 1,000m over two years and incurring US$3 million in exploration expenditures over five years. Mirasol may terminate the agreement at any time after the completion of the initial 1,000m drilling commitment (news release January 13, 2020). Upon completion of this option, NEM will have the right to earn back 70% of the project in two stages. In stage 1, NEM will have to make a cash payment of US$3 million to Mirasol and fund $6 million in exploration over three years. In stage 2, NEM will have to deliver a NI 43-101 compliant Prefeasibility Study on a resource of no less than two million ounces of Au equivalent using agreed upon cut-off grades or incur an additional US$21 million in exploration expenditures over six years. If NEM completes stage 1 but not stage 2, Mirasol will retain 100% of the project and NEM will be granted an additional 0.5% NSR royalty, which may be bought back by Mirasol at fair market value. Exploration Results The 16,300 ha Inca Gold project is located in Region III of Chile approximately 100 km north of Copiapo, and within the Inca Del Oro mining district that hosts both Santiago Metals Delirio Cu-Au mine and PanAust/Codelco’s Inca de Oro porphyry Cu-Au deposit. Inca Gold lies between 2,000 to 3,000m ASL and has good access allowing for year-round exploration. Local geology on the southern portion of the project is characterized by a thick volcanic-sedimentary sequence consisting of ignimbrites, lava flows, and volcanic breccias. The northern portion consists of an older sequence of intensely folded and faulted ignimbrites and volcanic breccias. These two geologic domains are separated by a regional NE lineament mostly covered by Atacama gravels. 10 Mirasol’s initial exploration at the Sandra prospect defined five Ag-Au prospects. In addition, the Company had staked an additional 2,400 ha of exploration claims directly to the south of the Sandra target to cover prospective ground, although initial prospection did not lead to any new areas of significant interest being detected. Following the approval of the Company’s environmental report in early 2021, a 1,714m Phase I drill program was completed at the Sandra prospect. A total of eight diamond holes were drilled on three separate targets to test for mineralization below outcropping quartz veins. In general, low-grade Au and Ag were encountered over narrow (0.5 to 1m) widths. The highest values returned were from hole IG-DD-004 that intercepted 0.27 g/t Au and 47.8 g/t Ag over 0.5m (see news release June 30, 2021). No further work is planned at the Sandra prospect. Following the completion of the maiden drill program at Sandra, the Company met the minimum drilling commitment and exploration expenditures required for the first two years under the option agreement with NEM, and now has until January 2023 to evaluate the other prospects at Inca Gold. Two additional prospects, Vania North and Vania South, host separate porphyry/IOCG and/or High- Sulfidation Epithermal (HSE) targets concealed under transported alluvial/colluvial cover in a very attractive structural architectural setting. Vania North and South are set within a strong north- northeast structural corridor which hosts the Inca del Oro porphyry (located 12 km to the southwest) and the expansive El Salvador mining district (some 50 km to the north). In addition, the Delirio Cu mine, owned and operated by Santiago Metals, is located 4 km to the west which mines Cu-in- tourmaline hydrothermal breccias, within an area characterised by abundant historical alluvial Au workings. Vania North Vania North is characterized by several distinct, coincident geochemical and geophysical anomalies cradled within an attractive structural intersection. A recent Electrical IP Pole-Dipole survey over the geochemical anomalies has successfully detected compelling coincident IP anomalies. Vania North is considered a high-quality drill target (news release September 7, 2022). A strong coherent geochemical Au anomaly was originally identified using Newmont`s proprietary Deep Sensing Geochemical (DSG) sampling system at Vania North. The DGS system detects concealed anomalies under transported material by using a highly technical and effective sampling and analysis procedure, in conjunction with detailed regolith mapping. Coincident with the DGS Au anomaly is a strong annular geochemical halo of pathfinder elements (Hg, Nb, Cd, Ag, Mo, Ni, As) within magnetic depletion zone interpreted to be controlled by the intersection of northwest and northeast trending structural lineaments. Mirasol’s subsequent reprocessing and reinterpretation of the Newmont magnetic data clearly delineates a prominent northeast-southwest trend of magnetic depletion, coincident within a long, shallow topographic valley. The magnetic depletion and low resistivity, identified from the recent IP survey, suggests that the rocks along this trend may have been subjected to acid-sulphate leaching and may contain sections of vuggy silica, which are deemed to be prospective zones for late-stage mineralizing Au events. On the western edge of the concealed anomaly, within the outcropping wall rocks at the edge of cover, alteration is seen in the form of locally hornfelsed rocks hosting Cu mineralization in small restricted structures. The recent electrical IP geophysical campaign has highlighted several compelling concealed targets at Vania North. The geophysical interpretation suggests the potential existence of HSE-type anomalies, which may represent diatreme and vein-type structures, possibly underlain by a deeper more porphyry-like geophysical response, which warrants further evaluation, including drilling. Prior to drilling, which is scheduled to commence in Q1 2023, Mirasol plans to complete infill DSG lines at Vania North to assist in vectoring into the best areas for the maiden drill program. 11 Vania South A compelling prospect 3 km south of Vania North, Vania South, was identified by Mirasol through the reprocessing and reinterpretation of historical Newmont magnetic data. At the Vania South target a strong, intriguing magnetic high feature is shallowly concealed below transported alluvial sediments within the southeast corner of the Mag grid, that shows a notably smoother magnetic texture surrounding the main anomaly. This strong magnetic high anomaly could represent a concealed Cu/Au porphyry target, with the magnetic high representing the potassic-altered core of a porphyry system, and the smooth magnetic border representing the envelope of hydrothermal alteration (news release September 7, 2022). Mirasol has completed an electrical IP Pole-Dipole survey over the magnetic body described above to assist in defining drill targets, processing and interpretation is pending. As was completed by Newmont at Vania North, Mirasol will also complete a new DSG survey at Vania South to test for geochemical anomalies within the surface regolith cover over the magnetic high feature and also potential areas of interest on either side to the northwest and southeast. Both the IP geophysical data and the DSG geochemical data will be compiled and interpreted prior to the end of 2022 and used to better define drill targets at Vania South. Altazor Au Project, Northern Chile In 2017 Mirasol signed an option and farm-in agreement with Newcrest Mining (“NCM”) for the Altazor project, which was later terminated on August 18, 2021. During the term of this agreement, NCM spent more than US$3M on the project defining two highly prospective drill-ready targets, which remain untested by drilling. Due to the prospective nature of these targets and the intention to aggressively progress the project Mirasol is considering whether to self-fund an initial 2,000m drill program, or to bring in a funding partner. Engagement with the local community in respect to exploration plans is progressing. Exploration Results Altazor is a HSE Au project covering 33,000 ha located in an underexplored section of the Mio- Pliocene age mineral belt. Mirasol completed a first-pass of reconnaissance sampling over approximately 50% of the project area in 2017. These results showed comparable geology, alteration patterns and Au ppb-level anomalous assays in soil and rock chip samples to those reported from surface sampling at Gold Fields’ Au-Ag HSE Salares Norte development stage project. Salares Norte has a geological setting analogous to Altazor and is also located in the Mio-Pliocene mineral belt of Chile (news release October 11, 2017). Altazor has favourable infrastructure situated just 20 km south of 345 kV powerlines that follow International Highway Route 23, a paved road connecting northern Chile and Argentina. In common with other Mio-Pliocene mines and projects, Altazor is located at high altitude of between 4,000 and 5,200m; however, Altazor has good “drive-up access” via an open valley and a network of easily passable gravel tracks. During Mirasol’s initial reconnaissance sampling, a total of 216 stream sediment, 395 soil and 933 rock chip samples were collected and returned significantly anomalous Au, Ag, Cu, Pb, Zn and epithermal path finder elements, from sampling in the vicinity of mapped breccia bodies (news release October 11, 2017). In late 2018, Mirasol reported the results from the 2017/18 exploration program completed under the exploration agreement with NCM to define targets for drill testing (news release November 12, 2018). The program included alteration analysis of soils, radiometric age dating,1,035 line-km ground magnetic geophysical survey, geological mapping, geochemical rock chip sampling over an area of 128 km2, a 2,030-sample low detection limit soil grid covering 85.6 km2 and a 66.9 line-km Controlled- source Audio-frequency Magnetotellurics (“CSAMT”) resistivity geophysical survey. Integrated analysis of the combined data sets indicated Altazor to be a district-scale, zoned alteration system 12 preserved at a level that could conceal HSE Au deposits beneath “barren” steam-heated cap rocks and post mineral cover. This program successfully identified multiple compelling large-scale drill targets in three principal prospects that have alteration, geochemical and geophysical characteristics in common with the predrill target signatures of the Salares Norte and Alturas Au HSE discoveries. During the first half of 2019 fieldwork of the large Altazor alteration system was reinitiated to explore extensions of the prospects identified in the previous season’s program; to undertake first pass exploration of new claims staked at the end of last season; and to cover interpreted extensions of the alteration system. Fieldwork consisted of rock chip and alteration sampling as well as detailed geologic mapping. The defined, highly prospective drill-ready targets remain to be drill tested. Mirasol continues to actively engage with the community in the vicinity of Altazor to secure an exploration agreement for a drilling program. The concerns of the community are being addressed to achieve a mutually beneficial agreement. Gorbea Au Project, Northern Chile The Gorbea project (“Gorbea”) comprises a package of mineral claims totaling 33,000 ha located in the Mio-Pliocene age mineral belt of northern Chile. The project is located approximately 70 km north of Gold Fields Salares Norte development stage project, at an altitude of 4,100 to 4,500m ASL, and is easily accessible by seasonally maintained roads and gravel tracks. Gorbea was subject to previous joint ventures with Newcrest Mining Limited “Newcrest” that was terminated in August 2022 and Yamana Gold Inc. (“Yamana”) that was terminated in April 2018. Under the partnership, Yamana incurred exploration expenditures in excess of US$8 million. Yamana’s exploration identified a significant body of HSE Au mineralization at the Atlas zone, which returned a best drill intercept of 114m grading 1.07 g/t Au, including 36m grading 2.49 g/t Au (news release September 11, 2017). Newcrest invested over US$11.6 million in exploration on the Gorbea Project, completed nearly 7,500 meters of drilling and made payments of US$600,000 to Mirasol. Over the last exploration season, in addition to the 2,072 meters of drilling (reported February 28, 2022), Newcrest completed surface exploration, mapping and geochemical sampling on the Project. Once the latest data has been received and reviewed by Mirasol, all options to continue advancing exploration at Gorbea will be considered, including the potential to identify new partners. Exploration Results The Atlas prospect is centred on a sizable +20 km2 HSE alteration system that hosts multiple Au and Ag targets. The system exhibits many of the key geological and mineralization features characteristic of economic systems in the area, such as at the Salares Norte development stage project (Gold Fields - Reserves: 3.5 Moz Au and 39 Moz Ag3), Alturas advanced stage project (Barrick Gold - Inferred Resource: 8.9 Moz Au4) and La Coipa mine (Kinross Gold – Reserves: 0.9 Moz Au and 41.7 Moz Ag / Resources: 1.4 Moz Au and 35.3 Moz Ag5), supporting its potential to host large-scale Au mineralization. In late 2021, NCM completed five reverse circulation drill holes for 2,072m with two holes at the Atlas prospect and three holes at the previously untested El Dorado prospect. No meaningful mineralization was encountered in these holes. To date, thirty-seven drill holes (16,905m) have been completed at the Atlas prospect by both NCM and Mirasol’s previous partner Yamana. At Atlas, hole ATLT0011A targeted the extension to the southeast of a silicified polymictic breccia body outcropping on surface (Apollo Breccia) coinciding with a high-resistivity feature. Although vuggy silica texture, quartz alunite alteration and pathfinder elements were intersected, the lack of 3 Goldfields Limited - Mineral Resources and Mineral Reserves Supplement to the Integrated Annual Report 2021 4 Barrick Gold Corporation - Mineral Reserves and Mineral Resources in Q4 Report for the year ended December 31, 2021 5 Kinross Gold Corporation - 2021 Annual Mineral Reserve and Resource Statement 13 Au values indicates a peripheral position to the mineralized centre. Hole ATLT0012 was drilled to test for potential continuation to the north in the Atlas Central zone. The results limit the potential of the mineralized body in a northerly direction. However, potential remains to extend the mineralization to both the east and west to and explore for higher-grade mineralization (news release February 28, 2022). Notably a potential HSE Au target located to the east-southeast of the Apollo Breccia/Atlas Central Zone, defined by coincident anomalous zones of multiple pathfinder elements, alunite composition, high Au values and a high-resistivity anomaly, remains to be drill tested. At El Dorado, the drill holes targeted a combination of positive features, including a high-resistive feature, a polymictic breccia body with vuggy silica fragment and a steam-heat zone, all associated with elevated pathfinder elements. No further work is planned at El Dorado in the near term. Nord Polymetallic Project, Northern Chile The Nord project was originally staked by Mirasol as part of its Atacama-Puna generative program and lies adjacent to the Ciclon-Exploradora polymetallic-epithermal project, which is currently being advanced to production. The 1,967-ha project is located in Region III of Chile within the Exploradora District, which lies on the western side of the north-south trending regional scale Domeyko fault zone and within the world class Eocene-Oligocene porphyry Cu belt. Control of the Nord project was recently returned to Mirasol and the option agreement signed with Encantada SpA (“Encantada”), an affiliate of Mineria (news release September 8, 2020) has been terminated. Encantada was unable to secure financing to advance the project and 100% control was returned to Mirasol. Exploration Results Based on Mirasol’s initial surface exploration, the project has the potential to host two main styles of mineralization. The first style is characterized by large vein-type mineralization injected into fault structures hosting polymetallic (Cu, zinc (“Zn”), lead (“Pb”), Ag, Au) mineralization, as seen in the active small-scale mines located near the northeast corner of the claim boundary and at Mineria’s Ciclon-Exploradora polymetallic development project, which is located adjacent to the eastern blocks of the project. While surface geochemistry has returned only low to anomalous precious and base metal results, Mineria’s understanding will be valuable to define drill targets for potential extensions or parallel structures to the known mineralization (news release October 31, 2019). In addition, the project also hosts the potential for porphyry Cu-Au style mineralization. In the central part of the property a large alteration zone displays patterns of quartz-sericite and advanced argillic alteration with thin tourmaline veinlets, which are characteristic of some porphyry-style alteration assemblages. In the first half of 2021, Encantada completed an initial fieldwork program, which included geological mapping, geochemistry and geophysical surveys to define targets. A scout diamond drill program was completed largely on a property controlled by Encantada (Target 1) and adjacent to Nord, with one initial drill hole completed within the Nord tenure to test a Au-Cu mineralized corridor. Follow up drilling took place at Nord in October and November 2021 to test the multiple north- northeast trending mineralized corridors identified on the property. Encantada completed five drill holes totaling 1,192m on Target 3 in the center of the Nord project. Narrow zones of Zn mineralization (sphalerite - pyrrhotite) were encountered in the northern holes with higher temperature (garnet- pyroxene-magnetite) skarn carrying narrow zones of Cu-Au mineralization intercepted in the south. The skarn and increasing Cu-Au+Mo values may indicate a vector towards a porphyry target to the southeast. At Target 2, geological mapping at 1:2,000 and 1:5,000 scale has been completed on a porphyry prospect interpreted to be of similar Mid Eocene-Oligocene (33-36 Ma) age to the Exploradora 14 complex, which is located 4 km to the northeast. Three porphyry intrusives with potassic (secondary biotite) alteration, overprinted by strong sericite-clay alteration with local alunite, limonite and Cu oxides, occur in two elongated 200 x 500m and 150 x 300m zones. Porphyry-type veining includes early biotite-magnetite (“EB”) veins and scarce A veins along a north-northwest trend near the contacts of the porphyry with the monzodiorite intrusive host rock. An Induced Polarization (“IP”) geophysical survey completed over the area has defined a strong and broad chargeability anomaly from 100-500m depth associated with the altered porphyry intrusions. New attractive porphyry drill targets have been defined and following evaluation Mirasol will consider advancing exploration, including drill testing, potentially with the participation of a new partner. Argentina Tefnut Prospect – San Juan Porphyry Cu Projects Tefnut, staked by Mirasol through its project generation program, comprises approximately 4,500 hectares of exploration claims. It is located within the fertile Mio-Pliocene copper-belt in the province of San Juan, Argentina, which hosts several high-profile advanced projects including Filo del Sol, Josemaria, Altar, Los Azules and El Pachon. The Company’s preliminary reconnaissance program of prospecting, high level geological mapping, geochemical sampling and alteration analysis, successfully defined a large 1.5 by 1.5 kilometres porphyry related phyllic alteration system with outcropping copper-mineralization (news release June 9, 2022). Tefnut is located at the intersection of a major orogenic parallel north-south structure and a lesser defined north-northwest trans-orogenic lineament which is the common structural configuration that has localized other major deposits and development projects in the province of San Juan. In close proximity to the west and in Chile, advanced projects such as Novicio, West Wall and Pimenton represent good analogies for the prospectivity of the immediate area. Within the large 1.5 x 1.5 kilometre intensely altered phyllic footprint at Tefnut, discrete outcropping exposures of porphyry-style copper-mineralization occur in the deeply incised creeks. This mineralization is associated with high-density stockworks of quartz magnetite and fine magnetite only stringers, within strongly potassic altered (biotite-feldspar-magnetite) intrusive dioritic porphyry hosting disseminated chalcopyrite and Cu-oxides. Initial grab samples from these mineralized outcrops have returned 0.14% and 0.19% Cu. In addition, anomalous molybdenum values of 42 ppm hosted in type B veinlets, with the four highest values (from a population of 15) ranging from 17-42 ppm, were recovered from the overlying rhyolites that exhibit intense phyllic alteration. These initial geological and geochemical results indicate the presence of an underexplored and potentially substantive porphyry Cu-Mo system. Potassically altered dioritic intrusive rocks, hosting disseminated Cu mineralization, are exposed in discrete erosional windows through an extensive area of phyllic alteration with local remnant advanced argillic altered sections. It is considered that Tefnut has been eroded to an optimal level for the exploration with the prospective copper mineralized potassic zone preserved at shallow levels and extending to depth. Given the encouraging results from the initial reconnaissance campaign, Mirasol is planning to progress its exploration efforts during the upcoming southern hemisphere exploration season (October 2022 - April 2023). Detailed grid-based geochemical sampling, geological/structural mapping and geophysical surveys will be required to advance this new and exciting prospect to a drill ready stage. 15 Libanesa Au/Ag Project, Santa Cruz The option agreement on the Libanesa project with Golden Arrow Resources Corporation was terminated (news release July 21, 2022). Golden Arrow exceeded its contractual minimum commitment by spending over US$500,000 on exploration (news release dated October 12, 2021). The exploration program included field mapping, surface sampling, trenching and 1,716 meters of drilling at the Cerro Plomo/Cerro Rodonda and the Lagunita prospects. Mirasol firmly believes that quality drill targets remain at Libanesa (Cerro Plomo) and is currently reviewing this data and evaluating how to best test these remaining targets. Exploration Results Libanesa is a 14,500 ha Ag-Au (Pb) project discovered by Mirasol. It is located at the northeastern margin of the Deseado Massif Au-Ag metallogenic province, approximately 70 km west of the port of Puerto Deseado, 40 km northwest of the Cerro Moro Au-Ag Mine operated by Yamana Gold and 100 km northeast of the Don Nicolas Au-Ag mine operated by Cerrado Gold. Libanesa hosts several diversified geological, geochemical and geophysical-supported drill targets. Cerro Plomo is the principal prospect and is characterized by a well-mineralized Au/Ag hydrothermal breccia that is exposed at surface and supported by both chargeability and resistivity geophysical anomalies at depth. Peripheral polymetallic veins at the Libanesa Main prospect represent secondary targets and are supported by strong base metal and Au mineralization. The Lagunita prospect is a third prospective zone, which has reported encouraging rock chip Au values from more typical low sulfidation-type epithermal veins and breccias. This prospect warrants additional surface exploration to vector into the potentially better mineralized parts of this extensive vein system, where intermittent vein occurrences, outcropping/sub-cropping through post mineral cover, have been mapped over a strike length of more than 2.3 km. (see news release June 1st, 2021 for a summary on previous work completed at Libanesa). In April 2022, under the option agreement with Golden Arrow a 1,716m maiden drill program at Libanesa was completed. Drilling was focused at the Cerro Redondo prospect with nine holes being completed and another two holes completed at the Lagunita targets (news release March 24, 2022). The drill results are pending. Sascha – Marcelina Au-Ag Project, Santa Cruz Mirasol staked the Sascha project in 2003 to secure the 5 km-long Sascha Vein Zone, which was partially drill-tested while under an exploration agreement with Coeur Mining (“Coeur”) from 2006 to 2009. Coeur terminated the agreement in 2009 and returned 100% of the project to Mirasol. On January 23, 2019, Mirasol signed an option-to-purchase agreement with a private mining company for the 5,700 ha Marcelina exploration claims, consolidating the full district under the Company. The agreement was amended in January 2022 to extend the option period by two years. Under the amended agreement, Mirasol can acquire 100% of the Marcelina claims by making staged option payments totalling US$3.75 million (of which $150,000 has been paid) over six years and granting a 1.5% NSR royalty. Cash payments for US$50,000, US$100,000 and US$ 3.45M are due in January 2023, 2024 and 2025, respectively. Following the consolidation of Sascha-Marcelina, Mirasol completed an integrated interpretation of Mirasol’s district-scale exploration data sets collected prior to 2009. Anomalous rock chip Au-Ag assays and Aster satellite alteration anomalies define a 16.5 x 4.0 km (65 km2) hydrothermal “footprint” to the district, showing a large-scale, zoned alteration system characteristic of a sizable Au-Ag LSE system. Five multi-kilometre-long mineralized vein and silicified breccia trends have been recognized to date across the consolidated district. The trends traverse the Pellegrini Silica Cap, or outcrop through post-mineral gravel and basalt cover that surrounds the Silica Cap (news release January 25, 2019). 16 The geologic and geomorphic setting of the Pellegrini Silica Cap and related silica structures and veins is analogous to the setting of the Cerro Negro mine operated by Newmont, which is a high- grade, low-cost, Au-Ag underground mine located approximately 100 km to the north of Sascha- Marcelina (Proven and Probable Reserves: 2.56 Moz Au and 16.55 Moz Ag / Measured and Indicated Resource: 0.57 Moz Au and 2.99 Moz Ag / Inferred Resource: 1.66 Moz Au and 9.42 Moz Ag6). In the first half of 2019 Mirasol completed additional surface exploration activities on the Sascha- Marcelina project (news release July 18, 2019), which included geological mapping, detailed rock chip geochemical sampling, extensive soil grid geochemical sampling (with PXRF sourced geochemistry) and the acquisition of alteration data using in-house handheld ASD technology on all the rock chips and soil samples collected. This work has defined a large alteration footprint located in the immediate vicinity of the Marcelina claims, hosting an epithermal silica vein system with multiple mineralized trends. Within this area, new prospects have been recognized with the Estancia Trend and the Igloo Trend, both located in close proximity to an extensive Pellegrini Silica Cap, which is interpreted as representing the preserved fossil paleosurface of a low sulfidation system. Mirasol followed up with a total of 40 line-km of IP geophysics surveys completed over the three principal areas - the Estancia Trend (20.5 line-km), the Pellegrini silica cap (14.2 line-km) and the Igloo trend (5.35 line-km). Significant chargeability and resistivity anomalies were defined, indicating the possible presence of sulphides and silica bodies, which could represent zones of hydrothermal alteration and mineralization at shallow depths. Mirasol incorporated this geophysical data with the results from the surface exploration to define a series of large-scale drill targets supported by a prospective geological setting, widespread indications of Au and Ag mineralization, and near surface, coincident geophysical anomalies (news release April 15, 2021). A 2,814m drilling program completed in 2021, focused on three prioritized target areas, returned encouraging results. The Pellegrini Trend drilling defined a broad zone of Au and Ag mineralization overprinting a younger Pb and Zn rich base metal pulse, that is interpretated to represent the high- level expression in this epithermal system. Drilling on the Igloo and Estancia Trends also returned a number of anomalous Au and Ag intercepts and improved the understanding of the local geological settings, so assisting in vectoring towards higher-grade zones at depth and within a more permissive stratigraphic horizon in potential follow-up drill programs t (see news release August 9, 2021). At the Estancia Trend, six holes (1,011m) were completed. Three of these holes located in the southern part of the prospect (Estancia Sur) returned anomalous Au results. This drilling demonstrated that Estancia Sur is located in the lower part of the Matilda formation or upper part of the Chon Aike formation, neither of which are good, competent host rocks for productive fissure veins. Instead of concentrating mineralization, their physical characteristics allow for wider intersections of lower grade and dispersed mineralization as illustrated by the results from drill hole EST-DDH-003 (8.7m at 0.32 g/t Au). However, with focused deeper drilling, it is considered likely that stronger mineralization could be encountered in the more permissive rock type (mid to lower Chon Aike formation). At the Igloo Trend, limited initial drilling intercepted mineralization very similar to that of Estancia Sur, related to narrow veinlets, zones of pseudo-stockwork and fluidized channels hosting brecciation, with Au grades up to 0.57 g/t. This mineralization is associated with a pronounced and widespread “cloud” of pathfinder elements characterised by As, Sb, Hg and Ba. Such zones of anomalous pathfinder elements typically reside above productive systems in several low sulfidation Au-Ag epithermal mines and deposits in Santa Cruz and provide a strong vector to depth for stronger mineralization. At the Pellegrini Trend, four diamond drill holes were completed within the main target area to test a structurally controlled IP resistivity anomaly, with an additional two scout holes competed outboard 6 Newmont Corporation - 2/24/2022 Press Release 17 of the main target area that were collared to drill test two other major northwest-trending fault structures to the west and north, for a combined total of 1,431m. Holes PEL-DDH-001, PEL-DDH-002 and PEL-DDH-005 at the Pellegini main target area all encountered, within their upper levels, restricted zones of anomalous mineralization associated with hydrothermal brecciation. Hole PEL-DDH-005, which was drilled deeper below PEL-DDH-002, exhibits the best mineralized intersection to date. A wide zone of peripheral crackle brecciation starts at 170m vertically below surface and continues into an inner core of hydrothermal polymictic brecciation for a total intercepted width of brecciation >25 m. This inner zone returned an intersection of 20.4m at 0.24 g/t Au and 39 g/t Ag (58 g/t AgEq7) from 242.5m, including 10.5m at 0.28 g/t Au and 66 g/t Ag (87 g/t AgEq) from 249m. High Zn and Pb base metal results are also associated with this brecciated body with 0.82% Pb and 0.7% Zn over the broader 20.4m interval, including 1.3m with 3.19% Pb and 2.56% Zn. In late 2021 Mirasol drilled hole PEL-DDH-007 behind and under PEL-DDH-005 to test the depth and lateral extent of the breccia body previously intercepted. No significant Au or Ag mineralization was encountered apart from isolated values of 0.4 g/t Au and 140 g/t Ag from narrow veinlet zones. These veinlets are generally sub-parallel to the core axis and potentially have an antithetic structural configuration. However, broad Pb and Zn mineralization was intercepted returning: • 33.9m at 1.3% Pb and 0.5% Zn from 298.6m (250 ppm Pb cut-off) o o including 15.85m at 2.1% Pb and 0.8% Zn from 285.15m (1,000 ppm Pb cut-off) Including a higher-grade section of 7.2m at 4.1% Pb and 1.4% Zn from 289m (1% Pb cut-off) Evaluation of the three holes drilled at Pellegrini in the breccia zone (PEL-DDH-002, 005 and 007) suggests that the mineralized zone may have a west-dipping orientation. A scissor drill hole oriented from west to east is recommended to better test the potential of the target. Furthermore, it appears that the three holes have not adequately tested the coincident chargeability/resistivity anomaly defined from the recent deep penetrating IP geophysics located to the west of holes PEL-DDH-005 and 007 and directly at depth below PEL-DDH-002. The mineralization also appears to decrease in intensity, most notably in Au/Ag, further to the east, outboard and distal to this remaining untested central target. Other Properties Mirasol holds several additional drill-ready and early-stage exploration properties prospective for Au, Ag and Cu mineralization in southern Argentina and northern Chile. The Company has also completed initial field programs to advance a number of early-stage porphyry prospects in the Argentinian Cordillera. In addition, Mirasol has signed confidentiality agreements, distributed data sets and conducted field reviews with selected companies with the objective of securing potential new partnerships for these properties. In September 2021, Mirasol introduced and reported initial exploration results from its 100% owned Osiris Cu project (“Osiris”) located within the fertile Miocene belt of Chile which hosts several high- profile advanced projects such as Altar, Los Azules, El Pachon and the Pelambres Mine. Osiris was staked by Mirasol and comprises approximately 10,000 ha of exploration claims. Mirasol’s detailed surface exploration, which included geological mapping, geochemical sampling and alteration analysis, has defined two drill-ready concealed porphyry Cu-Mo-(Au) targets (Filo Gordito and Northern Osiris). Mirasol has initiated a search for an exploration partner to advance and drill test Osiris (news release September 29, 2021). 7 Silver equivalent (“AgEq”) is calculated using metal prices of US$ 1800/oz for Au and US$ 24/oz for Ag. Recoveries are assumed to be 100% as no metallurgical test data is available. The equation used is: AgEq g/t = Ag g/t + (Au g/t x 75) 18 HIGHLIGHTS FOR THE YEARS ENDED JUNE 30, 2022 AND 2021 FINANCIAL CONDITION The Company’s cash and cash equivalents was $5,698,539 and working capital $6,234,606 as of June 30, 2022. During the year ended June 30, 2022, the Company incurred total company-wide net cash expenditures of $4,414,666. The financial statements show a total expenditure of $5,089,895 of which non-cash items such as share-based payments and depreciation totalled $675,229. For the year ended June 30, 2022, the total net cash expenditure was distributed between head office corporate spending of $1,172,657, inclusive of officer’s salaries, board fees, business development, corporate administration, investor relations and regulatory compliance; and a total net exploration expenditure of $3,242,009 (table 1). The annual level of spending by the Company is determined by its ability to secure financing through the sale of its securities, sales of assets and concluding exploration agreements with its industry partners. EXPLORATION FINANCIAL SUMMARY The Company’s total exploration costs include exploration, property retention costs, costs associated with preparing projects for joint venture, in-country operations and management, and local value added taxes (“VAT”). For the year ended June 30, 2022, Mirasol invested $1,881,097 on exploration in Chile and $1,360,912 in Argentina (table 1). The Company received $3,156,807 in cost recoveries during the year ended June 30, 2022, including claims fees, salaries of Mirasol employees seconded to the partner-funded programs and other operating costs that are covered by the partners under the terms of agreements. Mirasol earned $153,300 of management fee income during the period. The Company also received $343,397 in option payments from its Coronación and Nord projects (table 1). CORPORATE MATTERS On September 15, 2021, the Company announced the appointment of Mr. Timothy C. Moody, B.Sc. (Hon), to the Board of Directors of the Company. Mr. Moody has over 30 years of experience in the mining industry, with expertise in mineral exploration, resource assessment, business development and corporate strategy. The Company also announced the grant of a total of 3,100,000 incentive stock options to directors, officers, employees, consultants, and contractors. The options are for a five-year term at an exercise price of $0.34 per share and will vest over a period of three years. On November 22, 2021, the Company granted a total of 165,000 restricted share units (“RSU’s”) to certain officers and employees of the Company under the short-term incentive plan approved by the board. On November 25, 2021, the Company announced its intention to renew its normal course issuer bid (the "Bid") to purchase for cancellation, from time to time, as it considers advisable, up to 3,500,000 of its issued and outstanding common shares. The Bid commenced on December 15, 2021, and will terminate on December 14, 2022, or such earlier time as the Bid is completed or at the option of the Company. 19 On January 4, 2022, the Company announced the promotion of Ms. Carmen Cazares to Chief Financial Officer. Ms. Cazares joined Mirasol in 2019 and previously served as the Company’s Corporate Controller. Ms. Cazares, CPA, CGA, is a member of the Chartered Professional Accountants of British Columbia and has a broad operational and accounting background with more than 30 years of experience. On May 2, 2022, the Company announced the appointment of Mr. Troy Shultz as Vice President Investor Relations to increase understanding and support for the Company. Mr. Shultz has more than 15 years of investor relations experience in the mining industry. Mirasol also announced the resignation of Jonathan Rosset, Vice President Corporate Development to pursue other opportunities. RESULTS OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2022 AND 2021 The Company’s net loss for the year ended June 30, 2022 (“2022”) was $5,081,013 or $0.10 per share compared to a net loss of $5,962,584 or $0.11 per share for the year ended June 30, 2021 (“2021”), a decrease of $881,571. The decrease in net loss during 2022 is due to a combination of a decrease in exploration expenditures, administration costs, overhead costs related to the exploration activities, and foreign exchange loss, and an increase in interest income, investment income, and share-based payments. The Company’s total loss before other items was $5,089,895 and $5,361,037 for the years ended June 30, 2022 and 2021, respectively. The Company recorded interest income of $523,497 from its investments during the year ended June 30, 2022, compared to $614,748 during the same period in 2021. The Company also recorded an unrealized loss on its marketable securities of $739,691 compared to $149,586 during the same period in 2021. The Company recorded a gain of $249,022 on foreign exchange from conversion of funds during the year ended June 30, 2022, compared to a loss of $1,075,835 during the year ended June 30, 2021. Share-based payments increased to $578,477 in 2022 from a recovered amount of $25,968 in 2021. The recovered amount in 2021 was due to the reversal of previously recognized share-based payments from options that were cancelled during the period. Depreciation expense decreased to $96,752 in 2022 from $106,237 in 2021. Both are non-cash items. Other notable variances include a decrease in net exploration expenditures to $3,242,009 in 2022 as compared to $3,935,809 in 2021 (table 1); a decrease in business development, marketing and investor relations expenses to $233,053 in 2022 from $276,034 in 2021; a decrease of management and directors fees to $537,047 in 2022 as compared to $697,144 in 2021; an increase in office administration, filing fees, and travel expenses to $253,311 in 2022 compared to $234,308 in 2021; and an increase in professional fees to $149,246 in 2022 compared to $137,473 in 2021 from various consultants. Please refer to the Company’s audited consolidated financial statements for a breakdown of the Company’s general and administration expenses for the years ended June 30, 2022 and 2021. 20 The following table provides changes in exploration expenditures and cost recoveries for the years ended June 30, 2022, and 2021: Table 1: Summary of exploration expenditures for the years ended June 30, 2022 and 2021. Table 1 - Exploration summary Twelve months Jun 30, Exploration costs Exploration costs recovery Corporate operation costs Total exploration costs Option income Management fees Net Exploration expenses Total Chile Total Argentina Total Mirasol 2022 1,979,167 (560,681) 806,008 2,224,494 (343,397) - 1,881,097 2021 2,632,369 2022 3,086,516 2021 4,062,099 2022 5,065,683 2021 6,694,468 (936,080) (2,596,126) (1) (2,832,227) (3,156,807) (3,768,307) 856,385 1,023,822 1,066,180 1,829,830 1,922,565 2,552,674 (750,719) - 1,801,955 1,514,212 - (153,300) 1,360,912 2,296,052 - (162,198) 2,133,854 3,738,706 (343,397) (153,300) 3,242,009 4,848,726 (750,719) (162,198) 3,935,809 (1) During the year ended June 30, 2022, the Company received USD$1,433,869 from Silver Sands as part of the option agreement (2021 - $1,742,879). Funds were received in Canada and transferred to the Company’s subsidiary in Argentina. Once the funds were received in Argentina, the Company used a mechanism whereby the US funds are used to buy and then sell government bonds denominated in pesos. The buy and sell of the bond create an implied exchange rate, which diverges significantly above Argentina’s official fixed exchange rate. Accordingly, a recovery of $2,596,126 has been recorded under Virginia project in Argentina (2021 - $2,832,227), (note #1 in the breakdown by projects for Argentina’s exploration and evaluation expenses table). FOURTH QUARTER ANALYSIS The Company’s net loss for the three months ended June 30, 2022 (“2022”) was $1,435,174 or $0.03 per share compared to a net loss of $1,824,030 or $0.03 per share for the three months ended June 30, 2021 (“2021”), a decrease of $388,856. The decrease in net loss during 2022 is due to a combination of a decrease in exploration expenditures, administration costs, overhead costs related to the exploration activities, and interest income, and an increase in foreign exchange gain and investment loss, and share-based payments. The Company’s total loss before other items was $1,343,887 and $2,158,364 for the three months ended June 30, 2022 and 2021, respectively. The Company recorded interest income of $81,583 from its investments during the three months ended June 30, 2022, compared to $522,855 during the same period in 2021. The Company also recorded an unrealized loss on its marketable securities of $281,157 compared to $130,860 during the same period in 2021. The Company recorded a gain of $94,723 on foreign exchange from conversion of funds during the three months ended June 30, 2022, compared to a loss of $45,166 during the same period in 2021. Share-based payments increased to $123,771 in 2022 from $16,513 in 2021. Depreciation expense decreased to $19,195 in 2022 from $27,358 in 2021. Both are non-cash items. Other notable variances during the three months ended June 30, 2022 include a decrease in net exploration expenditures to $876,701 in 2022 compared to $1,822,750 during the same period in 2021 (Table 2); an increase in business development, marketing and investor relations expenses to $84,718 in 2022 from $64,533 in 2021; a decrease of management and directors fees to $129,600 in 2022 as compared to $143,896 in 2021; an increase in office administration, filing fees, and travel 21 expenses to $76,649 in 2022 compared to $52,493 in 2021; and a increase in professional fees to $33,253 in 2022 compared to $30,281 in 2021 from various consultants. The following table provides changes in exploration expenditures and cost recoveries for the three months ended June 30, 2022, compared to the same period in 2021: Table 2: Summary of exploration expenditures for the three months ended June 30, 2022, and 2021. Table 2 - Exploration summary Three months Jun 30, Exploration costs Exploration costs recovery Corporate operation costs Total exploration costs Management fees Net Exploration expenses Total Chile Total Argentina Total Mirasol 2022 308,289 (93,229) 297,781 512,841 - 512,841 2021 809,249 2022 852,644 (894,659) (781,147) 269,303 183,893 - 183,893 342,745 414,242 (50,382) 363,860 2021 1,287,406 (180,012) 539,341 1,646,735 (7,878) 1,638,857 2022 1,160,933 2021 2,096,655 (874,376) (1,074,671) 640,526 927,083 (50,382) 876,701 808,644 1,830,628 (7,878) 1,822,750 A breakdown by country and group of projects of the Company’s exploration and evaluation expenses for the twelve and three months ended June 30, 2022 and 2021: 22 CHILE Altazor Camp and general Contractors and consultants Exploration costs recovered Environmental Mining rights and fees Travel & accommodation Gorbea Package Camp and general Contractors and consultants Exploration costs recovered Mining rights and fees Option Income Coronation Camp and general Contractors and consultants Option income Mining rights and fees Travel & accommodation Rubi Assays and sampling Camp and general Contractors and consultants Exploration costs recovered Drilling Environmental Mining rights and fees Resource Studies Travel & accommodation Nord Contractors and consultants Exploration costs recovered Mining rights and fees Option income For the Twelve Months Ended June 30, 2022 2021 For the Three Months Ended Jun 30, 2022 2021 11,162 54,318 (91,532) 4,088 83,586 10,656 72,278 - 20,635 (221,626) 296,477 - 95,486 2,411 12,333 (93,615) 31,989 1,801 (45,081) 20,546 18,434 168,187 (181,530) 115,080 8,332 69,409 - 17,936 236,394 5,571 (65,993) 50,556 (249,782) (259,648) 14,395 32,579 (98,168) - 159,705 13,762 122,273 159 11,090 (229,986) 263,428 (618,527) (573,836) - 6,869 (66,422) 12,870 - (46,683) 1,792 45,657 152,591 (607,926) 275,644 43,864 68,784 19,581 60,736 60,723 25,438 - 45,815 (65,770) 5,483 - 2,893 - - 63,041 - 65,934 - 3,755 (221,626) 8,945 - (208,926) 1,027 4,588 - 4,465 482 10,562 - - 957 194,390 - - 47 - - 195,394 2,076 (65,993) 4,168 - (59,749) 719 8,967 (98,168) - 6,042 1,979 (80,461) - 1,501 (229,986) 20,504 - (207,981) - 605 - 7,730 - 8,335 - 37,409 121,675 (566,505) 275,644 14,418 68,506 - 54,186 5,333 716 - 1,950 - 2,666 Total - Properties joint ventured to other companies 99,429 (432,040) 3,215 (272,108) Chile Pipeline Projects Assays and sampling Camp and general Contractors and consultants Geophysics Mining rights and fees Professional fees Travel & accommodation - - 12,927 117,043 13,817 - - 143,787 15,905 2,925 45,418 - 19,845 1,400 2,304 87,797 - - 1,991 117,043 9,486 - - 128,520 23,187 60,932 252,112 290,475 101,032 1,400 18,680 747,818 23 CHILE (Cont'd…) Los Amarillos (Brahma) Contractors and consultants Drilling preparation Mining rights and fees Zeus Contractors and consultants Mining rights and fees Professional fees For the Twelve Months Ended June 30, 2022 2021 For the Three Months Ended Jun 30, 2022 2021 1,673 9,046 34 10,753 315 3,504 - 3,819 5,073 - 13,627 18,700 2,681 20,925 1,612 25,218 1,673 9,046 - 10,719 315 389 - 704 - - 1,670 1,670 - 2,142 - 2,142 Total - 100% owned properties 762,390 187,705 99,220 132,332 Inca Assays and sampling Camp and general Contractors and consultants Drilling Drilling preparation Environmental Geophysics Mining rights and fees Resource studies Travel & accommodation Ladera - Joint Venture Contractors and consultants Join Venture Payments Mining rights and fees 2,454 20,789 31,442 - 1,290 - 102,857 51,248 - - 210,080 - - - - 50,868 104,587 359,640 343,999 - 10,904 - 50,739 8,580 84,448 1,013,765 7,134 64,398 5,211 76,743 - 12,494 3,125 - 1,290 - 77,794 16,085 - - 110,788 - - - - 20,081 8,436 31,626 (11,917) - 4,119 - 1,250 - (1,452) 52,143 - - - - Total - Earn-in joint venture on third party projects 210,080 1,090,508 110,788 52,143 Project Generation Corporate Operation & Management - Chile 3,190 806,008 99,397 856,385 1,837 297,781 2,223 269,303 Total Chile 1,881,097 1,801,955 512,841 183,893 ARGENTINA Virginia - Joint Venture Assays and sampling Camp and general Contractors and consultants Drilling Drilling preparation Exploration costs recovered (1) Geophysics Mining rights and fees Travel & accommodation Total - Properties joint ventured to other companies 215,017 770,519 527,057 926,674 11,524 (2,596,126) 770 48,520 39,400 (56,645) (56,645) 301,829 712,270 449,432 1,199,579 35,658 (2,832,227) 15,893 32,039 43,586 (41,941) (41,941) 71,008 233,916 141,200 312,442 500 (781,147) - 16,572 9,723 4,214 4,214 81,328 42,349 33,327 5,187 - (180,012) - 9,099 3,935 (4,787) (4,787) 24 ARGENTINA (Cont'd…) Argentina Pipeline Projects Assays and sampling Camp and general Contractors and consultants Environmental Mining rights and fees Claudia Camp and general Contractors and consultants Environmental Mining rights and fees La Curva Camp and general Contractors and consultants Environmental Mining rights and fees Travel & accommodation Sasha Contractors and consultants Mining rights and fees For the Twelve Months Ended June 30, 2022 2021 For the Three Months Ended Jun 30, 2022 2021 5,725 93,333 43,576 2,103 12,209 156,946 - 8,868 13,388 119,496 141,752 8,270 15,396 6,619 22,247 1,376 53,908 709 8,969 9,678 3,685 4,463 24,654 372 13,372 46,546 3,375 1,316 - 116,966 121,657 5,142 792 134 19,234 1,072 26,374 1,128 3,615 4,743 2,700 178 5,483 - 5,216 13,577 - 3,815 - 34,534 38,349 1,303 664 - 5,287 - 7,254 - 2,226 2,226 3,685 4,026 20,344 - 3,393 31,448 - 845 - 31,878 32,723 5,142 760 134 4,551 1,072 11,659 126 628 754 Total - 100% owned properties 362,284 199,320 61,406 76,584 Marcelina - Joint Venture Assays and sampling Camp and general Contractors and consultants Drilling Drilling preparation Environmental Mining rights and fees Travel & accommodation Total - Earn-in joint venture on third party projects 30,414 13,739 62,892 63,341 - 4,580 8,842 943 184,751 184,751 141,967 183,021 111,611 588,869 5,818 2,606 26,479 12,122 1,072,493 1,072,493 - - 4,504 - - - 1,373 - 5,877 5,877 141,967 182,525 88,526 582,139 5,818 - 22,500 12,122 1,035,597 1,035,597 Management Fee Income Corporate Operation & Management - Argentina (153,300) 1,023,822 (162,198) 1,066,180 (50,382) 342,745 (7,878) 539,341 Total Argentina 1,360,912 2,133,854 363,860 1,638,857 Total Exploration and Evaluation Costs 3,242,009 3,935,809 876,701 1,822,750 25 SELECTED ANNUAL INFORMATION Sales Loss for the year Loss per share – basic and diluted Total assets Total long-term liabilities 2022 $ - (5,081,013) (0.10) 8,474,274 (115,048) 2021 $ - (5,962,584) (0.11) 13,475,668 (163,642) 2020 $ - (5,902,479) (0.11) 19,233,887 (205,043) Dividends declared - - - SUMMARY OF QUARTERLY RESULTS The following table sets out selected unaudited quarterly financial information of the Company and is derived from unaudited quarterly consolidated financial statements prepared by management in accordance with IAS 34 and accounting policies consistent with IFRS. Income (Loss) from Continued Operations $ (1,435,174) (1,856,893) (955,790) (833,156) (1,824,030) (1,733,447) (1,062,288) (1,342,819) Basic Income (Loss) per Share from Continued Operations $ (0.03) (0.03) (0.02) (0.02) (0.03) (0.03) (0.02) (0.02) Diluted Income (Loss) per Share from Continued Operations $ (0.03) (0.03) (0.02) (0.02) (0.03) (0.03) (0.02) (0.02) Revenues $ Nil Nil Nil Nil Nil Nil Nil Nil Period 4th Quarter 2022 3rd Quarter 2022 2nd Quarter 2022 1st Quarter 2022 4th Quarter 2021 3rd Quarter 2021 2nd Quarter 2021 1st Quarter 2021 The Company’s quarterly results will vary depending on exploration and business development activities. The Company also grants incentive stock options to its directors, management, employees and consultants, which cause a variation in the Company’s results. The movement in the value of the US dollar relative to the Canadian dollar can also have an impact on the Company’s results from one period to the next as the Company holds its working capital primarily in US dollars. INVESTING ACTIVITIES The Company continued to invest Canadian and US dollars in interest-bearing financial instruments maturing up to one year. The total amount invested in 2022 was $4,543,650 compared to $7,825,180 in the same period in 2021. Excluding the interest income from the bond premium in Argentina, the Company received interest income of $10,959 during the year ended June 30, 2022, compared to $73,998 for the year ended June 30, 2021. 26 CAPITAL RESOURCES AND LIQUIDITY In order to finance the Company’s exploration programs and to cover administrative and overhead expenses, the Company primarily raises money through equity sales and from the exercise of convertible securities (share purchase options and warrants). Many factors influence the Company’s ability to raise funds, including the health of the resource market, the climate for mineral exploration investment, the Company’s track record and the experience and calibre of its management. The Company has no operations that generate cash flow and its long-term financial success is dependent on management’s ability to discover economically viable mineral deposits. The Company applies the project generator model where it seeks and presents partners with an option to joint venture the Company’s projects, in order to have those partners fund the exploration to earn an interest. In some agreements, the Company receives cash option payments or common stock of the joint venture partner, as a portion of the partner’s cost to earn an interest. If any of its exploration programs are successful and the partners complete their earn-ins, the Company would have to provide its share of ongoing exploration and development costs in order to maintain its interests; and, if not, reduce its equity interest through a monetization transaction or dilution of its ownership interest or conversion to a royalty interest. The Company does not anticipate mining revenues from sale of mineral production in the foreseeable future. With working capital of approximately $6.2 million on June 30, 2022, the Company has sufficient funds to conduct its administrative, business development, and discretionary exploration activities over the next twelve months. Actual funding requirements may vary from those planned due to several factors, including the Company’s joint venture partners encountering difficulty in financing exploration programs on optioned properties. The Company further believes it has the ability to raise equity capital to meet its foreseeable longer-term working capital needs but recognizes that the ability to raise capital in the future involves risks beyond its control. OFF-BALANCE SHEET ARRANGEMENTS The Company has no significant off-balance sheet arrangements. PROPOSED TRANSACTIONS The Company has no proposed transactions. TRANSACTIONS WITH RELATED PARTIES Details of the transactions between the Company’s related parties are disclosed below. a) Compensation of key management personnel Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. 27 The remuneration of management and independent directors was as follows: Management compensation (i) Share-based payments (ii) Director’s fees (iii) Year Ended June 30, 2022 525,580 392,329 95,550 1,013,459 $ $ 2021 317,191 (91,051) 83,815 309,955 $ $ i. Management compensation is included in management fees (2022 - $384,443; 2021 - $62,500) and in exploration expenditures (2022 – $141,137; 2021 - $254,691) in the Company’s consolidated statements of loss and comprehensive loss. ii. Share-based payments are included in the share-based payments expense in the Company’s consolidated statements of loss for the years ended June 30, 2022, and 2021. iii. The independent directors of the Company are paid $2,100 per month (2021 - $1,785 per month). b) Transactions with other related parties Certain of the Company’s officers and directors render services to the Company as sole proprietors or through companies in which they are an officer, director, or partner. The following companies are related parties through association of the Company’s directors and officers: Max Pinsky Personal Law Corporation Chase Management Ltd., a Company owned by Nick DeMare Manning Lee Management Ltd., a Company owned by Mathew Lee Nature of transactions Legal fees Professional fees CFO services The Company incurred the following fees and expenses with related parties as follows: Legal fees (i) CFO services (ii) Years Ended June 30, 2022 80,986 15,000 95,986 2021 96,794 30,000 126,794 $ $ $ $ i. Legal fees are included in professional fees (2022 - $39,286; 2021 - $54,508) and in business development (2022 – $41,700; 2021 - $42,100) in the Company’s consolidated statements of loss and comprehensive loss. ii. CFO services are included in management fees in the Company’s consolidated statements of loss for the years ended June 30, 2022, and 2021. Included in accounts payable and accrued liabilities at June 30, 2022, is an amount of $46,819 (2021 - $40,935) owing to directors and officers of the Company and to companies where the directors and officers are principals. 28 SIGNIFICANT ACCOUNTING POLICIES The details of the Company’s accounting policies are presented in Note 3 of the Company’s audited consolidated financial statements for the year ended June 30, 2022. The following policies are considered by management to be essential to the understanding of the processes and reasoning that go into the preparation of the Company’s financial statements and the uncertainties that could have a bearing on its financial results. RECENT ACCOUNTING ADOPTION New accounting standards issued but not yet in effect Classification of liabilities as current or non-current (Amendments to IAS 1) The IASB has published Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) which clarified the guidance on whether a liability should be classified as either current or non- current. The amendments: (i) Clarify that the classification of liabilities as current or non-current should only be based on rights that are in place “at the end of the reporting period”; (ii) Clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and (iii) Make clear that settlement includes transfers to the counterparty of cash, equity instruments, other assets or services that result in extinguishment of the liability. This amendment is effective for annual periods beginning on or after January 1, 2023. Earlier application is permitted. The extent of the impact of adoption of this amendment has not yet been determined. Insurance contracts IFRS 17 IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a more uniform measurement and presentation approach for all insurance contracts. These requirements are designed to achieve the goal of a consistent, principle-based accounting for insurance contracts. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, profit and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. 29 FINANCIAL INSTRUMENTS The Company’s financial instruments as at June 30, 2022, consist of cash and cash equivalents, receivables and advances, marketable securities, accounts payable and accrued liabilities and advances from joint venture partners. The fair value of all these instruments approximates their carrying value. There are no off-balance sheet financial instruments. The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company's financial instruments are summarized below. The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company operates in Canada, Argentina and Chile and a portion of its expenses are incurred in United States dollars, Australian dollars and in Argentine and Chilean Pesos. A significant change in the currency exchange rates between the US and Australian dollar relative to the Canadian dollar and the Argentine and Chilean Peso to the Canadian dollar could have an effect on the Company’s results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations. The Company appointed a special treasury committee comprising of three board members to consider management’s recommendations to mitigate the exposure to foreign currency risk. The committee and management maintain a ratio of 75:20:05 for US$: CAD$: AUD$ of the treasury whenever practical. MANAGEMENT OF CAPITAL RISK The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, to pursue the development of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes the components of equity. The Company manages the capital structure and adjusts it considering changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, acquire, or dispose of assets, enter into joint ventures or obtain debt financing. To facilitate the management of its capital requirements, the Company prepares annual and quarterly expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. To maximize ongoing development efforts, the Company does not pay dividends. The Company’s investment policy is to invest its cash in highly liquid short-term interest-bearing investments with maturities of twelve months or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations. The Company does not invest in commercial paper. The Company is not subject to externally imposed capital requirements. 30 ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE Additional disclosure concerning the Company’s operating expenses is provided above, and in the Company’s consolidated statements of loss and comprehensive loss of the audited consolidated financial statements for the year ended June 30, 2022 that is available on the Company’s website at www.mirasolresources.com or on its SEDAR company page accessed through www.sedar.com. OUTSTANDING SHARE DATA As of the date of this MD&A, the Company had 54,030,043 issued and outstanding common shares. In addition, the Company has 3,785,000 options outstanding that expire through May 1st, 2027. At the date of this MD&A, no RSU’s were outstanding. Details of issued share capital are included in Note 14 of the Company’s audited consolidated financial statements for the year ended June 30, 2022. APPROVAL The Audit Committee of the Company has approved the disclosure contained in this MD&A. ADDITIONAL INFORMATION Additional information relating to the Company is available on SEDAR at www.sedar.com and on the Company’s website at www.mirasolresources.com. 31
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