<SEC-DOCUMENT>0000917225-17-000020.txt : 20170714
<SEC-HEADER>0000917225-17-000020.hdr.sgml : 20170714
<ACCEPTANCE-DATETIME>20170714151029
ACCESSION NUMBER:		0000917225-17-000020
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		11
CONFORMED PERIOD OF REPORT:	20170712
ITEM INFORMATION:		Completion of Acquisition or Disposition of Assets
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20170714
DATE AS OF CHANGE:		20170714

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SOLITARIO EXPLORATION & ROYALTY CORP.
		CENTRAL INDEX KEY:			0000917225
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				841285791
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32978
		FILM NUMBER:		17965417

	BUSINESS ADDRESS:	
		STREET 1:		4251 KIPLING STREET
		STREET 2:		SUITE 390
		CITY:			WHEAT RIDGE
		STATE:			CO
		ZIP:			80033
		BUSINESS PHONE:		3035341030

	MAIL ADDRESS:	
		STREET 1:		4251 KIPLING STREET
		STREET 2:		SUITE 390
		CITY:			WHEAT RIDGE
		STATE:			CO
		ZIP:			80033

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SOLITARIO RESOURCES CORP
		DATE OF NAME CHANGE:	20000711
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<TYPE>8-K
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<FILENAME>close8k.htm
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<P STYLE="font: 14pt Times New Roman, Times, Serif; text-align: center; margin-right: 0; margin-left: 0"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 14pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; text-align: center; margin-right: 0; margin-left: 0"><B>Form 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-right: 0; margin-left: 0">CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d)<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Date of Report (Date of earliest event reported):
July 12, 2017</P>

<HR SIZE="1" NOSHADE ALIGN="CENTER" STYLE="width: 75%; color: white">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SOLITARIO EXPLORATION &amp; ROYALTY CORP.</B></P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center">(Exact name of registrant as specified
in its charter)</P>

<HR SIZE="1" NOSHADE ALIGN="CENTER" STYLE="width: 75%; color: white">

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
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    <TD STYLE="width: 38%; padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">Colorado</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">(State or other jurisdiction of</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">incorporation or organization) </FONT></TD>
    <TD STYLE="padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">001-32978</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">(Commission</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">File Number) </FONT></TD>
    <TD STYLE="padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">84-1285791</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">(I.R.S. Employer</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">Identification No.)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-right: 0; margin-left: 0">4251 Kipling Street, Suite
390<BR>
Wheat Ridge, CO 80033<BR>
(Address of principal executive offices)</P>

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    <TD STYLE="width: 65%; padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">Registrant&rsquo;s telephone number, including area code:</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">(303) 534-1030</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-right: 0; margin-left: 0">Not Applicable<BR>
(Former name or former address, if changed since last report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 2%; padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&#9744;</FONT></TD>
    <TD STYLE="width: 98%; padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1%; padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif">&#9744;</TD>
    <TD STYLE="width: 99%; padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&#9744;</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&#9744;</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>




<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>

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<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Item 2.01</B></TD><TD><B>Completion of Acquisition or Disposition of Assets.&nbsp;</B></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0">As previously announced on April 26, 2017, Solitario
Exploration &amp; Royalty Corp. (&ldquo;Solitario&rdquo;) and Zazu Metals Corporation. (&ldquo;Zazu&rdquo;) entered into an Arrangement
Agreement (the &ldquo;Agreement&rdquo;) providing for the acquisition of Zazu by Solitario (the &ldquo;Transaction&rdquo;).&nbsp;&nbsp;&nbsp;&nbsp;On
July 12, 2017, pursuant to the terms and conditions of the Agreement, Zazu became a wholly-owned subsidiary of Solitario.&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0"><B>Arrangement Agreement</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0">On July 12, 2017, Solitario and Zazu completed the
transaction contemplated by the Agreement, pursuant to which Zazu became a wholly-owned subsidiary of Solitario.&nbsp;&nbsp;Pursuant
to the Agreement, at the effective time, each issued and outstanding Zazu common share, no par value per share, was converted into
the right to receive 0.3572 of a share of common stock of Solitario, par value $0.01 per share.&nbsp;&nbsp;Solitario issued approximately
19,788,183 shares of its common stock as consideration in the Transaction. &nbsp;Based on the closing price of Solitario common
stock on July 12, 2017, as reported on the NYSE MKT, the aggregate value of the consideration paid or payable to former holders
of Zazu&rsquo;s common shares is approximately $13.7 million. In addition holders of Zazu options to buy Zazu shares of common
stock received an aggregate of 1,782,428 replacement options to purchase shares of Solitario common stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0">The requisite approval of the Plan of Arrangement
by Zazu shareholders was obtained at a special meeting of the Zazu shareholders held on June 29, 2017.&nbsp;&nbsp;Solitario&rsquo;s
shareholders approved the issuance of the shares of Solitario common stock necessary to effect the Plan of Arrangement at an annual
meeting of the Solitario shareholders held on June 29, 2017. On July 7, 2017, a final order (the &ldquo;Final Order&rdquo;) was
entered by the Ontario Superior Court of Justice (the &ldquo;Court&rdquo;) in connection with the Plan of Arrangement.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0">The foregoing description of the Agreement and the
Transaction contemplated by the Agreement does not purport to be complete and is subject to, and qualified in its entirety by,
reference to the full text of the Agreement, which was previously filed with the Securities and Exchange Commission (the &ldquo;SEC&rdquo;)
as Exhibit 2.1 to Solitario&rsquo;s Current Report on Form 8-K filed April 27, 2017 and is incorporated by reference as Exhibit
2.1 to this Current Report on 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Item 3.02</B></TD><TD><B>Unregistered Sales of Equity Securities</B></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0">&nbsp;As described in Item 2.01 of this Current Report
on Form 8-K, on July 12, 2017, Solitario issued approximately 19,788,183 shares of its common stock to the holders of common shares
of Zazu. The issuance of the Solitario common stock is exempt from registration under Section 3(a)(10) of the Securities Act of
1933, as amended (&ldquo;the Securities Act&rdquo;). Section 3(a)(10) of the Securities Act exempts the issuance of securities
issued in exchange for one or more bona fide outstanding securities, or partly in such exchange and partly for cash, from the registration
requirements of the Securities Act where the terms and conditions of such issuance and exchange have been approved by a court of
competent jurisdiction, after a hearing upon the fairness of the terms and conditions of such issuance and exchange at which all
persons to whom the securities will be issued have the right to appear and receive timely notice thereof. On July 7, 2017, the
Court issued the Final Order.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">The information disclosed under Item 2.01 of this Current
Report on Form 8-K is incorporated into this Item 3.02 in its entirety.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Item 5.03.</B></TD><TD><B>Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year.</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0">As previously reported on a Current Report on Form
8-K filed on June 29, 2017, Solitario shareholders approved an amendment to Solitario&rsquo;s Articles of Incorporation to change
the name of Solitario to &ldquo;Solitario Zinc Corp.&rdquo; (the &ldquo;Amendment&rdquo;). The Amendment was subject to completion
of the Transaction, which occurred on July 12, 2017. The Amendment will be effective July 17, 2017.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Item 7.01 Regulation FD Disclosure.</B></P>




<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 13, 2017,
Solitario issued a press release announcing the closing of the Transaction.</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The information
furnished under this Item 7.01, including the exhibits, shall not be deemed &ldquo;filed&rdquo; for purposes of Section 18 of the
Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933,
except as shall be expressly set forth by reference to such filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Item 9.01.</B></TD><TD STYLE="text-align: justify"><B>Financial Statements and Exhibits.</B></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 12pt 0 0">(d)List of Exhibits</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-bottom: black 1pt solid; padding-top: 0.75pt; padding-right: 0.75pt">
        <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Exhibit</B></P>
        <P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Number</B></P></TD>
    <TD STYLE="padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-top: 0.75pt; padding-right: 0.75pt; text-align: center; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Arrangement Agreement and Plan of Arrangement dated April 26, 2017, among Solitario Exploration &amp; Royalty Corp. and Zazu Metals Corporation&nbsp;&nbsp;(incorporated by reference to Exhibit 2.1 to Solitario&rsquo;s Form 8-K filed with the United States Securities and Exchange Commission on April 27, 2017.)</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.1 *</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Articles of Amendment. </FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.1*</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Audited financial statements of Zazu as at and for the years ended December 31, 2016 and 2015, and the unaudited interim financial statements of Zazu as at and for the three month period ended March 31, 2017 and 2016.</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.2*</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unaudited pro forma <FONT STYLE="background-color: white">condensed combined balance sheet of Solitario and Zazu as of March 31, 2017, and the unaudited pro forma condensed combined statements of operations of Solitario and Zazu for the three months ended March 31, 2017, and for the year ended December 31, 2016.</FONT></FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.3*</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Press release of Solitario dated July 13, 2017</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0.75pt; padding-right: 0.75pt; line-height: 115%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>




<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-right: 0; margin-left: 0"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.25in">Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.</P>

<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">July 13, 2017</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; margin-bottom: 7.75pt">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">Solitario Exploration &amp; Royalty Corp.</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">By: </FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%"><U>/s/ James R. Maronick</U></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 10pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 10pt; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; line-height: 115%">James R. Maronick, Chief Financial Officer</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>exh31.htm
<DESCRIPTION>COLORADO SECRETARY OF STATE
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>


<P STYLE="font: 12pt/107% Times New Roman, Times, Serif; margin: 0 0 0 2.75in"><IMG SRC="image_001.jpg" ALT="" STYLE="height: 36px; width: 79px"></P>

<P STYLE="font: 12pt/107% Times New Roman, Times, Serif; margin: 0 0 0 2.75in; text-align: right">EXHIBIT 3.1</P>

<P STYLE="font: 12pt/107% Times New Roman, Times, Serif; margin: 0 0 0 2.75in; text-align: right">&nbsp;</P>

<P STYLE="font: 12pt/107% Times New Roman, Times, Serif; margin: 0 0 0 2.75in">&nbsp;</P>

<P STYLE="font: 12pt/107% Times New Roman, Times, Serif; margin: 0 0 0 2.75in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Colorado
Secretary of State</P>

<P STYLE="font: 12pt/107% Times New Roman, Times, Serif; margin: 0 7.15pt 0 2.75in; text-align: right">Date and Time: 07/07/2017
01:34 PM</P>

<P STYLE="font: 11pt/103% Times New Roman, Times, Serif; margin: 0 0 0.55pt"><FONT STYLE="font-size: 10.5pt">Document must be filed
electronically. &#9; &#9; &#9; &#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-size: 18.5pt"><SUB>ID Number: 19871594776</SUB></FONT> <FONT STYLE="font-size: 10.5pt">&#9;
</FONT></P>

<P STYLE="font: 10.5pt/103% Times New Roman, Times, Serif; margin: 0 0 0.55pt; text-indent: -0.5pt">Paper documents are not accepted.</P>

<P STYLE="font: 11pt/103% Times New Roman, Times, Serif; margin: 0 28.15pt 0.55pt 0; text-indent: -0.5pt"><FONT STYLE="font-size: 10.5pt">Fees
&amp; forms are subject to change. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;</FONT><FONT STYLE="font-size: 12pt">Document number: 20171521906 </FONT><FONT STYLE="font-size: 10.5pt">For
more information or to print copies &#9;</FONT><FONT STYLE="font-size: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amount Paid: $25.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-size: 10.5pt">of
filed documents, visit www.sos.state.co.us. </FONT></P>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 6pt/107% Times New Roman, Times, Serif; margin: 0 0.15pt 12.3pt 0; text-align: right">ABOVE SPACE FOR OFFICE USE
ONLY</P>

<P STYLE="font: bold 10.5pt/107% Times New Roman, Times, Serif; margin: 0 0.05pt 0 0; text-align: center">Articles of Amendment</P>

<P STYLE="font: 10.5pt/107% Times New Roman, Times, Serif; margin: 0 0.05pt 7.55pt 0; text-align: center">filed pursuant to &sect;7-90-301,
et seq. and &sect;7-110-106 of the Colorado Revised Statutes (C.R.S.)</P>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8.4pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/103% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0.55pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">1.</FONT></TD><TD><FONT STYLE="font-size: 10.5pt">For the entity, its ID number and entity name are </FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.25in">&nbsp;</P>

<P STYLE="font: 11pt/103% Calibri, Helvetica, Sans-Serif; margin: 0 0 0.55pt">&#9;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt; line-height: 103%">ID
number &#9; &#9; </FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">19871594776</FONT></P>

<P STYLE="font: 11pt/105% Calibri, Helvetica, Sans-Serif; margin: 0 0 6.05pt">&#9; <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt; line-height: 105%">&#9;
&#9; &#9; </FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt; line-height: 105%"><I>(Colorado Secretary
of State ID number)</I></FONT></P>

<P STYLE="font: 11pt/103% Calibri, Helvetica, Sans-Serif; margin: 0 0 8.45pt">&#9;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt; line-height: 103%">Entity
name &#9; &#9; &#9;</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Solitario
Exploration &amp; Royalty Corp.</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/103% Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0.55pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt; line-height: 103%">2.</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt; line-height: 103%">The new entity name (if applicable)
is &nbsp;</FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Solitario
Zinc Corp.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 1.35pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/105% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0.1pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">3.</FONT></TD><TD><FONT STYLE="font-size: 8pt"><I>(If the following statement applies, adopt the statement by marking the box and include an
attachment.) </I></FONT></TD></TR></TABLE>

<P STYLE="font: 10.5pt/103% Calibri, Helvetica, Sans-Serif; margin: 0 0 0.55pt 18.5pt; text-indent: -0.5pt"><FONT STYLE="font-family: Segoe UI Symbol,sans-serif; border: black 2.25pt solid">&#9744;</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif">This document contains additional amendments or other information. </FONT></P>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/103% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0.55pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">4.</FONT></TD><TD><FONT STYLE="font-size: 10.5pt">If the amendment provides for an exchange, reclassification or cancellation of issued shares,
the attachment states the provisions for implementing the amendment. </FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 1.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 11pt/105% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0.1pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">5.</FONT></TD><TD><FONT STYLE="font-size: 8pt"><I>(<B>Caution</B>: <U>Leave blank</U> if the document does not have a delayed effective date.
Stating a delayed effective date has significant legal consequences. Read instructions before entering a date.) </I></FONT></TD></TR></TABLE>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.5in">&nbsp;</P>

<P STYLE="font: 8pt/105% Times New Roman, Times, Serif; margin: 0 0 0.1pt 18.5pt; text-indent: -0.5pt"><I>(If the following statement
applies, adopt the statement by entering a date and, if applicable, time using the required format.) </I></P>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 2.1pt 0.25in">&nbsp;</P>

<P STYLE="font: 11pt/103% Calibri, Helvetica, Sans-Serif; margin: 0 0 0.55pt">&#9; <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt; line-height: 103%">The
delayed effective date and, if applicable, time of this document is/are  </FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">07/17/2017
02:00 PM&#9;</FONT></P>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 10.3pt">&#9; <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt; line-height: 107%"><I>&#9;
&#9; &#9; &#9; &#9; &#9; &#9; &#9; &#9; (mm/dd/yyyy hour:minute am/pm) </I></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/107% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6.9pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><B>Notice</B>:</TD><TD></TD></TR></TABLE>

<P STYLE="font: 10pt/103% Times New Roman, Times, Serif; margin: 0 0.45pt 7.65pt 0; text-indent: -0.5pt">Causing this document
to be delivered to the Secretary of State for filing shall constitute the affirmation or acknowledgment of each individual causing
such delivery, under penalties of perjury, that such document is such individual's act and deed, or that such individual in good
faith believes such document is the act and deed of the person on whose behalf such individual is causing such document to be delivered
for filing, taken in conformity with the requirements of part 3 of article 90 of title 7, C.R.S. and, if applicable, the constituent
documents and the organic statutes, and that such individual in good faith believes the facts stated in such document are true
and such document complies with the requirements of that Part, the constituent documents, and the organic statutes.</P>

<P STYLE="font: 10pt/103% Times New Roman, Times, Serif; margin: 0 0.45pt 0.4pt 0; text-indent: -0.5pt">This perjury notice applies
to each individual who causes this document to be delivered to the Secretary of State, whether or not such individual is identified
in this document as one who has caused it to be delivered.</P>




<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR>
    <TD ROWSPAN="2" STYLE="vertical-align: top; padding-top: 0.1pt">
        <P STYLE="font: 10.5pt/normal Times New Roman, Times, Serif; margin: 0 0 32.05pt">6.</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 31.6pt">&nbsp;</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD>
    <TD COLSPAN="4" STYLE="vertical-align: top; font: 11pt/107% Calibri, Helvetica, Sans-Serif; padding-right: 11.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt">The
    true name and mailing&nbsp;&nbsp;address of the individual causing the document to be delivered for filing are</FONT></TD>
    <TD ROWSPAN="2" STYLE="vertical-align: bottom; padding-top: 0.1pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Waltz&#9;Peter&#9;F.</FONT></P>
        <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0 0 7.5pt"><I>&#9; (Last) &#9; &#9; (First) &#9; (Middle) (Suffix)
        </I></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt"></FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">1401 Lawrence Street</FONT></P>
        <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0 0 2.05pt">&#9; <I>(Street name and number or Post Office Box
        information) </I></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 4.95pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt"> </FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Suite 2300</FONT></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt"></FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">Denver&#9;CO&#9;80202-2498</FONT></P>
        <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0 0 2.05pt"><I>(City) &#9; (State) &#9; (Postal/Zip Code) </I></P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10.5pt"> </FONT><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif">United States</FONT></P>
        <P STYLE="font: 7pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.75in"><I>(Province &#8211; if applicable) (Country
        &#8211; if not US) </I></P></TD></TR>
<TR STYLE="vertical-align: top">

        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.25in">&nbsp;</P>
    <TD STYLE="padding-top: 0.1pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="padding-top: 0.1pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD>
    <TD STYLE="padding-top: 0.1pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; font: 11pt/107% Calibri, Helvetica, Sans-Serif; padding-top: 0.1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">AMD_PC </FONT></TD>
    <TD STYLE="vertical-align: top; font: 11pt/107% Calibri, Helvetica, Sans-Serif; padding-top: 0.1pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; font: 11pt/107% Calibri, Helvetica, Sans-Serif; padding-top: 0.1pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; font: 11pt/107% Calibri, Helvetica, Sans-Serif; padding-top: 0.1pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; font: 11pt/107% Calibri, Helvetica, Sans-Serif; padding-top: 0.1pt">&#9;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Page 1 of 2&nbsp;&nbsp;&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rev. 12/20/2016 </FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 7.1pt">&nbsp;</P>

<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 7.1pt"></P>

<P STYLE="font: 8pt/105% Times New Roman, Times, Serif; margin: 0 0 10.55pt; text-indent: -0.5pt"><I>(If the following statement
applies, adopt the statement by marking the box and include an attachment.) </I></P>

<P STYLE="font: 10.5pt/103% Calibri, Helvetica, Sans-Serif; margin: 0 0 7.25pt; text-indent: -0.5pt"><FONT STYLE="font-family: Segoe UI Symbol,sans-serif; border: black 2.25pt solid">&#9744;</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif">This document contains the true name and mailing address of one or more
additional individuals causing the document to be delivered for filing. </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/107% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6.9pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 0pt"><B>Disclaimer:</B></TD><TD></TD></TR></TABLE>

<P STYLE="font: 10pt/103% Times New Roman, Times, Serif; margin: 0 0.45pt 542.7pt 0; text-indent: -0.5pt">This form/cover sheet,
and any related instructions, are not intended to provide legal, business or tax advice, and are furnished without representation
or warranty. While this form/cover sheet is believed to satisfy minimum legal requirements as of its revision date, compliance
with applicable law, as the same may be amended from time to time, remains the responsibility of the user of this form/cover sheet.
Questions should be addressed to the user&#8217;s legal, business or tax advisor(s).</P>




<P STYLE="font: 8pt/107% Times New Roman, Times, Serif; margin: 0">AMD_PC &#9;Page 2 of 2 &#9; Rev. 12/20/2016</P>


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>exh991.htm
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 8.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 20pt Calibri, Helvetica, Sans-Serif; margin: 1pt 96.3pt 0; text-align: center; color: #1F497D"><B>ZAZU METALS CORPORATION</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3.8pt 96.3pt 0 96.25pt; text-align: center">Consolidated Financial
Statements</P>

<P STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; margin: 1.8pt 118.6pt 0 118.45pt; text-align: center">For the years ended
December 31, 2016 and 2015 (in US dollars)</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Georgia, Times, Serif; margin: 0 0 0 54.3pt">March 30, 2017</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 13pt Georgia, Times, Serif; margin: 0.3pt 0 0">&nbsp;</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0 0 0 54.3pt"><B>Independent Auditor&#8217;s Report</B></P>

<P STYLE="font: 11.5pt Georgia, Times, Serif; margin: 0.5pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Georgia, Times, Serif; margin: 0 0 0 54.3pt; text-indent: 0in">To the Shareholders of Zazu Metals Corporation</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10.5pt Georgia, Times, Serif; margin: 0.15pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/105% Georgia, Times, Serif; margin: 0 10.7pt 0 54.3pt">We have audited the accompanying consolidated financial
statements of Zazu Metals Corporation, which comprise the consolidated statements of financial position as at December 31, 2016
and December 31, 2015 and the consolidated statements of loss and comprehensive loss, changes in equity and cash flow for the years
then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.</P>

<P STYLE="font: 10pt Georgia, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<P STYLE="font: bold 10pt Georgia, Times, Serif; margin: 0 0 0 54.45pt; text-indent: 0in">Management&#8217;s responsibility for
the consolidated financial statements</P>

<P STYLE="font: 10pt/105% Georgia, Times, Serif; margin: 0.6pt 10.75pt 0 54.3pt">Management is responsible for the preparation
and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards,
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.</P>

<P STYLE="font: 10pt Georgia, Times, Serif; margin: 0.55pt 0 0">&nbsp;</P>

<P STYLE="font: bold 10pt Georgia, Times, Serif; margin: 0 0 0 54.3pt; text-indent: 0in">Auditor&#8217;s responsibility</P>

<P STYLE="font: 10pt/105% Georgia, Times, Serif; margin: 0.6pt 7.05pt 0 54.3pt">Our responsibility is to express an opinion on
these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted
auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free from material misstatement.</P>

<P STYLE="font: 10.5pt Georgia, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/105% Georgia, Times, Serif; margin: 0 5.75pt 0 54.3pt">An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor&#8217;s
judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity&#8217;s preparation
and fair presentation of the consolidated financial statements 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 entity&#8217;s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the consolidated financial statements.</P>

<P STYLE="font: 10.5pt Georgia, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/105% Georgia, Times, Serif; margin: 0 0 0 54.3pt; text-indent: 0.1pt">We believe that the audit evidence we
have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.</P>

<P STYLE="font: 13.5pt Georgia, Times, Serif; margin: 0.5pt 0 0">&nbsp;</P>

<P STYLE="font: 9pt/10.2pt Georgia, Times, Serif; margin: 5.05pt 0 0 54.3pt"><I>PricewaterhouseCoopers LLP</I></P>

<P STYLE="font: 9pt Georgia, Times, Serif; margin: 0 30.35pt 0 54.3pt"><I>PricewaterhouseCoopers Place, 250 Howe Street, Suite
1400, Vancouver, British Columbia, Canada V6C 3S7 T: +1 604 806 7000, F: +1 604 806 7806</I></P>

<P STYLE="font: 11.5pt Georgia, Times, Serif; margin: 0.05pt 0 0"><I>&nbsp;</I></P>

<P STYLE="font: 6pt Arial, Helvetica, Sans-Serif; margin: 0 0 0 54.3pt">&#8220;PwC&#8221; refers to PricewaterhouseCoopers LLP,
an Ontario limited liability partnership.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 8pt Arial, Helvetica, Sans-Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: bold 10pt Georgia, Times, Serif; margin: 5pt 0 0 54.3pt; text-indent: 0in">Opinion</P>

<P STYLE="font: 10pt/105% Georgia, Times, Serif; margin: 0.6pt 0 0 54.3pt">In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of Zazu Metals Corporation as at December 31, 2016 and December
31, 2015 and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting
Standards.</P>

<P STYLE="font: 9.5pt Georgia, Times, Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: bold 10pt Georgia, Times, Serif; margin: 0 0 0 54.3pt; text-indent: 0in">Emphasis of matter</P>

<P STYLE="font: 10pt/105% Georgia, Times, Serif; margin: 0.7pt 0 0 54.3pt">Without qualifying our opinion, we draw attention to
note 1 in the financial statements, which describes matters and conditions that indicate the existence of a material uncertainty
that may cast significant doubt about Zazu Metals Corporation&#8217;s ability to continue as a going concern.</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0.2pt 0 0">&nbsp;</P>

<P STYLE="font: bold 10pt Georgia, Times, Serif; margin: 0.05pt 0 0 54.3pt; text-indent: 0in">(signed) &#8220;PricewaterhouseCoopers
LLP&#8221;</P>

<P STYLE="font: 11pt Georgia, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 13pt Georgia, Times, Serif; margin: 0.35pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Georgia, Times, Serif; margin: 0 0 0 54.3pt"><B>Chartered Professional Accountants</B></P>




<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 62%; padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 14pt; color: #1F497D"><B>ZAZU METALS CORPORATION</B></FONT></TD>
    <TD NOWRAP STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt; color: #588695">Consolidated Statements of Financial Position</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt; color: #588695">In U.S. dollars</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>&nbsp;December 31 </B></FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959"><B>&nbsp;December 31 </B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Note</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>&nbsp;2016 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959"><B>&nbsp;2015 </B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Assets</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Current assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 90,463 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ 459,458 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Receivables and prepaids&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17,128 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36,323 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;107,591 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;495,781 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Non-current assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Equipment</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">4</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,956 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24,307 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;Exploration and evaluation assets</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">4</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,467,788 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,365,235 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Total assets</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,592,335 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ 15,885,323 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Liabilities</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Current liabilities</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Trade and other payables</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 26,838 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ 47,236 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;Loan payable</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">5</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;70,000 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Total liabilities</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;96,838 </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;47,236 </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="3" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Equity attributable to shareholders</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Share capital</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">6</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43,521,638 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43,521,638 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Contributed surplus</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;674,472 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;674,472 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Accumulated share based compensation</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">7</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,046,000 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,033,000 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Accumulated deficit</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;(34,746,613)</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;(34,391,023)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Total equity</B></FONT></TD>
    <TD NOWRAP STYLE="border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,495,497 </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,838,087 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Total liabilities and equity</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,592,335 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ 15,885,323 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Approved by the Board of Directors:</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><I>&quot;Gil Atzmon&quot; (signed)</I></FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><I>&quot;Bryan Morris&quot; (signed)</I></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Gil Atzmon</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Bryan Morris</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Director</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Director</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Nature of operations and going concern</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">1</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7.5pt">Approved by the Board of Directors:</P>

<P STYLE="font: 10.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 5.2pt"><I><U>&quot;Gil Atzmon&quot; (signed)&#9;</U>&#9;<U>&quot;Bryan
Morris&quot; (signed)&#9;</U></I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0 7.5pt">Gil Atzmon&#9;Bryan Morris</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0 7.5pt">Director&#9;Director</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0">&nbsp;</P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt"><I>The accompanying notes are an integral part of
these condensed interim consolidated financial statements</I></P>




<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font-size: 14pt; color: #1F497D"><B>ZAZU METALS CORPORATION</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font-size: 10pt; color: #588695">Consolidated Statements of Loss and Comprehensive Loss</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt; color: #588695">In U.S. dollars</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt"><B>&nbsp;Year ended </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959"><B>&nbsp;Year ended </B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt"><B>&nbsp;December 31, </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959"><B>&nbsp;December 31, </B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Note</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>&nbsp;2016 </B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959"><B>&nbsp;2015 </B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt"><B>Expenses</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Depreciation</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">$ 822 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ 1,556 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Audit and accounting</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;51,506 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;69,181 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Directors&#8217; fees</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30,089 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62,145 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Financial advisory fees</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20,723 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Insurance</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43,575 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45,397 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Investor and shareholder relations</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,158 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,652 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Legal fees</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,957 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,728 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Office, rent and communication</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,166 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35,566 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Regulatory and transfer agent</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56,562 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;57,408 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Salaries and benefits</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;136,498 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;458,471 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Share based compensation</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: center"><FONT STYLE="font-size: 10pt">7</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,000 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;229,400 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;Travel&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,712 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,745 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt"><B>Loss from operations</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;364,045 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,005,972 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Finance income</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,418 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,112 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Interest expense</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(921)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,458)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Foreign exchange gain (loss)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,958 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(63,038)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">&nbsp;Loss on disposal of equipment</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5,728)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt"><B>Net loss and comprehensive loss attributable to </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt"><B>the equity holders of the Company</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">$ (355,590)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ (1,076,084)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt"><B>Basic and diluted loss per share</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">$ (0.01)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ (0.02)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Weighted average number of shares outstanding</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;55,398,051 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52,776,383 </FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt"><I>The accompanying notes are an integral part of
these condensed interim consolidated financial statements</I></P>




<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 14pt; color: #1F497D"><B>ZAZU METALS CORPORATION</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt; color: #588695">Consolidated Statements of Changes in Equity</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt; color: #588695">In U.S. dollars</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 28%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>Common</B></P>
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>shares</B></P></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>Common</B></P>
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>shares</B></P></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>Contributed</B></FONT></TD>
    <TD NOWRAP STYLE="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>Accumulated</B></P>
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>share based</B></P></TD>
    <TD NOWRAP STYLE="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>Accumulated</B></FONT></TD>
    <TD NOWRAP STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>#</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>$</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>surplus</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>compensation</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>deficit</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959"><B>Balance, January 1, 2015</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">47,909,051 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">$ 42,070,409 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">$ 674,472 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">$ 5,773,200 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">$ (33,314,939)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">$ 15,203,142 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">Net loss and comprehensive</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">loss for the period</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">(1,076,084)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;(1,076,084)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">Share based compensation:</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">Charged to operations</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">229,400 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">229,400 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">Capitalized to exploration </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;&nbsp;and evaluation assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">30,400 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">30,400 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">Private placements of shares:</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;&nbsp;Proceeds</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;7,489,000 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">1,517,598 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">-</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">1,517,598 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;&nbsp;Share issue costs</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;(66,369)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;- </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">- </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">&nbsp;(66,369)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt; color: #595959"><B>Balance, December 31, 2015</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">55,398,051 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">43,521,638 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">674,472 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">6,033,000 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">(34,391,023)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959">15,838,087 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt"><B>Balance, January 1, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959"><B>55,398,051 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959"><B>43,521,638 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959"><B>674,472 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959"><B>6,033,000 </B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959"><B>(34,391,023)</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt; color: #595959"><B>15,838,087 </B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Net loss and comprehensive</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;loss for the year</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(355,590)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">(355,590)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">Share based compensation:</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;Charged to operations</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">13,000 </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">- </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">13,000 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;Capitalized to exploration </FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt">&nbsp;&nbsp;&nbsp;and evaluation assets</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 9pt"><B>Balance, December 31, 2016</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">55,398,051 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">$ 43,521,638 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">$ 674,472 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">$ 6,046,000 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">$ (34,746,613)</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 9pt">$ 15,495,497 </FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.5pt 0 0"><I>&nbsp;</I></P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt"><I>The accompanying notes are an integral part
of these condensed interim consolidated financial statements</I></P>




<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 14pt; color: #1F497D"><B>ZAZU METALS CORPORATION</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt; color: #588695">Consolidated Statements of Cash Flow</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="4" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt; color: #588695">In U.S. dollars</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 60%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt"><B>Year ended December 31,</B></FONT></TD>
    <TD NOWRAP STYLE="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959"><B>Year ended December 31,</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Note</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>2016</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959"><B>2015</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Cash flow provided by (used in):</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Operating activities</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Loss for the year</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">$ (355,590)</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ (1,076,084)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Adjustments for non-cash items:</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Depreciation</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;822 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,556 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Share based compensation</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">7</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,000 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;229,400 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Loss on disposal of equipment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,728 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Unrealized foreign exchange loss (gain)</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8,362)</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;66,700 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net changes in non-cash working capital items:</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Decrease in trade and other receivables</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20,279 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,252 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Decrease in trade and other payables</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20,506)</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22,742)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net cash used in operating activities</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;(350,357)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;(793,190)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Financing activities</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Loan proceeds</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;70,000 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net cash from financing activities</FONT></TD>
    <TD NOWRAP STYLE="border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;70,000 </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,451,229 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Investing activities</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Purchase of exploration and evaluation assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(96,752)</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(398,251)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Purchase of equipment</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,245)</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Net cash used in investing activities</FONT></TD>
    <TD NOWRAP STYLE="border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(96,752)</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-top: gray 1pt solid; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(399,496)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Effect of exchange rate changes on cash and cash equivalents</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,114 </FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(68,624)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Net increase (decrease) in cash and cash equivalents</B></FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(368,995)</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;189,919 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents at beginning of year</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;459,458 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: gray 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;269,539 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Cash and cash equivalents at end of year</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 90,463 </FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ 459,458 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Non-cash transactions:</B></FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Share based compensation capitalized to exploration and evaluation assets</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">$ 30,400 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Equipment depreciation capitalized to exploration and evaluation assets</FONT></TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6,529 </FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">9,250 </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="2" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt">Decrease in trade and other payables related to exploration and evaluation assets</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;(728)</FONT></TD>
    <TD NOWRAP STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595959">&nbsp;(198,566)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0"><I>&nbsp;</I></P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 78.65pt"><I>The accompanying notes are an integral part of these
condensed interim consolidated financial statements</I></P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">1.</FONT></TD><TD>Nature of operations and going concern</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.2pt 0 23.4pt; text-align: justify">Zazu Metals Corporation (the
&#8220;Company&#8221;) is a Canadian company which is engaged in the exploration and development of mineral properties. The Company
was incorporated by a Certificate of Incorporation issued pursuant to the provisions of the Canada Business Corporations Act on
November 29, 2006. The address of its registered office is 500 &#8211; 666 Burrard Street, Vancouver, BC, Canada, V6C 3P6.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.15pt 0 23.4pt; text-align: justify">The Company incorporated
Zazu Metals (Alaska) Corporation (&#8220;Zazu Alaska&#8221;), a subsidiary of the Company, in the State of Alaska, United States
on January 18, 2007.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.85pt 5.05pt 0 23.4pt; text-align: justify">The Company and its subsidiary
(together, the &#8220;Group&#8221;) are currently exploring a mineral exploration property located in the State of Alaska, United
States and have not yet determined whether their mineral property contains resources that are economically recoverable. The underlying
value of the Group&#8217;s mineral property and the recoverability of the related deferred costs are dependent on the existence
of economically recoverable resources in its mineral property and the ability of the Group to obtain the necessary financing to
complete development and upon future profitable production from, or the proceeds from the disposition of, its mineral property.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.05pt 0 23.4pt; text-align: justify">At December 31, 2016 the
Company did not have enough cash on hand to meet its planned expenditures for the next twelve months. The Company plans to pursue
financing in the future in order to fund its operations and to continue the advancement of its mineral property but the material
uncertainty of raising sufficient funds casts significant doubt about the Company&#8217;s ability to continue as a going concern.
The Company has historically raised funds primarily through the sales of equity securities for cash. While the Company expects
that it will obtain funding through an equity funding, or other means depending on market conditions, there can be no assurance
that the Company will be able to obtain such funding or obtain it on acceptable terms.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.15pt 0 23.4pt; text-align: justify">These consolidated financial
statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of operations. These financial statements do not reflect the adjustments to carrying values
of assets and liabilities that would be necessary should the going concern assumption prove to be inappropriate, and these adjustments
could be material.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">2.</FONT></TD><TD>Basis of presentation</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.05pt 0 23.4pt; text-align: justify">These consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards (&#8220;IFRS&#8221;) issued by the
International Accounting Standards Board (&#8220;IASB&#8221;). These consolidated financial statements were approved by the Board
of Directors on March 30, 2017.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">3.</FONT></TD><TD>Summary of significant accounting policies</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 0 0 23.4pt; text-align: justify">The significant accounting
policies used to prepare these consolidated financial statements are outlined as follows:</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.4pt; text-align: justify"><I>Consolidation</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.3pt 0 0.45in; text-align: justify">These consolidated financial
statements include the accounts of the Company and its wholly-owned subsidiary, Zazu Alaska. All intercompany transactions, balances,
income and expenses have been eliminated on consolidation.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.9pt 0 0 23.4pt; text-align: justify"><I>Foreign currency translation</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.25pt 0 32.35pt; text-align: justify"><U>Functional and presentation
currency:</U> Items included in the consolidated financial statements of the Company and its subsidiary are measured using the
currency of the primary economic environment in which the entity operates (the &#8220;functional currency&#8221;). These consolidated
financial statements are presented in US dollars which is the Group&#8217;s functional currency.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.25pt 0 0.45in; text-align: justify; text-indent: -0.05pt"><U>Transactions
and balances:</U> Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Generally, foreign exchange gains and losses resulting from the settlement of foreign currency
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies
other than an entity&#8217;s functional currency are recorded in the statement of loss.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

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<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6.4pt"><I>Cash and cash equivalents</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 11.4pt 0 15.4pt; text-align: justify">Cash and cash equivalents
consist of deposits held with banks and other short-term highly liquid investments with maturities of three months or less when
purchased.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6.4pt"><I>Financial instruments</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 11.15pt 0 15.4pt; text-align: justify">Financial assets and liabilities
are recognized when the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognized
when the rights to receive cash flows from the assets have expired or have been transferred and the Group has transferred substantially
all risks and rewards of ownership.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 11.3pt 0 15.4pt; text-align: justify">Financial assets and liabilities
are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized
amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 11.35pt 0 15.4pt; text-align: justify">At initial recognition,
the Group classifies its financial instruments in the following categories depending on the purpose for which the instruments were
acquired:</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 11.2pt 0 15.35pt; text-align: justify"><U>Loans and receivables:</U>
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. The Group&#8217;s loans and receivables are comprised of cash and cash equivalents and interest receivable and are included
in current assets due to their short-term nature.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 11.2pt 0 15.35pt; text-align: justify"><U>Financial liabilities
at amortized cost:</U> Financial liabilities at amortized cost are comprised of trade payables and are included in current liabilities
due to their short-term nature.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6.35pt"><I>Property, plant and equipment</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 11.2pt 0 15.4pt; text-align: justify">Property, plant and equipment
are 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&#8217;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 Group and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Repairs
and maintenance costs are charged to the statement of loss during the period in which they are incurred.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 11.2pt 0 15.75pt; text-align: justify">The major categories
of property, plant and equipment are depreciated using the declining balance method at the following rates:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.15pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 61%; padding-left: 10pt; font: 11pt Calibri, Helvetica, Sans-Serif"><FONT STYLE="font-size: 10pt">Exploration equipment</FONT></TD>
    <TD STYLE="width: 39%; padding-right: 9.9pt; font: 11pt Calibri, Helvetica, Sans-Serif; text-align: right"><FONT STYLE="font-size: 10pt">30%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Vehicles</FONT></TD>
    <TD STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 9.9pt; text-align: right"><FONT STYLE="font-size: 10pt">30%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Camp equipment</FONT></TD>
    <TD STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 9.9pt; text-align: right"><FONT STYLE="font-size: 10pt">20%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Computer equipment</FONT></TD>
    <TD STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 9.9pt; text-align: right"><FONT STYLE="font-size: 10pt">45%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Office furniture and equipment</FONT></TD>
    <TD STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; padding-right: 9.9pt; text-align: right"><FONT STYLE="font-size: 10pt">20%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6.1pt 11.35pt 0 15.35pt; text-align: justify">The Group allocates
the amount initially recognized in respect of an item of property, plant and equipment to its significant parts and depreciates
separately each such part. Residual values, method of amortization and useful lives of the assets are reviewed annually and adjusted
if appropriate.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 11.3pt 0 15.35pt; text-align: justify">Gains and losses on disposals
of property, plant and equipment are determined by comparing the proceeds with the carrying amount of the asset and are included
as part of other gains and losses in the statement of loss.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6.4pt"><I>Exploration and evaluation assets</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 11.25pt 0 15.4pt; text-align: justify">The Group's intangible
assets are the deferred exploration and evaluation expenses associated with the Group's mineral property. Direct mineral property
acquisition costs, holding costs, field exploration and field supervisory costs are capitalized. Once the technical feasibility
and commercial viability of extracting the mineral resource has been determined the property will be considered to be a mine under
development. Exploration and evaluation assets are also tested for impairment before the assets are transferred to development
properties.</P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 11.25pt 0 15.4pt; text-align: justify"></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.2pt 0 0.2in; text-align: justify">Any incidental revenues earned
in connection with exploration activities are applied as a reduction to capitalized exploration costs.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 5.5pt 0 0.2in; text-align: justify">When a project is abandoned,
sold or considered to be impaired in value, an appropriate charge to other gains and losses in the statement of loss will be made.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 5.4pt"><I>Impairment of non-financial assets</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.85pt 5.15pt 0 14.35pt; text-align: justify">Property, plant and
equipment and intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying amount
may not be recoverable. Long-lived assets that are not amortized are subject to regular impairment tests at the end of each reporting
period. The Group&#8217;s only long-lived intangible asset is its Lik mineral property. If there is any indication that an asset
may be impaired, its recoverable amount is estimated and the carrying value of the asset is written down to its recoverable amount.
The recoverable amount is the higher of its fair value less costs of disposal and its value in use. Fair value less costs of disposal
is determined as the amount that would be obtained from the sale of the asset in an arm&#8217;s length transaction between knowledgeable
and willing parties. Fair value of mineral assets is generally determined as the present value of the estimated future cash flows
expected to arise from the continued use of the asset, including any expansion prospects. Value in use is determined as the present
value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and from its
ultimate disposal. An impairment loss is recognized for the amount by which the asset&#8217;s carrying amount exceeds its recoverable
amount.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 0 0 14.35pt; text-align: justify">The Group evaluates impairment
losses for potential reversals when events or circumstances warrant such consideration.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 5.35pt"><I>Decommissioning and Restoration Provisions</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.3pt 0 14.35pt; text-align: justify">The Group is subject to
various government laws and regulations relating to environmental disturbances caused by exploration and evaluation activities.
The Group records the present value of the estimated costs of legal and constructive obligations required to restore the exploration
sites in the period in which the obligation is incurred. The nature of rehabilitation activities includes restoration, reclamation
and re-vegetation of the affected exploration sites.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.2pt 0 14.35pt; text-align: justify">The restoration provision
generally arises when the environmental disturbance is subject to government laws and regulations. The restoration provision is
adjusted at the end of 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 risk-free rate. The present value of the estimated costs is capitalized
by increasing the carrying amount of the related mining assets. Over time, the discounted liability is increased for the changes
in present value based on current market discount rates and liability specific risks.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.35pt 0 14.35pt; text-align: justify">Additional environment
disturbances or changes in rehabilitation costs will be recognized as additions to the corresponding assets and rehabilitation
liability in the period in which they occur.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.85pt 0 0 5.35pt"><I>Leases</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.25pt 0 14.35pt; text-align: justify">Leases which transfer substantially
all of the benefits and risks incidental to the ownership of property are accounted for as finance leases. Finance leases are capitalized
at the lease commencement at the lower of the fair market value of the leased property and the net present value of the minimum
lease payments. Each lease payment is allocated between the liability and finance charge. The property, plant and equipment acquired
under finance leases are depreciated over the shorter of the asset&#8217;s useful life and the lease term.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.5pt 0 14.35pt; text-align: justify">All other leases are accounted
for as operating leases wherein rental payments are expensed as incurred. The Group only has operating leases for the year ended
December 31, 2016.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.95pt 0 0 5.4pt"><I>Employee benefits</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.15pt 0 14.35pt; text-align: justify"><U>Share-based compensation:</U>
The Company has a stock option plan which permits the Company&#8217;s Board of Directors to grant stock options to certain employees,
directors and consultants. The exercise price, term to expiry and vesting period are determined at the discretion of the Board
of Directors but the exercise price may not be lower than the market price of the common shares on the date of grant, less any
discount permitted by the Toronto Stock Exchange. The term to expiry is generally five years from the date of grant. The stock
options normally vest as follows: one third after 90 days following the date of grant; a further one third after 12 months following
the date of grant; and the final one third after 18 months following the date of grant.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.3pt 0 14.35pt; text-align: justify">Each tranche in an award
is considered a separate award with its own vesting period and grant date fair value. Fair value of each tranche is measured at
the date of grant using the Black-Scholes option pricing model. Compensation expense is recognized over the tranche&#8217;s vesting
period based on the number of awards expected to vest, by increasing contributed surplus. The number of awards expected to vest
is reviewed at least annually, with any impact being recognized immediately.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.2pt 0 14.35pt; text-align: justify"><U>Termination benefits:</U>
The Group recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees
according to a detailed formal plan without possibility of withdrawal, or providing benefits as a result of an offer made to encourage
voluntary termination. Benefits falling due more than twelve months after the end of the reporting period are discounted to their
present value.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 5.35pt"><I>Income tax</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.85pt 5.25pt 0 0.2in; text-align: justify">Current tax expense is
calculated using income tax rates that have been enacted or substantively enacted at the balance sheet date.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.15pt 0 0.2in; text-align: justify">Deferred tax is recognized
on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases
used in the computation of taxable profit, and are accounted for using the liability method. Deferred tax liabilities are generally
recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences
can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial
recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.35pt 0 0.2in; text-align: justify">The carrying amount of any
deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.85pt 5.25pt 0 0.2in; text-align: justify">Deferred tax assets and
liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset
realized, based on income tax rates and income tax laws that have been enacted or substantively enacted by the balance sheet date.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which
the Group expects to recover or settle the carrying amount of its assets and liabilities.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.25pt 0 0.2in; text-align: justify">Deferred tax assets and liabilities
are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, and when they
relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities
on a net basis.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.9pt 0 0 5.4pt"><I>Share capital</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.3pt 0 0.2in; text-align: justify">Common shares are classified
as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.85pt 0 0 5.35pt"><I></I></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.85pt 0 0 5.35pt"><I>Earnings per share</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.2pt 0 14.35pt; text-align: justify">Basic earnings (loss) per
share is computed by dividing income (or loss) attributable to common shareholders by the weighted average number of common shares
outstanding during the period. The computation of diluted earnings per share assumes the conversion, exercise or contingent issuance
of securities only when such conversion, exercise or issuance would have a dilutive effect on earnings per share. The dilutive
effect of convertible securities is reflected in diluted earnings per share by application of the &quot;if converted&quot; method.
The effect of potential issuances of shares from the exercise of outstanding options and warrants would be anti-dilutive for the
periods presented and accordingly, basic and diluted loss per share are the same.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.85pt 0 0 23.35pt"><I>Critical accounting estimates</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.15pt 0 0.45in; text-align: justify">The Group makes estimates
and assumptions concerning the future that will, by definition, seldom equal actual results. The following are the estimates and
judgments applied by management that most significantly affect the Group's financial statements. These estimates and judgments
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.3pt 0 32.35pt; text-align: justify"><U>Exploration and evaluation
assets:</U> The carrying value of the Group's mineral property is reviewed by management quarterly, or whenever events or circumstances
indicate that its carrying amount may not be recovered. If impairment is determined to exist, the carrying value will be written
down to the recoverable amount.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.4pt"><I>Accounting standards issued but not yet applied</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.1pt 0 32.35pt; text-align: justify">The IASB has issued new
and amended standards and interpretations which have not yet been adopted by the Group. The following is a brief summary of the
new and amended standards and interpretations which may impact the Group in the future:</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.3pt 0 32.35pt; text-align: justify"><U>IFRS 9 &#8211; Financial
Instruments:</U> IFRS 9 <I>Financial Instruments </I>(&#8220;IFRS 9&#8221;) replaces IAS 39 <I>Financial Instruments: Recognition
and Measurement </I>(&#8220;IAS 39&#8221;). IFRS 9 uses a single approach to determine whether a financial asset is measured at
amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages
its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets.
The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. The
Group is required to adopt IFRS 9 effective January 1, 2018.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 5.3pt 0 0.45in; text-align: justify; text-indent: -0.05pt"><U>IFRS
16 &#8211; Leases:</U> The IASB has issued IFRS 16, Leases, which is effective for annual periods commencing on or after January
1, 2019. This new standard eliminates the classification of leases as either operating leases or finance leases and introduces
a single lessee accounting model which requires the lessee to recognize assets and liabilities for all leases with a term of longer
than 12 months. Early adoption is permitted provided IFRS 15 has already been adopted or is applied from the same date. The Company
is currently evaluating the effect the standard will have on its consolidated financial statements.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 17.95pt"><FONT STYLE="letter-spacing: -0.05pt">4.</FONT></TD><TD>Equipment and exploration and evaluation assets</TD></TR></TABLE>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 69%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 18%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 18.55pt 0 0; text-align: center"><B>Lik</B></P>
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 18.55pt 0 0; text-align: center"><B>Mineral</B></P>
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 18.55pt 0 0; text-align: center"><B>Property</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Equipment</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 5.45pt"><FONT STYLE="font-size: 10pt; color: #595958">Opening net book value at January 1, 2015</FONT></TD>
    <TD STYLE="padding-top: 5.45pt; padding-right: 17.85pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,125,900</FONT></TD>
    <TD STYLE="padding-top: 5.45pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 39,596</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt; color: #595958">Additions</FONT></TD>
    <TD STYLE="padding-right: 17.85pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">239,335</FONT></TD>
    <TD STYLE="padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">1,245</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt; color: #595958">Loss on disposal of equipment</FONT></TD>
    <TD STYLE="padding-right: 17.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD>
    <TD STYLE="padding-right: 1.2pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(5,728)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid"><FONT STYLE="font-size: 10pt; color: #595958">Depreciation for the year</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 17.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(10,806)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 2.95pt"><FONT STYLE="font-size: 10pt; color: #595958">Net book value at December 31, 2015</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 2.95pt; padding-right: 17.85pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,365,235</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 2.95pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 24,307</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0; color: #595958">Cost</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 17.85pt 0 0; text-align: right; color: #595958">$ 15,365,235</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 4.3pt 0 0; text-align: right; color: #595958">$ 307,336</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid"><FONT STYLE="font-size: 10pt; color: #595958">Accumulated depreciation</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 17.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(283,029)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt"><FONT STYLE="font-size: 10pt; color: #595958">Net book value at December 31, 2015</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 17.85pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,365,235</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 24,307</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 14pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0.05pt"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 69%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 18%">
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 18.55pt 0 0; text-align: center"><B>Lik</B></P>
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 18.55pt 0 0; text-align: center"><B>Mineral</B></P>
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 18.55pt 0 0; text-align: center"><B>Property</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 13%">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Equipment</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 5.35pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Opening net book value at January 1, 2016</FONT></TD>
    <TD STYLE="padding-top: 5.35pt; padding-right: 17.85pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,365,235</FONT></TD>
    <TD STYLE="padding-top: 5.35pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 24,307</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Additions</FONT></TD>
    <TD STYLE="padding-right: 17.85pt; text-align: right"><FONT STYLE="font-size: 10pt">102,553</FONT></TD>
    <TD STYLE="padding-right: 4.25pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Depreciation for the period</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 17.8pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt">(7,351)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Net book value at December 31, 2016</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 2.95pt; padding-right: 17.85pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,467,788</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 2.95pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 16,956</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt">Cost</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 17.85pt 0 0; text-align: right">$ 15,467,788</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 4.3pt 0 0; text-align: right">$ 307,336</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Accumulated depreciation</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 17.8pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt">(290,380)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Net book value at December 31, 2016</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 17.85pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,467,788</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 16,956</FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 0 0 6.35pt; text-align: justify; text-indent: 0in">Lik Property</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.3pt 0 6.35pt; text-align: justify">The Group is participating
in the exploration and development of the Lik property through a joint arrangement with Teck American, Inc. (&#8220;Teck American&#8221;),
a wholly owned subsidiary of Teck Resources Limited. The Group acquired its interest in the joint arrangement in June 2007 by making
a cash payment of $20 million and granting a 2% net proceeds royalty.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.25pt 0 6.35pt; text-align: justify">The Group is the operator
of the joint arrangement and holds a 50% interest in the project. The Group has the right to form a joint venture with Teck American
and increase its interest to 80% by incurring qualifying exploration expenditures on or before January 27, 2018. The terms of the
joint arrangement are governed by the Lik Block Agreement, signed in 1983, which specified an amount of $25.0 million of qualifying
expenditures to be adjusted annually for inflation, and which amount is currently estimated to be approximately $42.2 million.
As of December 31, 2016 a total of $21.9 million has been incurred in exploration expenditures pursuant to the terms of the Lik
Block Agreement. If the qualifying expenditures are not made before January 2018, the Group remains as operator and its interest
stays at 50%.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.35pt 0 6.35pt; text-align: justify">Once the Group satisfies
this expenditure obligation, Teck American has a onetime election to (i) maintain the 20% interest which shall become a participating
interest pursuant to a joint venture agreement with a pro rata sharing of the pre-existing 1% net profits interest, or (ii) transfer
its interest in exchange for a 2% net smelter return royalty interest such that the Group would become the holder of a 100% undivided
interest in the Lik property subject only to the pre-existing 1% net profits interest, the 2% net proceeds royalty and the 2% net
smelter return royalty.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.95pt 0 0 23.4pt">Acquisition and deferred exploration expenditures
made by the Group are as follows:</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 13.5pt Calibri, Helvetica, Sans-Serif; margin: 0.6pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 45%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 26%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 69.15pt; text-align: center; text-indent: -1.75pt; color: #595958"><B>Balance</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 69.15pt; text-align: center; text-indent: -1.75pt; color: #595958"><B>December
        31,</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 69.15pt; text-align: center; text-indent: -1.75pt; color: #595958"><B>2015</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid">
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 7.9pt 0 0; text-align: center">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 7.9pt 0 8.1pt; text-align: center"><B>2016</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 7.9pt 0 8.1pt; text-align: center"><B>Expenditures</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 11.85pt; text-align: center; text-indent: -1.75pt"><B>Balance</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 11.85pt; text-align: center; text-indent: -1.75pt"><B>December
        31,</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 10.1pt; text-align: center; text-indent: -1.75pt"><B>2016</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 5.45pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Deferred exploration</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Administration and insurance</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 641,986</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 41,899</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 683,885</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Assays/analysis</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">800,347</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">15,825</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">816,172</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Camp, freight and logistics</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">1,922,042</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">7,472</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">1,929,514</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Drilling</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">4,118,746</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">4,327</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">4,123,073</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Engineering and other studies</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">3,586,896</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">16,042</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">3,602,938</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Environmental</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">2,442,328</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 11.75pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">2,442,328</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Geological</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">941,596</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">9,488</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">951,084</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Reclamation</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">30,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">7,500</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">37,500</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Share based compensation</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">605,200</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 11.75pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">605,200</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2.95pt; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">15,089,141</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2.95pt; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">102,553</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2.95pt; padding-right: 4.35pt; text-align: right"><FONT STYLE="font-size: 10pt">15,191,694</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0.55pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Acquisition</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.55pt; padding-right: 10.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">20,276,094</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.55pt; padding-right: 11.75pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.55pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">20,276,094</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Write-downs</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 7.25pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(20,000,000)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 11.75pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 1.2pt; text-align: right"><FONT STYLE="font-size: 10pt">(20,000,000)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total deferred property expenditures</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 10.35pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,365,235</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 102,553</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,467,788</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0.05pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">5.</FONT></TD><TD>Loan payable</TD></TR></TABLE>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.2pt 0 23.35pt; text-align: justify">In order to provide working
capital while a larger financing was pursued, the Group&#8217;s Chief Executive Officer loaned the Group $70,000 in October 2016.
This loan is unsecured and payable on demand, with interest calculated at 6% per year and paid monthly. See also notes 10 &#8211;
Related party transactions and 14 &#8211; Subsequent Events.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.35pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">6.</FONT></TD><TD>Share capital</TD></TR></TABLE>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.35pt 0 23.35pt; text-align: justify">The Company&#8217;s common
shares began trading on the Toronto Stock Exchange on December 19, 2007 under the symbol &#8220;ZAZ&#8221; and on the OTCQX exchange
in the United States on July 28, 2014 under the symbol &#8220;ZAZUF&#8221;. Beginning December 1, 2016 the Company&#8217;s common
shares ceased trading on the Toronto Stock Exchange and began trading on the TSX Venture Exchange. The Company&#8217;s common shares
ceased trading on the OTCQX exchange on December 31, 2016.</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.45pt 0 23.35pt; text-align: justify">The Company is authorized
to issue an unlimited number of Common Shares with no par value and an unlimited number of Special Voting Shares with no par value.
At December 31, 2016 the Company had 55,398,051 shares (2015 &#8211; 55,398,051 shares) issued and outstanding.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">7.</FONT></TD><TD>Stock options and share based compensation</TD></TR></TABLE>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 70%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid">
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 5.75pt; text-align: center"><B>Number of options</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7.9pt; text-align: center; text-indent: -1.7pt"><B>Average</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 14.1pt; text-align: center; text-indent: -1.7pt"><B>exercise
        price</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 3.4pt; text-align: center; text-indent: -1.7pt"><B>(CDN$)</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 5.35pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Opening balance at January 1, 2015</FONT></TD>
    <TD STYLE="padding-top: 5.35pt; padding-right: 14pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">4,390,000</FONT></TD>
    <TD STYLE="padding-top: 5.35pt; padding-right: 0.05in; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 0.67</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Granted</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 14pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">600,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 0.05in; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">0.25</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Balance at December 31, 2015</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 14pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">4,990,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 0.05in; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 0.62</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt">Opening balance at January 1, 2016</P></TD>
    <TD STYLE="border-bottom: #818181 1pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 14pt 0 0; text-align: right">4,990,000</P></TD>
    <TD STYLE="border-bottom: #818181 1pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0.05in 0 0; text-align: right">$ 0.62</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Balance at December 31, 2016</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 14pt; text-align: right"><FONT STYLE="font-size: 10pt">4,990,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 0.05in; text-align: right"><FONT STYLE="font-size: 10pt">$ 0.62</FONT></TD></TR>
</TABLE>
<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.4pt">The stock options outstanding at December 31, 2016 expire
as follows:</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 8.5pt Calibri, Helvetica, Sans-Serif; margin: 0.6pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 57%; border-bottom: black 1pt solid">
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt"><B>Expiry Date</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 1.45pt"><B>Number</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; text-indent: 1.45pt"><B>outstanding</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 12.8pt; text-align: center"><B>Exercise price</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 12.8pt; text-align: center"><B>(CDN$)</B></P></TD>
    <TD STYLE="vertical-align: top; width: 12%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 3.25pt; text-indent: -2.3pt"><B>Vested and</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 3.25pt"><B>exercisable</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt">May 2018</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 12.85pt 0 0; text-align: right">1,000,000</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 17.45pt 0 0; text-align: right">0.80</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 1.8pt 0 0; text-align: right">1,000,000</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">November 2018</FONT></TD>
    <TD STYLE="padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">1,190,000</FONT></TD>
    <TD STYLE="padding-right: 17.45pt; text-align: right"><FONT STYLE="font-size: 10pt">0.70</FONT></TD>
    <TD STYLE="padding-right: 1.8pt; text-align: right"><FONT STYLE="font-size: 10pt">1,190,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">May 2019</FONT></TD>
    <TD STYLE="padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">2,200,000</FONT></TD>
    <TD STYLE="padding-right: 17.45pt; text-align: right"><FONT STYLE="font-size: 10pt">0.60</FONT></TD>
    <TD STYLE="padding-right: 1.8pt; text-align: right"><FONT STYLE="font-size: 10pt">2,200,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">August 2020</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">600,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 17.45pt; text-align: right"><FONT STYLE="font-size: 10pt">0.25</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 1.8pt; text-align: right"><FONT STYLE="font-size: 10pt">400,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total stock options outstanding</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">4,990,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 1.8pt; text-align: right"><FONT STYLE="font-size: 10pt">4,790,000</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.95pt 5.3pt 0 23.4pt; text-align: justify">Under the terms of the
employment agreements between the Group and its senior officers, an officer&#8217;s unvested stock options will vest immediately
and become exercisable if the agreement is terminated by the Group, or if the officer so elects within 120 days of a change of
control of the Group.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.1pt 0 23.4pt; text-align: justify">The Company recognizes stock
based compensation over the vesting period of the underlying options using the fair value calculated by the Black-Scholes option
pricing model. Option pricing models require the input of highly subjective assumptions including expected price volatility. Changes
in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily
provide a reliable single measure of the fair value of the Company&#8217;s stock options granted and/or vested during the period.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">8.</FONT></TD><TD>Income taxes</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 0 0 23.4pt; text-align: justify">A reconciliation of income taxes
at statutory rates is as follows:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0.05pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 71%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>Year</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>Ended</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>December
        31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>2016</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>Year</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>ended
        December 31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2.3pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Accounting loss before taxes</FONT></TD>
    <TD STYLE="border-bottom: gray 1.5pt solid; padding-top: 2.3pt; padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 355,590</FONT></TD>
    <TD STYLE="border-bottom: gray 1.5pt solid; padding-top: 2.3pt; padding-right: 3.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">$ 1,076,084</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 5.9pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Tax recovery at the statutory rate of 26% (2015 &#8211; 26%)</FONT></TD>
    <TD STYLE="padding-top: 5.9pt; padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 92,500</FONT></TD>
    <TD STYLE="padding-top: 5.9pt; padding-right: 3.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">$ 279,800</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Share based compensation and other non deductible costs</FONT></TD>
    <TD STYLE="padding-right: 9.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,700)</FONT></TD>
    <TD STYLE="padding-right: 0.35pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">(60,400)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Deduction for share issue costs</FONT></TD>
    <TD STYLE="padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">21,600</FONT></TD>
    <TD STYLE="padding-right: 3.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">18,900</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Effect of changes in tax rates, foreign exchange and other</FONT></TD>
    <TD STYLE="padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">71,900</FONT></TD>
    <TD STYLE="padding-right: 0.35pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">(543,200)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Unrecognized deferred tax assets</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 9.7pt; text-align: right"><FONT STYLE="font-size: 10pt">(182,300)</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 3.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">304,900</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Income tax expense</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 12.8pt; text-align: right"><FONT STYLE="font-size: 10pt">$ -</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 3.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">$ -</FONT></TD></TR>
</TABLE>
<P STYLE="font: 14.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 5.25pt 0 23.4pt; text-align: justify">Deferred income taxes
arise from temporary differences in the recognition of income and expenses for financial reporting and tax purposes. The significant
components of deferred income tax assets and liabilities at December 31, 2016 and 2015 are as follows:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.15pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 70%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7pt; text-align: center"><B>December 31,</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7pt; text-align: center"><B>2016</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.3pt 0 0; text-align: center; color: #818181"><B>December
        31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; color: #818181"><B>2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2.3pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Non-capital losses</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 11.35pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 3,005,700</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 3.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">$ 2,814,200</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Equity issue costs</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 11.35pt; text-align: right"><FONT STYLE="font-size: 10pt">23,100</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 3.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">26,200</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total unrecognized deferred income tax assets</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 11.35pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 3,028,800</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 3.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #818181">$ 2,840,400</FONT></TD></TR>
</TABLE>
<P STYLE="font: 14.5pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.3pt 0 23.35pt; text-align: justify">The Group has approximately
CDN$15,400,000 of non-capital losses for Canadian tax purposes and $98,200 of non-capital losses for US tax purposes that expire
between 2026 and 2036. Certain of the Group&#8217;s losses are restricted in their use</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.35pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">9.</FONT></TD><TD>Compensation of key management</TD></TR></TABLE>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.35pt; text-align: justify">The remuneration of directors
and other members of key management personnel included:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 70%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>Year</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>Ended</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>December
        31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>2016</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>Year</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>ended
        December 31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2.3pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Salaries, consulting fees and directors&#8217; fees</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 10.15pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 120,090</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 453,395</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Short-term employee benefits</FONT></TD>
    <TD STYLE="padding-right: 10.15pt; text-align: right"><FONT STYLE="font-size: 10pt">37,837</FONT></TD>
    <TD STYLE="padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">44,329</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Stock based compensation</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 10.15pt; text-align: right"><FONT STYLE="font-size: 10pt">13,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">259,800</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 3.05pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total compensation of key management</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 3.05pt; padding-right: 10.15pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 170,927</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 3.05pt; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 757,524</FONT></TD></TR>
</TABLE>
<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.2pt 0 23.35pt; text-align: justify">Key management personnel were
not paid post-employment benefits, termination benefits or other long-term benefits during the years ended December 31, 2016 and
December 31, 2015. </P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">10.</FONT></TD><TD>Related party transactions</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 0 0 23.4pt; text-align: justify">Related parties and the nature
of the Group&#8217;s transactions with them are:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0.05pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 51%; border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt"><B>Related party</B></FONT></TD>
    <TD STYLE="width: 49%; border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>Nature of transactions</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 5.95pt"><FONT STYLE="font-size: 10pt">Gil Atzmon</FONT></TD>
    <TD STYLE="padding-top: 5.95pt; text-align: right"><FONT STYLE="font-size: 10pt">Loan</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Peterson McVicar LLP </FONT><FONT STYLE="font-size: 6.5pt">(1)</FONT></TD>
    <TD STYLE="padding-top: 0.25pt; padding-right: 0.05pt; text-align: right"><FONT STYLE="font-size: 10pt">Legal fees</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt">Lincoln Mining Corp. </FONT><FONT STYLE="font-size: 6.5pt">(2)</FONT></TD>
    <TD STYLE="padding-top: 0.3pt; text-align: right"><FONT STYLE="font-size: 10pt">Office rent</FONT></TD></TR>
</TABLE>
<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt/13.05pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 59.4pt"><FONT STYLE="font-size: 6.5pt">(1) </FONT>A
company owned or controlled by one of the Company&#8217;s directors</P>

<P STYLE="font: 10pt/13.05pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 59.4pt"><FONT STYLE="font-size: 6.5pt">(2) </FONT>A
company whose officer and director is a director of the Company</P>

<P STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 9.55pt 5.35pt 0 23.35pt; text-align: justify">In October 2016 Gil
Atzmon, the Group&#8217;s Chief Executive Officer, loaned the Group $70,000. This loan is unsecured and payable on demand, with
interest calculated at 6% per year and paid monthly.</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 5.2pt 0 23.35pt; text-align: justify">The Group incurred fees
and expenses with the above mentioned related parties. Related party transactions also include directors&#8217; fees and are in
the ordinary course of business, occurring on terms that are similar to those of transactions with unrelated parties.</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0.05pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 71%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>Year</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>Ended</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>December
        31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 8.35pt; text-align: center; text-indent: -1.65pt"><B>2016</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>Year</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>ended
        December 31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 3.4pt 0 4.5pt; text-align: center; text-indent: -0.95pt; color: #818181"><B>2015</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 2.3pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Interest on loan from Chief Executive Officer</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2.3pt; padding-right: 0.15in; text-align: right"><FONT STYLE="font-size: 10pt">$ 921</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2.3pt; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 2,458</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Legal fees expensed</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.15in; text-align: right"><FONT STYLE="font-size: 10pt">4,957</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">1,728</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt">Legal fees capitalized to exploration and</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 18.7pt">evaluation assets</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 10.75pt 0 0; text-align: right">-</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 2.4pt 0 0; text-align: right; color: #595958">808</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Legal fees recorded as a share issue cost</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.75pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">6,293</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Office rent</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.75pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">11,530</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Directors&#8217; fees</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 0.15in; text-align: right"><FONT STYLE="font-size: 10pt">30,089</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">62,145</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total related party transactions</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 0.15in; text-align: right"><FONT STYLE="font-size: 10pt">$ 35,967</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 84,962</FONT></TD></TR>
</TABLE>
<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.4pt; text-align: justify">At the period end, the Group had
the following outstanding balances payable to related parties:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 71%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7pt; text-align: center"><B>December 31,</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7pt; text-align: center"><B>2016</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.3pt 0 0; text-align: center; color: #818181"><B>December
        31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; color: #818181"><B>2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2.3pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Loan from Chief Executive Officer</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 0.15in; text-align: right"><FONT STYLE="font-size: 10pt">$ 70,000</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 2.35pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Loan interest</FONT></TD>
    <TD STYLE="padding-right: 0.15in; text-align: right"><FONT STYLE="font-size: 10pt">268</FONT></TD>
    <TD STYLE="padding-right: 2.35pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Directors&#8217; fees</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 0.15in; text-align: right"><FONT STYLE="font-size: 10pt">6,876</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 20,660</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: #818181 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 0.15in; text-align: right"><FONT STYLE="font-size: 10pt">$ 77,144</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 20,660</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">11.</FONT></TD><TD>Commitments</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 0 0 23.4pt">The following is a summary of the Group&#8217;s contractual
obligations and commitments as at December 31, 2016:</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 47%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: black 1pt solid">
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0; text-align: center">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 19.9pt; text-align: center"><B>Total</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; border-bottom: black 1pt solid">
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0; text-align: center">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 12.95pt; text-align: center"><B>2017</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 9.4pt; text-align: center"><B>2018 &#8211;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 12.9pt; text-align: center"><B>2020</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 9.35pt; text-align: center"><B>2021 &#8211;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 12.85pt; text-align: center"><B>2022</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 10.15pt; text-align: center; text-indent: -3.5pt"><B>2023
        and</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 10.15pt; text-align: center"><B>beyond</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 10pt">Lik project</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 12.85pt 0 0; text-align: right">$ 12,000</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 9.3pt 0 0; text-align: right">$ 12,000</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 9.25pt 0 0; text-align: right">-</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 6.55pt 0 0; text-align: right">-</P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 5.35pt 0 0; text-align: right">-</P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt"><FONT STYLE="font-size: 10pt">Office operation leases</FONT></TD>
    <TD STYLE="padding-right: 12.85pt; text-align: right"><FONT STYLE="font-size: 10pt">1,819</FONT></TD>
    <TD STYLE="padding-right: 9.3pt; text-align: right"><FONT STYLE="font-size: 10pt">1,819</FONT></TD>
    <TD STYLE="padding-right: 9.25pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 6.55pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.35pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
</TABLE>
<P STYLE="font: 12.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.95pt 12.35pt 0 23.35pt; text-align: justify">The Group has entered
into employment agreements with its senior officers for an aggregate of $7,500 per month effective January 1, 2016. These agreements
can be terminated by the Group at any time, or by the officer within 120 days of a change of control of the Group, subject to the
payment of the greater of (i) a lump sum amount ranging from $25,000 to</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 12.25pt 0 23.35pt; text-align: justify">$30,833, and (ii) the minimum
payment prescribed by applicable employment standards legislation. At such time any outstanding stock options will immediately
vest and, upon the officer&#8217;s request, the Group will provide an interest free loan for up to six months to exercise any stock
options, with the shares held by the Group as collateral. Salary amounts are reviewed annually by the Compensation Committee of
the Board of Directors.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6.15pt 0 0 23.35pt; text-align: justify">The Department of Natural
Resources of the State of Alaska requires the Group, as operator of the Lik project, to post a</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 12.25pt 0 23.35pt; text-align: justify">$250,000 bond to cover any
future reclamation activities necessary upon the abandonment of the mining claims that make up the project. The Group has contracted
with a surety bond company to provide this bond.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 14.5pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.35pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">12.</FONT></TD><TD>Financial instruments</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 12.25pt 0 23.35pt; text-align: justify">The Group&#8217;s financial
instruments are classified into the following categories and the following table shows their carrying values.</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 70%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7pt; text-align: center"><B>December 31,</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7pt; text-align: center"><B>2016</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.3pt 0 0; text-align: center; color: #818181"><B>December
        31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; color: #818181"><B>2015</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 1.85pt; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Loans and receivables </FONT><FONT STYLE="font-size: 6.5pt">(1)</FONT></TD>
    <TD STYLE="padding-top: 3.55pt; padding-right: 11.65pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 90,497</FONT></TD>
    <TD STYLE="padding-top: 3.55pt; padding-right: 11.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 459,727</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt"><FONT STYLE="font-size: 10pt">Financial liabilities at amortized cost</FONT></TD>
    <TD STYLE="padding-right: 11.65pt; text-align: right"><FONT STYLE="font-size: 10pt">96,838</FONT></TD>
    <TD STYLE="padding-right: 11.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">47,236</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 4.7pt; padding-left: 10pt"><FONT STYLE="font-size: 6.5pt">(1) </FONT><FONT STYLE="font-size: 10pt">Consists of:</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 22.6pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents &#8211; US currency</FONT></TD>
    <TD STYLE="padding-right: 11.65pt; text-align: right"><FONT STYLE="font-size: 10pt">71,279</FONT></TD>
    <TD STYLE="padding-right: 11.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">227,245</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 22.6pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents &#8211; CDN currency</FONT></TD>
    <TD STYLE="padding-right: 11.65pt; text-align: right"><FONT STYLE="font-size: 10pt">19,184</FONT></TD>
    <TD STYLE="padding-right: 11.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">232,213</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/198% Calibri, Helvetica, Sans-Serif; margin: 0 73.2pt 0 23.4pt; text-indent: -0.05pt">The carrying values
of all of the Group&#8217;s financial assets and liabilities reasonably approximate their fair values. The Group is exposed to
certain financial risks, including currency risk, liquidity risk and credit risk.</P>

<P STYLE="font: 10pt/9.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.4pt; text-align: justify"><I>Capital Risk Management</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.9pt 12.25pt 0 0.45in; text-align: justify">The Group&#8217;s objectives
of capital management are intended to safeguard the entity's ability to support the Group&#8217;s normal operating requirements
on an ongoing basis, continue the development and exploration of its mineral properties and support any expansionary plans.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 12.35pt 0 0.45in; text-align: justify">The capital structure of
the Group consists of equity attributable to shareholders. The Group manages the capital structure and makes adjustments in light
of changes in economic conditions and the risk characteristics of the Group&#8217;s assets.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.95pt 9.3pt 0 15.4pt; text-align: justify">To effectively manage
the entity&#8217;s capital requirements, the Group has in place a planning and budgeting process to help determine the funds required
to ensure the Group has the appropriate liquidity to meet its operating and growth objectives. The Group has historically relied
on the issuance of shares to develop the project and will most likely be obliged to do so again in the future.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.85pt 0 0 6.4pt"><I>Currency risk</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 9.25pt 0 15.4pt; text-align: justify">The Group&#8217;s financial
assets and liabilities consist of cash and cash equivalents, trade receivables and trade payables, some of which are denominated
in Canadian dollars. The Group is exposed to financial gain or loss as a result of foreign exchange movements by the Canadian dollar
against the US dollar.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 9.3pt 0 15.4pt; text-align: justify">In addition to costs denominated
in US dollars, the Group also incurs general and administrative costs denominated in Canadian dollars. Accordingly, the Group&#8217;s
general and administrative costs are affected by changes in the foreign exchange rate of the Canadian dollar. The Group has elected
not to hedge its exposure to fluctuations in the Canadian dollar.</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 15.4pt; text-align: justify">The Group was exposed to currency
risk through the following assets and liabilities denominated in Canadian dollars:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 54%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 31%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 14.8pt 0 0; text-align: center"><B>December 31,</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 14.8pt 0 0; text-align: center"><B>2016</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 14.8pt 0 0; text-align: center"><B>(CDN$)</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; color: #595958"><B>December 31,</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; color: #595958"><B>2015</B></P>
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center; color: #595958"><B>(CDN$)</B></P></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2.3pt; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Loans and receivables</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 14.95pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 25,759</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 14.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 321,384</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt"><FONT STYLE="font-size: 10pt">Financial liabilities at amortized cost</FONT></TD>
    <TD STYLE="padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt">(15,542)</FONT></TD>
    <TD STYLE="padding-right: 11.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(64,144)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9.45pt 0 15.4pt; text-align: justify; text-indent: -0.05pt">Based
on the net exposures in the preceding table as at December 31, 2016, and assuming that all other variables remain constant, a 10%
appreciation or depreciation of the Canadian dollar against the US dollar would result in an increase/decrease of $800 (2015 &#8211;
$18,600) in the Group&#8217;s net loss.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6.4pt"><I>Liquidity risk</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 9.25pt 0 15.35pt; text-align: justify">Liquidity risk is the potential
that the Group will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate
funding. The Group manages liquidity risk through the management of its capital structure. The Group manages and makes adjustments
to the capital structure as opportunities arise in the marketplace or as and when funding is required. Historically the Group&#8217;s
primary source of funding has been the sale of equity securities for cash. The Group is not in commercial production on the Lik
property and, accordingly, it does not generate cash from operations. See Note 1 for going concern discussion.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 0 0 15.35pt; text-align: justify">Trade and other payables are
all due within the current operating period.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6.35pt"><I>Credit risk</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.85pt 9.2pt 0 15.35pt; text-align: justify">The Group&#8217;s credit
risk arises from the non-performance by counterparties to fulfill their contractual obligations. The Group&#8217;s maximum exposure
to credit risk is limited to its cash and cash equivalents and trade and other receivables.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 9.45pt 0 15.35pt; text-align: justify">The Group mitigates its
credit risk on its cash and cash equivalents by maintaining its funds in bank and investment accounts in one of Canada&#8217;s
largest financial institutions that holds a Standard &amp; Poor&#8217;s senior debt credit rating of AA-.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 9.4pt 0 15.35pt; text-align: justify">The maximum credit risk
exposure at December 31, 2016 is limited to the carrying value of the cash and cash equivalents and trade and other receivables
at the period end.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">13.</FONT></TD><TD>Segment reporting</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 12.4pt 0 23.4pt; text-align: justify">The Group currently operates
in one business segment, being the exploration and development of mineral properties. The Group&#8217;s non-current assets at December
31, 2016 and December 31, 2015 by geographic areas are as follows:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0.05pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 58%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; padding-right: 8.8pt; padding-left: 3.85pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Canada</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid; padding-right: 5.5pt; padding-left: 12.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>United States</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid; padding-right: 6.3pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 2.25pt; padding-left: 10pt"><FONT STYLE="font-size: 10pt; color: #595958">Non-current assets at December 31, 2015</FONT></TD>
    <TD STYLE="padding-top: 2.25pt; padding-right: 4.3pt; padding-left: 8.35pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 1,828</FONT></TD>
    <TD STYLE="padding-top: 2.25pt; padding-right: 5.5pt; padding-left: 15.65pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,387,714</FONT></TD>
    <TD STYLE="padding-top: 2.25pt; padding-right: 9.9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,389,542</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 10pt"><FONT STYLE="font-size: 10pt">Non-current assets at December 31, 2016</FONT></TD>
    <TD STYLE="padding-right: 4.3pt; padding-left: 8.35pt; text-align: right"><FONT STYLE="font-size: 10pt">1,005</FONT></TD>
    <TD STYLE="padding-right: 5.5pt; padding-left: 22.95pt; text-align: right"><FONT STYLE="font-size: 10pt">15,483,739</FONT></TD>
    <TD STYLE="padding-right: 9.9pt; text-align: right"><FONT STYLE="font-size: 10pt">15,484,744</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 17.95pt"><FONT STYLE="letter-spacing: -0.05pt">14.</FONT></TD><TD>Subsequent event</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 12.25pt 0 23.35pt; text-align: justify">In March 2017, the Chief
Executive Officer loaned the Group an additional $30,000. This loan is unsecured and payable on demand, with interest calculated
at 6% per year and paid monthly and is intended to provide working capital while a larger financing is pursued.</P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 12.25pt 0 23.35pt; text-align: justify"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 8.5pt Times New Roman, Times, Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 20pt Calibri, Helvetica, Sans-Serif; margin: 1pt 96.3pt 0; text-align: center; color: #1F497D"><B>ZAZU METALS CORPORATION</B></P>

<P STYLE="font: 10pt/115% Calibri, Helvetica, Sans-Serif; margin: 3.8pt 110pt 0 109.95pt; text-align: center">Condensed Interim
Consolidated Financial Statements For the 3 months ended March 31, 2017 and 2016 Unaudited</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 96.3pt; text-align: center">(in US dollars)</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>




<P STYLE="margin: 0"><IMG SRC="image_002.gif" ALT="" STYLE="width: 130px; height: 59px"></P>

<P STYLE="margin: 0"></P>




<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 64%; padding-left: 2.25pt"><FONT STYLE="font-size: 14pt; color: #1F497D"><B>ZAZU METALS CORPORATION</B></FONT></TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD ROWSPAN="2" STYLE="width: 14%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt/102% Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt; color: #588695">Condensed Interim Consolidated Statements
        of Financial Position (Unaudited)</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0 1.8pt; color: #588695">In U.S. dollars</P></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-top: 0.25pt; text-align: center"><FONT STYLE="font-size: 9.5pt"><B>Note</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0; text-align: center"><B>March 31,</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0; text-align: center"><B>2017</B></P></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 9pt 0 0; text-align: center">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 0; text-align: center; color: #5A5A5A"><B>December 31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 0; text-align: center; color: #5A5A5A"><B>2016</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.55pt 0 0 1.8pt"><B>Assets</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0 1.8pt">Current assets</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0 10.9pt">Cash and cash equivalents</P></TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>$64,879</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6.35pt 9pt 0 0; text-align: right; color: #5A5A5A">$ 90,463</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Receivables and prepaids</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>10,647</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A; letter-spacing: -0.05pt">17,128</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt">Non-current assets</P></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 1.7pt; padding-right: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 1.7pt; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>75,526</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 1.7pt; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A; letter-spacing: -0.05pt">107,591</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Equipment</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>4</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>15,690</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A; letter-spacing: -0.05pt">16,956</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Exploration and evaluation assets</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>4</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>15,472,697</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A; letter-spacing: -0.05pt">15,467,788</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Total assets</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>$15,563,913</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 15,592,335</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.5pt 0 0">&nbsp;</P>

<P STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7.5pt; text-indent: 0in">Liabilities</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 2.4pt 7.5pt">Current liabilities</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 62%; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Trade and other payables</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; padding-right: 4.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>$ 20,549</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-right: 9.15pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 26,838</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Loans payable</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>5</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>100,000</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9.15pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">70,000</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Total liabilities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>120,549</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 9.15pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">96,838</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt"><B>Equity attributable to shareholders</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0 1.8pt">Share capital</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 4.5pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 4.5pt 0 0; text-align: right"><B>6</B></P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 8.9pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 8.9pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 8.9pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 8.9pt 0 0; text-align: right"><B>43,521,638</B></P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9.15pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9.15pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 9.15pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 9.15pt 0 13.3pt; text-align: right; color: #5A5A5A">43,521,638</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Contributed surplus</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>674,472</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9.15pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">674,472</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Accumulated share based compensation</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>7</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>6,046,600</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9.15pt; padding-left: 18.35pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">6,046,000</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Accumulated deficit</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>(34,799,346)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9.15pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">(34,746,613)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Total equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>15,443,364</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 9.15pt; padding-left: 13.3pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">15,495,497</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 1.75pt"><FONT STYLE="font-size: 10pt"><B>Total liabilities and equity</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-right: 4.5pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 8.9pt; padding-left: 20.5pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>$15,563,913</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 9.15pt; padding-left: 5.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 15,592,335</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt/11pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt">Nature of operations and going concern</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 4.5pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/11pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt 0 0; text-align: right"><B>1</B></P></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 7.5pt">Approved by the Board of Directors:</P>

<P STYLE="font: 10.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 5.2pt"><I><U>&quot;Gil Atzmon&quot; (signed)&#9;</U>&#9;<U>&quot;Bryan
Morris&quot; (signed)&#9;</U></I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0 7.5pt">Gil Atzmon&#9;Bryan Morris</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0 7.5pt">Director&#9;Director</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.15pt 0 0">&nbsp;</P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt"><I>The accompanying notes are an integral part of
these condensed interim consolidated financial statements</I></P>




<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 2.25pt"><FONT STYLE="font-size: 14pt; color: #1F497D"><B>ZAZU METALS CORPORATION</B></FONT></TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">Condensed Interim Consolidated Statements of Loss and Comprehensive Loss</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">(Unaudited)</FONT></TD>
    <TD STYLE="padding-right: 13.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">In U.S. dollars</FONT></TD>
    <TD STYLE="padding-right: 13.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 13.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 19.65pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.9pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-right: -68.7pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 13.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt 0 9.1pt; text-align: center; color: #5A5A5A"><B>For
        the 3</B></P>
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt 0 9.1pt; text-align: center; color: #5A5A5A"><B>Months
        ended</B></P>
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt 0 9.1pt; text-align: center; color: #5A5A5A"><B>March
        31,</B></P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 4.5pt; text-align: center; color: #5A5A5A">For the 3</P>
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 4.5pt; text-align: center; text-indent: -1.85pt; color: #5A5A5A">Months
        ended</P>
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 4.5pt; text-align: center; color: #5A5A5A">March 31,</P></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 13.4pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>Note</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 4.5pt; padding-left: 9.1pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-left: 4.5pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #5A5A5A">2016</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-top: 5.55pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Expenses</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Depreciation</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 34.45pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>$ 113</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 206</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Audit and accounting</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>-</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">7,355</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Directors&#8217; fees</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 34.2pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>7,548</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">7,390</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Insurance</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 29.15pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>10,781</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">11,233</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Investor and shareholder relations</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>174</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">132</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Office, rent and communication</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 34.2pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>2,849</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">4,650</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Regulatory and transfer agent</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 29.15pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>11,354</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">16,246</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Salaries and benefits</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 29.15pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>14,514</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">36,376</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Share based compensation</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>7</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>600</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">4,100</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Travel</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; padding-left: 34.2pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>3,734</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-top: 1.7pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Loss from operations</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 1.7pt; padding-right: 9pt; padding-left: 29.15pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>51,667</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 1.7pt; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">87,688</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-top: 0.35pt; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Finance income</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.35pt; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>33</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.35pt; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">552</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Interest expense</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>5</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 31.2pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>(1,045)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Foreign exchange gain (loss)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>(54)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">10,220</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-top: 1.7pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Net loss and comprehensive loss attributable to</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: gray 2.25pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt"><B>the equity holders of the Company</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-right: 9pt; padding-left: 18.85pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>$ (52,733)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-right: 9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ (76,916)</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: gray 2.25pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 1.8pt"><B>Basic and diluted loss per share</B></P></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-right: 4.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 0; text-align: right"><B><I>&nbsp;</I></B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 9pt 0 0; text-align: right"><B><I>&nbsp;</I></B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 9pt 0 31.9pt; text-align: right"><B>$ 0.00</B></P></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 0; text-align: right"><I>&nbsp;</I></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 9pt 0 0; text-align: right"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 9pt 0 0; text-align: right; color: #5A5A5A">$ 0.00</P></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt/11pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt">Weighted average number of shares outstanding</P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 9pt 0 0; text-align: right"><B><I>&nbsp;</I></B></P>
        <P STYLE="font: 10pt/11pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 11.5pt; text-align: right"><B>55,398,051</B></P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 9pt 0 0; text-align: right"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt/11pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 17.2pt; text-align: right; color: #5A5A5A">55,398,051</P></TD></TR>
<TR>
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD>
    <TD STYLE="width: 14%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 12.5pt Calibri, Helvetica, Sans-Serif; margin: 0.15pt 0 0"><I>&nbsp;</I></P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt"><I>The accompanying notes are an integral part of
these condensed interim consolidated financial statements</I></P>




<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="padding-left: 2.25pt"><FONT STYLE="font-size: 14pt; color: #1F497D"><B>ZAZU METALS CORPORATION</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">Condensed Interim Consolidated Statements of Changes in Equity</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 28%; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">(Unaudited)</FONT></TD>
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD>
    <TD STYLE="width: 11%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">In U.S. dollars</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 7.55pt 0 0; text-align: right"><B>Common</B></P></TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 8.7pt 0 0; text-align: right"><B>Common</B></P></TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 6.05pt 0 0; text-align: right"><B>Accumulated</B></P></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 7.5pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>shares</B></FONT></TD>
    <TD STYLE="padding-right: 8.65pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>shares</B></FONT></TD>
    <TD STYLE="padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>Contributed</B></FONT></TD>
    <TD STYLE="padding-right: 6.1pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>share based</B></FONT></TD>
    <TD STYLE="padding-left: 6.9pt"><FONT STYLE="font-size: 10pt"><B>Accumulated</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 7.45pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>#</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 8.65pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>$</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 4.2pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>surplus</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 6.05pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>compensation</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 9.05pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>Deficit</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 4.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt; color: #5A5A5A"><B>Balance, January 1, 2016</B></P></TD>
    <TD>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 7.4pt 0 0; text-align: right; color: #5A5A5A">55,398,051</P></TD>
    <TD>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 8.55pt 0 0; text-align: right; color: #5A5A5A">$ 43,521,638</P></TD>
    <TD>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 4.1pt 0 0; text-align: right; color: #5A5A5A">$ 674,472</P></TD>
    <TD>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.9pt 0 0; text-align: right; color: #5A5A5A">$ 6,033,000</P></TD>
    <TD>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 5.95pt; color: #5A5A5A">$ (34,391,023)</P></TD>
    <TD>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 5.95pt; color: #5A5A5A">$ 15,838,087</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2.85pt; padding-left: 1.75pt"><FONT STYLE="font-size: 10pt; color: #5A5A5A">Net loss and comprehensive</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10.9pt"><FONT STYLE="font-size: 10pt; color: #5A5A5A">loss for the period</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 8.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD>
    <TD STYLE="padding-right: 4.05pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD>
    <TD STYLE="padding-right: 5.85pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD>
    <TD STYLE="padding-right: 5.85pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">(76,916)</FONT></TD>
    <TD STYLE="padding-right: 1.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">(76,916)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2.85pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #5A5A5A">Share based compensation:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: gray 1pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt; color: #5A5A5A">Charged to operations</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 8.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 4.05pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 5.9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">4,100</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 8.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">4,100</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #5A5A5A"><B>Balance, March 31, 2016</B></FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 7.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">55,398,051</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 8.55pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 43,521,638</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 4.1pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 674,472</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 5.9pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 6,037,100</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 5.95pt"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ (34,467,939)</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 5.95pt"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 15,765,271</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.75pt"><B>Balance, January 1, 2017</B></P></TD>
    <TD>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 7.4pt 0 0; text-align: right">55,398,051</P></TD>
    <TD>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 8.55pt 0 0; text-align: right">$ 43,521,638</P></TD>
    <TD>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 4.1pt 0 0; text-align: right">$ 674,472</P></TD>
    <TD>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.9pt 0 0; text-align: right">$ 6,046,000</P></TD>
    <TD>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 5.95pt">$ (34,746,613)</P></TD>
    <TD>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 5.95pt">$ 15,495,497</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2.85pt; padding-left: 1.75pt"><FONT STYLE="font-size: 10pt">Net loss and comprehensive</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">loss for the year</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 8.5pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 4.05pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.85pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-right: 5.85pt; text-align: right"><FONT STYLE="font-size: 10pt">(52,733)</FONT></TD>
    <TD STYLE="padding-right: 1.8pt; text-align: right"><FONT STYLE="font-size: 10pt">(52,733)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2.85pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Share based compensation:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: gray 1pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Charged to operations</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 8.5pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 4.05pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 5.9pt; text-align: right"><FONT STYLE="font-size: 10pt">600</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 8.8pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="border-bottom: gray 1pt solid; padding-right: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">600</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Balance, March 31, 2017</B></FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 7.4pt; text-align: right"><FONT STYLE="font-size: 10pt">55,398,051</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 8.55pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 43,521,638</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 4.1pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 674,472</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 5.9pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 6,046,600</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 5.95pt"><FONT STYLE="font-size: 10pt">$ (34,799,346)</FONT></TD>
    <TD STYLE="border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 5.95pt"><FONT STYLE="font-size: 10pt">$ 15,443,364</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt"><I>The accompanying notes are an integral part of
these condensed interim consolidated financial statements</I></P>




<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 63%; padding-left: 2.25pt"><FONT STYLE="font-size: 14pt; color: #1F497D"><B>ZAZU METALS CORPORATION</B></FONT></TD>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 17%">&nbsp;</TD>
    <TD STYLE="width: 13%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">Condensed Interim Consolidated Statements of Cash Flow</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">(Unaudited)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt; color: #588695">In U.S. dollars</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 24.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 25.35pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 1.15pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-left: 2.05pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 4.8pt; text-align: center"><B>For the 3</B></P>
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 4.8pt; text-align: center"><B>months ended</B></P>
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 4.8pt; text-align: center"><B>March 31,</B></P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt; text-align: center; color: #5A5A5A"><B>For the 3</B></P>
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt; text-align: center; color: #5A5A5A"><B>months ended</B></P>
        <P STYLE="font: 10pt/11.5pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt; text-align: center; color: #5A5A5A"><B>March 31,</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 4.2pt; padding-left: 3.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>Note&#9;</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 9pt; padding-left: 4.8pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #5A5A5A"><B>2016</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 5.55pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Cash flow provided by (used in):</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 5.55pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Operating activities</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0.35pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Loss for the period</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.35pt; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">$ (52,733)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.35pt; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ (76,916)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Adjustments for non-cash items:</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Depreciation</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">113</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">206</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Share based compensation</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; padding-left: 0.05in; text-align: right"><FONT STYLE="font-size: 10pt"><B>7</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">600</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">4,100</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Unrealized foreign exchange loss (gain)</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">35</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">(9,457)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Net changes in non-cash working capital items:</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Decrease in trade and other receivables</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">6,523</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">5,156</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-left: 10.9pt"><FONT STYLE="font-size: 10pt">Decrease in trade and other payables</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">(6,328)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">(16,326)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Net cash used in operating activities</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">(51,790)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">(93,237)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt"><B>Financing activities</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Loan proceeds</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.2pt; padding-left: 0.05in; text-align: right"><FONT STYLE="font-size: 10pt"><B>5</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">30,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Net cash from financing activities</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">30,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt"><B>Investing activities</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 9pt; padding-left: 4.8pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-top: 0.35pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Purchase of exploration and evaluation assets</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 0.35pt; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,756)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 0.35pt; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">(13,115)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Net cash used in investing activities</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">(3,756)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 3.3pt; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">(13,115)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid">
        <P STYLE="font: 13pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt">Effect of exchange rate changes on cash and cash equivalents</P></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid">
        <P STYLE="font: 13pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 4.8pt; text-align: right"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 4.8pt; text-align: right">(38)</P></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid">
        <P STYLE="font: 13pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt; text-align: right"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt; text-align: right; color: #5A5A5A">10,919</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 1.8pt"><B>Net decrease in cash and cash equivalents</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 9pt 0 4.8pt; text-align: right"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 9pt 0 4.8pt; text-align: right">(25,584)</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 4.5pt 0; text-align: right"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 4.5pt; text-align: right; color: #5A5A5A">(95,433)</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 1pt solid; padding-top: 0.35pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents at beginning of period</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 0.35pt; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">90,463</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 1pt solid; padding-top: 0.35pt; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">459,458</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt"><B>Cash and cash equivalents at end of period</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 9pt; padding-left: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 64,879</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: gray 2.25pt solid; padding-top: 6.75pt; padding-right: 4.5pt; padding-left: 4.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">$ 364,025</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0"><I>&nbsp;</I></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 1.8pt"><B>Non-cash transactions:</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0.35pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Equipment depreciation capitalized to exploration and evaluation assets</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.2pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.35pt; padding-left: 38.95pt; text-align: right"><FONT STYLE="font-size: 10pt">1,153</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.35pt; padding-right: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">1,632</FONT></TD></TR>
<TR>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-top: 0.35pt; padding-left: 1.8pt"><FONT STYLE="font-size: 10pt">Increase (decrease) in trade and other payables related to exploration and evaluation assets</FONT></TD>
    <TD STYLE="vertical-align: top; padding-top: 0.35pt; padding-right: 15pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.35pt; padding-right: 4.8pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #5A5A5A">8,210</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><I>&nbsp;</I></P>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 3.2pt 0 0 78.65pt"><I>The accompanying notes are an integral part of
these condensed interim consolidated financial statements</I></P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">1.</FONT></TD><TD>Nature of operations and going concern</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.25pt 0 23.35pt; text-align: justify">Zazu Metals Corporation
(the &#8220;Company&#8221;) is a Canadian company which is engaged in the exploration and development of mineral properties. The
Company was incorporated by a Certificate of Incorporation issued pursuant to the provisions of the Canada Business Corporations
Act on November 29, 2006. The address of its registered office is 500 &#8211; 666 Burrard Street, Vancouver, BC, Canada, V6C 3P6.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.2pt 0 23.35pt; text-align: justify">The Company incorporated
Zazu Metals (Alaska) Corporation (&#8220;Zazu Alaska&#8221;), a subsidiary of the Company, in the State of Alaska, United States
on January 18, 2007.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.05pt 0 23.35pt; text-align: justify">The Company and its subsidiary
(together, the &#8220;Group&#8221;) are currently exploring a mineral exploration property located in the State of Alaska, United
States and have not yet determined whether their mineral property contains resources that are economically recoverable. The underlying
value of the Group&#8217;s mineral property and the recoverability of the related deferred costs are dependent on the existence
of economically recoverable resources in its mineral property and the ability of the Group to obtain the necessary financing to
complete development and upon future profitable production from, or the proceeds from the disposition of, its mineral property.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.1pt 0 23.35pt; text-align: justify">At March 31, 2017 the Company
did not have enough cash on hand to meet its planned expenditures for the next twelve months. The Company plans to pursue financing
in the future in order to fund its operations and to continue the advancement of its mineral property but the material uncertainty
of raising sufficient funds casts significant doubt about the Company&#8217;s ability to continue as a going concern. The Company
has historically raised funds primarily through the sales of equity securities for cash. While the Company expects that it will
obtain funding through an equity funding, or other means depending on market conditions, there can be no assurance that the Company
will be able to obtain such funding or obtain it on acceptable terms.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.25pt 0 23.4pt; text-align: justify">These condensed interim
consolidated financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of operations. These financial statements do not reflect the adjustments
to carrying values of assets and liabilities that would be necessary should the going concern assumption prove to be inappropriate,
and these adjustments could be material.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">2.</FONT></TD><TD>Basis of presentation</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.85pt 5.55pt 0 23.4pt; text-align: justify">These condensed interim
consolidated financial statements should be read in conjunction with our audited consolidated annual financial statements for the
year ended December 31, 2016.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.35pt 0 23.35pt; text-align: justify">These condensed interim
consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (&#8220;IFRS&#8221;)
issued by the International Accounting Standards Board (&#8220;IASB&#8221;). These condensed interim consolidated financial statements
were approved by the Board of Directors on May 18, 2017.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">3.</FONT></TD><TD>Summary of significant accounting policies</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.25pt 0 23.4pt; text-align: justify">The Group prepares its audited
consolidated annual financial statements in accordance with IFRS as issued by IASB. These condensed interim consolidated financial
statements follow the same accounting policies and methods of application as our most recent annual financial statements and should
be read in conjunction with our most recent audited consolidated annual financial statements.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">4.</FONT></TD><TD>Equipment and exploration and evaluation assets</TD></TR></TABLE>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 53%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 35%; border-bottom: Black 1pt solid; padding-right: 18.55pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Lik mineral property</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Equipment</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 5.45pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Opening net book value at January 1, 2016</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 5.45pt; padding-right: 17.85pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,365,235</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 5.45pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 24,307</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Additions</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 17.85pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt; color: #595958">102,553</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.25pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Depreciation for the year</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 17.8pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 1.2pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(7,351)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Net book value at December 31, 2016</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-top: 2.95pt; padding-right: 17.85pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,467,788</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-top: 2.95pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 16,956</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 0.7pt; color: #595958">Cost</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0 114.65pt; text-align: right; text-indent: -114.65pt"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 17.85pt 0 114.65pt; text-align: right; text-indent: -114.65pt; color: #595958">$
        15,467,788</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 4.3pt 0 0; text-align: right; color: #595958">$ 307,336</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Accumulated depreciation</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 17.8pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(290,380)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Net book value at December 31, 2016</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 17.85pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,467,788</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 16,956</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.6pt 0 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt">Opening net book value at January 1, 2017</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 114.65pt; text-align: right; text-indent: -114.65pt"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.6pt 0 0 114.65pt; text-align: right; text-indent: -114.65pt"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 17.85pt 0 114.65pt; text-align: right; text-indent: -114.65pt">$
        15,467,788</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.6pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 4.3pt 0 0; text-align: right">$ 16,956</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Additions</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 17.85pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt">4,909</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.25pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Depreciation for the period</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 17.8pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt">(1,266)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-top: 3.05pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Net book value at March 31, 2017</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-top: 3.05pt; padding-right: 17.85pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt">$ 15,472,697</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-top: 3.05pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,690</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 0.7pt">Cost</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0 114.65pt; text-align: right; text-indent: -114.65pt"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 17.85pt 0 114.65pt; text-align: right; text-indent: -114.65pt">$
        15,472,697</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0; text-align: right"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 4.3pt 0 0; text-align: right">$ 307,336</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Accumulated depreciation</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 17.8pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt">(291,647)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Net book value at March 31, 2017</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 17.85pt; padding-left: 114.65pt; text-align: right; text-indent: -114.65pt"><FONT STYLE="font-size: 10pt">$ 15,472,697</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 4.3pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,690</FONT></TD></TR>
</TABLE>
<P STYLE="font: 14.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 23.4pt; text-align: justify"><B>Lik Property</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 5.3pt 0 23.35pt; text-align: justify">The Group is participating
in the exploration and development of the Lik property through a joint arrangement with Teck American, Inc. (&#8220;Teck American&#8221;),
a wholly owned subsidiary of Teck Resources Limited. The Group acquired its interest in the joint arrangement in June 2007 by making
a cash payment of $20 million and granting a 2% net proceeds royalty.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.2pt 0 23.35pt; text-align: justify">The Group is the operator
of the joint arrangement and holds a 50% interest in the project. The Group has the right to form a joint venture with Teck American
and increase its interest to 80% by incurring qualifying exploration expenditures on or before January 27, 2018. The terms of the
joint arrangement are governed by the Lik Block Agreement, signed in 1983, which specified an amount of $25.0 million of qualifying
expenditures to be adjusted annually for inflation, and which amount is currently estimated to be approximately $43.1 million.
As of March 31, 2017 a total of $21.9 million has been incurred in exploration expenditures pursuant to the terms of the Lik Block
Agreement. If the qualifying expenditures are not made before January 2018, the Group remains as operator and its interest stays
at 50%.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.3pt 0 23.35pt; text-align: justify">Once the Group satisfies
this expenditure obligation, Teck American has a onetime election to (i) maintain the 20% interest which shall become a participating
interest pursuant to a joint venture agreement with a pro rata sharing of the pre-existing 1% net profits interest, or (ii) transfer
its interest in exchange for a 2% net smelter return royalty interest such that the Group would become the holder of a 100% undivided
interest in the Lik property subject only to the pre-existing 1% net profits interest, the 2% net proceeds royalty and the 2% net
smelter return royalty.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 0 0 23.35pt; text-align: justify">Acquisition and deferred exploration
expenditures made by the Group are as follows:</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 14pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0.05pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 55%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 9.95pt; text-align: center; text-indent: -1.75pt; color: #595958"><B>Balance</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 8pt 0 9.95pt; text-align: center; color: #595958"><B>December 31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 9.95pt; text-align: center; color: #595958"><B>2016</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid">
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0; text-align: center">&nbsp;</P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0.1in 0 12.55pt; text-align: center"><B>2017</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0.1in 0 7.35pt; text-align: center"><B>Expenditures</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0.05in 0 0.15in; text-align: center"><B>Balance</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0.05in 0 0.15in; text-align: center"><B>March 31,</B></P>
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0.05in 0 0.15in; text-align: center"><B>2017</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 5.35pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Deferred exploration</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Administration and insurance</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 683,885</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">$ 353</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 684,238</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Assays/analysis</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">816,172</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">3,403</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">819,575</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Camp, freight and logistics</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">1,929,514</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">396</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">1,929,910</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Drilling</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">4,123,073</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">757</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">4,123,830</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Engineering and other studies</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">3,602,938</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">3,602,938</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Environmental</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">2,442,328</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">2,442,328</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Geological</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">951,084</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">951,084</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Reclamation</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">37,500</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">37,500</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 9.7pt"><FONT STYLE="font-size: 10pt">Share based compensation</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">605,200</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">605,200</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 3.05pt; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">15,191,694</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 3.05pt; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">4,909</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 3.05pt; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">15,196,603</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0.5pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Acquisition</FONT></TD>
    <TD STYLE="vertical-align: top; padding-top: 0.5pt; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">20,276,094</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.5pt; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0.5pt; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">20,276,094</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Write-downs</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(20,000,000)</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">(20,000,000)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total deferred property expenditures</FONT></TD>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 10.4pt; padding-left: 5.45pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,467,788</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 0.1in; text-align: right"><FONT STYLE="font-size: 10pt">$ 4,909</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 15,472,697</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0.05pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">5.</FONT></TD><TD>Loan payable</TD></TR></TABLE>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 5.3pt 0 23.4pt; text-align: justify">In order to provide working
capital while a larger financing was pursued, the Group&#8217;s Chief Executive Officer loaned the Group $70,000 in October 2016
and $30,000 in March 2017. These loans are unsecured and payable on demand, with interest calculated at 6% per year and paid monthly.
See also note 9 &#8211; Related party transactions.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">6.</FONT></TD><TD>Share capital</TD></TR></TABLE>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.3pt 0 23.35pt; text-align: justify">The Company&#8217;s common
shares began trading on the Toronto Stock Exchange on December 19, 2007 under the symbol &#8220;ZAZ&#8221; and on the OTCQX exchange
in the United States on July 28, 2014 under the symbol &#8220;ZAZUF&#8221;. Beginning December 1, 2016 the Company&#8217;s common
shares ceased trading on the Toronto Stock Exchange and began trading on the TSX Venture Exchange. The Company&#8217;s common shares
ceased trading on the OTCQX exchange on December 31, 2016.</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.3pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.4pt 0 23.35pt; text-align: justify">The Company is authorized
to issue an unlimited number of Common Shares with no par value and an unlimited number of Special Voting Shares with no par value.
At March 31, 2017 the Company had 55,398,051 shares (2016 &#8211; 55,398,051 shares) issued and outstanding.</P>




<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 2.95pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">7.</FONT></TD><TD>Stock options and share based compensation</TD></TR></TABLE>

<P STYLE="font: 9pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 73%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; padding-right: 5.6pt; padding-left: 1.25pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Number of options</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.55pt 0 7.9pt; text-align: center; text-indent: -1.7pt"><B>Average</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.55pt 0 7.9pt; text-align: center; text-indent: -1.7pt"><B>exercise
        price</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 3.55pt 0 7.9pt; text-align: center; text-indent: -1.7pt"><B>(CDN$)</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 5.45pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Opening balance at January 1, 2016</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 5.45pt; padding-right: 5.6pt; padding-left: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">4,390,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-top: 5.45pt; padding-right: 3.55pt; padding-left: 7.9pt; text-align: right; text-indent: -1.7pt"><FONT STYLE="font-size: 10pt; color: #595958">$ 0.62</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt; color: #595958">Balance at December 31, 2016</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 5.6pt; padding-left: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">4,990,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 3.55pt; padding-left: 7.9pt; text-align: right; text-indent: -1.7pt"><FONT STYLE="font-size: 10pt; color: #595958">$ 0.62</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #818181 1pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt">Opening balance at January 1, 2017</P></TD>
    <TD STYLE="border-bottom: #818181 1pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.6pt 0 1.25pt"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 5.6pt 0 1.25pt"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 5.6pt 0 1.25pt; text-align: right">4,990,000</P></TD>
    <TD STYLE="border-bottom: #818181 1pt solid">
        <P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 3.55pt 0 7.9pt; text-indent: -1.7pt"><B>&nbsp;</B></P>
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 3.55pt 0 7.9pt; text-indent: -1.7pt"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 3.55pt 0 7.9pt; text-align: right; text-indent: -1.7pt">$
        0.62</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Balance at March 31, 2017</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 5.6pt; padding-left: 1.25pt; text-align: right"><FONT STYLE="font-size: 10pt">4,990,000</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 3.55pt; padding-left: 7.9pt; text-align: right; text-indent: -1.7pt"><FONT STYLE="font-size: 10pt">$ 0.62</FONT></TD></TR>
</TABLE>
<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.4pt">The stock options outstanding at March 31, 2017 expire
as follows:</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 8.5pt Calibri, Helvetica, Sans-Serif; margin: 0.6pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 57%; border-bottom: black 1pt solid">
        <P STYLE="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt"><B>Expiry Date</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6pt; text-align: center; text-indent: 1.45pt"><B>Number</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6pt; text-align: center; text-indent: 1.45pt"><B>outstanding</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6.15pt; text-align: center; text-indent: 6.65pt"><B>Exercise
        price</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 6.15pt; text-align: center; text-indent: 6.65pt"><B>(CDN$)</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 3.25pt; text-align: center"><B>Vested and</B></P>
        <P STYLE="font: 10pt/11.25pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 3.25pt; text-align: center"><B>exercisable</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.7pt">May 2018</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 7.35pt 0 6pt; text-align: right; text-indent: 1.45pt">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 7.35pt 0 6pt; text-align: right; text-indent: 1.45pt">1,000,000</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 10.25pt 0 6.15pt; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 10.25pt 0 6.15pt; text-align: right">0.80</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 8.1pt 0 3.25pt; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 8.1pt 0 3.25pt; text-align: right">1,000,000</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">November 2018</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 7.35pt; padding-left: 6pt; text-align: right; text-indent: 1.45pt"><FONT STYLE="font-size: 10pt">1,190,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.25pt; padding-left: 6.15pt; text-align: right"><FONT STYLE="font-size: 10pt">0.70</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; padding-left: 3.25pt; text-align: right"><FONT STYLE="font-size: 10pt">1,190,000</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">May 2019</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 7.35pt; padding-left: 6pt; text-align: right; text-indent: 1.45pt"><FONT STYLE="font-size: 10pt">2,200,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 10.25pt; padding-left: 6.15pt; text-align: right"><FONT STYLE="font-size: 10pt">0.60</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.1pt; padding-left: 3.25pt; text-align: right"><FONT STYLE="font-size: 10pt">2,200,000</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">August 2020</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 7.35pt; padding-left: 6pt; text-align: right; text-indent: 1.45pt"><FONT STYLE="font-size: 10pt">600,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 10.25pt; padding-left: 6.15pt; text-align: right"><FONT STYLE="font-size: 10pt">0.25</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 8.1pt; padding-left: 3.25pt; text-align: right"><FONT STYLE="font-size: 10pt">600,000</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total stock options outstanding</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 7.35pt; padding-left: 6pt; text-align: right; text-indent: 1.45pt"><FONT STYLE="font-size: 10pt">4,990,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-right: 10.25pt; padding-left: 6.15pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 8.1pt; padding-left: 3.25pt; text-align: right"><FONT STYLE="font-size: 10pt">4,990,000</FONT></TD></TR>
</TABLE>
<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.95pt 5.3pt 0 23.4pt; text-align: justify; text-indent: -0.05pt">Under
the terms of the employment agreements between the Group and its senior officers, an officer&#8217;s unvested stock options will
vest immediately and become exercisable if the agreement is terminated by the Group, or if the officer so elects within 120 days
of a change of control of the Group.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.1pt 0 23.4pt; text-align: justify">The Company recognizes stock
based compensation over the vesting period of the underlying options using the fair value calculated by the Black-Scholes option
pricing model. Option pricing models require the input of highly subjective assumptions including expected price volatility. Changes
in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily
provide a reliable single measure of the fair value of the Company&#8217;s stock options granted and/or vested during the period.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0.05pt; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">8.</FONT></TD><TD>Compensation of key management</TD></TR></TABLE>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 23.4pt; text-align: justify">The remuneration of directors
and other members of key management personnel included:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0.05pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 69%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid; padding-right: 5.7pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>3 months ended March 31, 2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid; padding-right: 8.05pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958"><B>3 months ended March 31, 2016</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2.3pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Salaries, consulting fees and directors&#8217; fees</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 5.7pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 18,082</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 8.05pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$29,890</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Short-term employee benefits</FONT></TD>
    <TD STYLE="padding-right: 5.7pt; text-align: right"><FONT STYLE="font-size: 10pt">2,844</FONT></TD>
    <TD STYLE="padding-right: 8.05pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">11,372</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Stock based compensation</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 5.7pt; text-align: right"><FONT STYLE="font-size: 10pt">600</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 8.05pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">4,100</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 3.05pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total compensation of key management</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 3.05pt; padding-right: 5.7pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 21,526</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 3.05pt; padding-right: 8.05pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 45,362</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

<!-- Field: Page; Sequence: 29 -->
    <DIV STYLE="margin-top: 6pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 7.5pt Calibri, Helvetica, Sans-Serif; margin: 0.25pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.95pt 5.2pt 0 23.35pt; text-align: justify">Key management personnel
were not paid post-employment benefits, termination benefits or other long-term benefits during the periods ended March 31, 2017
and March 31, 2016.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">9.</FONT></TD><TD>Related party transactions</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 0 0 23.35pt; text-align: justify">Related parties and the nature
of the Group&#8217;s transactions with them are:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 46%; border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt"><B>Related party</B></FONT></TD>
    <TD STYLE="width: 54%; border-bottom: black 1pt solid; text-align: right"><FONT STYLE="font-size: 10pt"><B>Nature of transactions</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 5.95pt"><FONT STYLE="font-size: 10pt">Gil Atzmon</FONT></TD>
    <TD STYLE="padding-top: 5.95pt; text-align: right"><FONT STYLE="font-size: 10pt">Loan</FONT></TD></TR>
</TABLE>
<P STYLE="font: 14.5pt Calibri, Helvetica, Sans-Serif; margin: 0.5pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.1pt 0 23.35pt; text-align: justify">In October 2016 and March
2017 Gil Atzmon, the Group&#8217;s Chief Executive Officer, loaned the Group $70,000 and $30,000 respectively. These loans are
unsecured and payable on demand, with interest calculated at 6% per year and paid monthly.</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.1pt 0 23.35pt; text-align: justify; text-indent: -0.05pt">The
Group incurred fees and expenses with the above mentioned related party. Related party transactions also include directors&#8217;
fees and are in the ordinary course of business, occurring on terms that are similar to those of transactions with unrelated parties.</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 75%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; padding-right: 5.7pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>3 months ended March 31, 2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; border-bottom: Black 1pt solid; padding-right: 8.1pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958"><B>3 months ended March 31, 2016</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 2.3pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Interest on loan from Chief Executive Officer</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2.3pt; padding-right: 5.7pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 1,045</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-top: 2.3pt; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">-</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Directors&#8217; fees</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 5.7pt; text-align: right"><FONT STYLE="font-size: 10pt">7,548</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1pt solid; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 7,390</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total related party transactions</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 5.7pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 8,593</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 7,390</FONT></TD></TR>
</TABLE>
<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.35pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.4pt; text-align: justify">At the period end, the Group had
the following outstanding balances payable to related parties:</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 75%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; padding-left: 6.65pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>March 31, 2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 12%; border-bottom: Black 1pt solid; padding-right: 8.1pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958"><B>December 31, 2016</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2.3pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Loan from Chief Executive Officer</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 4.5pt; padding-left: 6.65pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 100,000</FONT></TD>
    <TD STYLE="padding-top: 2.3pt; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 70,000</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Interest on loan from Chief Executive Officer</FONT></TD>
    <TD STYLE="padding-right: 4.5pt; padding-left: 6.65pt; text-align: right"><FONT STYLE="font-size: 10pt">275</FONT></TD>
    <TD STYLE="padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">268</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #818181 1pt solid; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Directors&#8217; fees</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 4.5pt; padding-left: 6.65pt; text-align: right"><FONT STYLE="font-size: 10pt">6,937</FONT></TD>
    <TD STYLE="border-bottom: #818181 1pt solid; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">6,876</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-left: 0.7pt"><FONT STYLE="font-size: 10pt">Total related party transactions</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 4.5pt; padding-left: 6.65pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 107,212</FONT></TD>
    <TD STYLE="border-bottom: #818181 1.5pt solid; padding-top: 2.95pt; padding-right: 8.1pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 77,144</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.15pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 17.95pt"><FONT STYLE="letter-spacing: -0.05pt">10.</FONT></TD><TD>Commitments</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 0 0 23.35pt; text-align: justify">The following is a summary of
the Group&#8217;s contractual obligations and commitments as at March 31, 2017:</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 47%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: black 1pt solid; padding-top: 0.05pt; padding-left: 19.9pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 11%; border-bottom: black 1pt solid; padding-top: 0.05pt; padding-left: 12.95pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 9.4pt; text-align: center"><B>2018 &#8211;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 12.9pt; text-align: center"><B>2020</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 9.35pt; text-align: center"><B>2021 &#8211;</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 12.85pt; text-align: center"><B>2022</B></P></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt/10.1pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 10.15pt; text-align: center; text-indent: -3.5pt"><B>2023
        and</B></P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 10.15pt; text-align: center"><B>beyond</B></P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 0 0">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0 10pt">Lik project</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 8.3pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 8.3pt 0 0; text-align: right">$ 37,000</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 7.45pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 7.45pt 0 0; text-align: right">$ 37,000</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 7.45pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 7.45pt 0 0; text-align: right">-</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 4.75pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 4.75pt 0 0; text-align: right">-</P></TD>
    <TD STYLE="vertical-align: bottom">
        <P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.55pt 3.55pt 0 0; text-align: right">&nbsp;</P>
        <P STYLE="font: 10pt/12.15pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 3.55pt 0 0; text-align: right">-</P></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Office operation leases</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.3pt; text-align: right"><FONT STYLE="font-size: 10pt">1,049</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 7.45pt; text-align: right"><FONT STYLE="font-size: 10pt">1,049</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 7.45pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 4.75pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 3.55pt; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 2.95pt 12.35pt 0 23.35pt; text-align: justify">The Group has entered
into employment agreements with its senior officers for an aggregate of $3,500 per month effective January 1, 2017. These agreements
can be terminated by the Group at any time, or by the officer within 120 days of a change of control of the Group, subject to the
payment of the greater of (i) a lump sum amount ranging from $25,000 to</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 12.25pt 0 23.35pt; text-align: justify">$30,833, and (ii) the minimum
payment prescribed by applicable employment standards legislation. At such time any outstanding stock options will immediately
vest and, upon the officer&#8217;s request, the Group will provide an interest free loan for up to six months to exercise any stock
options, with the shares held by the Group as collateral. Salary amounts are reviewed annually by the Compensation Committee of
the Board of Directors.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6.15pt 0 0 23.35pt; text-align: justify">The Department of Natural
Resources of the State of Alaska requires the Group, as operator of the Lik project, to post a</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 12.25pt 0 23.35pt; text-align: justify">$250,000 bond to cover any
future reclamation activities necessary upon the abandonment of the mining claims that make up the project. The Group has contracted
with a surety bond company to provide this bond.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.05pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.35pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">11.</FONT></TD><TD>Financial instruments</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 12.3pt 0 23.35pt; text-align: justify">The Group&#8217;s financial
instruments are classified into the following categories and the following table shows their carrying values.</P>

<P STYLE="font: 6.5pt Calibri, Helvetica, Sans-Serif; margin: 0.1pt 0 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 72%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; padding-left: 3.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>March 31, 2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid; padding-left: 9.95pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958"><B>December 31, 2016</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 1.85pt; padding-left: 10pt"><FONT STYLE="font-size: 10pt">Loans and receivables </FONT><FONT STYLE="font-size: 6.5pt">(1)</FONT></TD>
    <TD STYLE="padding-top: 3.55pt; padding-right: 11.65pt; padding-left: 3.4pt; text-align: right"><FONT STYLE="font-size: 10pt">$ 64,879</FONT></TD>
    <TD STYLE="padding-top: 3.55pt; padding-right: 11.95pt; padding-left: 9.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 90,497</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt"><FONT STYLE="font-size: 10pt">Financial liabilities at amortized cost</FONT></TD>
    <TD STYLE="padding-right: 11.65pt; padding-left: 3.4pt; text-align: right"><FONT STYLE="font-size: 10pt">120,549</FONT></TD>
    <TD STYLE="padding-right: 11.95pt; padding-left: 9.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">96,838</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 4.7pt; padding-left: 10pt"><FONT STYLE="font-size: 6.5pt">(1) </FONT><FONT STYLE="font-size: 10pt">Consists of:</FONT></TD>
    <TD STYLE="padding-right: 11.65pt; padding-left: 3.4pt">&nbsp;</TD>
    <TD STYLE="padding-left: 9.95pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 22.6pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents &#8211; US currency</FONT></TD>
    <TD STYLE="padding-right: 11.65pt; padding-left: 3.4pt; text-align: right"><FONT STYLE="font-size: 10pt">62,023</FONT></TD>
    <TD STYLE="padding-right: 11.95pt; padding-left: 9.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">71,279</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 22.6pt"><FONT STYLE="font-size: 10pt">Cash and cash equivalents &#8211; CDN currency</FONT></TD>
    <TD STYLE="padding-right: 11.65pt; padding-left: 3.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,856</FONT></TD>
    <TD STYLE="padding-right: 11.95pt; padding-left: 9.95pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">19,184</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/197% Calibri, Helvetica, Sans-Serif; margin: 0 73.2pt 0 23.4pt; text-indent: -0.05pt">The carrying values
of all of the Group&#8217;s financial assets and liabilities reasonably approximate their fair values. The Group is exposed to
certain financial risks, including currency risk, liquidity risk and credit risk.</P>

<P STYLE="font: 10pt/9.3pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.4pt; text-align: justify"><I>Capital Risk Management</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3.05pt 12.2pt 0 0.45in; text-align: justify">The Group&#8217;s objectives
of capital management are intended to safeguard the entity's ability to support the Group&#8217;s normal operating requirements
on an ongoing basis, continue the development and exploration of its mineral properties and support any expansionary plans.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 12.35pt 0 0.45in; text-align: justify">The capital structure of
the Group consists of equity attributable to shareholders. The Group manages the capital structure and makes adjustments in light
of changes in economic conditions and the risk characteristics of the Group&#8217;s assets.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.85pt 12.3pt 0 0.45in; text-align: justify">To effectively manage
the entity&#8217;s capital requirements, the Group has in place a planning and budgeting process to help determine the funds required
to ensure the Group has the appropriate liquidity to meet its operating and growth objectives. The Group has historically relied
on the issuance of shares to develop the project and will most likely be obliged to do so again in the future.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.85pt 0 0 23.4pt; text-align: justify"><I>Currency risk</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 12.25pt 0 0.45in; text-align: justify">The Group&#8217;s financial
assets and liabilities consist of cash and cash equivalents, trade receivables and trade payables, some of which are denominated
in Canadian dollars. The Group is exposed to financial gain or loss as a result of foreign exchange movements by the Canadian dollar
against the US dollar.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 12.3pt 0 0.45in; text-align: justify">In addition to costs denominated
in US dollars, the Group also incurs general and administrative costs denominated in Canadian dollars. Accordingly, the Group&#8217;s
general and administrative costs are affected by changes in the foreign exchange rate of the Canadian dollar. The Group has elected
not to hedge its exposure to fluctuations in the Canadian dollar.</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0">&nbsp;</P>

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<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.4pt 0 0"></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 0.45in">The Group was exposed to currency risk through the following
assets and liabilities denominated in Canadian dollars:</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 69%; padding-left: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; padding-right: 8.9pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>March 31, 2017</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; padding-right: 5.5pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958">December 31, 2017</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 8.9pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>(CDN$)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.5pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958">(CDN$)</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.9pt; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.5pt; text-align: right">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 2.5pt"><FONT STYLE="font-size: 10pt">Loans and receivables</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>$ 3,801</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.5pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 25,759</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 2.5pt"><FONT STYLE="font-size: 10pt">Financial liabilities at amortized cost</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 8.9pt; text-align: right"><FONT STYLE="font-size: 10pt"><B>(11,781)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">(15,542)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 5.35pt 0 32.35pt; text-align: justify">Based on the net exposures
in the preceding table as at March 31, 2017, and assuming that all other variables remain constant, a 10% appreciation or depreciation
of the Canadian dollar against the US dollar would result in an increase/decrease of $600 (2016 &#8211; $800) in the Group&#8217;s
net loss.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 8.85pt 0 0 23.35pt"><I>Liquidity risk</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.3pt 0 32.35pt; text-align: justify">Liquidity risk is the potential
that the Group will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate
funding. The Group manages liquidity risk through the management of its capital structure. The Group manages and makes adjustments
to the capital structure as opportunities arise in the marketplace or as and when funding is required. Historically the Group&#8217;s
primary source of funding has been the sale of equity securities for cash. The Group is not in commercial production on the Lik
property and, accordingly, it does not generate cash from operations. See Note 1 for going concern discussion.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 0 0 32.35pt; text-align: justify">Trade and other payables are
all due within the current operating period.</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0.45pt 0 0">&nbsp;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0 0 0 23.35pt"><I>Credit risk</I></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 3pt 5.2pt 0 32.35pt; text-align: justify">The Group&#8217;s credit
risk arises from the non-performance by counterparties to fulfill their contractual obligations. The Group&#8217;s maximum exposure
to credit risk is limited to its cash and cash equivalents and trade and other receivables.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 5.45pt 0 32.35pt; text-align: justify">The Group mitigates its
credit risk on its cash and cash equivalents by maintaining its funds in bank and investment accounts in one of Canada&#8217;s
largest financial institutions that holds a Standard &amp; Poor&#8217;s senior debt credit rating of AA-.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.35pt 0 32.35pt; text-align: justify">The maximum credit risk
exposure at March 31, 2017 is limited to the carrying value of the cash and cash equivalents and trade and other receivables at
the period end.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 9.5pt Calibri, Helvetica, Sans-Serif; margin: 0.2pt 0 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0; color: #1F497D"><TR STYLE="vertical-align: top">
<TD STYLE="width: 5.35pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="letter-spacing: -0.05pt">12.</FONT></TD><TD>Segment reporting</TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 0 0 23.35pt">The Group currently operates in one business segment,
being the exploration and development of mineral properties. The Group&#8217;s non-current assets at March 31, 2017 and December
31, 2016 by geographic areas are as follows:</P>

<P STYLE="font: 7pt Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 60%; padding-left: 2.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 12%; border-bottom: Black 1pt solid; padding-right: 14pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958"><B>Canada</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 15%; border-bottom: Black 1pt solid; padding-right: 13.55pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958"><B>United States</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 13%; border-bottom: Black 1pt solid; padding-right: 2.4pt; text-align: center"><FONT STYLE="font-size: 10pt; color: #595958"><B>Total</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 2.5pt"><FONT STYLE="font-size: 10pt; color: #595958">Non-current assets at December 31, 2016</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 14pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 1,005</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.55pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,483,739</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt; color: #595958">$ 15,484,744</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-left: 2.5pt"><FONT STYLE="font-size: 10pt">Non-current assets at March 31, 2017</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 14pt; text-align: right"><FONT STYLE="font-size: 10pt">892</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 13.55pt; text-align: right"><FONT STYLE="font-size: 10pt">15,487,495</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 2.4pt; text-align: right"><FONT STYLE="font-size: 10pt">15,488,387</FONT></TD></TR>
</TABLE>
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<TD STYLE="width: 5.4pt"></TD><TD STYLE="width: 17.95pt"><FONT STYLE="font-size: 10pt; letter-spacing: -0.05pt"><B>13.</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>Subsequent events</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.85pt 0 0 23.35pt">In April 2017 the Group and Solitario Exploration
&amp; Royalty Corp. (NYSE:XPL; TSX:SLR) (&quot;Solitario&quot;) entered into a definitive arrangement agreement (the &quot;Arrangement
Agreement&quot;) pursuant to which Solitario will acquire all of the issued and outstanding common shares of Company (the &quot;Zazu
Shares&quot;) by way of a statutory plan of arrangement (the &quot;Arrangement&quot;) under the Canada Business Corporations Act.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.25pt 0 5.35pt; text-align: justify">Under the terms of the Arrangement
Agreement, holders of Zazu Shares (&quot;Zazu Shareholders&quot;) will receive, on closing, 0.3572 of a common share of Solitario
(the &quot;Exchange Ratio&quot;) in exchange for each Zazu Share held. Following the completion of the Arrangement, former Zazu
Shareholders are expected to hold approximately 34% of the issued and outstanding shares of the combined company and the Group
will be entitled to nominate two directors to be appointed to the board of directors of the combined company.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.3pt 0 5.35pt; text-align: justify">The Arrangement Agreement
includes customary provisions, including with respect to non-solicitation, a right granted to Solitario to match superior proposals
and fiduciary-out provisions, as well as representations, covenants and conditions which are customary for transactions of this
nature. In addition, the Group and Solitario have each agreed to pay a termination fee in the amount of US$0.75 million to the
other party upon the occurrence of certain termination events.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 6pt 5.3pt 0 5.35pt; text-align: justify">Shareholders of both Solitario
and the Company will be asked to approve the Arrangement at upcoming shareholder meetings in June 2017. The Arrangement is also
subject to applicable regulatory approvals and the satisfaction of certain other closing conditions.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 5.9pt 5.2pt 0 5.35pt; text-align: justify">After signing the Arrangement
Agreement, Solitario will provide the Company with interim debt financing in May 2017 by means of a secured convertible debenture
issued by Zazu in the principal amount of US$1.5 million (the &quot;Debenture&quot;). The Debenture will be secured by way of a
general security and pledge agreement and will bear interest at a rate of 5% per annum. If the Arrangement Agreement is terminated
prior to the effective date of the Arrangement, all principal amounts outstanding and any interest payable thereon will become
payable two years following the issuance of the Debenture. In certain circumstances, the Debenture is convertible at the option
of Solitario into Zazu Shares at a price of US$0.22 per Zazu Share.</P>





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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0">Solitario Exploration &amp; Royalty Corp</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0">PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">MARCH 31, 2017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">(Unaudited - Expressed in U.S. Dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">On April 26, 2017, Solitario Exploration
&amp; Royalty Corp. (&ldquo;Solitario&rdquo; or the &ldquo;Company&rdquo;) and Zazu Metals Corporation (&ldquo;Zazu&rdquo;) entered
into a definitive arrangement agreement (the &ldquo;Arrangement Agreement&rdquo;) pursuant to which Solitario will acquire all
of the issued and outstanding common shares of Zazu (the &ldquo;Transaction&rdquo;) by way of a plan of arrangement (the &ldquo;Plan
of Arrangement&rdquo;). Pursuant to the Plan of Arrangement, Solitario will acquire each common share of Zazu from Zazu&rsquo;s
shareholders in exchange for 0.3572 of a share of Solitario common stock (the &ldquo;Exchange Ratio&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The unaudited <I>pro forma</I> condensed
combined statement of operations for the year ended December 31, 2016 and the three month period ended March 31, 2017 combines
the historical consolidated statements of operations of Solitario and Zazu, giving effect to the acquisition as if it had occurred
on January 1, 2016. The unaudited <I>pro forma</I> condensed combined balance sheet as of March 31, 2017 combines the historical
consolidated balance sheets of Solitario and Zazu, giving effect to the acquisition as if it had occurred on March 31, 2017. The
historical consolidated financial information has been adjusted in the unaudited <I>pro forma</I> condensed combined financial
statements to give effect to <I>pro forma</I> events that are (i) directly attributable to the acquisition, (ii) factually supportable,
and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The unaudited <I>pro forma</I> condensed
combined financial statements should be read in conjunction with (i) the accompanying notes to the unaudited <I>pro forma</I> condensed
combined financial statements; (ii) the historical financial statements of Solitario and the accompanying notes in Solitario&rsquo;s
Annual Report on Form 10-K for the year ended December 31, 2016; (iii) the historical financial statements of Zazu and the accompanying
notes in Zazu&rsquo;s annual audited financial statements for the year ended December 31, 2016 ; (iv) the unaudited condensed financial
statements of Zazu and accompanying notes for the three months ended March 31, 2017; and (v) additional information contained in,
or incorporated by reference into, the Proxy Statement filed by Solitario with the Securities and Exchange Commission on May 23,
2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The unaudited <I>pro forma</I> condensed
combined financial statements have been presented for informational purposes only. The <I>pro forma</I> information is not necessarily
indicative of what the combined company&rsquo;s financial position or results of operations actually would have been had the acquisition
been completed as of the dates indicated. Since the unaudited <I>pro forma</I> condensed combined financial statements have been
prepared based on preliminary estimates, the final amounts recorded at the date of the acquisition may differ materially from the
information presented. These estimates are subject to change pending further review of the assets acquired and liabilities assumed.
In addition, the unaudited <I>pro forma</I> condensed combined financial information does not intend to project the future financial
position or operating results of the combined company.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>




<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="margin: 0"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; color: blue"><B>Table of Contents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">SOLITARIO EXPLORATION &amp; ROYALTY CORP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">As of March 31, 2017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0">Historical</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 12pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">(in thousands of US dollars)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Solitario As of<BR> March 31,<BR> 2017</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Zazu As<BR> of March 31,<BR> 2017</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Adjustments<BR> (Note 4)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD>&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Combined</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Current Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 15%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Cash and cash equivalents</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 13%; font: 10pt Times New Roman, Times, Serif; text-align: right">91</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 13%; font: 10pt Times New Roman, Times, Serif; text-align: right">65</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 15%">&nbsp;</TD><TD STYLE="width: 2%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 13%; font: 10pt Times New Roman, Times, Serif; text-align: right">156</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Short-term investments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">14,989</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">14,989</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Investments in marketable equity securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,685</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,685</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Prepaid expenses and other</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">72</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">83</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Total Current Assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">16,837</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">76</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">16,913</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Mineral properties</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">46</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,473</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(15,197</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">(a)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,010</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">14,688</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">(c)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Other assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">609</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">624</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Total Assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">17,492</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,564</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(509</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">32,547</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Liabilities and Stockholders&rsquo; Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Current Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Accounts payable and accrued liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">116</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">121</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">237</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Shareholders&rsquo; Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Common stock, par value $0.01, 100,000,000 authorized shares, 38,685,189 issued and outstanding at March 31, 2017</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">387</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">148</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">(b)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">535</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Additional paid in capital</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">55,784</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">50,242</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 7.4pt 0 0; text-align: right">(50,242)</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 7.4pt 0 0; text-align: right">14,693&nbsp;</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 7.4pt 0 0; text-align: right">93&nbsp;</P></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">(d) <BR>(b) <BR>(b)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">70,570</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Deficit <BR></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(39,414</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(34,799</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 7.4pt 0 0; text-align: right">49,996&nbsp;</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 7.4pt 0 0; text-align: right">(15,197)</P></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">(d) <BR>(a)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(39,414</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Accumulated other comprehensive loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">619</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">619</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Total Shareholders&rsquo; Equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">17,376</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,443</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(509</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">32,310</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Total Liabilities and Shareholders&rsquo; Equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">17,492</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,564</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(509</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">32,547</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; color: blue"><B>Table of Contents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">SOLITARIO EXPLORATION &amp; ROYALTY CORP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">For the Year Ended December 31, 2016</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">(in thousands of US dollars, except per share amounts)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Solitario<BR> Year Ended<BR> December 31, 2016</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Zazu<BR> Year Ended<BR> December 31, 2016</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Adjustments<BR> (Note 4)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Combined</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Cost, expense and other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 40%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Exploration expense</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">628</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">103</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a&nbsp;</FONT></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">731</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Depreciation and amortization</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">General and administrative</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,163</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">364</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,527</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Property abandonment and impairment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">13</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">13</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Total cost, expense and other</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,809</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">364</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">103</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,276</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Interest income (expense) &ndash; net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">44</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">45</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Gain (loss) on marketable securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">40</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">40</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Gain on derivative instruments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">672</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">672</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;Other income (loss)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(10</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Total other income (expense)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">746</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">755</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -10pt; padding-left: 20pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Net Loss before income tax</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,063</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(355</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(103</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,521)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Income tax benefit (expense)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">353</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">353</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Net Loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1710</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(355</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(103</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,168)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Other comprehensive income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Unrealized gain on marketable equity securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">601</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">601</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Total Comprehensive Loss for the Period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,109</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(355</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(103</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">$(1,567)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Loss per Common Share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Basic and diluted</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.04</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.01</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">$(0.03)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Weighted Average Number of Common</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Shares Used in Per Share Calculations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Basic and diluted (000&rsquo;s)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">38,906</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">55,398</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">19788</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">58,694</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; color: blue"><B>Table of Contents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">SOLITARIO EXPLORATION &amp; ROYALTY CORP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">For the Three Months Ended March 31, 2017</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;<FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 12pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">(in thousands of US dollars, except per share amounts)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Solitario Three Months&nbsp;&nbsp;Ended March 31, 2017</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Zazu<BR> Three Months<BR> March 31, 2017</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Adjustments<BR> (Note 4)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Combined</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Cost, expense and other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 40%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Exploration expense</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">151</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">5</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a&nbsp;</FONT></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 3%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">156</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Depreciation and amortization</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">General and administrative</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">300</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">52</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">352</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Total cost, expense and other</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">452</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">52</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">509</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Interest income (expense) &ndash; net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">46</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">45</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Gain (loss) on marketable securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">221</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">221</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 20pt">Gain on derivative instruments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">172</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">172</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left">Total other income (expense)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">439</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">438</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -10pt; padding-left: 20pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Net Loss before income tax</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(13</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(53</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(5</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(71)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Income tax benefit (expense)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Net Loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(13</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(53</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(5</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(71)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Other comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Unrealized loss on marketable equity securities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(93</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(93)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Total Comprehensive Loss for the Period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(106</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(53</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(5</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">$(164)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Loss per Common Share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Basic and diluted</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.00</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(0.00</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">$(0.00)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Weighted Average Number of Common</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Shares Used in Per Share Calculations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Basic and diluted (000&rsquo;s)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">38,692</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">55,398</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">19788</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">58,480</TD></TR>
</TABLE>

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<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="margin: 0"><IMG SRC="image_002.jpg" ALT="" STYLE="width: 676px; height: 4px"></P>

<P STYLE="margin: 0">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; color: blue"><B>Table of Contents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Note -1 Basis of presentation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The unaudited <I>pro forma</I> condensed
combined financial statements are based on Solitario&rsquo;s and Zazu&rsquo;s historical consolidated financial statements as adjusted
to give effect to the acquisition of Zazu. The unaudited <I>pro forma</I> combined statements of operations for the three months
ended March 31, 2017 and year ended December 31, 2016 give effect to the Zazu acquisition as if it occurred on January 1, 2016.
The unaudited <I>pro forma</I> combined balance sheet as of March 31, 2017 gives effect to the Zazu acquisition as if it had occurred
on March 31, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">These unaudited pro forma consolidated
financial statements have been compiled from:</P>

<P STYLE="font: 6pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a)</FONT></TD>
    <TD STYLE="vertical-align: top; width: 94%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The unaudited pro forma condensed combined balance sheet combines Solitario&rsquo;s balance sheet as of March 31, 2017 and Zazu&rsquo;s balance sheet of March 31, 2017. </FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">b)</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2016 combines Solitario&rsquo;s statement of operations for the year ended December 31, 2016 and Zazu&rsquo;s statement of operation for the year ended December 31, 2016. </FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">c)</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2017 combines Solitario&rsquo;s statement of operations for the three months ended March 31, 2017 and Zazu&rsquo;s statement of operations for the three months ended March 31, 2017.&nbsp;&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The unaudited <I>pro forma</I> condensed
combined financial statements also do not reflect any cost savings, operating synergies or revenue enhancements that the combined
company may achieve as a result of the acquisition, the total expected costs to integrate the operations of Solitario and Zazu,
or the total expected costs necessary to achieve such cost savings and operating synergies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">Certain reclassifications have been
made to the historical presentation of Zazu to conform to the presentation used in the unaudited <I>pro forma</I> condensed combined
financial statements. These reclassifications have no impact on the historical operating loss, total assets, liabilities or shareholders&rsquo;
equity reported by Solitario or Zazu. Upon consummation of the acquisition, further review of Zazu&rsquo;s financial statements
may result in additional revisions to Zazu&rsquo;s classifications to conform to Solitario&rsquo;s presentation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 16pt 0 0">Note 2 &ndash; Accounting Policies</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">Upon consummation of the Agreement,
Solitario will continue the review of Zazu&rsquo;s accounting policies. As a result of that review, Solitario may identify differences
between the accounting policies of the two companies that, when conformed, could have a material impact on the combined financial
statements. At this time, Solitario is not aware of any differences that would have a material impact on the combined financial
statements, except as follows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">Zazu&rsquo;s prepares its financial
statements in accordance with International Financial Reporting Standards (&ldquo;IFRS&rdquo;) as issued by the International Accounting
Standards Board (&ldquo;IASB&rdquo;). Under IFRS, acquisition and exploration expenditures on mineral properties, less recoveries
in the pre-production stage, are deferred until such time as the properties are put into commercial production, sold, or become
impaired. On the commencement of commercial production, the deferred costs are charged to operations on the unit-of-production
method based upon estimated recoverable proven and probable reserves. General exploration expenditures are charged to operations
in the period in which they are incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">Under U.S. GAAP, acquisition costs are
capitalized, but exploration costs are not considered to have the characteristics of property, plant and equipment and, accordingly,
are expensed prior to the company determining that economically proven and probable mineral reserves exist, after which all such
costs are capitalized.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"></P>




<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="margin: 0"><IMG SRC="image_002.jpg" ALT="" STYLE="width: 676px; height: 4px"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; color: blue"><B>Table of Contents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Set out below are the material adjustments
to Zazu&rsquo;s mineral properties and deficit as at March 31, 2017, and to operating expenses for the three months ended March
31, 2017 and the year ended December 31, 2016 in order to conform to U.S. GAAP:</P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 12pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">(in thousands of US dollars)</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1pt solid">Mineral Properties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">As at March 31,<BR> 2017</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 56%; font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">IFRS</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="width: 8%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">$15,473</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Deferred exploration costs prior to the establishment of proven and probable reserves</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,197)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">U.S. G.A.A.P</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">$276</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Statement of Operations</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Three Months Ended</FONT><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">March 31, 2017</FONT></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Year Ended December 31,&#13; 2016</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Net Loss based on IFRS</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">53</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">$355</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Deferred exploration costs prior to the establishment of proven and probable reserves</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">5</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">103</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Net Loss based on U.S. G.A.A.P</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">58</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">$458</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 14pt 0 0">Note 3 &ndash; Preliminary Purchase Price Allocation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The acquisition of Zazu by Solitario
has been accounted for using the acquisition method of accounting in accordance with ASC 805. Further, under the acquisition method,
the purchase price is allocated to assets acquired and liabilities assumed based on their estimated fair values, with any excess
of the purchase price over the estimated fair value of the identifiable net assets acquired recorded as goodwill.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The estimated consideration is approximately
$14,934,000 based on the (i) value of Solitario shares to be exchanged for Zazu shares based upon Solitario&rsquo;s closing share
price of $0.75 on May 22, 2017 as quoted on the NYSE-MKT for a value of $14,841,000 and (ii) the estimated value of $93,000 for
the Replacement Options based upon a Black-Scholes model using a price of one share of common stock of Solitario of $0.75, a grant
date of June 30, 2017, a volatility of 55%, and a risk-free interest rate of 1%. The value of the merger consideration will fluctuate
based upon changes in the share price of Solitario&rsquo;s common stock and the number of Zazu&rsquo;s common shares outstanding
on the closing date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The following table summarizes the components
of the estimated consideration</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 14pt">&nbsp;</FONT><FONT STYLE="font-size: 10pt"><B>Solitario
shares:</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 12pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Shares eligible for conversion</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; font: 10pt Times New Roman, Times, Serif; text-align: right">55,398,051</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Common stock exchange ratio per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0.3572</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Equivalent new shares issued (par value $0.01)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">19,788,184</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Solitario common stock price on May 22, 2017</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0.75</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Estimated purchase price, shares</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">14,841,000</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify"><B>Solitario options:</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 12pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Zazu options eligible for exchange</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; font: 10pt Times New Roman, Times, Serif; text-align: right">4,990,000</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Option exchange ratio per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">0.3572</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Equivalent Solitario options to be granted</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,782,428</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Term of options (average years)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1.3</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Solitario share price</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.75</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Average exercise price ($2.24 - $0.70)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1.74</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Expected volatility</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">55</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Average value per option share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.05</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Estimated purchase price, options</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">93,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 12pt 0 0; text-align: justify"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 12pt 0 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The estimated purchase price, including
the value of Solitario shares and the estimated value of the Replacement Options, will be computed using the price of a share Solitario
common stock on the closing date, therefore the estimated purchase price will fluctuate with the market price of a share of Solitario
common stock until the Transaction is closed. As a result, the final purchase price could differ significantly from the current
estimate, which could materially impact <I>pro forma</I> financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The following table provides sensitivities
to changes in purchase price due to changes in the per share price of Solitario common stock:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3">Share consideration sensitivity</TD><TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 12pt">&nbsp;</TD><TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 12pt">&nbsp;</TD><TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 12pt">&nbsp;</TD><TD STYLE="font-size: 12pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 12pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="font-size: 12pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Price of Solitario <BR> Common<BR> Stock</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Exchange Ratio</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Calculated per Share<BR> Value of<BR> Zazu Common Stock</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Share Purchase Price <BR>(000&rsquo;s)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of May 22, 2017</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">0.75</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 16%; text-align: right">0.3572</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">0.268</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">14,841</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Increase of 10%</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.83</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.3572</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.296</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">16,424</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Decrease of 10%</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.68</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.3572</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.243</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13,456</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 12pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Option consideration sensitivity for change in Solitario share price only:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Price of Solitario<BR> Common<BR> Stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Exchange Ratio</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Black-Scholes Valuation <BR>(000&rsquo;s)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">As of May 22, 2017</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.75</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.3572</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 11%; font: 10pt Times New Roman, Times, Serif; text-align: right">93</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Increase of 10%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.83</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.3572</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">123</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Decrease of 10%</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.68</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">0.3572</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">67</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following represents the preliminary allocation
of the total purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"></P>




<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

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<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="margin: 0"><IMG SRC="image_002.jpg" ALT="" STYLE="width: 676px; height: 4px"></P>

<P STYLE="margin: 0">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 12pt; color: blue"><B>Table of Contents</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 12pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Total Purchase Price</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 18%; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">14,934</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Cash and cash equivalents</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">65</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Other current assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Other assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Mineral properties (under IFRS)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,473</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Total identifiable assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,564</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Accounts payable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(121</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Net identifiable assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,443</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Deficiency of purchase price over historical assets acquired</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(509</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Adjustment to mineral properties for U.S. GAAP</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">15,197</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Pro forma adjustment to mineral property acquisition costs</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">14,688</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">Net tangible assets were valued at their
respective carrying amounts as management believes that these amounts approximate their current fair values.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0.25in 0 0">Note 4 &ndash; Pro forma adjustments</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The <I>pro forma</I> adjustments are
based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in
the unaudited <I>pro forma</I> condensed combined financial information:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a.</FONT></TD>
    <TD STYLE="vertical-align: top; width: 89%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To adjust mineral property exploration costs that were capitalized under IFRS, but would have been expensed under U.S. GAAP (see Note 2). The effect of this adjustment at March 31, 2017 is to reduce the carrying value of mineral property interest by $15,197,000 and increase deficit by $15,197,000. The effect of this adjustment for the three months ended March 31, 2017 is to increase exploration expense by $5,000. The effect of this adjustment for the year ended December 31, 2016 is to increase exploration expense by $103,000. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">b.</FONT></TD>
    <TD STYLE="vertical-align: top; width: 89%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To record the issuance of: (i) 19,788,184 common shares of Solitario with a par value of $0.01 in exchange for all of the issued and outstanding common shares of Zazu pursuant to the Agreement; recorded at fair value of $14,841,000 (see Note 3), and to (ii) to record the estimated value of $93,000 for the Replacement Options granted to Zazu option holders using a Black-Scholes model (See Note 3). </FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">c.</FONT></TD>
    <TD STYLE="vertical-align: top; width: 89%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Record the estimated excess of the consideration over the assets, as adjusted to US GAAP as of March 31, 2017 (See Note 3). </FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">d.</FONT></TD>
    <TD STYLE="vertical-align: top; width: 90%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Record the elimination of the net assets of Zazu and the net equity of Zazu as of March 31, 2017. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">e.</FONT></TD>
    <TD STYLE="vertical-align: top; width: 89%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Pro forma</I> loss per share, basic and diluted, includes the addition of 19,788,000 shares of common stock which will be issued in conjunction with the closing of the Agreement (Note 3). The following adjustments represent the changes to basic and diluted weighted average shares outstanding: </FONT></TD></TR>
</TABLE>
<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;(in thousands of shares)</FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Historical Weighted</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Average Shares - Basic </FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">and Diluted</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share Issuance </FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pro Forma Weighted</FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Average Shares - Basic </FONT><BR>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">and Diluted</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; background-color: #CCEEFF; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Year ended December 31, 2016</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39,906</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19,788</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">58,694</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="vertical-align: top; background-color: #CCEEFF; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Three months ended March 31, 2017</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">38,692</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19,788</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">58,480</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">f.</FONT></TD>
    <TD COLSPAN="13" STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Solitario has not provided for any income tax benefit related to the operating losses of Zazu due to insufficient evidence to indicate on a more likely than not basis such benefits could be realized. </FONT></TD></TR>
<TR>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 55%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<TYPE>EX-99.3
<SEQUENCE>5
<FILENAME>exh993.htm
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<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-indent: 0.25in"><IMG SRC="image_003.jpg" ALT="" STYLE="height: 121px; width: 170px"></P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-indent: 0.25in"><IMG SRC="image_004.jpg" ALT="" STYLE="height: 69px; width: 260px"></P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-indent: 0.25in"><B>July 13, 2017 </B></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 14pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>Solitario Completes Acquisition of Zazu
Metals </B></P>

<P STYLE="font: 14pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: center"><B>and Its Interest in the Lik Zinc Project
</B></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>DENVER, COLORADO &amp; VANCOUVER, BRITISH
COLUMBIA </B>- Solitario Exploration &amp; Royalty Corp. (NYSE MKT:XPL; TSX:SLR) (&quot;<B>Solitario</B>&quot;) and Zazu Metals
Corporation (TSXV:ZAZ) (&quot;<B>Zazu</B>&quot;) are pleased to announce that Solitario has completed its acquisition of Zazu Metals
Corporation (&ldquo;Zazu&rdquo;) pursuant to the plan of arrangement (&ldquo;Arrangement&rdquo;) previously announced on April
27, 2017. The Arrangement was approved by the Ontario Superior Court of Justice (Commercial List) on July 7, 2017, after overwhelming
approval by both Solitario and Zazu shareholders on June 29, 2017 (see Solitario&rsquo;s press release dated June 29, 2017).</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">Key investment highlights of the Zazu acquisition
include:</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 11pt">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">The combination creates
an exciting new zinc-focused company with two advanced high-grade zinc projects that more than triples the Company&rsquo;s measured,
indicated and inferred zinc equivalent resources. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">-</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Solitario goes from
a company with just over 361 million pounds of attributable zinc-equivalent in the measured and indicated resource category to
one with over 2.76 billion pounds of attributable zinc-equivalent.</B></FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">-</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>The inferred resource
category increases from approximately 970 million pounds of attributable zinc-equivalent to 1.7 billion pounds of attributable
zinc-equivalent.</B></FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 11pt">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">Reduces development
risks as both projects are located in favorable jurisdictions with experienced zinc producing joint venture partners.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 11pt">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">Increases the Company&rsquo;s
exploration potential upside.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 11pt">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">Reduces shareholder
risk by diversifying Solitario&rsquo;s asset base.</FONT></TD></TR></TABLE>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">Important upcoming news for Solitario will
be the completion of the Bongar&aacute; Zinc Project Preliminary Economic Assessment (&ldquo;PEA&rdquo;). The Company engaged SRK
Consulting in January to complete the PEA, which is being jointly funded by Solitario and its joint-venture partner Minera Milpo
(&ldquo;Milpo&rdquo;). Completion of the PEA remains on-track for the end of July 2017.</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">Chris Herald, President and CEO of Solitario
stated, &ldquo;The Zazu acquisition is transformational and highly accretive as it more than triples our total attributable high-grade
zinc-dominant resources. This enhances our leverage to the current positive zinc price environment. With our large resource base
and strong balance sheet, Solitario now stands apart from others in the emerging zinc developers&rsquo; space. &rdquo;</P>




<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt"></P>

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<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt">Solitario welcomes Mr. Gil Atzmon and Mr. Joshua Crumb,
to the Board of Directors of Solitario. Mr. Atzmon and Mr. Crumb, former members of Zazu&rsquo;s Board of Directors, bring valuable
experience in the mining industry and the Lik project and we expect to benfit greatly from their addition to Solitario&rsquo;s
Board of Directors. In addition, upon the completion of the Arrangement and to better reflect our focus on zinc assets, shareholders
of Solitario voted in favor of a name change to Solitario Zinc Corp. The name change will become effective on July 17.</P>

<P STYLE="font: 14pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-align: center"><B><U>Solitario Company-wide Resources</U></B></P>

<P STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><U>Lik Mineral Resource Estimate (100%
basis) &ndash; December 31, 2013</U></B></P>

<P STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; border: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Location (Cut-off)</B></FONT></TD>
    <TD STYLE="width: 8%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 10%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Ag</B></FONT></TD>
    <TD STYLE="width: 17%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>% Zn-Equivalent</B></FONT></TD>
    <TD STYLE="width: 19%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Zn-Equivalent</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Indicated&ndash;Open Pit</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Mt</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>% Zn</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>% Pb</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Grams/t</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Grade*</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Millions Pounds</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Lik South&nbsp;&nbsp;(5%)</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>16.85</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>8.0</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>50</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>11.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>4,432</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Lik North&nbsp;&nbsp;(5%)</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>0.44</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>10.0</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2.8</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>59</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>14.2</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>138</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Indicated-Underground</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;Lik South&nbsp;&nbsp;(7%)</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>0.69</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>8.0</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>3.2</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>51</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>12.4</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>188</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;Lik North&nbsp;&nbsp;(7%)</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>0.13</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>8.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>38</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>12.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>36</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Sub-Total</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>17.29</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>8.1</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>50</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>12.0</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>4,795</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Inferred-Open Pit</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Lik South&nbsp;&nbsp;(5%)</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>0.74</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>7.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>13</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>9.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>161</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Lik North&nbsp;&nbsp;(5%)</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2.13</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>8.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>46</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>12.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>604</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Inferred &ndash;Underground</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;Lik South&nbsp;&nbsp;(7%)</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>0.51</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>7.0</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.6</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>11</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>8.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>98</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;Lik North&nbsp;&nbsp;(7%)</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.96</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>9.2</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>3.0</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>46</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>13.2</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>572</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Sub-Total</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>5.34</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>8.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>38</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>10</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1,436</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">CIM Definitions were followed for Mineral Resources</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">Mineral Resources were estimated using an average long-term zinc price of $1.20/lb., lead price $1.20 per pound and silver price of $27/oz.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="7" STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt">A density value of 3.5 g/cubic cm.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>*Zinc-Equivalent Grade based upon the following
metal prices: $1.00 Zn, $0.90 Pb and $20 Ag</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Source: </B>Preliminary Economic Assessment
Technical Report &ndash; Zazu Metals Corporation, Lik Deposit Alaska, USA dated April 23, 2014 and effective march 3, 2014, prepared
by Robert L. Matter and Tony Loschiavo, P. Eng. (JDS Energy and Mining, Inc.), Neil Gow, P. Gee. (Roscoe Postle Associates, Inc.)
and Michael Travis, PE (Travis Peterson Environmental Consulting, Inc.)</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><U>Bongara Mineral Resource Estimate (100%
basis) &ndash; June 5, 2014</U></B></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; border: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Category</B></FONT></TD>
    <TD STYLE="width: 9%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 7%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 8%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 10%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Ag</B></FONT></TD>
    <TD STYLE="width: 17%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>% Zn-Equivalent</B></FONT></TD>
    <TD STYLE="width: 19%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Zn-Equivalent</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Mt</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>% Zn</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>% Pb</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Grams/t</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Grade</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Millions Pounds</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Measured</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.43</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>13.0</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.9</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>19</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>15.5</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>486</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Indicated</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.35</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>12.5</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>17</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>14.7</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>439</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>&nbsp;&nbsp;&nbsp;Sub-Total</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2.78</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>12.8</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.8</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>18</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>15.1</B></FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>925</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt"></P>

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<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; border: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>Inferred</B></FONT></TD>
    <TD STYLE="width: 9%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>9.07</B></FONT></TD>
    <TD STYLE="width: 7%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>10.9</B></FONT></TD>
    <TD STYLE="width: 8%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>1.2</B></FONT></TD>
    <TD STYLE="width: 10%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>12</B></FONT></TD>
    <TD STYLE="width: 17%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>12.4</B></FONT></TD>
    <TD STYLE="width: 19%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-family: Calibri, Helvetica, Sans-Serif; font-size: 11pt"><B>2,488</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Source: </B>The Mineral Resource Statement
and Technical Report for the Bongar&aacute; Zn-Pb-Ag Deposit, Amazonas Department, Peru, was prepared on behalf of Solitario by
SRK Consulting (U.S.) Inc. (&ldquo;SRK&rdquo;), an independent and internationally recognized mining engineering firm.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B>Notes:</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">1. Mineral Resources are not Mineral Reserves
and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated
will be converted into Mineral Reserves;</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">2. Mineral resources are reported to a Net
Smelter Return zinc-equivalent (ZnEq%) cut-off grade based on metal price assumptions, metallurgical recovery assumptions, mining
costs, processing costs, general and administrative (G&amp;A) costs, and NSR factors. Mining costs, processing, G&amp;A, and transportation
costs total US$51.30/t. <B>Please see Solitario News Release dated June 23, 2014 for details.</B></P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">3. Resulting cutoff grades used in this resource
statement were 4.1% ZnEq for sulfide, 5.0% ZnEq for oxide, and 4.5% ZnEq for mixed material types.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">4. Zinc equivalency for reporting in situ
contained metal resources above was calculated using: ZnEq (%) = Zn (%) + 1.0 * PB (%) + 0.03 * Ag (g/t).</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">5. Density was calculated based on material
types and metal grades. The average density in the mineralized zone was 2.91 g/cm3 as a function of the zinc and lead sulfide mineral
content.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">6. Mineral Resources as reported are undiluted.</P>

<P STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">7. Mineral resource tonnage and contained
metal have been rounded to reflect the precision of the estimate, and numbers may not add due to rounding.</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt"><B>Cautionary Note to U.S. Investors concerning estimates
of Resources: </B>This news release uses the terms &ldquo;Measured, Indicated and Inferred Resources.&rdquo; The Company advises
U.S. investors that while these terms are recognized and required by Canadian regulations, the SEC does not recognize the terms.
U.S. investors are cautioned not to assume that any part or all of Measured or Indicated Mineral Resources will ever be converted
into Reserves. Inferred Resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic
and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred
resource exists, or is economically or legally minable.</P>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt">This release has been reviewed for accuracy by Walter
Hunt, Chief Operating Officer of Solitario, who is a &ldquo;qualified person&rdquo; as that term is defined in NI 43-101.</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>About Solitario </I></B></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">Solitario is a U.S. based zinc exploration
company traded on the NYSE MKT (&quot;XPL&quot;) and on the Toronto Stock Exchange (&quot;SLR&quot;). With the Zazu acquisition,
Solitario now holds a 50% operating interest in the Lik zinc-lead-silver deposit in Northwest Alaska, which is large tonnage, high-grade
and potentially open pittable. Teck Resources Limited is a 50% partner with Solitario in the Lik deposit, with Solitario acting
as the project manager. Zazu completed a positive PEA on the Lik deposit in 2014.</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt">Solitario&rsquo;s other core asset is a 39% interest
in the advanced, high-grade, Bongar&aacute; zinc project located in northern Peru. The project has a significant mineral resource
and Solitario is fully carried to production by its joint venture partner Milpo, one of the largest zinc producers in Peru. Since
inception of the Bongar&aacute; joint venture in 2006, the Brazilian conglomerate Votorantim and its subsidiary, Milpo, have funded
100% of project expenditures. Milpo will earn a 70% interest in the project by continuing to solely fund all project expenditures
and committing to place the project into production based upon a positive feasibility study. After earning 70%, and <FONT STYLE="color: #222222">at
the request of </FONT>Solitario, Milpo has further agreed to finance Solitario's 30% participating interest for construction.
Solitario will repay the loan facility through 50% of its net cash flow distributions.</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">Solitario also holds an 85% interest
in the Chambara exploration project in Peru (Milpo holds the remaining 15%), a 7.5% equity interest in Vendetta Mining, two exploration
properties in Peru, and one royalty in each of Peru, Brazil, the United States and Mexico.</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 12pt; text-align: justify">Additional information about
Solitario is available online at www.solitarioxr.com</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">The TSX and NYSE MKT have not reviewed and
do not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained herein.</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-align: justify">FOR MORE INFORMATION at SOLITARIO,
CONTACT:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">Debbie Mino-Austin</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">Director, Investor Relations</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">(800) 229-6827</P></TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">Christopher E. Herald</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">President &amp; CEO</P>
        <P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">(303) 534-1030</P></TD></TR>
</TABLE>
<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Cautionary Language</I></B></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">None of the NYSE MKT, the Toronto Stock Exchange
nor the TSX Venture Exchange have passed upon the merits of the proposed Arrangement and have neither approved nor disapproved
the contents of this press release. None of the NYSE MKT, the Toronto Stock Exchange, the TSX Venture Exchange nor their regulation
service providers accepts responsibility for the adequacy or accuracy of this release.</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"><B><I>Forward-looking Statements</I></B></P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify">This press release contains forward-looking
statements within the meaning of the U.S. Securities Act of 1933 and the U.S. Securities Exchange Act of 1934, and as defined
in the United States Private Securities Litigation Reform Act of 1995 (and the equivalent under Canadian securities laws), that
are intended to be covered by the safe harbor created by such sections. Forward-looking statements are statements that are not
historical fact. They are based on the beliefs, estimates and opinions of the Company's management on the date the statements
are made and address activities, events or developments that Solitario expects or anticipates will or may occur in the future,
and are based on current expectations and assumptions. Forward-looking statements involve a number of risks and uncertainties.
Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements. Such forward-looking statements include, without limitation, statements
regarding the Company&rsquo;s expectation of the projected timing and outcome of engineering studies; expectations regarding the
receipt of all necessary permits and approvals to implement a mining plan, if any, at Bongar&aacute;; the potential for confirming,
upgrading and expanding zinc, lead and silver mineralized material at Bongar&aacute;; future operating and capital cost estimates
may indicate that the stated resources may not be economic; estimates of zinc, lead and silver grades provided are not diluted
mining grades and the predicted or actual mining grade could be substantially lower; estimates of recovery rates for the three
types of mineralization, sulfide, oxide and mixed could be lower than estimated for establishing the cutoff grade; and other statements
that are not historical facts; risks associated with our funding partner&rsquo;s (Votorantim Metais) ability to finance continued
development and potential construction of the Bongar&aacute; project. Although Solitario management believes that its expectations
are based on reasonable assumptions, it can give no assurance that these expectations will prove correct. Important factors that
could cause actual results to differ materially from those in the forward-looking statements include, among others, risks relating
to risks that Solitario&rsquo;s exploration and property advancement efforts will not be successful; risks relating to fluctuations
in the price of zinc, lead and silver; the inherently hazardous nature of mining-related activities; uncertainties concerning
reserve and resource estimates; availability of outside contractors in connection with Bongar&aacute; and Lik projects, and other
activities; uncertainties relating to obtaining approvals and permits from governmental regulatory authorities and country risks
of operations both inside and outside of the United States; the possibility that environmental laws and regulations will change
over time and become even more restrictive; and availability and timing of capital for financing the Company&rsquo;s exploration
and development activities, including uncertainty of being able to raise capital on favorable terms or at all; as well as those
factors discussed in Solitario&rsquo;s filings with the U.S. Securities and Exchange Commission (the &ldquo;SEC&rdquo;) including
Solitario&rsquo;s latest Annual Report on Form 10-K and its other SEC filings (and Canadian filings) including, without limitation,
its latest Quarterly Report on Form 10-Q. These risks, uncertainties and other factors include, but are not limited to factors
referenced in Solitario's other continuous disclosure filings, which are also available at <FONT STYLE="color: #0563C1">www.sedar.com</FONT><U>.
</U>Readers should not place undue reliance on these forward-looking statements. Solitario does not assume any obligation to update
any forward-looking statements, except as required by applicable securities laws. The Company does not intend to publicly update
any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required
under applicable securities laws.</P>


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