Gold Mountain Mining : GMTN_-Audited Financial Statements 31 January 2022

GOLD MOUNTAIN MINING CORP. (Formerly Freeform Capital Partners Inc.)

Consolidated Financial Statements Years Ended January 31, 2022 and 2021

(Expressed in Canadian Dollars)

Table of Contents

AUDITORS' REPORT 2

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 8

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS 9

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 10

CONSOLIDATED STATEMENTS OF CASH FLOWS 11

NOTE 1 - NATURE OF OPERATIONS 12

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION 12

NOTE 3 - MANAGEMENT JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY 19

NOTE 4 - REVERSE TAKEOVER 21

NOTE 5 - RECEIVABLES 22

NOTE 6 - PREPAID EXPENSES AND DEPOSITS 22

NOTE 7 - PROPERTY AND EQUIPMENT 23

NOTE 8 - RECLAMATION DEPOSITS 25

NOTE 9 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 26

NOTE 10 - SHORT-TERM LOANS 26

NOTE 11 - PROMISSORY NOTE 26

NOTE 12 - FLOW-THROUGH SHARE PREMIUM LIABILITY 27

NOTE 13 - RECLAMATION PROVISION 27

NOTE 14 - SHARE CAPITAL AND SHARE-BASED PAYMENTS 27

NOTE 15 - RELATED PARTY TRANSACTIONS 31

NOTE 16 - SUPPLEMENTAL CASH FLOW INFORMATION 33

NOTE 17 - CAPITAL MANAGEMENT 33

NOTE 18 - INCOME TAX 34

NOTE 19 - FINANCIAL INSTRUMENTS 35

NOTE 20 - COMMITMENTS 36

NOTE 21 - EVENTS AFTER REPORTING PERIOD 36

Independent auditor's report

To the Shareholders of Gold Mountain Mining Corp.

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Gold Mountain Mining Corp. and its subsidiaries (together, the Company) as at January 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS).

What we have audited

The Company's consolidated financial statements comprise:

the consolidated statements of financial position as at January 31, 2022 and 2021; the consolidated statements of loss and comprehensive loss for the years then ended; the consolidated statements of changes in shareholders' equity for the years then ended; the consolidated statements of cash flows for the years then ended; and

the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

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

Independence

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. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended January 31, 2022. These matters were

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addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

How our audit addressed the key audit matter

Impairment assessment of exploration and evaluation assets of the Elk Gold Property prior to reclassification as property and equipment

Refer to note 2 - Significant accounting policies and basis of presentation, note 3 - Management judgments and key estimation uncertainty and note 7 - Property and equipment to the consolidated financial statements.

Effective June 1, 2021, the Company commenced capitalization of all direct costs related to the development of the Elk Gold Property, as management determined that the technical feasibility and commercial viability of the property had been established. Accordingly, the Company reclassified capitalized costs associated with the Elk Gold Property from exploration and evaluation to mineral property within property and equipment. Capitalized mineral property costs will be carried at cost until the Elk Gold Property is placed in commercial production, sold, abandoned, or determined by management to be impaired in value. Costs related to development work are capitalized in property and equipment as mineral property. The net book value of the exploration and evaluation assets related to Elk Gold Property at the time of the reclassification amounted to $12.3 million as at June 1, 2021.

Concurrent with the development decision, the Company completed an impairment test of the Elk Gold Property which compared the carrying value to the recoverable amount. The recoverable amount is the greater of the value in use and the fair value less disposal costs. The fair value less disposal costs was used to determine the recoverable amount of the Elk Gold Property and was calculated using a discounted cash flow model based on the preliminary economic assessment prepared by management's experts. The significant assumptions that impacted the fair value included future gold prices, capital cost estimates, operating cost estimates, estimated mineral resources,

Our approach to addressing the matter involved the following procedures, among others:

Tested how management determined the recoverable amount of the Elk Gold Property as at June 1, 2021, which included the following:

Evaluated the appropriateness of the method used by management in the discounted cash flow model.

Tested the underlying data used in the discounted cash flow model.

Evaluated the reasonableness of future gold prices by considering external market and industry data.

The work of management's experts was used in performing the procedures to evaluate the reasonableness of capital cost estimates, operating cost estimates and estimated mineral resources. As a basis for using this work, the competence, capabilities and objectivity of management's experts was evaluated, the work performed was understood and the appropriateness of the work as audit evidence was evaluated. The procedures performed also included evaluation of the methods and assumptions used by management's experts, tests of the data used by management's experts and an evaluation of their findings.

Professionals with specialized skill and knowledge in the field of valuation assisted us in assessing the reasonableness of the discount rate

Key audit matter

How our audit addressed the key audit matter

used within the model.

and the discount rate. Based on the result of the impairment test, management concluded that there was no impairment.

We considered this a key audit matter due to (i) significance of the property and equipment balance related to the Elk Gold Property and (ii) significant audit effort and subjectivity in performing procedures to test significant assumptions used by management in determining the recoverable amount, which involved significant judgment by management. We were also assisted by professionals with specialized skill and knowledge in the field of valuation.

Other information

Management is responsible for the other information. The other information comprises the 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 identified above 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.

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.