EX-99.57 58 exhibit99-57.htm EXHIBIT 99.57 Vizsla Silver Corp.: Exhibit 99.57 - Filed by newsfilecorp.com

 

 

VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Condensed Consolidated Interim Financial Statements

(Expressed in Canadian Dollars - unaudited)

For the three months ended July 31, 2020 and 2019

 

 

 


NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCAL STATEMENTS

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

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by management and approved by the Audit Committee and Board of Directors of the Company. They include appropriate accounting principles, judgment and estimates in accordance with IFRS for unaudited condensed consolidated interim financial statements.

The Company's independent auditors have not performed a review of these unaudited condensed consolidated interim financial statements in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of unaudited condensed interim financial statements by an entity's auditors.


VIZSLA RESOURCES CORP.
(formerly Vizsla Capital Corp.)

Condensed Consolidated Interim Statements of Financial Position
Expressed in Canadian dollars - unaudited

    July 31,     April 30,  
As at   2020     2020  
    $     $  
ASSETS            
             
Current assets            
Cash   33,529,187     2,583,910  
Tax receivables   459,046     262,943  
Prepaid expenses   172,509     106,344  
             
Total current assets   34,160,742     2,953,197  
             
Property, plant and equipment   47,045     38,769  
Exploration and evaluation assets (Note 4)   7,696,452     6,647,715  
             
Total assets   41,904,239     9,639,681  
             
LIABILITIES            
             
Current liabilities            
Accounts payable and accrued liabilities   150,048     117,662  
Due to related parties   -     25,253  
             
Total liabilities   150,048     142,915  
             
SHAREHOLDERS' EQUITY            
             
Share capital (Note 5)   45,553,078     12,202,496  
             
Reserves   3,094,999     2,126,899  
             
Share to be issued (Note 4)   308,594     308,594  
             
Deficit   (7,202,480 )   (5,141,223 )
             
Total shareholders' equity   41,754,191     9,496,766  
             
Total liabilities and shareholders' equity   41,904,239     9,639,681  

Note 1 - Nature of operations and going concern

They are signed on the Company's behalf by:

 

   

"Michael Konnert"

"Craig Parry"

Director

Director, Chairman

The accompanying notes are an integral part of these condensed consolidated interim financial statements


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
Expressed in Canadian dollars, except for number of shares - unaudited

    Three Months     Three Months  
    Ended     Ended  
    July 31, 2020     July 31, 2019  
    $     $  
             
General and administrative expenses            
Amortization   3,362     237  
Consulting fees   194,094     73,643  
Insurance   9,275     3,698  
Exploration   -     46,912  
Marketing   490,806     19,722  
Office and miscellaneous   62,439     33,021  
Professional fees   56,977     67,948  
Share based compensation (Note 6)   968,100     189,525  
Transfer agent and filing   9,968     14,171  
Travel and promotion   -     28,179  
Foreign exchange   266,236     -  
             
Net loss and comprehensive loss   2,061,257     477,056  
             
Basic and diluted loss per share   (0.06 )   (0.01 )
             
Weighted average number of common shares            
- Basic and diluted   34,127,628     28,020,352  

The accompanying notes are an integral part of these condensed consolidated interim financial statements


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Condensed Consolidated Interim Statements of Cash Flows Expressed in Canadian dollars - unaudited

    Three Months     Three Months  
    Ended     Ended  
    July 31, 2020     July 31, 2019  
    $     $  
Operating activities            
             
Net loss for the period   (2,061,257 )   (477,056 )
Items not affecting cash:            
Amortization   3,362     237  
Share based compensation   968,100     189,525  
             
Changes in non-cash working capital items:            
Accounts payable and accrued liabilities   32,386     (36,259 )
Due to/from related parties   (25,253 )   (5,500 )
Taxes receivable   (196,103 )   14,525  
Prepaid expenses   (66,165 )   (43,785 )
             
Net cash flows provided by (used in) operating activities   (1,344,930 )   (358,313 )
             
Investing activities            
             
Advances   -     (73,000 )
Exploration and evaluation expenditures   (1,048,737 )   -  
Purchase of equipment   (11,638 )   (1,820 )
             
Net cash flows (used in) investing activities   (1,060,375 )   (74,820 )
             
Financing activities            
             
Deferred finance costs   -     -  
Cash proceeds of common shares issued (net of share issue costs)   33,350,582     1,885,774  
             
Net cash flows provided by (used in) financing activities   33,350,582     1,885,774  
             
Increase (Decrease) in cash   30,945,277     1,452,641  
             
Cash, beginning of period   2,583,910     150,222  
             
Cash, end of period   33,529,187     1,602,863  

Note 8 - Non-cash Investing and Financing Activities

The accompanying notes are an integral part of these condensed consolidated interim financial statements


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Consolidated Statements of Changes in Equity

Expressed in Canadian dollars, except for number of shares

    Common shares                          
    Number     Amount     Reserves     Share to be     Deficit     Total  
                      issued              
          $     $     $     $     $  
Balance, April 30, 2019   20,133,335     2,183,961     288,466     -     (934,193 )   1,538,234  
                                     
Shares issued pursuant to private placement   28,244,768     7,874,438     125,262     -     -     7,999,700  
Shares issued pursuant to exercise of warrants and options   4,267,245     1,073,617     -     -     -     1,073,617  
Shares issued upon acquisition of Canam Alpine Ventures Ltd.   6,250,000     1,896,987     -     -     -     1,896,987  
Share issuance costs - cash   -     (557,713 )   -     -     -     (557,713 )
Share issuance costs - finders warrants   -     (268,794 )   268,794     -     -     -  
Share to be issued   -     -     -     308,594     -     308,594  
Stock based compensation   -     -     1,444,377     -     -     1,444,377  
Net loss and comprehensive loss for the year   -     -     -     -     (4,207,030 )   (4,207,030 )
                                     
Balance, April 30, 2020   58,895,348     12,202,496     2,126,899     308,594     (5,141,223 )   9,496,766  
                                     
Shares issued pursuant to private placement and prospectus   27,035,500     32,559,620     -     -     -     32,559,620  
Shares issued pursuant to exercise of warrants and options   2,647,404     790,962     -     -     -     790,962  
Stock based compensation   -     -     968,100     -     -     968,100  
Net loss and comprehensive loss for the year   -     -     -     -     (2,061,257 )   (2,061,257 )
                                     
Balance, July 31, 2020   88,578,252     45,553,078     3,094,999     308,594     (7,202,480 )   41,754,239  

The accompanying notes are an integral part of these condensed consolidated interim financial statements


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

1. Nature and Continuance of Operations and Going Concern

The Company was incorporated on September 26, 2017 under the Business Corporations Act (British Columbia) under the name Vizsla Capital Corp. On March 6, 2018, the Company changed its name to Vizsla Resources Corp. The Company's principal business activity is the exploration of mineral properties. The Company currently conducts substantially all of its operations in Canada in one business segment.

The head office and principal address of the Company is located at 1001- 1030 West Georgia Street, Vancouver, B.C., V6E 3B9.

The Company has not yet determined whether its properties contain ore reserves that are economically recoverable. The recoverability of the amounts shown for mineral properties and exploration costs is dependent upon the existence of economically recoverable ore reserves, the ability of the Company to obtain necessary financing to complete the exploration and development of its properties, and upon future profitable production or proceeds from the disposal of properties.

These condensed consolidated interim financial statements have been prepared using accounting principles applicable to a going concern which assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. The Company emphasises that attention should be drawn to matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. The most significant of these being the Company's ability to carry out its business objectives dependent on the Company's ability to receive continued financial support from related parties, to obtain public equity financing, or to generate profitable operations in the future. Other uncertainties include the fact that the Company is currently in the exploration stage for its interests in the Blueberry property in British Columbia, Canada (see Note 5), the economic viability of which have not been fully assessed. The Company has not yet determined whether these properties contain reserves that are economically recoverable. The recoverability of capitalized costs on the Blueberry property is uncertain and dependent upon projects achieving commercial production or sale. The outcome of these matters cannot be predicted at this time. The Company is considering a number of alternatives to secure additional capital including obtaining funding facilities or equity financings. Although management intends to secure additional financing there is no assurance management will be successful or that it will establish future profitable operations. These factors together raise substantial doubt about the Company's ability to continue as a going concern.

    July 31,     April 30,  
    2020     2020  
             
Deficit $ (7,202,480 ) $ (5,141,223 )
Working capital $ 34,010,694   $ 2,810,282  

If the going concern assumption was not appropriate for these condensed consolidated interim financial statements then adjustments would be necessary to the carrying value of assets and liabilities, the reported expenses and the consolidated statements of financial position classifications used and such amounts would be material.


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

2. Significant Accounting Policies and Basis of Presentation

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") have been omitted or condensed, and therefore these condensed consolidated interim financial statements should be read in conjunction with the Company's April 30, 2019 audited annual consolidated financial statements and the notes to such financial statements.

These condensed consolidated interim financial statements are based on the IFRS issued and effective as of March 30, 2020, the date these condensed consolidated interim financial statements were authorized for issuance by the Company's Board of Directors, and follow the same accounting policies and methods of computation as the most recent annual consolidated financial statements, except for the impact of the changes in accounting policies disclosed below:

a) Basis of consolidation

These condensed consolidated interim financial statements incorporate the financial statements of the Company, NorthBase Resources Inc. and Canam Alpine Ventures Ltd., the Company's wholly owned subsidiaries. (Note 4)

b) New accounting standard and interpretation

The Company adopted the following new accounting standard and interpretation:

IFRS 16, Leases (effective January 1, 2019) introduced new requirements for the classification and measurement of leases. Under IFRS 16, a lessee no longer classifies leases as operating or financing and records all leases on the condensed consolidated statement of financial position, unless the lease term is 12 months or less or the underlying asset has a low value. The Company has applied a modified retrospective transition approach. The Company does not have any leases, and as a result, this standard had no impact on the Company's condensed consolidated interim financial statements on adoption.

IFRIC 23, Uncertainty over Income Tax Treatments (effective January 1, 2019) provides guidance when there is uncertainty over income tax treatments including, but not limited to, whether uncertain tax treatments should be considered separately; assumptions made about the examination of tax treatments by tax authorities; the determination of taxable profit, tax bases, unused tax losses, unused tax credits, and tax rates; and, the impact of changes in facts and circumstances. This interpretation did not have an impact on the Company's condensed consolidated interim financial statements.


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

2. Significant Accounting Policies and Basis of Presentation (cont'd…)

c) Accounting standards issued but not yet adopted

The Company has not applied the following amendment that has been issued but is not yet effective:

Amendments to IFRS 3, Business Combinations (effective January 1, 2020) assist in determining whether a transaction should be accounted for as a business combination or an asset acquisition. It amends the definition of a business to include an input and a substantive process that together significantly contribute to the ability to create goods and services provided to customers, generating investment and other income, and it excludes returns in the form of lower costs and other economic benefits. The Company has not elected to apply this amendment early.

4. Exploration and Evaluation Assets

Exploration and evaluation assets are summarized in the table below:

    July 31,     April 30,  
    2020     2020  
Northbase Resources Inc. - Blueberry Property (a) $ 1,457,886   $ 1,457,886  
Canam Alpine Ventures Ltd. - Panuco-Copala property (b)   7,603,566     5,189,829  
  $ 9,061,452   $ 6,647,715  

a. Acquisition of Northbase Resources Inc.

On January 16, 2019, pursuant to a definitive share exchange agreement dated December 17, 2018, the Company acquired all of the issued and outstanding common shares of Northbase Resources Inc. ("Northbase") a private British Columbia company which controls a district-scale (20,265 hectare) land package known as the Blueberry Property in the Babine porphyry copper district in central British Columbia. Under the terms of the acquisition, the holders of Northbase shares received one common share of the Company in exchange for each Northbase share held.

The Company issued an aggregate 9,100,001 common shares in connection with the acquisition at a fair value of $0.15 per common share (Note 8). The shares are subject to a four month hold period.


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

4. Exploration and Evaluation Assets (continued)

a. Acquisition of Northbase Resources Inc. (continued)

The transaction was accounted for as an asset acquisition. The purchase consideration was as follows:

Share consideration $ 1,365,000  
Transaction costs   15,612  
Consideration given $ 1,380,612  

The allocation of the purchase price to the assets acquired and liabilities assumed was based upon estimated fair value at the date of acquisition as below:

Cash $ 44,630  
Accounts payable and accrued liabilities   (21,485 )
Exploration and evaluation asset   1,357,467  
Net assets acquired $ 1,380,612  

Blueberry Property

Cost related to the properties can be summarized as follows:

    Balance,           Balance,           Balance,  
    April 30,           April 30,           July 31,  
    2019     Additions     2020     Additions     2020  
    $     $     $     $     $  
Acquisition costs                              
Shares   1,357,467     -     1,357,467     -     1,357,467  
    1,357,467     -     1,357,467     -     1,357,467  
Exploration costs                              
Analysis   -     15,365     15,365     -     15,365  
Equipment   -     13,800     13,800     -     13,800  
Geophysical consulting   -     45,499     45,499     -     45,499  
Project management   -     6,130     6,130     -     6,130  
Travel, supplies and field expenses   -     19,625     19,625     -     19,625  
    -     100,419     100,419     -     100,419  
                      -        
Balance   -     100,419     1,457,886     -     1,457,886  


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

4. Exploration and Evaluation Assets (continued)

b. Acquisition of Canam Alpine Ventures Ltd.

On November 5, 2019, pursuant to a definitive share exchange agreement (the "Agreement") dated September 13, 2019, the Company acquired all of the issued and outstanding common shares of Canam Alpine Ventures Ltd.("Canam"), a private British Columbia company. Canam owns two subsidiaries in Mexico, Minera Canam SA DE CV and Operaciones Canam Alpine SA DE CV.

According to the Agreement, the Company agreed to pay the consideration of $45,000 cash ($30,000 not paid) and issue 6,000,000 common shares (issued) and 12,000,000 Milestone Shares on the occurrence of milestone events as follows:

- Milestone event 1: Upon exercise of any defined options by Canam, the Company will issue 6,500,000 common shares;
- Milestone event 2: Upon definition of a resource greater than 200,000 gold equivalent ounces, the Company will issue 5,500,000 common shares.

In addition, the Company issued 250,000 common shares at the closing of the transaction and agreed to issue an additional 250,000 common shares on each occurrence of Millstone event 1 and 2 for a total of 750,000 common shares as finders' fees. As of April 30, 2020, neither of the above milestone events occurred.

The Company recorded $296,250 and $12,345 as contingent consideration in relation to the two milestone events and related finder's fees, respectively, which represented its fair value at the date of acquisition and was classified as shares to be issued, representing the fair value at the date of acquisition of the fixed number of shares that are required to be issued based on the milestones. The contingent consideration will not be remeasured and settlement is accounted for in equity.

The transaction was accounted for as an asset acquisition. The purchase consideration was as follows:

Cash consideration $ 45,000  
Share consideration   1,798,237  
Share consideration to finders   98,750  
Contingent consideration   308,595  
Effective settlement of Loans receivable (note 5)   1,064,647  
Transaction cost - legal fee   125,190  
Total consideration given $ 3,440,419  

The whole purchase price was allocated to exploration and evaluation asset since Canam has no other asset and liability on the date of acquisition.


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

4. Exploration and Evaluation Assets (continued)

Panuco - Copala Property

On August 8, 2019 Canam entered into an option agreement with Minera Rio Panuco SA de CV ("Panuco") whereby the Company can earn a 100% interest in certain concessions and assets by spending USD$2,000,000 in exploration by the second anniversary date of the agreement and paying a cumulative of USD$23,000,000. The option agreement was amended on May 6, 2020 (Note 16).

On September 9, 2019, Canam entered into option agreement with Silverstone Resources SA de CV ("Copala") whereby the Company can earn a 100% interest in certain concessions and assets by spending USD$1,423,000 in exploration by the second anniversary date of the agreement and paying a cumulative of USD$20,000,000.

Panuco - Copala Property

Costs related to the properties can be summarized as follows:

    Balance,           Balance,  
    April 30,           July 31,  
    2020     Additions     2020  
    $     $     $  
Acquisition costs                  
                   
- Cash   45,000     -     45,000  
- Shares issued   1,896,987     -     1,896,987  
- Contingent consideration   308,595     -     308,595  
- Effective settlement of Loans receivable   1,064,647     -     1,064,647  
    3,440,419     -     3,440,419  
                   
Exploration costs                  
                   
Analysis   162,056     19,890     181,946  
Drilling   368,376     338,057     706,433  
Equipment   69,283     19,160     88,443  
Geological Consulting   553,226     313,965     867,191  
Maintenance   174,717     164,310     339,027  
Field Cost   357,157     167,705     524,862  
Travel and Misc.   64,595     25,650     90,245  
    1,749,410     1,048,737     2,798,147  
                   
Balance   5,189,829     1,048,737     6,238,566  


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

4. Exploration and Evaluation Assets (continued)

Following is a summary of the terms of exercising the options:

    Panuco     Copala  
    Work     Option     Work     Option  
    Commitment     Payment     Commitment     Payment  
Milestone   (USD)     (USD)     (USD)     (USD)  
On signing $ -   $ 450,000   $ -   $ 335,575  
12 month anniversary of signing $ 1,000,000   $ -   $ 711,500   $ 450,000  
24 month anniversary of signing $ 1,000,000   $ 3,050,000   $ 711,500   $ 2,134,500  
36 month anniversary of signing $ -   $ 4,000,000   $ -   $ 2,846,000  
48 month anniversary of signing $ -   $ 5,000,000   $ -   $ 3,557,500  
60 month anniversary of signing $ -   $ 5,000,000   $ -   $ 4,269,000  
72 month anniversary of signing $ -   $ 5,500,000   $ -   $ 6,407,425  
Total $ 2,000,000   $ 23,000,000   $ 1,423,000   $ 20,000,000  

5. Share Capital

a) Authorized:

Unlimited number of common shares with no par value.


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

5. Share Capital (cont'd…)

b) Issued and Outstanding

As at July 31, 2020, 57,877,968 (April 30, 2019: 20,133,335) common shares with no par value were issued and outstanding.

During the three months ended July 31, 2020, the Company issued common shares of the Company (the "Shares") as follow:

 On June 6, 2019, the Company completed a private placement, whereby the Company issued an aggregate of 13,192,829 Units of the Company at a price of $0.15 per Unit for gross proceeds of $1,978,924. Each Unit consists of common share and one share purchase warrant exercisable for at $0.25 for a period of 2 years. The Company paid a cash fee of $87,150 and issued 621,000 brokers warrants in connection with the financing. The fair value of broker warrant is $42,120.

 On November 5, 2019, the Company issued 6,250,000 common shares in connection with the acquisition of Canam Alpine Ventures Ltd (Note 4b).

 On November 28, 2019, the Company completed a private placement, whereby the Company issued an aggregate of 9,058,500 common shares of the Company at a price of $0.40 per common share for gross proceeds of $3,623,000. The Company paid a cash fee of $217,380 and issued 543,510 compensation options in connection with the financing. Each compensation option is exercisable at $0.40 for a period of one year.

 On December 5, 2019, the Company completed a private placement, whereby the Company issued an aggregate of 941,500 common shares of the Company at a price of $0.40 per common share for gross proceeds of $376,600. The Company paid a cash fee of $22,596 and issued 56,490 compensation options in connection with the financing. Each compensation option is exercisable at $0.40 for a period of one year. In addition, the Company paid a corporate finance fee of $80,000 and issued 200,000 warrants exercisable at $0.40 for a period of one year.

 On December 20, 2019, the Company completed a private placement, whereby the Company issued an aggregate of 5,051,939 common shares of the Company at a price of $0.40 per common share for gross proceeds of $2,020,776. The Company paid a cash fee of $121,247 and issued 88,200 compensation options in connection with the financing. Each compensation option is exercisable at $0.40 for a period of two years.

 On June 18, 2020, the Company closed a prospectus offering whereby it issued 10,752,500 common shares of the Company at a price of $0.43 per common share for gross proceeds of $4,623,575. In connection with the prospectus offering, the Company paid finders fees of $277,415 and issued 645,150 finders warrants entitling the holder to purchase an additional common share of the Company at $0.43 per share for a period of two years.

 On July 30, 2020, the Company closed a brokered private placement whereby it issued 16,043,000 units of the Company at a price of $1.87 per unit for gross proceeds of $30,000,410. Each unit consist of one common share and one warrant exercisable at $2.40 and expiring July 30, 2022. In connection with the financing, the Company paid finders fees of $1,813,465 and issued 962,580 finders warrants entitling the holder to purchase an additional common share of the Company at $1.87 per share for a period of two years.


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

 On July 30, 2020, the Company closed a non-brokered private placement whereby it issued 240,000 units of the Company at a price of $1.87 per unit for gross proceeds of $448,800. Each unit consist of one common share and one warrant exercisable at $2.40 and expiring July 30, 2022. In connection with the financing, the Company paid finders fees of $13,464.

 During the three months ended July 31, 2020, 2,605,304 warrants were exercised for proceeds of $746,362.

 During the three months ended July 31, 2020, 110,000 options were exercised for proceeds of $42,100.

c) Escrow shares

As at July 31, 2020, the Company has 3,847,500 common shares held in escrow (April 30, 2019: 7,162,500).

d) Warrants

Warrants

As at July 31, 2020, the Company has 10,350,945 warrants exercisable.

The following is a summary of warrant transactions for the nine months ended July 31, 2020 and year ended April 30, 2020.

    July 31, 2020     April 30, 2020  
    Number of     Weighted     Number of     Weighted  
    warrants     average     warrants     average  
          exercise           exercise  
          price           price  
          $           $  
Warrants outstanding, beginning of the period   11,040,617     0.20     355,833     0.15  
Issued   1,847,732     1.44     14,702,029     0.26  
Exercised   (2,537,404 )   (0.17 )   (4,017,245 )   (0.24 )
Warrants outstanding, end of the period   10,350,945     0.47     11,040,617     0.20  


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

5. Share Capital (cont'd…)

d) Warrants (cont'd…)

The following warrants were outstanding and exercisable July 31, 2020:

    Exercise     Number of warrants  
Expiry date   price     outstanding and exercisable  
September 19, 2020 $ 0.15     2,592  
June 6, 2021 $ 0.25     8,257,131  
November 28, 2021 $ 0.40     103,290  
December 5, 2021 $ 0.40     113,725  
December 18, 2021 $ 0.40     26,475  
June 18, 2022 $ 0.43     645,150  
July 30, 2022 $ 1.87     962,582  
July 30, 2022 $ 2.40     240,000  

The fair value of the warrants granted was calculated as of the grant date using the Black- Scholes option pricing model with the following assumptions:

Risk Free Interest Rate 1.38%
Expected Dividend Yield -
Expected Volatility 125%
Expected Term in Years 2 years

The Company recorded $0.07 per warrant with a cumulative total fair value of $42,120 against reserves.

f) Options

The Company has adopted a Stock Option Plan (the "Plan") pursuant to which options may be granted to directors, officers and consultants of the Company. Under the terms of the Plan, the Company can issue a maximum of 10% of the issued and outstanding common shares at the time of the grant, a maximum term of 10 years and the exercise price of each option is determined by the directors, but may not be less than the closing market price of the Common Shares on the day preceding the date of granting of the option less any available discount, in accordance with TSXV Policies. No option may be granted for a term longer than ten years. Options granted under the Plan including vesting and the term, are determined by, and at the discretion of, the Board of Directors.


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

5. Share Capital (cont'd…)

f) Options (cont'd…)

The continuity of stock options for the nine months ended July 31, 2020 and April 30, 2020 is as follows:

    July 31, 2020     April 30, 2020  
    Number of     Weighted average     Number of     Weighted average  
    options     exercise price     options     exercise price  
          $           $  
Options outstanding, beginning of the period   5,343,000     0.35     2,010,000     0.15  
Issued   1,570,000     0.79     3,613,000     0.47  
Cancelled   (45,000 )   (0.79 )   (30,000 )   (0.15 )
Exercised   (110,000 )   (0.38 )   (250,000 )   (0.41 )
Options outstanding, end of the period   6,758,000     0.45     5,343,000     0.35  

The following options were outstanding and exercisable as July 31, 2020:

    Exercise     Number of Options  
Expiry date   price     outstanding and exercisable  
February 27, 2029 $ 0.15     1,980,000  
June 13, 2024 $ 0.17     1,268,000  
December 24, 2024 $ 0.56     400,000  
December 30, 2024 $ 0.69     1,480,000  
January 7, 2025 $ 0.72     105,000  
June 29, 2025 $ 0.79     1,525,000  

The fair value of the options granted was calculated using the Black-Scholes option pricing model with the following assumptions:

Risk Free Interest Rate 0.36%-1.66%
Expected Dividend Yield -
Expected Volatility 112%-126%
Expected Term in Years 5 years

The Company recorded total fair value of $968,100 and $189,525 as share based compensation for the three months ended July 31, 2020 and 2019.


VIZSLA RESOURCES CORP.

(formerly Vizsla Capital Corp.)

Notes to Condensed Consolidated Interim Financial Statements
For the Three Months Ended July 31, 2020 and 2019
Expressed in Canadian dollars, except for number of shares

6. Related Party Transactions

During the three months ended July 31, 2020 and 2019, the Company has the following related party transactions:

(a) The Company has incurred $110,000 and $30,000 in consulting fees to the Company's Officers as compensation.

(b) The Company has incurred $40,000 and $Nil in consulting fees to the Company's Directors as compensation.

(c) The Company has granted 960,000 (2019: Nil) stock options in total to directors, officers and consultants of the Company (Note 5f).

These transactions are in the normal course of operations and have been valued in these condensed consolidated interim financial statements at the exchange amount, which is the amount of consideration established and agreed to by the related parties.