Aurcana Silver : Interim Financial Report

AURCANA SILVER CORPORATION

Condensed Interim Consolidated Financial Statements

June 30, 2022

(Unaudited)

Expressed in United States dollars unless otherwise stated

2751 Graham Street, Victoria BC V8T 3Z1 Canada PHONE : (604) 331‐9333 FAX : (604) 633‐9179 www.aurcana.com

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51‐102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the Company's interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by, and are the responsibility of, the Company's management.

The Company's independent auditor has not performed a review of these interim financial statements in accordance with the standards established by the Canadian Institute of Chartered Professional Accountants for a review of financial statements by an entity's auditor.

"Kevin Drover"	"Charles R. Andrews"
President and CEO	CFO

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Aurcana Silver Corporation

Condensed Interim Consolidated Statements of Financial Position

(Expressed in United States dollars)

			June 30
	Notes		2022
Assets
Current assets
Cash and cash equivalents	24	$	46,135
Trade and other receivables	4		45,470
Inventory	5		1,751,788
Prepaid expenses and advances	6		2,478,745
Non Current assets			4,322,138
Long term deposits			326,260
Non‐current prepaid expenses			‐
Property, plant and equipment	7		70,874,637
Mineral Properties	8		40,885,708
Right‐of‐use asset	9		‐
Reclamation deposits	10		7,839
Total assets		$	116,416,582
Liabilities
Current liabilities
Accounts payable and accrued liabilities	11	$	13,342,522
Private financing	14		4,291,128
Mercuria financing	16		310,000
Current portion of lease payable	9		‐
Current portion of borrowings	16		28,000,000
Non Current liabilities			45,943,650
Long term accrued liabilities	13		3,344,948
Provision for environmental rehabilitation	15		1,120,270
Borrowings	16		‐
Close‐Out derivatives	17		18,283,950
Derivative liability	17		‐
Total liabilities			68,692,818
Equity
Share capital	18		71,873,613
Contributed surplus			154,962,997
Accumulated other comprehensive income			(1,811,270)
Deficit			(177,312,741)
Total equity attributable to equity holders of the parent			47,712,599
Non‐controlling interest			11,165
Total equity			47,723,764
		$	116,416,582

December 31 2021

• 1,535,841
  90,058

2,075,734

3,475,922

7,177,555

326,260

4,240

70,478,429

40,885,708

4,271

525,245

$ 119,401,708

• 12,071,916
  3,525,436
  ‐
  5,343
  5,992,676

21,595,371

3,344,948

1,120,270

15,943,614

‐

3,306,545

45,310,748

69,249,146

152,428,438

916,082

(148,513,871)

74,079,795

11,165

74,090,960

$ 119,401,708

Nature of Operations and Going Concern (Note 1)

Subsequent Events (Note 30)

See accompanying notes to these consolidated financial statements.

Approved on behalf of the Board of Directors:
"Peter Fairfield"	"Michael P. Gross"
Director	Director

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Aurcana Silver Corporation Condensed Interim Consolidated Statements of Loss and Comprehensive Loss For the Periods Ended June 30, 2022 and 2021 (Expressed in United States dollars, unless otherwise stated)

	Notes			Three months ended June 30,				Six months ended June 30,
			2022			2021				2022			2021
Expenses
General and administrative costs	19	$	1,007,425	$	689,248	$	1,986,588	$	1,445,153
Financing expense and others	20			1,800,643			542,735				7,596,178			1,061,174
Maintenance costs	21			1,244,544			60,624				5,903,138			105,971
Depreciation and amortization property, plant and equipment	7			123,811			160				277,016			315
Amortization of right‐of‐use asset	9			‐			4,586				4,271			9,036
Stock‐based compensation	18			376,777			1,329,097				893,317			1,439,174
Foreign exchange (gain) loss				(2,741,755)			(564,558)				(2,744,253)			1,013,500
				1,811,445			2,061,892				13,916,255			5,074,323
Gain (loss) in derivatives fair value estimate	17			‐			(2,814,629)				(14,977,405)			318,338
Other income				(18,662)			404,169				94,790			411,921
Net income (loss) for the period before other comprehensive
items				(1,830,107)			(4,472,352)				(28,798,870)			(4,344,064)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustment				(2,625,729)			(552,622)				(2,727,352)			800,879
Total other comprehensive income (loss) for the period				(2,625,729)			(552,622)				(2,727,352)			800,879
Total comprehensive income (loss) for the period
	$	(4,455,836)		$	(5,024,974)		$	(31,526,222)		$	(3,543,185)
Weighted average number of shares basic and diluted				309,131,509			275,708,062				303,663,190			269,883,904
Loss per share
Loss per share basic and diluted		$	(0.01)	$	(0.02)	$	(0.09)	$	(0.02)

See accompanying notes to these condensed interim consolidated financial statements.

Aurcana Silver Corporation Condensed Interim Consolidated Statements of Changes in Equity (Expressed in United States dollars, unless otherwise stated)

					Accumulated
					Other		Shareholders	Non‐
	Share Capital	Contributed	Comprehensive		of	controlling	Total
	Number of
	shares	$	Surplus	Income (Loss)	Deficit	the Company	Interest	Equity
Balance, December 31, 2020	238,010,005	47,167,854	138,413,862		176,172	(113,059,603)	72,698,285	11,165	72,709,450
Net income for the period	‐	‐	‐		‐	(4,344,064)	(4,344,064)	‐	(4,344,064)
Shares issued for:
Private placement (note 18)	34,292,893	17,920,795	8,466,538		‐	‐	26,387,333	‐	26,387,333
Share Issue Costs (note 18)	‐	(1,839,085)	499,534		‐	‐	(1,339,551)	‐	(1,339,551)
Exercised warrants	5,897,611	2,236,875	(412,428)		‐	‐	1,824,447	‐	1,824,447
Stock‐based compensation	‐	‐	1,439,174		‐	‐	1,439,174	‐	1,439,174
Currency translation adjustment	‐	‐	‐		800,879	‐	800,879	‐	800,879
Balance, June 30, 2021	278,200,509	65,486,439	148,406,680		977,051	(117,403,667)	97,466,503	11,165	97,477,668
Net loss for the period	‐	‐	‐		‐	(31,110,204)	(31,110,204)	‐	(31,110,204)
Shares issued for:
Private placement (note 18)	12,275,542	4,767,088	2,394,263		‐	‐	7,161,351	‐	7,161,351
Share Issue Costs (note 18)	1,530,530	(1,025,322)	573,169		‐	‐	(452,153)	‐	(452,153)
Exercised warrants	60,000	20,941	(3,085)		‐	‐	17,856	‐	17,856
Stock‐based compensation expensed	‐	‐	56,922		‐	‐	56,922	‐	56,922
Stock‐based compensation capitalized	‐	‐	1,000,489				1,000,489		1,000,489
Currency translation adjustment	‐	‐	‐		(60,969)	‐	(60,969)	‐	(60,969)
Balance, December 31, 2021	292,066,581	69,249,146	152,428,438		916,082	(148,513,871)	74,079,795	11,165	74,090,960
Net loss for the period	‐	‐	‐		‐	(28,798,870)	(28,798,870)	‐	(28,798,870)
Shares issued for:
Private placement (note 18)	16,592,928	3,239,147	1,501,111		‐	‐	4,740,258	‐	4,740,258
Share Issue Costs (note 18)	472,000	(614,680)	140,131		‐	‐	(474,549)	‐	(474,549)
Stock‐based compensation expensed	‐	‐	893,317		‐	‐	893,317	‐	893,317
Currency translation adjustment	‐	‐	‐		(2,727,352)	‐	(2,727,352)	‐	(2,727,352)
Balance, June 30, 2022	309,131,509	$ 71,873,613	$ 154,962,997	$	(1,811,270)	$ (177,312,741)	$ 47,712,599	$ 11,165	$ 47,723,764

See accompanying notes to these condensed interim consolidated financial statements.

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