Minco Base Metals Corporation

Condensed Consolidated Interim Financial Statements For the three and six months ended March 31, 2018, and 2017 (1)

MINCO BASE METALS CORPORATION 2028 1055 West Georgia Street Vancouver, B.C. V6E 3R5 Phone: 604-688-8002 Fax: 604-688-8030 NOTICE TO READER Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of condensed consolidated 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 consolidated interim financial statements of Minco Base Metals Corporation have been prepared by, and are the responsibility of the Company s management. The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. s independent auditor has not performed a review of these financial statements in accordance with standards established by the Institute of Chartered Professional Accountants of Canada for a review of condensed consolidated interim financial statements by an entity s auditor. Dr. Ken Cai President and CEO Larry Tsang, CPA, CA Chief Financial Officer Vancouver, Canada May 22, 2018 (2)

Index Page Condensed Consolidated Interim Financial Statements 4-7 Condensed Consolidated Interim Statements of Financial Position 4 Condensed Consolidated Interim Statements of Operation and Comprehensive Income (Loss) 5 Condensed Consolidated Interim Statements of Changes in Shareholders Equity 6 Condensed Consolidated Interim Statements of Cash Flows 7 8 15 1 General information 8 2 Basis of preparation 8 3 Cash and cash equivalents 9 4 Short-term investments 10 5 Other receivables 10 6 Inventories 10 7 Property and equipment 11 8 Exploration and evaluation assets 12 9 Related party transactions 12 10 Share capital 13 11 Fair value measurements 14 12 Contingence 15 (3)

Condensed Consolidated Interim Statements of Financial Position March 31, September 30, 2018 2017 Assets $ $ Current assets Cash and cash equivalents (note 3) 1,692,466 982,778 Short-term investments (note 4) 20,328,172 19,718,809 Other receivables (note 5) 170,609 305,322 Prepaid expenses and deposits 96,981 37,174 Inventories (note 6) 1,893,964 1,708,450 24,182,192 22,752,533 Reclamation bond (note 8) 100,000 100,000 Exploration and evaluation assets (note 8) 153,916 153,916 Property and equipment 1,996,230 3,019,459 Total assets 26,432,338 26,025,908 Liabilities Current liabilities Accounts payable and accrued liabilities 43,541 488,983 Current taxes payable 1,719,028 1,636,679 Due to related parties (note 9) 240,595 52,001 2,003,164 2,177,663 Non-current liabilities Provision for restoration and rehabilitation 20,536 20,536 Deferred tax liabilities 529,941 419,736 Total liabilities 2,553,641 2,617,935 Shareholders equity Share capital (note 10(a)) 665,343 665,343 Contributed surplus 1,056,920 1,022,276 Retained earnings 22,156,434 21,720,354 Total shareholders' equity 23,878,697 23,407,973 Total liabilities and shareholders' equity 26,432,338 26,025,908 Approved by the Board of Directors: Ken Cai Maria Tang Ken Cai Maria Tang Director Director The accompanying notes are an integral part of these condensed consolidated interim financial statements. (4)

Condensed Consolidated Interim Statements of Operation and Comprehensive Loss Three months ended March 31, Six months ended March 31, 2018 2017 2018 2017 $ $ $ $ Administrative expenses Accounting and audit 20,050 8,141 32,491 15,607 Amortization 88,133 192 155,469 384 Consulting 29,320 14,187 49,845 32,967 Directors' fees 9,000 11,000 15,500 17,000 Legal, regulatory and filing 12,036 7,667 13,315 9,229 Office expenses 43,700 25,751 64,828 46,291 Property investigation - - 11,280 38,992 Rent 29,744 22,056 51,911 43,891 Travel 5,290 9,547 13,033 10,930 Salaries and benefits 140,835 182,239 249,358 453,226 Share-based compensation (note 10(b)) 3,189 44,850 34,644 127,048 Loss before other income (381,297) (325,630) (691,674) (795,565) Foreign exchange gain (loss) 1,320,366 1,824 1,907,793 (416,801) Impairment (note 7) (256,440) - (856,440) - Interest income 104,719 92,487 235,843 157,938 Income (loss) for the period before income taxes 787,348 (231,319) 595,522 (1,054,428) Income tax recovery (expenses), current (23,616) (6,474) (49,237) (26,653) Income tax recovery (expenses), deferred (81,000) 2,618 (110,205) 151,350 Income (loss) and comprehensive loss for the period 682,732 (235,175) 436,080 (929,731) Loss per share - basic 0.05 (0.02) 0.03 (0.07) - diluted 0.05 (0.02) 0.03 (0.07) Weighted average number of common shares outstanding - basic 13,922,257 13,922,257 13,922,257 13,922,257 - diluted 14,910,757 13,922,257 14,872,007 13,922,257 The accompanying notes are an integral part of these condensed consolidated interim financial statements. (5)

Condensed Consolidated Interim Statements of Changes in Shareholders Equity For the six months ended March 31, 2018 and 2017 Changes in Shareholders Equity Number of shares Share Contributed Retained capital surplus earnings Total $ $ $ $ Balance October 1, 2016 13,992,257 665,343 799,102 23,711,858 25,176,303 Comprehensive loss for the period - - - (929,731) (929,731) Share-based compensation - - 127,048-127,048 Balance March 31, 2017 13,992,257 665,343 926,150 22,782,127 24,373,620 Balance October 1, 2017 13,992,257 665,343 1,022,276 21,720,354 23,407,973 Comprehensive income for the period - - - 436,080 436,080 Share-based compensation - - 34,644-34,644 Balance March 31, 2018 13,992,257 665,343 1,056,920 22,156,434 23,878,697 The accompanying notes are an integral part of these condensed consolidated interim financial statements. (6)

Condensed Consolidated Interim Statements of Cash Flows For the six months ended March 31, 2018 and 2017 2018 2017 $ $ Cash flows generated from (used in) operating activities Net income (loss) for the period 436,080 (929,730) Adjustments for: Impairment 856,440 - Amortization 155,469 384 Share-based compensation (note 10 (b)) 34,644 127,048 Deferred income tax expenses (recovery) 110,205 (151,350) Foreign exchange gain (loss) related to short-term investments and cash and cash equivalent (1,907,792) 416,801 Changes in items of working capital: Other receivables 134,713 153,902 Prepaid expenses and deposits (59,807) 13,772 Inventories (115,688) - Accounts payable and accrued liabilities (445,441) 137,862 Due from/to related parties 188,594 217,211 Current taxes payable 82,349 20,530 Net cash used in operating activities (530,234) 6,430 Cash flows generated from (used in) investing activities Mineral property costs (2,218) (285,359) Acquisition of property and equipment (56,290) (209,510) Sales of (purchase of) short-term investments 1,195,204 (235,276) Net cash generated from (used in) investing activities 1,136,696 (730,145) Effect of exchange rates on cash 103,226 (5,543) Increase (decrease) in cash and cash equivalents 709,688 (729,258) Cash and cash equivalents - beginning of period 982,778 1,802,902 Cash and cash equivalents - end of period 1,692,466 1,073,644 The accompanying notes are an integral part of these condensed consolidated interim financial statements. (7)

1. General information ( MBM or the Company ) was incorporated on May 22, 2007 under the Business Corporations Act (British Columbia). Its principal business activity is the acquisition, exploration and development of resource properties. The Company s registered office is 2028 1055 West Georgia Street, Vancouver, British Columbia, Canada. The Company is currently exploring, developing, and operating placer mineral interests in the area near Quesnel, British Columbia, Canada and the Company continues to review and assess new mineral exploration or development projects for acquisition. 2. Basis of preparation Basic of preparation These condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries, Minco Mining & Metals Limited ( MM&M HK ), a company incorporated in Hong Kong. Allgold BC Ltd. ( Allgold ), a company incorporated in British Columbia of Canada, and Minco Mining (BVI) Ltd. ( Minco BVI ), a company incorporated in the British Virgin Islands. Information of the subsidiaries are as follows: Name Principal activities (ownership interest) Place of Incorporation MM&M HK Treasury company (100%) Hong Kong Allgold Exploring and producing mineral properties (100%) Canada Minco BVI Holding company (100%) British Virgin Islands These condensed consolidated interim financial statements have been prepared in accordance with the International Financial Reporting Standards ( IFRS ) issued by the International Accounting Standards Board ( IASB ) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. These condensed consolidated interim financial statements should be read in conjunction with the Company s annual financial statements for the recent year ended September 30, 2017, which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies applied in these condensed consolidated interim financial statements are consistent with those applied in the preparation of the consolidated annual financial statements for the year ended September 30, 2017 except the adoption of IFRS 9, commencing January 1, 2018. IFRS 9, Financial Instruments, addresses classification and measurement of financial assets. It replaces the multiple category and measurement models in IAS 39 Financial Instruments: Recognition and Measurement for debt instruments with a new mixed measurement model having only two categories: amortized cost and fair value through profit or loss. Requirements for financial liabilities are largely carried forward from the existing requirements in IAS 39 except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss are generally recorded in other comprehensive income. There are no impacts to the Company s financial statements for the adoption of IFRS 9. (8)

3. Cash and cash equivalents As at March 31, 2018, cash and cash equivalents consisted of $72,243 cash (September 30, 2017- $93,998) and a term deposit of $1,620,223 with original maturity 90 days or less (September 30, 2017- $888,780). The yields of these term deposit were between 1.1% and 1.40%. Amount in Original Currency Canadian Dollar Equivalent ($) March 31, 2018 Cash denominated in Canadian dollars 70,631 70,631 Cash denominated in Chinese RMB 7,893,182 1,621,835 1,692,466 September 30, 2017 Cash denominated in Canadian dollars 79,594 79,594 Cash denominated in Chinese RMB 4,816,436 903,184 982,778 All of the cash denominated in RMB is maintained in the People s Republic of China ( PRC ), where the remittance of funds to a jurisdiction outside the PRC is subject to government rules and regulations on foreign currency controls. Remittance of these funds back to Canada may require approvals by the relevant government authorities or designated banks in the PRC or both. The Company is a foreign entity in China and does not have a registered Chinese subsidiary. Therefore it is not allowed to open a bank account in China. In order to hold the funds from the disposition of the Company s interest in Gansu Keyin Mining Co. Ltd. ( Keyin ) and the White Silver Mountain property in 2009, the Company entered a trust agreement dated December 21, 2009 (the Trust Agreement ) and subsequently renewed on November 30, 2011 with Beijing Zhongjia Kailong Technology Development Co. Ltd. ( Zhongjia ), a Chinese registered entity controlled by a brother of the Chief Executive Officer of the Company. Pursuant to the Trust Agreement, Zhongjia held the cash denominated in Chinese RMB in trust for the benefit of the Company. During the six months ended March 31, 2018, the Company was charged $2,983 (2017- $2,907) for the safekeeping. (9)

4. Short-term investments The Company s short-term investments consisted of one guaranteed investment certificate of $57,500 and three term deposits with a maturity of 365 days: March 31, 2018 September 30, 2017 $ $ Term deposits denominated in RMB 20,270,672 19,661,309 A term deposit denominated in Canadian dollar 57,500 57,500 20,328,172 19,718,809 All the short-term investments are held with high creditworthy financial institutions. The yields on the 365 days deposits ranged from 1.65% to 1.95% per annum (2017 between 1.65% and 1.95%). Pursuant to the Trust Agreement, all term deposits denominated in RMB are held by Zhongjia for the benefit of the Company. 5. Other receivables March 31, 2018 September 30, 2017 $ $ Interest receivable 163,138 207,080 GST receivable 7,471 19,356 Other receivable - 78,886 170,609 305,322 6. Inventories As at March 31, 2018, the carrying cost of the Company s inventories are as follows: March 31, 2018 $ Supplies for production 7,974 Finished goods mineral concentrate 1,885,990 Total inventory 1,893,964 As at March 31, 2018, the cost of the inventory was approximately equal to its net realizable value. (10)

7. Property and equipment Mineral interest (QR Project) Mining equipment Motor vehicles mobile home and others $ $ $ $ $ At September 30, 2017 1,527,100 1,054,391 351,225 86,743 3,019,459 Additions 2,217-56,290-58,507 Amortization (49,867) (121,146) (43,802) (10,481) (225,296) Impairment (600,000) (256,440) - - (856,440) At March 31, 2018 879,450 676,805 363,713 76,262 1,996,230 At September 30, 2017: Cost 1,842,543 1,285,457 427,994 108,649 3,664,643 Accumulated amortization (315,443) (231,066) (76,769) (21,906) (645,184) Net 1,527,100 1,054,391 351,225 86,743 3,019,459 At March 31, 2018: Cost 1,844,760 1,285,457 484,284 108,649 3,723,150 Impairment (600,000) (256,440) - - (856,440) Accumulated amortization (365,310) (352,212) (120,571) (32,387) (870,480) Net 879,450 676,805 363,713 76,262 1,996,230 During the six months ended March 31, 2018, the amortization and depletion of the Company s property and equipment was $225,296 of which $69,827 was added to the product inventory and $155,469 was expensed. The Company finalized its 2018 operating budget for the QR Project and indicators of impairment existed leading to a test of recoverable amount of the QR Project on December 31, 2017. The impairment test compared the carrying amount of the QR Project to its recoverable amount. The recoverable amount is the higher of the fair value less costs of disposal and value in use. The Company estimated the recoverable amount based on the value in use using a discounted cash flow model for a 21-month period ending September 30, 2019. The significant assumptions that impact the resulting fair value include: Future gold prices ranging between US$1,249/oz to US$1,300/oz based on third party forecasts US dollar to Canadian dollar exchange rate of 1.255 based on third party forecasts Operating costs based on the operating budget of 2018 Gold production based on the Company's most recent mining plan Given the short life of the project, the model is highly sensitive to all of the key inputs. Upon completion of the impairment test, the Company concluded that the QR Project was impaired. An impairment of $600,000 was recorded on December 31, 2017. On March 31, 2018, the Company reviewed the equipment on hands before the beginning of the production in fiscal 2018 and disposed various equipment and machinery bought in 2016 with no salvage value. As a result, an impairment of $256,440 has been recorded for the three months ended March 31, 2018. Total (11)

7. Property and equipment (Continued) In connection with the QR Project, the Company has provided a reclamation bond of $100,000 to the government that is expected to be recovered after the QR project is completed. 8. Exploration and evaluation assets As at March 31, 2018 and September 30, 2017, the Company had the following exploration and evaluation asset: Lucky Project $ Acquisition 105,000 Capitalized expenditures 48,916 153,916 9. Related party transactions The Company, Minco Gold Corporation ( Minco Gold ), and Minco Silver Corporation ( Minco Silver ) are related as all three entities have the same senior management team. Shared expenses The Company, Minco Gold, and Minco Silver share offices and certain administrative expenses in Vancouver. During the six months ended March 31, 2018, the Company paid Minco Gold an amount of $40,038 (2017 - $21,381) in respect of rent, and $89,143 (2017 - $85,712) in respect of other shared office expenses and administrative expenses; During the six months ended March 31, 2018, the Company reimbursed a Chinese subsidiary of Minco Silver ( MSV Subsidiary) an amount of $120.902 for shared office space and supplies, $175,534 for labor charges, and $ 54,632 for administration services in connection with the use of labor of this MSV Subsidiary in connection with the QR Project. Key management compensation During the three and six months ended March 31, 2018 and 2017, the following compensation was charged by key management. Key management includes the Company s directors and senior management. Except $8,400 cash compensation that was included in the Company s mineral interest, all the remaining remunerations have been included in administrative expenses. (12)

9. Related party transactions (continued) Three months ended March 31, Six months ended March 31, 2018 2017 2018 2017 $ $ $ $ Cash remuneration 39,096 33,608 69,224 65,588 Share-based compensation (5,317) 36,924 9,791 104,595 Total 33,779 70,532 79,015 170,183 The above transactions are conducted in the normal course of business. Amount due to related parties March 31, September 30, 2018 2017 Due to Minco Silver $ $ - Reimbursement of expenses 218,245 39,823 Due to Minco Gold: - Reimbursement of the shared expenses 22,350 12,178 Total due to related parties 240,595 52,001 Exchange of funds with Minco Silver The Company keeps most of its funds in China, and the remittances of these funds from China to Canada require approval by the relevant government authorities or designated banks in China or both. The Company borrows Canadian funds from Minco Silver in Canada, and repays the amounts in RMB to Minco Silver s subsidiaries in China from time to time. During the six months ended March 31, 2018, the Company received $350,000 from Minco Silver in Canada that was and to be repaid to Minco Silver s subsidiaries in China. 10. Share capital (a) Common shares Authorized: unlimited number of common shares without par value. (b) Stock options The Company may grant up to 10% of its issued and outstanding shares as options to its directors, officers, employees and consultants under its incentive stock option plan. During the six months ended March 31, 2018, the Company granted stock options, exercisable to purchase up to an aggregate of 325,000 shares of the Company, to directors and consultant. These options vest in three tranches over a three-year period, have an exercise price of $0.89 per share, and will expire on February 27, 2023 if unexercised. (13)

10. Share capital (continued) During the six months ended March 31, 2018, the Company recorded $34,645 (March 31, 2017 - $82,198) of share-based compensation expenses. Continuity and details of the Company s options are as follows: Number outstanding Exercise price $ Balance, September 30, 2017 911,000 0.89 Granted 325,000 0.89 Forfeited (170,000) 0.89 Balance, March 31, 2018 1,066,000 0.89 Options outstanding Options exercisable Number outstanding Weighted average remains contractual life Exercise price Number exercisable Exercise price year $ $ 1,066,000 3.35 0.89 494,000 0.89 To determine the fair value of the options granted. the Company used the Black-Scholes option pricing model which requires the use of highly subjective estimates and assumptions including the expected stock price volatility. In the absence of a volatility of the Company s share price, the Company has used the annual volatility of the share prices of six Canadian junior mining public companies as a proxy to estimate the Company s share price volatility for use in the Black-Scholes option pricing model. Changes in the underlying assumptions can materially affect the fair value estimates and therefore, in management s opinion, existing models do not necessarily provide a reliable measure of the fair value of the Company s stock options. 11. Fair value measurements Financial assets and liabilities that are recognized on the balance sheet at fair value can be classified in a hierarchy that is based on significance of the inputs used in making the measurements. The levels in the hierarchy are: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities, Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is derived from prices), and Level 3 - inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). Financial instruments classified as amortized cost that are not measured at fair value on the balance sheet are cash and cash equivalents, short-term investments, other receivables, accounts payable and accrued liabilities, and due to related parties. The fair values these financial instruments approximate their carrying values due to their short-term natures. (14)

12. Contingence The Company was named as a co-defendant of a civil lawsuit of which the plaintiff seeks for unspecified compensation. A Company s vehicle was involved in a traffic accident with the plaintiff in December 2016. The Company s vehicle is insured, and the Company has passed the claim to the vehicle s insurer. The financial impacts to the Company is not determinable and the Company has not accrued any expenditure or liability as of the date of this report (15)