FORM 5 QUARTERLY LISTING STATEMENT

Transcription

1 FORM 5 QUARTERLY LISTING STATEMENT Name of Listed Issuer: _PELOTON MINERALS CORPORATION_ (the Issuer ). Trading Symbol: PMC This Quarterly Listing Statement must be posted on or before the day on which the Issuer s unaudited interim financial statements are to be filed under the Securities Act, or, if no interim statements are required to be filed for the quarter, within 60 days of the end of the Issuer s first, second and third fiscal quarters. This statement is not intended to replace the Issuer s obligation to separately report material information forthwith upon the information becoming known to management or to post the forms required by the Exchange Policies. If material information became known and was reported during the preceding quarter to which this statement relates, management is encouraged to also make reference in this statement to the material information, the news release date and the posting date on the Exchange website. General Instructions (a) (b) Prepare this Quarterly Listing Statement using the format set out below. The sequence of questions must not be altered nor should questions be omitted or left unanswered. The answers to the following items must be in narrative form. When the answer to any item is negative or not applicable to the Issuer, state it in a sentence. The title to each item must precede the answer. The term Issuer includes the Listed Issuer and any of its subsidiaries. (c) Terms used and not defined in this form are defined or interpreted in Policy 1 Interpretation and General Provisions. There are three schedules which must be attached to this report as follows: SCHEDULE A: FINANCIAL STATEMENTS Financial statements are required as follows: For the first, second and third financial quarters interim financial statements prepared in accordance with the requirements under Ontario securities law must be attached. If the Issuer is exempt from filing certain interim financial statements, give the date of the exempting order. FORM 5 QUARTERLY LISTING STATEMENT January 2015 Page 1

2 SCHEDULE B: SUPPLEMENTARY INFORMATION The supplementary information set out below must be provided when not included in Schedule A. 1. Related party transactions Provide disclosure of all transactions with a Related Person, including those previously disclosed on Form 10. Include in the disclosure the following information about the transactions with Related Persons: (a) (b) (c) (d) (e) A description of the relationship between the transacting parties. Be as precise as possible in this description of the relationship. Terms such as affiliate, associate or related company without further clarifying details are not sufficient. A description of the transaction(s), including those for which no amount has been recorded. The recorded amount of the transactions classified by financial statement category. The amounts due to or from Related Persons and the terms and conditions relating thereto. Contractual obligations with Related Persons, separate from other contractual obligations. (f) Contingencies involving Related Persons, separate from other contingencies. 2. Summary of securities issued and options granted during the period. Provide the following information for the period beginning on the date of the last Listing Statement (Form 2A): (a) summary of securities issued during the period, FORM 5 QUARTERLY LISTING STATEMENT January 2015 Page 2

3 Date of Issue Type of Security (common shares, convertible debentures, etc.) Type of Issue (private placement, public offering, exercise of warrants, etc.) Number Price Total Proceeds Type of Consideration (cash, property, etc.) Describe relationship of Person with Issuer (indicate if Related Person) Commission Paid (b) summary of options granted during the period, Date Number Name of Optionee if Related Person and relationship Generic description of other Optionees Exercise Price Expiry Date Market Price on date of Grant 3. Summary of securities as at the end of the reporting period. Provide the following information in tabular format as at the end of the reporting period: (a) (b) (c) (d) description of authorized share capital including number of shares for each class, dividend rates on preferred shares and whether or not cumulative, redemption and conversion provisions, number and recorded value for shares issued and outstanding, description of options, warrants and convertible securities outstanding, including number or amount, exercise or conversion price and expiry date, and any recorded value, and number of shares in each class of shares subject to escrow or pooling agreements or any other restriction on transfer. FORM 5 QUARTERLY LISTING STATEMENT January 2015 Page 3

4 4. List the names of the directors and officers, with an indication of the position(s) held, as at the date this report is signed and filed. Kent Britton - Director Edward Ellwood Director, President, CEO Luard Manning - Director John F. O Donnell Director, Chairman Eric Plexman Director, CFO, Secretary Paul Teodorovici Director, Executive Vice-President Clifford Wiebe Director John Wozny - Director SCHEDULE C: MANAGEMENT DISCUSSION AND ANALYSIS Provide Interim MD&A if required by applicable securities legislation. Certificate Of Compliance The undersigned hereby certifies that: 1. The undersigned is a director and/or senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to sign this Quarterly Listing Statement. 2. As of the date hereof there is no material information concerning the Issuer which has not been publicly disclosed. 3. The undersigned hereby certifies to the Exchange that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in National Instrument ) and all Exchange Requirements (as defined in CNSX Policy 1). 4. All of the information in this Form 5 Quarterly Listing Statement is true. Dated May 30, Eric Plexman Name of Director or Senior Officer (Signed) Eric Plexman Signature CFO & Secretary Official Capacity FORM 5 QUARTERLY LISTING STATEMENT January 2015 Page 4

5 Issuer Details Name of Issuer Peloton Minerals Corporation. Issuer Address 380 Wellington Street, Tower B, 6 th Floor City/Province/Postal Code London, Ontario N6A 5B5 Contact Name Edward (Ted) L. Ellwood For Quarter Ended Q1 March 31, 2017 Issuer Fax No. (519) Contact Position President Date of Report YY/MM/D 2017/05/30 Issuer Telephone No. (519) Contact Telephone No. (519) Contact Address ted@pelotonminerals.com Web Site Address FORM 5 QUARTERLY LISTING STATEMENT January 2015 Page 5

6 (formerly Montana Gold Mining Company Inc.) Condensed Interim Consolidated Financial Statements For the Three Months Ended March 31,

7 Management s Responsibility for Interim Financial Statements The accompanying unaudited condensed interim financial statements of Peloton Minerals Corporation (the Company or "Peloton") are the responsibility of management. The unaudited condensed interim financial statements have been prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the unaudited condensed interim financial statements. Where necessary, management has made informed judgments and estimates in accounting for transactions which were not complete at the statement of financial position date. In the opinion of management, the unaudited condensed interim financial statements have been prepared within acceptable limits of materiality and are in accordance with International Accounting Standard 34, "Interim Financial Reporting", using accounting policies consistent with International Financial Reporting Standards appropriate in the circumstances. Management has established processes, which are in place to provide it sufficient knowledge to support management representations that it has exercised reasonable diligence that (i) the unaudited condensed interim consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by, the unaudited condensed interim consolidated financial statements and (ii) the unaudited condensed interim consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented by the unaudited condensed interim consolidated financial statements. The Board of Directors is responsible for reviewing and approving the unaudited condensed interim financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the unaudited condensed interim financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the unaudited condensed interim financial statements together with other financial information of the Company for issuance to the shareholders. Management recognizes its responsibility for conducting the Company s affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities. Notice to Reader "Edward Ellwood" (signed) "Eric Plexman" (signed) Under National Instrument , Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company s management. The Company s independent auditor has not performed a review of these unaudited condensed interim financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of condensed interim financial statements by an entity s auditor. 2

8 Interim Consolidated Statements of Financial Position As at Assets March 31, December 31, Current Cash $ 6,939 $ 37,737 HST receivable 16,943 16,162 Prepaid expenses 4,484 7,913 28,366 61,812 Equipment (Note 3) 83,989 86,259 Reclamation bonds (Note 5) 13,043 13,043 Liabilities $ 125,398 $ 161,114 Current Accounts payable and accrued liabilities (Notes 6 and 11) $ 376,572 $ 321, , ,556 Convertible debenture (Note 7) 37,407 35,097 Derivative liability (Note 7) 101, ,978 Foreign currency warrants (Note 9) 551, ,221 Shareholders' Deficiency 1,066,797 1,324,852 Capital stock (Note 8) 8,688,830 8,688,830 Contributed surplus 1,629,760 1,619,732 Deficit (11,259,989) (11,472,300) (941,399) (1,163,738) $ 125,398 $ 161,114 3

9 Interim Consolidated Statements of Earnings (Loss) and Comprehensive Earnings (Loss) For the Three Months Ended March Expenses Office and administrative costs $ 70,659 $ 71,445 Professional fees 13,718 10,136 Exploration and evaluation expenditures (Note 4) 2, Foreign exchange (gain) 1,876 6,882 Stock-based compensation (Note 9) 10,028 - Depreciation 2, ,760 89,313 Other expenses (income) Loss (gain) on revaluation of foreign currency warrants (Note 9) (306,840) 65,084 Loss (gain) on revaluation of derivative liability (Note 7) (117,833) 120,454 Accretion expense 2,310 1,790 (422,363) 187,328 Net (loss) earnings and comprehensive earnings (loss) for the period $ 321,603 $ (276,641) (Loss) earnings per share (Note 10) Basic and diluted $ $ (0.006) Weighted average number of common shares outstanding (Note 10) Basic and diluted 61,474,617 48,214,385 4

10 Interim Consolidated Statements of Changes in Equity (Deficiency) As at Number of Capital Units to Contributed Shares Stock be issued Surplus Deficit Total Balance, January 1, ,214,765 $ 8,171,500 $ - $ 1,606,868 $(9,964,671) $ (186,303) Net loss and comprehensive loss (276,641) (276,641) Proceeds received for units to be issued , ,493 Fair value of warrants extended (24,651) (24,651) Balance, March 31, ,214,765 8,171,500 32,493 1,606,868 (10,265,963) $(455,102) Net loss and comprehensive loss (1,069,878) (1,069,878) Units issued for cash 9,523, ,484 (32,493) ,991 Allocated to warrants - (142,943) (142,943) Debentures converted into Shares 3,636, , ,293 Shares issued for mining claims 100,000 5, ,496 Fair value of warrants extended (136,459) (136,459) Stock-based compensation ,864-12,864 Balance, December 31, ,474,617 8,688,830-1,619,732 (11,472,300) $(1,163,738) Net earnings and comprehensive earnings , ,603 Fair value of warrants extended (Note 9(b)) (109,292) (109,292) Stock-based compensation ,028-10,028 Balance, March 31, ,474,617 $ 8,688,830 $ - $ 1,629,760 $(11,259,989) $ (941,399) 5

11 Interim Consolidated Statements of Cash Flow For the Three Months Ended March 31, Cash provided by (used in) Operations Net earnings (loss) $ 321,603 $ (276,641) Items not affecting cash (Gain) loss on revaluation of foreign currency warrants (306,840) 65,084 Accretion expense 2,310 1,790 (Gain) loss on revaluation of derivative liability (117,833) 120,454 Depreciation 2,270 - Stock-based compensation 10,028 - (88,462) (89,313) Net changes in non-cash working capital HST receivable (781) (576) Prepaid expenses 3,429 (3.024) Accounts payable and accrued liabilities 55,016 70,973 (30,798) (21,940) Financing Proceeds from units to be issued - 32,493 Advances from a director ,335 Net change in cash (30,798) 11,395 Cash, beginning of period 37, Cash, end of period $ 6,939 $ 11,758 6

12 Notes to Condensed Interim Consolidated Financial Statements March 31, NATURE OF OPERATIONS AND GOING CONCERN Peloton Minerals Corporation ("the Company" or "Peloton") was incorporated under the Ontario Business Corporations Act on December 21, The Company has three wholly-owned subsidiary corporations, Montana Gold Subsidiary Corporation, a United States corporation, Celerity Mineral Corporation, a Canadian corporation and Celerity Subsidiary Corporation, a United States corporation. The Company is engaged in the business of locating and exploring mineral properties. Substantially all of the efforts of the Company are devoted to these business activities. To date, the Company has not earned significant revenues and is considered to be in the exploration stage. The head office and principal address of the Company is 380 Wellington Street, 6th Floor, London City Centre, Tower B, London, Ontario, N6A 5B5. While these unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") on a going concern basis that presumes the realization of assets and discharge of liabilities in the normal course of business, there are material uncertainties related to adverse conditions and events that cast significant doubt on the Company's ability to continue as a going concern. During the period ended March 31, 2017, the Company incurred a net earnings of $321,603 (March 31, 2016 net loss of $276,641) and, as of that date, the Company had accumulated a deficit of $11,259,989 (December 31, $11,472,300), a working capital deficiency of $348,206 (December 31, $259,744) and negative cash flows from operations of $30,798 (March 31, $21,940). These factors create material uncertainties that may cast significant doubt upon the Company s ability to continue as a going concern. As is common with exploration companies, the Company s ability to continue as a going concern is dependent upon obtaining necessary equity financing from time to time to finance its on-going and planned exploration activities and to cover administrative costs, the discovery of economically recoverable resources, the ability of the Company to secure and maintain title and beneficial interest in the properties, entering agreements with others to explore and develop the mineral properties and future profitable production or proceeds from disposition of such properties. These unaudited condensed interim consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue operations. Such adjustments may be material. 7

13 Notes to Condensed Interim Consolidated Financial Statements March 31, SIGNIFICANT ACCOUNTING POLICIES Statement of Compliance These unaudited condensed interim consolidated financial statements present the Company s financial results of operations and financial position under IFRS as at and for the three month period ended March 31, These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board. These unaudited condensed interim consolidated financial statements should be read in conjunction with the Company s audited financial statements for the year ended December 31, 2016, prepared in accordance with IFRS. The accounting policies adopted in these unaudited condensed interim consolidated financial statements are consistent with those disclosed in the Company s audited financial statement for the year ended December 31, Refer to these audited financial statements for significant accounting policies and future changes in accounting policies which remained unchanged as at March 31, These unaudited condensed interim consolidated financial statements were approved by the Board of Directors on May 30, Basis of Consolidation The unaudited condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Celerity Mineral Corporation (Canada), Celerity Subsidiary Corporation (United States) and Montana Gold Subsidiary Corporation (United States). The functional currency of each entity is the United States dollar. The financial statements of the subsidiaries are included in the unaudited condensed interim consolidated financial statements from the date that control commences until the date that control ceases. All transactions and balances between the Company and its subsidiaries are eliminated on consolidation. 3. EQUIPMENT Cost December 31, 2015 Additions December 31, 2016 Additions March 31, 2017 Diamond Drilling Equipment $87,255 $3,574 $90,799 $- $90,799 Accumulated Depreciation December 31, 2015 Depreciation December 31, 2016 Depreciation Diamond Drilling Equipment $- $4,540 $4,540 $2,310 $6,850 March 31, 2017 Carrying amount December 31, 2016 $- $- $- $- $86,259 Carrying amount March 31, 2017 $- $- $- $- $83,949 8

14 Notes to Condensed Interim Consolidated Financial Statements March 31, MINING CLAIMS - EXPLORATION AND EVALUATION EXPENDITURES Cumulative spending to date: December 31, March 31, 2016 Additions 2017 Silver Bell St. Lawrence Claims, MT (a) $ 438,347 $ 164 $ 438,511 Golden Trail Claims, NV (b) 281,262 2, ,307 River Stage Claims, ON (c) 12,355-12,355 Independence Valley, NV (d) 15,835-15,835 $ 747,799 $ 2,209 $ 750,008 December 31, December Additions 2016 Silver Bell St. Lawrence Claims, MT (a) $ 434,472 $ 3,875 $ 438,347 Golden Trail Claims, NV (b) 86, , ,262 River Stage Claims, ON (c) - 12,355 12,355 Independence Valley, NV (d) - 15,835 15,835 (a) Silver Bell St. Lawrence $ 521,469 $ 226,330 $ 747,799 The Company holds 100% interest in the Silver Bell St. Lawrence ("SBSL") property consisting of 10 (December 31, ) mining claims. These claims are subject to a 2% net smelter royalty to an arms-length party. The Company also holds 100% interest in 16 (December 31, ) mining claims adjacent to the northern and eastern boundaries of the SBSL property. These mining claims are called the Roar claims. To maintain the staked claims, the Company must pay annual maintenance fees to the Department of the Interior (Bureau of Land Management - BLM Nevada State Office) and the local county in the cumulative approximate amount of $155 per claim. (b) Golden Trail The Company holds 100% interest in 16 (December 31, ) contiguous unpatented mining claims in the Elko County region of Nevada. To maintain the staked claims, the Company must pay annual maintenance fees to the Department of the Interior (Bureau of Land Management - BLM Nevada State Office) and the local county in the cumulative approximate amount of $155 per claim. 9

15 Notes to Condensed Interim Consolidated Financial Statements March 31, MINING CLAIMS - EXPLORATION AND EVALUATION EXPENDITURES (Cont'd) (c) River Stage On May 23, 2016, the Company entered into a purchase option agreement to acquire 100% working interest in the River Stage property consisting of 5 unpatented mining claims. In order to earn its interest in the River Stage property, the Company paid $6,159 ($8,000 CDN) by June 15, 2016 and issued 100,000 common shares of the Company upon the signing of the purchase option agreement. Further, the Company must pay $5,958 ($8,000 CDN) on the first anniversary, $8,938 ($12,000 CDN) on the second anniversary and $18,620 ($25,000 CDN) on the third anniversary of the purchase option agreement. In addition, a 1.5% net smelter royalty was granted to the arms-length optionor of which the Company may reduce by 0.75% by paying $186,200 ($250,000 CDN) to the optionor. (d) Independence Valley During July 2016, the Company acquired by staking a 38 mineral claim package comprising 785 acres and located in Elko County, Nevada, about 77 miles south of the Company s Golden Trail Project. The mineral claim package the Independence Valley Project. To maintain the staked claims, the Company must pay annual maintenance fees to the Department of the Interior (Bureau of Land Management - BLM Nevada State Office) and the local county in the cumulative approximate amount of $155 per claim. 5. RECLAMATION BONDS As at March 31, 2017, a reclamation bond in the amount of $13,043 (December 31, $13,043) is being held by the Bureau of Land Management ("BLM") on the Golden Trail property. The Company has completed the site restoration work and management estimates that no further site restoration costs need to be incurred on the Golden Trail property. The Company has not recorded a restoration liability as at March 31, 2017 as the Company has not yet disturbed the land at the Golden Trail property to trigger the recognition of this liability. 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES The following is a breakdown of the amounts included in accounts payable: March 31, December 31, Trade payables $ 73,568 $ 59,696 Accrued liabilities: Management and director fees 285, ,245 Audit and accounting 17,247 26,615 $ 376,572 $ 321,556 10

16 Notes to Condensed Interim Consolidated Financial Statements March 31, CONVERTIBLE DEBENTURE (a) Convertible debenture of $100,000 USD ( Debenture 1 ) On August 11, 2015, the Company received $100,000 USD (principal) from an arm's length party in exchange for a convertible debenture. The convertible debenture is due on demand upon six months notice in writing, with such notice not to be given on or before August 11, The debenture pays interest at the rate of 4%, payable quarterly, beginning October 1, 2015 with the first payment due December 31, The convertible debenture, and all principal and interest owing, is convertible, in whole or in part, at the holder's option into units of the Company (the "Unit"). Each Unit consists of one common share and one common share purchase warrant. The conversion price of the debenture is $0.037 ($0.05 CDN) per Unit. Each warrant will entitle the holder to acquire one additional common share at a price of $ ($0.10 CDN) per share until August 11, As security, the Company has pledged the diamond drill rig (Note 3). If the common shares of the Company trade for ten consecutive days trading days on the Canadian Securities Exchange or any other stock exchange or quotation service upon which it happens to trade or be quoted at that time, at a price equal to or greater than $0.149 ($0.20 CDN) per share, this debenture will automatically be converted into units without any action on the part of either the Company or the holder. (b) Valuation of Debenture 1 The conversation rate of the units and the warrants to be issued on conversion of the above convertible debentures are not in the Company's functional currency and as a result are presented as a derivative financial liability. The Company valued the derivative financial liabilities using the Black-Scholes option pricing model and after valuing the derivative financial liabilities assigned the remaining value to the convertible debenture. The fair value of the units of Debenture 1 were estimated at the issuance date using the Black-Scholes pricing model with the following assumptions: Share price $0.04 CDN Expected dividend yield Nil Exercise price $ $0.10 CDN Risk free interest rate 0.72% Expected life years Expected volatility (based on historical prices) % The Company determined the amount relating to the units in the convertible debenture to be $76,

17 Notes to Condensed Interim Consolidated Financial Statements March 31, CONVERTIBLE DEBENTURE (Cont d) The fair value of the units of Debenture 1 were revalued at December 31, 2016 using the Black-Scholes option pricing model with the following assumptions: Share price $0.095 CDN Expected dividend yield Nil Exercise price $ $0.10 CDN Risk free interest rate 1.02% Expected life years Expected volatility (based on historical prices) 100% - 113% The units were revalued at $218,978 resulting in a loss on revaluation of derivative liability of $132,370. The fair value of the units of Debenture 1 were revalued at March 31, 2017 using the Black-Scholes option pricing model using the following assumptions: Share price $0.06 CDN Expected dividend yield Nil Exercise price $ $0.10 CDN Risk free interest rate 0.95% % Expected life years Expected volatility (based on historical prices) 82% The units were revalued at $101,145 resulting in a gain on revaluation of derivative liability of $117,833. Convertible Debenture March 31, December 31, Principal Debenture 1 $ 100,000 $ 100,000 Principal Debenture 2 - $ 156,840 Derivative liability Debenture 1 (76,886) (76,886) Derivative liability Debenture 2 - (84,111) Accretion expense 14,293 88,494 Conversion into common shares - (149,240) $ 37,407 $ 35,097 12

18 Notes to Condensed Interim Consolidated Financial Statements March 31, CONVERTIBLE DEBENTURE (Cont d) Derivative Liability March 31, December 31, Derivative liability Debenture 1 $ 76,886 $ 76,886 Derivative liability Debenture 2-84,111 Fair value adjustment Debenture 1 24, ,942 Conversion into common shares - (100,053) Conversion into warrants - (77,908) $ 101,145 $ 218, CAPITAL STOCK Authorized Unlimited common shares Issued and outstanding - common shares Number of Shares Value Balance, December 31, ,214,765 $ 8,171,500 Units issued for cash 9,523, ,017 Conversion of convertible debentures 3,636, ,760 Shares issued for mining claims 100,000 5,496 Allocated to warrants - (126,183) Balance, December 31, ,474,617 $ 8,688,830 Balance, March 31, ,474,617 $ 8,688,830 (i) There was no change in shares during the quarter ended March 31,

19 Notes to Condensed Interim Consolidated Financial Statements March 31, STOCK OPTIONS AND WARRANTS (a) Stock Options The Company has a Stock Option Plan (the "Plan") to provide options for the benefit of employees, directors and third parties. The maximum number of shares allocated to and made available to be issued under the Plan shall not exceed 10% of the common shares issued and outstanding (on a non-diluted basis) at any time. The exercise price of options granted under the Stock Option Plan will be determined by the directors, but will be at least equal to the closing trading price for the common shares for the last trading day prior to the grant and otherwise the fair market price as determined by the Board of Directors. The term of any option granted shall not exceed five years. Except as otherwise provided elsewhere in the Stock Option Plan, the options shall be cumulatively exercisable in installments over the option period at a rate to be fixed by the Board of Directors. The Company will not provide financial assistance to any optionee in connection with the exercise of options. Period ended March 31, Year ended December 31, Weighted Weighted Number Average Number Average of Exercise of Exercise Options Price (CDN) Options Price (CDN) Outstanding, beginning of period 4,750,000 $ ,250,000 $ 0.09 Granted 200,000 $ ,000 $ 0.10 Expired - $ - - $ - Outstanding, end of period 4,950,000 $ ,750,000 $ 0.09 Exercisable, end of period 4,825,000 $ ,500,000 $ 0.09 The Company had the following stock options outstanding at March 31, 2017: Number of Options Exercise Price Expiry Date 2,600,000 CDN $0.100 May 1, ,000 CDN $0.100 July 15, ,150,000 CDN $0.065 May 29, ,000 CDN $0.080 July 2, ,000 CDN $0.100 February 10, ,950,000 14

20 Notes to Condensed Interim Consolidated Financial Statements March 31, STOCK OPTIONS AND WARRANTS (Cont d) (a) Stock Options (Cont d) The above options were not included in the computation of diluted net loss per share as they are anti-dilutive. The weighted average remaining contractual life of these options is 1.10 years (December 31, years). On February 10, 2017, the Company granted 200,000 stock options to a consultant. The stock options are exercisable at $0.10 CDN per share and expire February 10, All the stock options vest immediately. The fair value of these stock options of $8,509 was estimated at the grant date based on the Black Scholes pricing model, using the following weighted average assumptions: (b) Warrants Share price $0.07 CDN Expected dividend yield Nil Exercise price $0.10 CDN Risk free interest rate 1.11% Expected life 5.0 years Expected volatility (based on historical prices) 121% The following summarizes the change in foreign currency warrants: Period ended Year ended March 31, December 31, Balance, beginning of period $ 749,221 $ 37,526 Fair value of warrants issued - April 22, ,215 Fair value of warrants issued - June 10, ,148 Fair value of warrants issued July 5, ,385 Fair value of warrants issued August 5, ,820 Fair value of warrants issued December 29, ,760 Fair value of warrants transferred on exercise of convertible debentures - 77,908 Fair value of warrants extended (Note 9(b)(i)) 109, ,110 Fair value adjustment (Note 9(b)(ii)) (306,840) 237,349 Balance, end of period $ 551,673 $ 749,221 (i) During the period ended March 31, 2017, the Company modified the expiry dates of the following outstanding warrants: - 2,000,000 warrants originally expiring on March 3, 2017 are now exercisable until March 3, 2019; - 2,300,505 warrants originally expiring on June 4, 2017 are now exercisable until June 4, 2019; - 1,310,260 warrants originally expiring on June 28, 2017 are now exercisable until June 28, 2019; 15

21 Notes to Condensed Interim Consolidated Financial Statements March 31, STOCK OPTIONS AND WARRANTS (Cont d) (b) Warrants (Cont'd) The incremental fair value of these warrants extended was estimated at $109,292 using the Black Scholes pricing model with the following weighted average assumptions: Share price $0.07 CDN Expected dividend yield Nil Exercise price $0.10 CDN Risk free interest rate 0.55% % Expected life (original) years Expected life (extended) years Expected volatility (original) (based on historical prices) 86% - 109% Expected volatility (extended) (based on historical prices) 78% - 104% As this is a capital transaction, the incremental fair value was recorded to foreign currency warrants with an offsetting charge to deficit. (ii) At March 31, 2017, the fair value of the 36,258,997 warrants outstanding was estimated at $551,673 using the Black-Scholes pricing model with the following weighted average assumptions: Share price $0.06 CDN Expected dividend yield Nil Exercise price $ $0.20 CDN Risk free interest rate 0.57% % Weighted average expected life 1.57 years Weighted average expected volatility (based on historical prices) % At March 31, 2017, a gain on revaluation of foreign currency warrants of $306,840 (March 31, loss of $65,084) was recognized in the interim unaudited consolidated statement of earnings (loss) and comprehensive earnings (loss). 16

22 Notes to Condensed Interim Consolidated Financial Statements March 31, STOCK OPTIONS AND WARRANTS (Cont d) b) Warrants (Cont'd) The Company had the following warrants outstanding at March 31, 2017: Number of Warrants Exercise Price (CDN) Expiry Date 2,000,000 $ 0.20 April 24, ,250,000 $ 0.20 June 19, ,000,000 $ 0.20 February 20, ,000,000 $ 0.20 May 14, ,650,000 $ 0.10 December 3, ,000,000 $ 0.10 March 3, ,300,505 $ 0.10 June 4, ,310,260 $ 0.10 June 28, ,000,000 $ 0.10 December 30, ,338,380 $ 0.10 May 20, ,000 $ 0.10 December 7, ,450,000 $ 0.10 April 22, ,200,000 $ 0.10 June 10, ,986,821 $ 0.10 August 5, ,850,000 $ 0.07 June 23, ,636,364 $ 0.10 December 21, ,667 $0.125 December 29, ,258, EARNINGS (LOSS) PER SHARE The calculation of basic and diluted earnings (loss) per share for the period ended March 31, 2017 was based on the earnings attributable to common shareholders of $321,603 (March 31, 2016 loss of $276,641) and the weighted average number of common shares outstanding of 61,474,617 (March 31, ,214,385). Diluted loss per share did not include the effect of 4,950,000 stock options and 36,258,997 warrants outstanding as they are anti-dilutive. 17

23 Notes to Condensed Interim Consolidated Financial Statements March 31, RELATED PARTY TRANSACTIONS Related parties include the Board of Directors, close family members and enterprises which are controlled by these individuals as well as certain persons performing similar functions. Related party transactions conducted in the normal course of operations are measured at fair value. Remuneration of Directors and key management of the Company was as follows: March 31, March 31, Management and director fees(i) 63,860 62,746 (i) Included in office and administrative costs in the consolidated statements of loss and comprehensive loss. Related party balances are listed below: (a) Included in accounts payable and accrued liabilities is approximately $285,757 (December 31, $235,245) of amounts owing to directors of the Company for management and director fees. 12. CAPITAL RISK MANAGEMENT The Company's objective when managing capital is to maintain its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. The Company includes capital stock, contributed surplus, deficit and foreign currency warrants in the definition of capital. The Company s primary objective with respect to its capital management is to ensure that it has sufficient cash resources to further exploration on its properties. To secure the additional capital necessary to pursue these plans, the Company may attempt to raise additional funds through the issuance of equity and warrants, debt or by securing strategic partners. The Company is not subject to externally imposed capital requirements and there has been no change with respect to the overall capital risk management strategy during the period ended March 31,

24 Notes to Condensed Interim Consolidated Financial Statements March 31, FINANCIAL RISK MANAGEMENT The Company is exposed to a variety of financial risks by virtue of its activities. In particular market risk (composed of currency risk), liquidity risk, fair value risk, interest risk and credit risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on financial performance. Risk management is carried out by management under policies approved by the Board of Directors. Management is charged with the responsibility of establishing controls and procedures to ensure that financial risks are mitigated in accordance with the approved policies. (a) Market Risk (i) Currency risk The Company operates internationally and is exposed to foreign exchange risk from the Canadian Dollar. Foreign exchange risk arises from purchase transactions as well as recognized financial assets and liabilities denominated in foreign currencies. As at March 31, 2017, the Company is exposed to currency risk through the following financial assets and liabilities denominated in Canadian dollars: March 31, December 31, Cash $ 3,212 $ 48,937 HST receivable $ 21,700 $ 21,700 Accounts payable and accrued liabilities $ 407,122 $ 370,796 The above balances were translated into US dollars at the period-end rate of $ (December 31, $0.7448) Canadian dollars to every US dollar. Based on the above net exposures as at March 31, 2017, assuming that all other variables remain constant, a +/- 5% change in the Canadian dollar against the United States dollar would result in an increase/decrease in net loss of approximately $14,000. (b) Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its obligations as they fall due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. Senior management is also actively involved in the review and approval of planned expenditures. As at March 31, 2017, the Company has current liabilities of $376,572 (December 31, $321,556) due within 12 months and has cash of $6,939 (December 31, $37,737) to meet its current obligations. As a result the Company has liquidity risk and is dependent on raising additional capital to fund operations. 19

25 Notes to Condensed Interim Consolidated Financial Statements March 31, FINANCIAL RISK MANAGEMENT (Cont d) (c) Fair Value Risk The carrying values of reclamation bonds, accounts payable and accrued liabilities approximate fair values due to the relatively short term maturities of these instruments. The estimated fair values of convertible debt also approximate carrying values due to the fact that effective interest rates are not significantly different from market rates. The estimated fair value of warrants are subject to fluctuations based on the inputs and assumptions used to value them. (d) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company s interest rate risk is primarily related to the Company s interest bearing debt on its consolidated statement of financial position. The Company does not have any debt with variable interest rates, thereby minimizing the Company s exposure to cash flow interest rate risk. (e) Credit Risk Credit risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk with respect to its cash. The Company reduces its credit risk by maintaining its primary bank accounts at large financial institutions. 15. COMMITMENTS The Company is committed under lease agreements to the payment of amounts totaling $6,471 until October The Company is also required to make payments to the Bureau of Land Management to keep mining claims in good standing as noted in Note SUBSEQUENT EVENTS (a) The Company granted 2,600,000 incentive stock options to directors and a consultant of the Company. These options are exercisable over 5 years at an exercise price of $0.10 CDN. (b) The Company is arranging a non-brokered private placement for up to $550,000 CDN and consisting of 10,000,000 units priced at $0.055 CDN per unit. Each unit consists of one common share and one common share purchase warrant exercisable for three years at $0.10 CDN. 20

26 1 PELOTON MINERALS CORPORATION Management s Discussion and Analysis Period Ended March 31, 2017 Dated May 30, 2017 (Form F1) This Management Discussion and Analysis ( MD&A ) of Peloton Minerals Corporation (the Company ) is provided for the purpose of reviewing the first quarter ended March 31, 2017 and comparing results to the previous period. The MD&A was prepared as of May 30, 2017 and should be read in conjunction with the Company s condensed interim consolidated financial statements and corresponding notes for the periods ending March 31, 2017 and The consolidated financial statements are prepared in accordance with International Financial Reporting Standards appropriate in the circumstances. All monetary amounts are expressed in United States dollars unless otherwise indicated. Additional information related to the Company is available for view on SEDAR at and at the Company s website located at DESCRIPTION OF THE BUSINESS The Company is a mineral exploration company focused on the acquisition and exploration of mineral resource properties, primarily gold and silver prospects in the province of Ontario, Canada and in the states of Montana and Nevada, USA. The Company is a reporting issuer in the Province of Ontario and its common shares trade on the Canadian Securities Exchange ( CSE ) under the symbol PMC, and on the OTC QB Market in the United States under the trading symbol PMCCF. CORPORATE ACTIVITIES GOLDEN TRAIL PROJECT, ELKO COUNTY, NEVADA The Company began a core drilling program in late 2016 and plans to complete the program in The program is designed to establish structural and zonation controls on mineralization along generally northwest-striking trends of mineralization and alteration. Early results from the drill core showed anomalous and coincident values in gold, silver, arsenic, antimony, and thallium in most of the 121 core samples. As a group, these five elements are considered indicators of Carlin-type mineralization. All rock types are strongly hydrothermally altered breccia, limestone, and calcareous siliciclastic sedimentary rocks. Surface outcrops are limited and more drilling is required to confirm structural and zonation controls on mineralization in three dimensions. In order to guide exploration drilling, Peloton geologists are currently integrating the recent multi-element geochemistry and assays from drilling with hyperspectral mineralogy of the drill core and earlier hyperspectral analyses of outcrop samples, both by Terracore, Inc., and recent airborne hyperspectral mineralogical data by SpecTIR LLC. These combined technologies have been shown to improve exploration success in lithologically similar and structurally complex settings such as the Long Canyon gold deposit in the Pequop Mountains to the south of Golden Trail. Mineralization at the Golden Trail Project is similar in geologic setting, host rock lithology, alteration and gangue mineralogy, and geochemistry to sedimentary rock-hosted gold deposits and especially gold mineralization typical of eastern Nevada, including the Carlin-type Long Canyon gold deposit in the Pequop Mountains.

27 2 Subsequent drill programs would seek to expand on this initial program along strike, at depth, and in other areas of the property. A large gravity anomaly underlies the Golden Trail claim block and the Company plans to test that in subsequent programs CORPORATE In February, 2017 the Company modified the expiry times of certain outstanding warrants of the Company as follows: a. 2,000,000 warrants exercisable at a price of CDN$0.10 until 5:00 pm on March 3, 2017 are now exercisable until 5:00 pm on March 3, 2019; b. 2,300,505 warrants exercisable at a price of CDN$0.10 until 5:00 pm on June 4, 2017 are now exercisable until 5:00 pm on June 4, 2019; c. 1,310,260 warrants exercisable at a price of CDN$0.10 until 5:00 pm on June 28, 2017 are now exercisable until 5:00 pm on June 28, OVERALL PERFORMANCE In summary the Company s financial condition has weakened over the past three months ended March 31, Working capital deficiency increased by $88,462 from ($259,774) at December 31, 2016 to ($348,206) at March 31, Working capital deficiency at March 31, 2016 was $205,173 The difference is mainly attributable to: a. ongoing office and administrative costs; b. accrual of management and director fees; c. a challenging environment for junior exploration company financing. SUBSEQUENT EVENTS Refer to the Corporate Activities section above. RESULTS OF OPERATIONS and SUMMARY OF QUARTERLY RESULTS Total assets as at the end of March 31, 2017 were $125,398 (March 31, $138,772) and consisted of cash $6,939 (March 31, $11,758), HST receivable of $16,943 (March 31, $9,351) prepaid expenses of $4,484 (March 31, $4,282), property, plant and equipment $83,989 (March 31, $87,225) and reclamation bonds $13,043 (March 31, 2016-$26,156). Total current liabilities as at March 31, 2017 were $376,572 ( $230,564) consisting primarily of trade payables and amounts due to directors and officers. Included in this amount is $237,862 (December 31, $235,245) of amounts owing to directors of the Company for management and directors fees. Long term financial liabilities consist of: Convertible debenture of $37,404 (March 31, $28,987; December 31, $35,097) Derivative liability of $101,145 (March 31, $207,062; December 31, $218,978) Warrants denominated in a foreign currency of $551,637 (March 31, $127,261; December 31, $749,221). Operating Revenues: The Company is a mineral exploration company and for the three months ended March 31, 2017 and March 31, 2016, the Company had no revenue. Raising capital through sales of its common shares funds the Company s exploration operations.

28 3 Expenses: Expenses for the three months ended March 31, 2017 were $100,760, an increase of $11,447 over the amount of $89,313 for the three months ended March 31, Exploration and claim maintenance expenses for the three months ended March 31, 2017 were $2,209 compared to $850 during the three months ended March 31, Expenses and gains incurred during the three months ended March 31, 2017 compared to the three months ending March 31, 2016 consisted of: i.office and administrative costs of $70,659 (2016-$71,445); ii.professional Fees of $13,718 (2016-$10,136); iii.loss on foreign exchange of $1,876 (2016-$6,882); iv.stock-based compensation of $10,028 (2016-nil) relating to the grant of stock options; v.gain on revaluation of foreign currency warrants of $306,840 (2016-loss $65,084); vi.gain on Revaluation of derivative conversion liability $117,833 (2016- loss $120,454); vii.accretion expense $2,310 (2016-$1,790). Net earnings (loss): The Company incurred net earnings of $321,603 for the three months ended March 31, 2017, compared to a net loss of $276,641 over the three months ended March 31, A gain of $306,840) on the re-evaluation foreign currency warrants and a gain of $117,833 from revaluation of derivative liability contributed to the Company recording net earnings for the quarter. There were considerable changes in some line items between the three months ended March 31, 2017 and March 31, The changes from revaluation of foreign currency warrants and the revaluation of derivative liability are book entries resulting from fluctuations in currency and stock price, and can swing considerably from quarter to quarter. There is no effect on the company s cash position from these fluctuations. Summary of Quarterly Results to March 31, 2017 Description Mar 31/17 Dec 31/16 Sep 30/16 June 30/16 Mar 31/16 Dec 31/15 Sep 30/15 June 30/15 $ $ $ $ $ $ $ $ Sales/Revenue Nil Nil Nil Nil Nil Nil Nil Nil Net Income/(Loss) 321,603 19,142 (884,986) (204,034) (276,641) (34,561) 346,373 74,363 Net Income/(Loss) Per share Basic & Diluted (.016) (004) (.006) (.001) LIQUIDITY As at March 31, 2017, the Company had cash in the amount of $6,939 (March 31, 2016-$11,758) and current liabilities of $376,572 (March 31, $230,564). As at March 31, 2017, the Company had working capital deficiency of $348,206 (March 31, $205,173).. Included in this amount is approximately $237,862 (March 31, 2016 $125,596) of amounts owing to directors of the Company for management and directors fees. As a result, the Company has liquidity risk and is dependent on raising capital.

29 4 CAPITAL RESOURCES For its long term business objectives, the Company will require funds for ongoing exploration work on its Silver Bell St. Lawrence Property in Montana, its Golden Trail Property and Independence Valley Property in Nevada and its River Stage Property in Ontario, to work on any other mineral projects that it acquires, as well as to meet its ongoing day-to-day operating requirements and will have to continue to rely on equity and debt financing during such period. There can be no assurance that financing, whether debt or equity, will be available to the Company in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms satisfactory to the Company. The Company does not have any other commitments for material capital expenditures over either the near or long term, and none are presently contemplated other than as disclosed above and/or over normal operating requirements. The Company is not in default of its obligations on any of its mineral properties at this time. OFF BALANCE SHEET ARRANGEMENTS At May 30, 2017, the Company had no off-balance sheet arrangements such as guarantee contracts, contingent interest in assets transferred to an entity, derivative instruments obligations or any obligations that trigger financing, liquidity, market or credit risk to the Company. TRANSACTIONS WITH RELATED PARTIES Related parties include the Board of Directors, close family members and enterprises which are controlled by these individuals as well as certain persons performing similar functions. Related party transactions conducted in the normal course of operations are measured at the exchange value (the amount established and agreed to by the related parties). Remuneration of Directors and key management of the Company during the period was as follows: Management and director fees in the amount of $63,860 were incurred in the quarter ended March 31, This amount was included in office and administrative costs in the consolidated statements of loss and comprehensive loss, however the amounts were accrued since the directors did not wish to divert the limited available funds from the advancement of the mineral projects. PROPOSED TRANSACTIONS There are no transactions proposed at this time other than as disclosed herein. ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES Accounting Policies The Company prepares its financial statements in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ) and interpretations of the IFRS Committee. The significant accounting policies of the Company are summarized in Note 2 to the Company s financial statements