Falco Resources Ltd.

2022 ESG Report

Published on December 7, 2023

Falco has prioritized ESG factors to define its mission and has adopted an inspiring vision firmly rooted in its values:
- Mission: Our way of being a miner : Building a lasting legacy every day, through every action we take.
- Vision : Falco’s innovative, scalable and transparent approach, rooted in current and future issues, is a model and a source of pride for its employees, its community and its peers.
- Values: Falco advocates values such as transparency, integrity, determination and audacity.

Disclaimer and Forward Looking Statements

Company Profile

Organizational Profile

Name

Falco Resources Ltd.

Describe nature of activities, brands, products and services

Falco is an exploration and development stage
company in the business of acquiring, exploring
and developing mineral properties in Canada.
Falco's focus is on the exploration and
development of its mineral properties in the
Rouyn-Noranda region of the Province of
Québec for base and precious metals, primarily
on its wholly owned Horne 5 polymetallic
deposit (the “Horne 5 project”).

Falco is one of the largest claim holders in the
Province of Québec, with extensive land
holdings in the Abitibi Greenstone Belt. Falco
owns mining claims and contractual rights in or
in relation to mining concessions covering an
aggregate of approximately 70,000 hectares of
land in the Noranda mining camp. Falco's
principal property is the Horne 5 Project,
located in the Noranda mining camp, which has
hosted several former gold and base metal
producers including the Horne Mine, which was
operated by Noranda Inc. from 1927 to 1976.
The Horne Mine produced approximately 11.6
million ounces of gold and 2.5 billion pounds of
copper.

For further details regarding the Horne 5
Project, refer to the Updated Feasibility Study
entitled, “Feasibility Study Update, Horne 5
Gold Project”, dated effective March 18, 2021,
which was prepared in accordance with
National Instrument 43-101 Respecting
Standards of Disclosure for Mineral Projects
(“NI 43-101”), and is available on SEDAR at
www.sedar.com.

Link to Corporate Website

https://www.falcores.com/en/

Industry Classification

NAICS:
212220 Gold and silver ore mining
212233 Copper-zinc ore mining

ISIC:
B0729 Mining of other non-ferrous metal ores

Market Capitalization

$0-$100Million USD

Type of Operations

Exclusively non-producing operations

Company Headquarters

Montreal, Canada

ESG Accountability

Role and Name of highest authority within company for Environment, Social and Governance strategy, programs and performance

Falco Board of Directors

ESG Reporting Period

Unless otherwise noted, all data contained in this report covers the following period

From

2022-01-01

2022-12-31

Audit Status

Identify the degree to which any inputs of the report are third-party checked

Self-Declared

Financial Reporting Period

Specify the frequency of sustainability reporting

Annually

Whether Financial reporting period aligns with the period for its sustainability reporting

Specify the reporting period for its financial reporting

From

2022-07-01

2023-06-30

If financial reporting period does not align with the period for its sustainability reporting, explain the reason for this

ESG reports follow a calendar year while the
financial report follow a financial year of July-
June. Any questions should be addressed to VP
Environment and Sustainable Development at
info@falcores.com.

Specify the contact point for questions about the report or reported information

Vice-President, Environment & Sustainable
Development

Geographic Scope of Report

Unless otherwise noted, the data in this report covers ESG matters related to the following countries of operations

Canada

Fragile and Conflict-Affected Situations

Identify all of the entity's countries of operations that align with the World Bank's list of "Fragile and Conflict-Affected Situations"

None

Business Operations Scope of Report

Identify notable exclusions, and reference any existing or planned reports that do or will address these (e.g, assets recently divested or acquired, non-managed joint ventures, specific exploration activities, recently closed sites, etc.)

No exclusion

Mineral Resource Types in Scope

Which of the following mineral resource types are covered by this report

• Inferred
• Indicated
• Measured

Mineral Reserve Types in Scope

Which of the following mineral reserve types are covered by this report

• Proven
• Probable

Currency

Unless otherwise noted, all financial figures referenced in this report are in the following currency

CAD

Organizational Profile

Provide a list of externally-developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes, or which it endorses, e.g., GRI, UN Global Compact

GRI, SASB, UN Global Compact, TSM and
TCFD.

Strategy

Provide a description of key impacts, risks, and opportunities,

Falco’s Management’s Discussion and Analysis
(MD&As) published on SEDAR on a quarterly
basis and also available on Falco's Web Site,
discuss the main risk factors associated with an
investment in Falco or in connection with its
business and operations (see attached).

As part of the development of the Horne 5
Project, Falco filed (i) its updated Feasibility
Study on SEDAR in 2021 and submitted (ii) its
Impact Study (2017) to the regulators in 2018
(''EIS'') and iii) complements to the EIS in 2022.
These studies discuss the project risks, impacts,
and opportunities in detail and are available at
the links below.

An enterprise and project risks analysis was
initiated with KPMG in 2021 and an
assessment of the top key risks was completed
in 2022, which are aligned with those risks
included in Falco’s MD&A.

Horne 5 Feasibility Study Update 2021

Horne 5 Environmental Impact Assessment (in
French)

Falco Management's Discussion and Analysis
(MDA) for periods ended Dec 31, 2022

Environmental Assessment Registry (in French)

Falco’s Management’s Discussion and Analysis (MD&As) 2022

Provide a statement from the highest governance body or most senior executive of the organization (i.e., CEO, chair, or equivalent senior position) about the relevance of sustainable development to the organization and its strategy for for contributing to sustainable development. (CEO's message for this report)

Message from the President & CEO, Luc
Lessard, and the Vice-President Environment &
Sustainable Development, Hélène Cartier (see
attached).

Falco Corporate Sustainability Report 2021

A word from Management

Policy commitments

Provide a description of the organization’s policy commitments for responsible business conduct

Falco has a diligent organizational structure
that ensures healthy corporate governance.
Falco expects its corporate governance
framework and practices to evolve in tandem
with its growth. The organizational structure is
supported by several policies with clear
directions and concrete objectives including a
Code of Ethics, which requires the observance
of high standards of business, environmental,
and personal ethics in the conduct of all
directors, officers, and other employees, and
third party services provider of Falco.

Additional policy commitments for responsible
business conduct are contained in the
additional policies identified below:

- Code of Ethics
- Internal Whistleblowing
- Anti-Bribery, Anti-Corruption and Anti-
Money Laundering (newly adopted in 2022)
- Prevention of Harrassment in the Workplace
and the Handling of Complaints
- Securities trading
- Tenure on the board of directors
- Diversity of the board of directors
- Diversity in corporate talent
- Health and Safety
- Corporate Social Responsibility
- Environmental

Code of Ethics

Prevention of Harrassment in the Workplace and the Handling of Complaints

Health and Safety

Diversity of the board of directors

Diversity in corporate talent

What are (if any) the authoritative intergovernmental instruments that the commitments reference

Although Falco’s policy commitments do not
reference the specific authoritative
intergovernmental instruments, Falco’s policies
above identified, are developed and annually
reviewed and amended (where required) on the
basis of best practices in corporate governance
and in compliance with all applicable laws and
regulations.

Do the commitments stipulate conducting due diligence

Falco policy commitments (including its Code of
Ethics, Anti-Bribery, Anti-Corruption, and Anti-
Money Laundering policy, and Internal
Whistleblowing policy) refer to due diligence,
monitoring, regular reviews, and/or reporting
on the policy commitments. Falco’s Internal
Whistleblowing policy provides for an
anonymous reporting mechanism with respect
to violations of commitments contained in
Falco’s policy commitments.

Do the commitments stipulate applying the Precautionary Principle or Approach

Yes

Falco’s Environmental Policy does refer to “the
precautionary principle " to mitigate the
nuisance factors that may result from our
operations. Although most of Falco’s policies do
not specifically stipulate the application of the
Precautionary Principle, they contain
guidelines and mechanisms that aim to prevent
and mitigate negative impacts notably in health
and safety and to prevent acts that would
contravene Falco’s policies.

Do the commitments stipulate respecting human rights

Describe the specific policy commitment to respect human rights

Although Falco’s policies do not overtly refer to
human rights, its commitments to human rights
include among others, the respect of all
(i) employees (including fair treatment and
equal opportunity, free from discrimination or
harassment of any sort, safe working
environment) and of (ii) all culture and rights of
communities (including First Nations) where
the Corporation operates its business
(including its stakeholders, customers,
suppliers, and other third parties treating with
the Company).

Policy on the Prevention of Harrassment in the Workplace and the Handling of Complaints

Code of Ethics

What are (if any) the internationally recognized human rights that the commitment covers

There are no specific references to
''internationally recognized human rights.''

What are the categories of stakeholders, including at-risk or vulnerable groups, that the organization gives particular attention to in the commitment

The First Nations and host communities are
specifically referred to in Falco's policy
commitments.

Provide links to the policy commitments, if publicly available, or, if the policy commitments are not publicly available, explain the reason for this

The policy commitments are publicly available
on the Falco website, see the link.

Links to the policy commitments

Report the level at which each policy commitment was approved within the organization, including whether this is the most senior level

All of such policy commitments were approved
by the Board of Directors of Falco its most
senior level of governance.

To what extent the policy commitments apply to the organization’s activities and to its business relationships

Falco’s policy commitments extend to
third parties conducting business (providing
services and goods) with the Company.

Describe how the policy commitments are communicated to workers, business partners, and other relevant parties

Undertakings to comply with the policy
commitments (Code of Ethics, Anti-Bribery,
Anti-Corruption and Anti Money Laundering
and Prevention of Harassment in the
Workplace and the Handling of Complaints) are
provided, on an annual basis, to all employees,
directors and third parties conducting business
(providing services and goods) with Falco and
each such policy commitments must be read,
agreed to and signed by all such parties.

Embedding policy commitments

Describe how the organization embeds each of its policy commitments for responsible business conduct throughout its activities and business relationships

Please refer to the information below for a
description of the Company's implementation
and enforcement of its policy commitments.

How are responsibilities allocated in order to implement the commitments across different levels within the organization

Allocation of responsibilities to implement
Falco’s policies is managed through Falco’s
managerial oversight and reporting structure.
Please refer to section “Governance structure
and composition” of this report. As per the
Code of Ethics, each employee with executive
or managerial responsibilities is responsible for
communicating the expectations contained in
the policy commitments to all employees under
his supervision and obtaining their undertaking
as to their awareness and compliance with such
policy commitments.

How are the commitments integrated into organizational strategies, operational policies, and operational procedures

The policy commitments have been established
by management of the Corporation as a Code
of Ethics to be observed by all directors and
employees of the Corporation in line with its
operations and activities. They are applicable in
all jurisdictions in which the Corporation
conducts business. This commitment is
renewed every year for each employee and all
directors.

How does the organization implement its commitments with and through its business relationships

As per the Code of Ethics, Falco's policy
commitments extend to all third parties
conducting business with the Company.

What implementation training does the organization provide

Employees receive periodic training regarding
ethics and business conduct including on
corruption, social and professional integration
of Aboriginal workers. Falco also encourages its
employees (including contractor) to take
training throughout the year.

Supply Chain

Estimated Total number of Business Entities in its downstream

Estimated End-Use customers

Types of activities related to the organization’s products and services carried out by the downstream entities (e.g., manufacturing, wholesale, retail);

Not applicable.

The nature of its business relationships with the downstream entities

Not applicable.

Describe significant changes in the information reported about business activities, value chain and other business relationships compared to the previous reporting period

No change.

Material Topics

Governance of Material Topics

Describe the process followed to determine the organization's material topics, including:

i. How has the organization identified actual and potential, negative and positive impacts on the economy, environment, and people, including impacts on their human rights, across its activities and business relationships; provide details

• Economic impact assessment
• Environmental impact assessment
• Social impact assessment
• Civil society organizations

Falco completed a Materiality Assessment with
an approach inspired from the Global Reporting
Initiative (GRI) standards.

A comprehensive list of potential ESG topics
was developed from multiple ESG standards
(BNQ 21000, Sustainable Development Goals,
SASB, GRI). Redundancies were eliminated and
some topics were grouped in order to finalize a
list of Selected ESG Topics (see attached).

Falco Selected ESG Topics (in French)

ii. How has the organization prioritized the impacts for reporting based on their significance

To understand the relative importance of the
selected ESG Topics to Falco's internal
stakeholders, a survey was developed and sent
to employees and manager and workshops
organized.

The relative materiality of the Selected ESG
Topics to Falco's external stakeholders was
assessed during a workshop.

The significance of Falco's ESG impacts was
assessed by WSP based on existing literature
on the organization and the Horne 5 Project
(see links below). The results were revised by
Falco's environment team in 2021. The
assessment and the Materiality Matrix were
finalized in 2022, after review by Falco's
Executives.

Falco Corporate Sustainability Report 2021

Horne 5 Environmental Impact Assessment
Study 2017 (in French)

Horne 5 Feasibility Study Update 2021

Falco Materiality Assessment External Stakeholder Input

Materiality Matrix 2022

Specify the stakeholders and experts whose views have informed the process of determining its material topics and provide details

• Business partners
• Civil society organizations
• Employees and other workers
• Local communities
• Non-governmental organizations

List the organization's material topics

• Procurement Practices
• Energy
• Water
• Biodiversity
• Emissions
• Effluents and Waste
• Labor/Management Relations
• Occupational Health and Safety
• Training and Education
• Diversity and Equal Opportunity
• Equal Remuneration for Women and Men
• Non-discrimination
• Indigenous Rights
• Local Communities
• Anti-corruption
• Supplier Assessment for Impacts on Society
• Closure Planning
• Communications
• Materials Stewardship
• Other, please specify

Falco and Horne 5 Materiality Assessment was
initiated in late 2021 and completed in 2022.
This list reflects the potential topics that will be
assessed, prioritized and reported in the 2022
ESG report.

The list of topics assessed by the organization
also includes :
- Climate changes and ESG Risks
- Resilience and Climate Risks
- Integrating ESG into business decisions
- Noise and Vibration
- Environmental and Social Costs
Internalization
- Board Diversity and Accountability
- ESG Disclosure

Materiality matrix

Environment

General Disclosure

Compliance with laws and regulations

Report the total number of significant instances of non-compliance with laws and regulations during the reporting period, and a breakdown of this total by:

Number of instances for which fines were incurred

Number of instances for which non-monetary sanctions were incurred

Report the total number of fines for instances of non-compliance with laws and regulations that were paid during the reporting period

Report the monetary value of fines for instances of noncompliance with laws and regulations that were paid during the reporting period ($Million)

Total number of fines for instances of non-compliance with laws and regulations that occurred in the current reporting period

Total monetary value of fines for instances of non-compliance with laws and regulations that occurred in the current reporting period ($Million)

Total number of fines for instances of non-compliance with laws and regulations that occurred in previous reporting periods

Total monetary value of fines for instances of non-compliance with laws and regulations that occurred in previous reporting periods

Describe the significant instances of non-compliance

Not applicable.

Describe how it has determined significant instances of non-compliance

Not applicable.

Greenhouse Gas Emissions

Scope 1

For your operations, disclose the gross global Scope1 greenhouse gas (GHG) emissions to the atmosphere of the seven GHGs covered under the Kyoto Protocol (tonne CO₂-e)

Carbon dioxide (CO₂) (tonne CO₂-e)

104.192

Methane (CH₄) (tonne CO₂-e)

0.000

Nitrous oxide (N₂O) (tonne CO₂-e)

0.000

Hydrofluorocarbon-23 (CHF₃) (tonne CO₂-e)

0.000

Hydrofluorocarbon-32 (CH₂F₂) (tonne CO₂-e)

0.000

Sulphur hexafluoride (SF₆) (tonne CO₂-e)

0.000

Nitrogen trifluoride (NF₃) (tonne CO₂-e)

0.000

Perfluoromethane (CF₄) (tonne CO₂-e)

0.000

Perfluoroethane (C₂F₆) (tonne CO₂-e)

0.000

Perfluorobutane (C₄F₁₀) (tonne CO₂-e)

0.000

Perfluorohexane (C₆F₁₄) (tonne CO₂-e)

0.000

The total amount of gross global Scope 1 GHG emissions (CO₂-e) (tonne)

104.192

Falco's Scope 1 GHG emissions were generated
by gasoline-fueled vehicles, diesel-fueled
drilling work, and by natural gas-powered
warehouse heating. The warehouses are
intended to be relocated to the future Horne 5
Mining Complex, which will be powered by
hydroelectricity from the grid.

GHG emissions (tonne CO2-e) have been
calculated based on estimated gasoline and
diesel consumption and natural gas invoices by
the Company's energy provider, using EPA
conversion factors.

The percentage of its gross global Scope 1 GHG emissions that are covered under an emissions-limiting regulation or program that is intended to directly limit or reduce emissions, such as cap-and-trade schemes, carbon tax/fee systems, and other emissions control (e.g., command-and-control approach) and permit-based mechanisms

100.0000%

The entity shall discuss its long-term and short-term strategy or plan to manage its Scope 1 greenhouse gas (GHG) emissions

Although its Scope 1 GHG emissions are low, in
part due to its limited activities in 2022, Falco
has already begun identifying and integrating
solutions to minimize the carbon footprint in
the planning and design stages of the Horne 5
Project.

Falco will maintain this approach and continue
to look for best practices and innovative
technologies to further reduce its GHG
emissions at the detailed engineering stage of
the project.

Falco GHG Emissions Reduction

Air Emissions

Report emissions of air pollutants that are released into the atmosphere

Emissions of carbon monoxide, reported as CO (tonne)

0.000

Emissions of oxides of nitrogen (NOx), reported as NOx (tonne)

0.000

Emissions of oxides of sulphur (SOx), reported as SOx (tonne)

0.000

Emissions of Particulate Matter 10 micrometres or less in diameter (PM₁₀), reported as PM₁₀ (tonne)

0.000

Emissions of lead and lead compounds, reported as Pb (tonne)

0.000

Emissions of mercury and mercury compounds, reported as Hg (tonne)

0.000

Emissions of non-methane Volatile Organic Compounds (VOCs) (tonne)

0.000

Falco is currently conducting exploration and
project development activities that do not
release significant air pollutants into the
atmosphere.

Energy Management

Total energy consumed in aggregate, in gigajoules (GJ) (hydrocarbons and electricity) including the fuel types used (e.g., biomass, hydro-electric power or bioenergy)

4,313.320

Falco's total energy consumed for 2022 is from:

- Vehicles (gasoline) : 65.958 GJ (1,53%)
- Drilling work (diesel) : 35.286 GJ (0,81%)
- Winter work (propane) 1.280 GJ (0,03%)
- Warehouses heating (natural gas) : 1890.588
GJ (43,81%)
- Rouyn-Noranda office (hydroelectricity from
the grid) : 2322.461 GJ (53,82%)
The warehouses are intended to be relocated
to the Horne 5 Mining Complex, which will be
powered by hydroelectricity from the grid.

Percentage energy consumed that was supplied by grid electricity

53.8439%

Percentage of energy consumed that is renewable energy

53.8439%

Water

Water Management

Disclose the amount of water that was withdrawn from freshwater sources (in thousands of cubic meters)

0.525

Most of the water consumed in 2022 was
withdrawn from the city's water supply system.

The water used for drilling came from surface
streams. Given the limited amount of water
withdrawn and since it was not measured and
only estimated, no distinction was made and all
water was considered to be from freshwater
sources.

For the Horne 5 Project, Falco will implement
various strategies and technologies to limit the
use of freshwater and maximize water
recirculation and reuse :
- Collecting Ponds will be installed at the mine
site to capture rainwater, which will be used in
the process.
- Once the tailings facility is in place,
precipitation and tailings water will be
collected and recirculated into the process.

Horne 5 Water Protection and Reduction

Disclose the freshwater withdrawn in locations with High or Extremely High Baseline Water Stress as a percentage of the total water withdrawn

0.0000%

Falco operates exclusively in the Province of
Quebec that is characterized by the Water
Resources Institute's Water Risk Atlas as a Low
Overall Water Risk area.

Disclose freshwater consumed in locations with High or Extremely High Baseline Water Stress as a percentage of the total water consumed

0.0000%

Disclose the amount of water that was consumed in its operations (in thousands of cubic meters)

0.525

The water consumed in 2022 was for:

- Drinking and sanitary water for the Rouyn-
Noranda office and warehouses, comes from
the city's water system and is determined from
water meters: 0.49 in thousands of cubic
meters (93%).

- Drilling conducted as part of environmental
and engineering studies for the Horne 5 Project
development : 0.035 thousand of cubic meters
(7%). This volume is an estimate, no
measurements were taken during drilling.
Drilling water was withdrawn from surface
streams.

Was your organization subject to any fines, enforcement orders, and/or other penalties for water-related regulatory violations

Total number of instances of non-compliance, including violations of a technology-based standard and exceedances of quality-based standards

Waste Management

Tailings Storage Facilities Management

Does your company manage Tailings Storage Facilities

Falco's activities are currently limited to
exploration and project development and the
Company does not currently own nor manage
any tailings storage facilities.

Disclose the approach to the development of Emergency Preparedness and Response Plans (EPRPs)

During the operation of the Horne 5 project,
Falco plans to strategically manage tailings to
minimize their impact on the environment.
Falco is committed to the several actions and
measures (see attached).

The Tailings Storage Facility (TSF) is designed
to manage acid mine drainage. The
classification of its containment structures and
the outcome of the risk assessment conducted
on them are disclosed as part of the
Environmental Impact Study (EIS).

An Operation, Maintenance and Surveillance
(OMS) Manual will be developed to ensure the
asset integrity and will include procedures such
as regular inspections as well as an emergency
preparedness and response plan.

Horne 5 Tailings Management (in French)

Horne 5 Tailings Management

Biodiversity

Management Plan

List the environmental and biodiversity management plan(s) implemented at active sites

Falco has no active sites in areas of high
biodiversity value at this stage. Environmental
and biodiversity management plans will be
implemented as the Horne 5 Project
development evolves.

Falco has initiated the third-party externally
verified UL 2723 ECOLOGO Certification for
Responsible Development for Mineral
Exploration, and is in compliance with the
Environmental Requirements included in the
standard.

Falco is also committed to the following
biodiversity protection measures as part of the
development of the Horne 5 Project:
- Limit the impact on wildlife by adjusting the
timing of activities, especially to protect fish
habitat, eastern whip-poor-will (a threatened
species) and bats (some of which are classified
as endangered).
- Cover tailings transport pipes with granular
material to allow the passage of small wildlife.
- Collaborate with regional stakeholders to
identify the most promising, innovative and
appropriate habitat loss compensation projects
for the region.

Horne 5 Vegetal Biodiversity (in French)

Horne 5 Wildlife Biodiversity (in French)

Horne 5 Biodiversity Protection

Impacts

Does access to the site involve traversing a protected area

This disclosure includes all relevant categories
and designations of provincial, national, and
internationally recognized protected areas,
including: the World Conservation Union
(IUCN) designation I-IV, UNESCO Natural
World Heritage Sites, UNESCO Man and the
Biosphere Reserves, and wetlands designated
under the Convention on Wetlands of
International Importance (the Ramsar
Convention).

Do any of the entities concessions share a watershed with a protected area

Percentage of proved reserves in sites with protected conservation status or in areas of endangered species habitat

0.0000%

The Horne 5 Project reserves and resources are
all located outside of protected areas.

Percentage of probable reserves in sites with protected conservation status or in areas of endangered species habitat

0.0000%

Percentage of inferred, indicated and/or measured resources in sites with protected conservation status or in areas of endangered species habitat

0.0000%

Falco has completed the environmental
biodiversity studies for the Horne 5 Project
development and its Environmental Impact
Assessment (EIA). The Horne 5 Project
resources and reserves are all located outside
of areas that could potentially impact
endangered species habitats.

As per its Environmental Policy, Falco will
respect legal requirements applicable, will
communicate its requirements to its suppliers
and subcontractors, and will contribute to the
preservation of local biodiversity during the
development of its mining projects. The
exploration activities are conducted in
accordance with the third-party externally
verified ECOLOGO Certification requirements.
The Horne 5 Project design integrates
numerous vegetal and wildlife biodiversity
protection measures that will be implemented
at active sites, as described in Biodiversity
Management Plan section above.

Social

Scale of the Organization

Describe how the organisation defines its "Operation"

Falco is in the business of exploring, evaluating
and developing mineral properties in Canada.
Its focus is on developing its mineral properties
in the Rouyn-Noranda region of the Province of
Québec for base and precious metals, primarily
on its wholly owned Horne 5 Project.

The Company has a 100% interest in
approximately 700 square kilometres of mining
claims and contractual rights in or in relation to
mining concessions in the Rouyn-Noranda
Mining Camp, which Management believes
represents approximately 70% of the entire
Mining Camp. Rouyn-Noranda is an established
Mining Camp in the Province of Québec with
the required infrastructure (electricity, rail,
water, etc.) in place for exploration and mine
development.

Report the total number of operations

Scale of the Organization

Report the total number of direct employees worldwide (exclude contractors)

This is the number of direct employees
(excluding contractors) as of December 31,
2022.

Report the total number of male direct employees worldwide (exclude contractors)

Report the total number of female direct employees worldwide (exclude contractors)

Report the total number of contract employees worldwide

Total number of employees worldwide (include contractors)

This is the number of employees (including
contractors) as of December 31, 2022.

Total number of female employees and contractors worldwide

Female employees and contractors as percentage of total employees and contractors

76.9231%

Total number of male employees and contractors worldwide

Male employees and contractors as percentage of total employees and contractors

23.0769%

Employee Information

Report the total number of direct employees by employment type (permanent and temporary), by gender

This is the number of direct employees as of
December 31, 2022.

Total number of permanent employees - female

Total number of permanent employees - male

Report the total number of employees by employment type (full-time and part-time), by gender

Report the total number of full-time employees

Report the total number of part-time employees

Total number of full-time employees - female

Total number of full-time employees - male

Describe the methodologies and assumptions used to compile the data

The data are compiled in an Excel table by the
pay service.

Are the numbers reported in head count, full-time equivalent (FTE), or using another methodology

The numbers reported are using a head count
methodology.

Are the numbers reported at the end of the reporting period, as an average across the reporting period, or using another methodology

The numbers reported at the end of the
reporting period reflect the actual number of
employees at the end of the period.

Provide contextual information necessary to understand the employment information provided

Falco Resources is working to develop the
Horne 5 Project with a small team of
specialized workers. The Falco team will grow
as the Horne 5 Project progresses, other
specialized workers will join the team.

Describe significant fluctuations, if any, in the number of employees during the reporting period and between reporting periods

The large decrease in the number of employees
is due to the lack of work associated with
waiting for the admissibility of the
environmental impact study.

Workers who are not employees

Report the total number of workers who are not employees and whose work is controlled by the organization

Describe the most common types of worker and their contractual relationship with the organization

Not applicable.

The type of work they perform

Not applicable.

Report the total number of contractors by employment type (permanent and temporary), by gender

Total number of temporary contractors - female

Report the total number of contractors by employment type (full-time and part-time), by gender

Total number of part-time contractors - female

Describe the methodologies and assumptions used to compile the information about workers who are not employees.

Workers who are not employees include only
contractors who work all year for Falco.

For the other contractors who do short-term
work, only hours worked are counted for the
Health and Safety statistics.

Falco Health and Safety statistics - 2022

Is the number of workers who are not employees reported in head count, full-time equivalent (FTE), or using another methodology

Yes, the number of workers who are not
employees is reported in head count.

Is the number of workers who are not employees reported at the end of the reporting period, as an average across the reporting period, or using another methodology

No, the number is the total of workers who
have worked throughout the year for Falco.

Describe significant fluctuations, if any, in the number of workers who are not employees during the reporting period and between reporting periods

One more person was hired for the exploration
department compared to last year.

Turnover

Report the total number and rate of employee turnover during the reporting period, by age group, and gender

All Employees

Total number of turnover (the number that left during the period)

Of these 10 turnovers, only one employee
voluntarily left their position. The other
turnovers relate to a temporary lack of work
due to the delay in receiving the admissibility of
the EIA by the relevant Quebec Ministry, which
momentarily precluded the Company from
further advancing to other steps of its
operations.

Female employees

Total number of turnover (the number of females that left during the period)

Male employees

Total number of turnover (the number of males that left during the period)

Turnover & Age Breakdown

Employees aged 30 years old and under

Total number of turnover (the number that left during the period)

Employees aged between 30 and 50 years old

Total number of turnover (the number that left during the period)

Employees over 50 years old

Total number of turnover (the number that left during the period)

Identify types of employees captured in the turnover rate calculations

All employees on the payroll

Includes employees and contractors
(temporary and permanent).

Average age of employees

Diversity and Equal Opportunity

Report the percentage of employees per employee category in each of the following diversity categories

Board of Directors

Total Board of Directors

Percent Male

66.6667%

Percent Female

33.3333%

Percent over 50 years of age

100.0000%

Senior Management

Total Senior Managers

This number is as of December 31, 2022.

Percent Male

50.0000%

Percent Female

50.0000%

Percent between 30 and 50 years of age

25.0000%

Percent over 50 years of age

75.0000%

Salaried (excluding Senior Management)

Total Salaried (excluding Senior Management)

Percent Male

14.2857%

Percent Female

85.7143%

Percent under 30 years of age

14.2857%

Percent between 30 and 50 years of age

57.1429%

Percent over 50 years of age

14.2857%

Technical Employees (skilled hourly)

Total Technical Employees

No hourly employees (only salaried).

Production Employees (unskilled hourly)

Total Production Employees

Contractors:

Total Contractors

Excluding Senior Management.

Percent Female

100.0000%

Labour Relations

Collective Bargaining Agreements

Percentage of total direct employees covered by collective bargaining agreements

0.0000%

Falco does not have any collective bargaining
agreements or unionized employees or
contractors.

For employees not covered by collective bargaining agreements, report whether the organization determines their working conditions and terms of employment based on collective bargaining agreements that cover its other employees or based on collective bargaining agreements from other organizations

Not applicable.

Notice Periods

Minimum number of weeks’ notice typically provided to employees and their representatives prior to the implementation of significant operational changes that could substantially affect them

Minimum of 2 weeks, as per applicable law.

Occupational Health and Safety

Work-related Injuries

Injuries - For all employees

i. Number of fatalities as a result of work-related injury

ii. Number of high-consequence work-related injuries (excluding fatalities)

iii. Number of recordable work-related injuries

iv. Main types of work-related injury, e.g., confined space, trips, falls, etc.

No work-related injuries of any kind for Falco
employees in 2022.

v. Number of hours worked

25,296

Lost Time Injuries (LTIs)

Lost Time Injuries Rate (LTIR)

0.000

Injuries - workers who are not employees but whose work and/or workplace is controlled by the organization

i. Number of fatalities as a result of work-related injury

ii. Number of high-consequence work-related injuries (excluding fatalities)

iii. Number of recordable work-related injuries

There was one work related incident for a sub
contractor working in an area controlled by
Falco using the wrong equipment which has not
been reported here. This was reported by is
employer.

iv. Main types of work-related injury, e.g., confined space, trips, falls, etc.

Reported only one injury for a worker who is
not employee but worked in workplaces
controlled by Falco.
In this case, a fall occurred due to the wrong
choice of equipment for work.

v. Number of hours worked

9,474

Work conducted by workers who are not
employees but whose work and/or workplaces
were controlled by Falco in 2022 included
drilling for environmental and engineering
studies as well as construction work supervised
by Falco, as part of a relocation project for the
development of the Horne 5 Project.

Lost Time Injuries (LTIs)

Lost Time Injuries Rate (LTIR)

0.000

Combined (Employees and non-employees, but controlled by the organization):

Total Hours Worked

34,770

Total number of all work-related injuries

Total Lost Time Injuries (LTIs)

Lost Time Injuries Rate (LTIR)

0.000

In 2022, Falco reported a 0.00 fatality rate, a
0.00 work-related injury rate, and a 0.00 lost
time injury rate (LTIR) for its employees by the
organization.

Also, Falco reported a 0.00 fatality rate, a 21.11
work-related injury rate, and a 21.11 lost time
injury rate (LTIR) for its non-employees
controlled by the organization.

Report the work-related hazards that pose a risk of high-consequence injury, including

i. How have these hazards been determined

As per its Health and Safety Policy, Falco has,
among others :
- Communicated its requirements to its
suppliers and subcontractors and made sure
they were respected; and
- Identified emergency situations and potential
accidents which could have an impact on the
environment, on the health of employees and
neighboring communities, and prepared to
handle those situations.

Work-related hazards that posed a high-
consequence injury risk in 2022 would have
been related to drilling and civil construction
activities. Risk analysis were conducted, by
Falco and/or its suppliers and subcontractors,
prior to field work activities, and incorporated
in Prevention and Safety Plans, along with
appropriate measures and controls to
implement in order to mitigate the identified
hazards.

Falco Health & Safety Policy

ii. Which of these hazards have caused or contributed to high-consequence injuries during the reporting period

Civil construction and drilling activities can
cause injuries because they are risky works.

iii. Actions taken or underway to eliminate these hazards and minimize risks using the hierarchy of controls

Prevention and Safety Plans are developed, by
Falco and/or its suppliers and subcontractors,
for each field work program.

These plans are reviewed with workers
involved prior to each job site and inductions
are provided to all field employees and
contractors before initiating work.

A Health and Safety Meeting is held and a Work
Card is filled in at the beginning of each shift.

Site Supervision is carried out during shifts, and
Health and Safety Inspections are conducted
regularly.

Falco Prevention and Safety Plan (in French)

Falco Work Card (in French)

Report on actions taken or underway to eliminate other work-related hazards and minimize risks using the hierarchy of controls

Prevention and Safety Plans include risk
assessment and associated mitigation
measures and controls for all work-related
hazards, high-consequence like minors ones.

The Prevention and Safety Plans is amended by
adding the elements present in the injury event
report.

Whether and, if so, why any workers have been excluded from this disclosure, including the types of worker excluded, e.g., short-term contractors

No workers were excluded from this disclosure.

Disclose any contextual information necessary to understand how the data have been compiled, i.e., any standards, methodologies, and assumptions used

Prevention and Safety Plans are developed and
implemented in compliance with the regulation
applicable, namely the "Loi sur la santé et la
sécurité du travail" and the "Commission des
normes de l'équité de la santé et de la sécurité
du travail (CNESST)".

Health and Safety data are compiled
accordingly on a monthly basis for both
employees and contractors (see attached).

Falco reports its Health and Safety data to the
Quebec Mining Association (AMQ), via the
Metrio plateform, annually.

Loi sur la santé et la sécurité du travail au
Québec

CNESST

Falco Health and Safety Data 2022 (in French)

Safety Training

Disclose the average number of training hours provided to its workforce for health, safety, and emergency management training

Average hours of health, safety, and emergency response training for (a) full-time/direct employees

1.45

2022 Health and Safety (H&S) Training
provided to Falco's employees consisted of
First Aid in the Workplace program by the
CNESST.

Security, Human Rights and Rights of Indigenous People

Identify the countries of operations within the World Bank's list of “Fragile and Conflict-Affected Situations”

None

Describe the nature of any social risks, for all operating countries, that could have a material risk to operations

At the present time, to the knowledge of Falco,
none of the properties in which Falco has an
interest, is the subject of a specific aboriginal
land claim. However, no assurance can be
provided that such will not be the case in the
future.

While Falco is committed to operating in a
socially responsible manner there is no
guarantee that its efforts will meet all of third
parties’ expectations, which could have a
material adverse effect on the company’s
business, financial position and operations.

Falco's Corporate Social Responsibility Policy
includes commitments in terms of Social and
Economic Benefits, Stakeholder Engagement
and Crisis Management.

Social risks are addressed as part of the Risk
Factors discussed and published on a quarterly
basis in Falco's Management Discussion &
Analysis (MDAs) available on SEDAR Falco's
website.

Falco Management Discussion & Analysis and
other published reports

Falco Corporate Social Responsibility Policy

Falco Corporate Social Responsibility Policy 2022

Percentage of proved reserves that are located in or near areas of active conflict

0.0000%

Percentage of probable reserves that are located in or near areas of active conflict

0.0000%

Describe due diligence practices and procedures with respect to indigenous rights of communities in which it operates or intends to operate

At the present time, to the knowledge of Falco,
none of the resources and reserves are located
in areas subject of a specific aboriginal land
claim.

Nonetheless, Falco recognizes the importance
of Indigenous communities, in particular the
Abitibiwinni First Nation in Abitibi-
Témiscamingue. Falco seeks to collaborate and
participate in the community's socio-economic
development to help support more equitable
distribution of wealth within the territory and
to learn and apply the shared ancestral
ecological knowledge of the Abitibiwinni First
Nation in the development of the Horne 5
Project.

Abitibiwinni-Québec Agreement, 2017 (in
french)

Community Relations

Artisanal and Small-Scale Mining

Number of company operating sites where artisanal and small-scale mining (ASM) takes place on, or adjacent to, the site (not controlled by company/unauthorized)

Programs

Report on community relations programs, objectives and achievements in the past 3 years

In addition to listening to and developing a
project in collaboration with the Rouyn-
Noranda community, Falco seeks to become an
active and involved member of the community.

In 2022, Falco met with its Consultative
Committee 2 times and organized the following
activities:
- Presentation of the engagement and
interaction plan for 2022-2023.
- Technical presentations on the Air quality
modeling (atmospheric dispersion) of the
Horne 5 Project .
- Presentation of the social monitoring
preliminary program.
- Presentation of the ESG action plan.
- General presentation of the Horne 5 Project
and update.

Over 90 consultation meetings were conducted
between 2017 and 2022.
Falco organized activities focused on specific
themes, including:
- Community consultation on the tailings
facility.
- Community consultation on potable water
protection.
- Discussions to maintain good neighborhood
relationships with the snowmobile and all-
terrain associations, as well as with the nearby
golf club to understand issues and challenges.
- Community consultation on noise, dust, and
vibration controls measures.

Discuss the processes, procedures, and practices to manage risks and opportunities associated with the rights and interests of communities in areas where it conducts business

Falco’s approach is measured through ESG
criteria. Falco has been proactive and made
progress in securing its social license to operate
in the community, and believes that ESG is
fundamental to creating a positive impact on
local and regional economies, better working
and living environment, health and employment
as well as creating value for shareholders.

Falco will continue to take a proactive approach
to its public consultation process and has been
working diligently to identify as many
stakeholders as possible in the Rouyn-Noranda
and Abitibi region. Based on the numerous
community meetings held throughout the
region, Falco observes strong community
support for the Horne 5 Project.

Since February 5, 2019, a consultation
committee (the “Committee”) composed of
representatives from the community was
created. Falco remains committed to working
with various stakeholders to finalize a plan for
the Horne 5 Project that will maximize benefits
for the entire community, our shareholders and
other stakeholder groups. The mandate of the
Committee is to propose enhancements to
optimize cohabitation with all stakeholders and
insure that the consultation and engagement
plan has been implemented and has fulfilled its
objective.

Falco's Corporate Social Responsibility Policy
includes commitments in terms of Social and
Economic Benefits, Stakeholder Engagement
and Crisis Management.

Falco has implemented a complaint (grievance)
management system modeled after the
Canadian Mining Association "Towards
Sustainable Mining" program.

Falco Corporate Social Responsibility Policy

Falco Corporate Social Responsibility Policy 2022

Risks and Opportunities

Disclose the total number of site shutdowns or project delays due to non-technical factors

Governance

Climate Change

Oversight

Is there board-level oversight of climate-related issues within your organization

Yes

Responsibility

Provide the highest management-level position(s) or committee(s) with responsibility for climate-related issues

Chief Executive Officer (CEO)

Reporting

Frequency of reporting to the board on climate-related issues

As important matters arise

Incentives

Do you provide incentives for the management of climate-related issues, including the attainment of targets

No, and we do not plan to introduce them in the
next two years

Given the current stage of the Horne 5 Project,
no water-related issues are expected within the
next two years.

Risk and Opportunity Management

Does your organization have a process for identifying, assessing, and responding to climate-related risks and opportunities

Yes

Falco will continue to identify the physical and
transition risks associated with climate change
and implement appropriate mitigation
measures to improve its resilience.

Risk Assessments

Have you identified any inherent climate-related risks with the potential to have a substantive financial or strategic impact on your business

Yes

Falco recognizes that climate change is an
international and community concern that may
affect the business and operations of Falco,
directly or indirectly.

The continuing rise in global average
temperatures has created varying changes to
regional climates across the globe, resulting in
risks to personnel, equipment, and commodity
supply. The mining industry as an emitter of
greenhouse gas emissions is particularly
exposed to these regulations.

Governments at all levels are moving towards
enacting legislation to address climate change
by regulating carbon emissions and energy
efficiency, among other things. Costs
associated with meeting these requirements
may be subject to some offset by increased
energy efficiency and technological innovation;
however, there is no assurance that compliance
with such legislation will not have an adverse
effect on Falco's business, results of operations,
financial condition, and share price.

Extreme weather events (such as prolonged
drought or freezing, increased flooding,
increased periods of precipitation, and
increased frequency and intensity of storms)
have the potential to disrupt operations and
transport routes. Extended disruptions could
result in interruption to production which may
adversely affect Falco's business results of
operations, financial condition, and its share
price.

Opportunity Assessments

Have you identified any climate-related opportunities with the potential to have a substantive financial or strategic impact on your business

Strategy

Have climate-related risks and opportunities influenced your organization’s strategy and/or financial planning

Yes, and we have developed a low-carbon
transition plan

Falco has already begun identifying and
integrating solutions to minimize the carbon
footprint in planning and design stages of the
Horne 5 Project. Falco will maintain this
approach and continue to look for best
practices and innovative technologies to
further reduce its GHG emissions at the
detailed engineering stage of the project.

Water Management

Quality and Quantity Dependency

Rate the importance (current and future) of freshwater quality and quantity to the success of your business

Direct use importance rating

Important

Freshwater needs are currently limited and
provided by the city's water supply system.
Freshwater quality and quantity will be
important for the development of the Horne 5
Project, although it will only be a small
proportion of the water usage (~5%).

Rate the importance (current and future) of sufficient quantity of recycled, brackish and/or produced water for the success of your business

Direct use importance rating

Important

Recycled water will be important for the Horne
5 Project development since the design targets
a water recirculation and reuse rate of 95%.

Risk Assessments

Does your organization undertake a water-related risk assessment

Yes, water-related risks are assessed

Select the options that best describe your procedures for identifying and assessing water-related risks

i. Coverage

Full

ii. Risk Assessment Procedure

Water risks are assessed in an environmental
risk assessment

iii. Frequency of Risk Assessment

Not defined

iv. How far into the future are risks considered

More than 6 years

Have you identified any inherent water-related risks with the potential to have a substantive financial or strategic impact on operations

Other, please specify

As part of the Horne 5 feasibility study and its
environmental impact assessment, Falco
identified measures to mitigate water-related
risks.

To ensure water protection, several measures
will be put in place, including:
- Double-walled pipes to transport tailings and
recirculate water, preventing spillage in the
event of a rupture.
- Installation of 16 state-of-the-art
instrumented leakage containment tanks along
the pipeline route to detect leaks and prevent
spillage.
- Installation of modern and efficient water
treatment plans that enable high water quality
standards.

Opportunity Assessments

Have you identified any water-related opportunities with the potential to have a substantive financial or strategic impact on your business

Yes, we have identified opportunities, and some
or all are being realized

As part of the Horne 5 Project development,
Falco will implement various strategies and
technologies to limit the use of freshwater and
maximize water recirculation and reuse:
- Collecting ponds will be installed at the mine
site to capture the rainwater, which will be used
in the process.
- Once the tailings facility is in place,
precipitation and tailings water will be
collected and recirculated into the process.

The design now targets a water recirculation
and reuse rate of over 95%, compared to 90%
in 2017.

Responsibility

Provide the highest management-level position(s) or committee(s) with responsibility for water-related issues

Chief Executive Officer (CEO)

Policy

Does your organization have a documented water policy

Other, please specify

Falco has an Environmental Policy which states
its commitment to manage efficiently surface
water and groundwater resources at all stages
of its projects life cycle (see attached).

The Horne 5 Project design includes multiple
Water Protection and Water Consumption
Reduction Measures and Commitments (see
excerpt from Falco's Sustainability Report
2021 attached).

Falco Environmental Policy