AMARC RESOURCES LTD.

FINANCIAL STATEMENTS

FOR THE YEARS ENDED
MARCH 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars)

REPORT OF INDEPENDENT REGISTERED CHARTERED PROFESSIONAL ACCOUNTANTS

To the Shareholders of Amarc Resources Ltd.

We have audited the accompanying financial statements of Amarc Resources Ltd., which comprise the statements of financial position as at March 31, 2016 and 2015 and the statements of loss and comprehensive loss, changes in equity and cash flows for each of the years in the three year period ended March 31, 2016, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Amarc Resources Ltd. as at March 31, 2016 and 2015 and its financial performance and its cash flows for each of the years in the three year period ended March 31, 2016 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Emphasis of Matter

Without modifying our opinion, we draw attention to Note 1 in the financial statements which indicates that the Company is dependent upon its ability to secure new sources of financing to fund on-going exploration and development objectives. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that casts significant doubt about the Company's ability to continue as a going concern.

INDEPENDENT REGISTERED CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, Canada
July 22, 2016

Amarc Resources Ltd.

Statements of Financial Position

(Expressed in Canadian Dollars)

			March 31,			March 31,
	Note		2016			2015
ASSETS
Current assets
Cash and cash equivalents	3	$	747,408		$	489,150
Amounts receivable and other assets	5		117,406			971,890
Marketable securities			26,404			59,841
			891,218			1,520,881
Non-current assets
Restricted cash	4		205,028			234,198
			205,028			234,198
Total assets		$	1,096,246		$	1,755,079
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	7	$	22,357		$	66,299
Balance due to a related party	10		180,476			212,642
Director's loan	8		1,000,000			1,000,000
			1,202,833			1,278,941
Non-current liabilities
Director's loan	8		234,849			–
			234,849			–
Total liabilities			1,437,682			1,278,941
Shareholders' (deficiency) equity
Share capital	9(a)		58,967,910			58,955,410
Reserves			5,357,405			5,068,700
Accumulated deficit			(64,666,751	)		(63,547,972	)
			(341,436	)		476,138
Total liabilities and shareholders' (deficiency) equity		$	1,096,246		$	1,755,079

Nature of operations and going concern (note 1)
Events after the reporting period (notes 1, 6, and 8)

The accompanying notes are an integral part of these financial statements.

/s/ Robert A. Dickinson	/s/ Rene G. Carrier
Robert A. Dickinson	Rene G. Carrier
Director	Director

Amarc Resources Ltd.

Statements of Loss

(Expressed in Canadian Dollars, except for weighted average number of common shares outstanding)

			Year ended March 31,
			2016		2015		2014
	Note				(note 2(b))		(note 2(b))
Expenses	10 & 12
Exploration and evaluation	6	$	2,808,395	$	4,158,436	$	1,217,213
Assays and analysis			119,460		131,856		52,950
Drilling			746,312		726,685		–
Equipment rental			18,806		31,357		8,771
Geological			440,156		921,192		374,551
Helicopter			773,841		947,480		65,285
Property costs and assessments			153,692		554,398		521,048
Site activities			202,373		190,708		95,731
Socioeconomic			328,716		504,608		74,956
Travel and accommodation			25,039		150,152		23,921
Administration			1,288,920		1,477,731		1,306,126
Legal, accounting and audit			83,745		61,450		44,626
Office and administration	12(b)		1,112,622		1,293,768		1,104,938
Shareholder communication			50,355		67,388		102,129
Travel and accommodation			10,229		22,772		23,142
Trust and regulatory			31,969		32,353		31,291
Cost recoveries			(3,102,061)		(880,501)		(122,612)
Pursuant to IKE Option Agreement	6(a)		(3,067,403)		–		–
Mineral exploration tax credits			(34,658)		(880,501)		(122,612)
Share-based payments			–		–		103,004
			995,254		4,755,666		2,503,731
Other items
Finance income			(10,341)		(38,189)		(68,759)
Finance expenses – director's loans	8		139,606		203,802		–
Finance expenses – other	6(c)		–		–		23,136
Foreign exchange loss			2,183		809		1,937
Derecognition of liabilities of joint venture	6(c)		–		–		(284,717)
Gain on disposition of marketable securities	2(e)(i)		(7,923)		(38,064)		(68,750)
Impairment of marketable securities	2(e)(i)		–		–		48,225
Mineral property interests written off			–		–		2
Loss for the year		$	1,118,779	$	4,884,024	$	2,154,805
Basic and diluted loss per common share		$	0.01	$	0.04	$	0.02
Weighted average number of common shares outstanding			141,406,301		139,357,212		138,644,883

The accompanying notes are an integral part of these financial statements.

Amarc Resources Ltd.

Statements of Comprehensive Loss (income)

(Expressed in Canadian Dollars)

			Year ended March 31,
	Note		2016		2015			2014
Loss for the year		$	1,118,779	$	4,884,024		$	2,154,805
Other comprehensive loss (income):
Items that may be reclassified subsequently to profit and loss:
Revaluation of marketable securities	2(e)(i)		25,415		(3,954	)		(25,012	)
Reallocation of the fair value of marketable securities upon disposition	2(e)(i)		8,023		38,517			9,875
Impairment of marketable securities	2(e)(i)		–		–			(48,225	)
Total other comprehensive loss (income) for the year			33,438		34,563			(63,362	)
Comprehensive loss for the year		$	1,152,217	$	4,918,587		$	2,091,443

The accompanying notes are an integral part of these financial statements.

Amarc Resources Ltd.

Statements of Changes in Equity (Deficiency)

(Expressed in Canadian Dollars, except for share information)

		Share capital				Reserves
						Share-based		Investment			Share
		Number				payments		revaluation			warrants
	Note	of shares		Amount		reserve		reserve			reserve		Deficit			Total
Balance at April 1, 2013		138,624,061	$	58,756,410	$	2,099,636	$	26,041		$	2,811,220	$	(56,509,143	)	$	7,184,164
Share-based payments	9(c)	–		–		103,004		–			–		–			103,004
Common shares issued – property payment	8	100,000		5,000		–		–			–		–			5,000
Total other comprehensive income		–		–		–		63,362			–		–			63,362
Loss for the year		–		–		–		–			–		(2,154,805	)		(2,154,805	)
Balance at March 31, 2014		138,724,061	$	58,761,410	$	2,202,640	$	89,403		$	2,811,220	$	(58,663,948	)	$	5,200,725
Common shares issued – loan bonus	8	2,500,000		187,500		–		–			–		–			187,500
Common shares issued – property payment	9(b)	100,000		6,500		–		–			–		–			6,500
Total other comprehensive income		–		–		–		(34,563	)		–		–			(34,563	)
Loss for the year		–		–		–		–			–		(4,884,024	)		(4,884,024	)
Balance at March 31, 2015		141,324,061	$	58,955,410	$	2,202,640	$	54,840		$	2,811,220	$	(63,547,972	)	$	476,138
Common shares issued – property payment	9(b)	100,000		12,500		–		–			–		–			12,500
Issuance of share purchase warrants	8	–		–		–		–			322,143		–			322,143
Total other comprehensive loss		–		–		–		(33,438	)		–		–			(33,438	)
Loss for the year		–		–		–		–			–		(1,118,779	)		(1,118,779	)
Balance at March 31, 2016		141,424,061	$	58,967,910	$	2,202,640	$	21,402		$	3,133,363	$	(64,666,751	)	$	(341,436	)

The accompanying notes are an integral part of these financial statements.

Amarc Resources Ltd.

Statements of Cash Flows

(Expressed in Canadian Dollars)

			Year ended March 31,
	Note		2016			2015			2014
Operating activities
Loss for the year		$	(1,118,779	)	$	(4,884,024	)	$	(2,154,805	)
Adjustments for:
Finance income			(10,341	)		(38,189	)		(68,759	)
Finance expenses – director's loans	8		139,606			203,802			23,136
Common shares issued, included in exploration expenses	9(b)		12,500			6,500			5,000
Gain on disposition of marketable securities			(7,923	)		(38,064	)		(68,750	)
Share-based payments			–			–			103,004
Derecognition of liabilities of joint venture	6(c)		–			–			(284,717	)
Impairment of marketable securities			–			–			48,225
Mineral property interests written off			–			–			2
Changes in working capital items
Amounts receivable and other assets			854,483			(767,442	)		1,222,357
Restricted cash			29,170			(1,532	)		34,136
Accounts payable and accrued liabilities			(43,942	)		30,898			2,492
Balances due to related parties			(32,166	)		142,703			(52,235	)
Net cash used in operating activities			(177,392	)		(5,345,348	)		(1,190,914	)
Investing activities
Interest received			10,341			38,189			68,759
Proceeds from disposition of AFS financial assets, net			7,923			39,839			68,750
Net cash provided by investing activities			18,264			78,028			137,509
Financing activities
Net proceeds from director's loans	8		500,000			1,000,000			–
Payments on debenture of a joint venture	6(c)		–			–			(43,136	)
Interest paid on director's loans	8		(82,614	)		(16,302	)		–
Net cash provided by (used in) financing activities			417,386			983,698			(43,136	)
Net increase (decrease) in cash and cash equivalents			258,258			(4,283,622	)		(1,096,541	)
Cash and cash equivalents, beginning of the year			489,150			4,772,772			5,869,313
Cash and cash equivalents, end of the year	3	$	747,408		$	489,150		$	4,772,772
Supplementary cash flow information:			–			–			–
Other non-cash investing and financing activities:
Issuance of the Company's equity instruments as loan bonus	8	$	322,143		$	187,500		$	–

The accompanying notes are an integral part of these financial statements.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

1. NATURE OF OPERATIONS AND GOING CONCERN

Amarc Resources Ltd. (the "Company" or "Amarc") is incorporated under the laws of the province of British Columbia, and its principal business activity is the acquisition and exploration of mineral properties. Its principal mineral property interests are located in British Columbia ("BC"). The address of the Company's corporate office is 15th Floor, 1040 West Georgia Street, Vancouver, BC, Canada V6E 4H1.

The Company is in the process of exploring its mineral property interests and has not yet determined whether its mineral property interests contain economically recoverable mineral reserves. The Company's continuing operations are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to continue the exploration and development of its mineral property interests and to obtain the permits necessary to mine, and on future profitable production or proceeds from the disposition of its mineral property interests.

These financial statements (the “Financial Statements”) have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As at March 31, 2016, the Company had cash and cash equivalents of $747,408, a working capital deficit, and a shareholders’ deficiency.

During the year ended March 31, 2016, the Company received $3,000,000 from Thompson Creek Metals Company Inc. (“Thompson Creek”) under the IKE Option Agreement (note 6(a)) and $500,000 from a director of the Company as a loan (note 8). Additionally, after the reporting period and before these Financial Statements were authorized for issuance, the Company received approximately $2,500,000 from Thompson Creek under the option agreement.

The Company will need to seek additional financing to meet its exploration and development objectives. The Company has a reasonable expectation that additional funds will be available when necessary to meet ongoing exploration and development costs. However, there can be no assurance that the Company will continue to be able to obtain additional financial resources or will achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, the Company will be required to re-evaluate its planned expenditures until additional funds can be raised through financing activities. These factors indicate the existence of a material uncertainty that raises significant doubt about the Company’s ability to continue as a going concern.

These Financial Statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these Financial Statements are described below. These policies have been consistently applied for all years presented, unless otherwise stated.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

(a) Statement of compliance

These Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC"), effective for the Company's reporting year ended March 31, 2016.

The Board of Directors of the Company authorized these Financial Statements on July 22, 2016 for issuance.

(b) Basis of presentation

These Financial Statements have been prepared on a historical cost basis, except for financial instruments classified as available-for-sale which are stated at fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting, except for cash flow information.

Certain comparative amounts have been reclassified to conform to the presentation adopted in the current year.

(c) Significant accounting estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The impact of such estimates is pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Changes in the subjective inputs and assumptions can materially affect fair value estimates. The following estimates and judgements have been used in these Financial Statements:

• assessment of the Company's ability to continue as a going concern;

• the determination of categories of financial assets and financial liabilities; and

• the carrying value and recoverability of the Company's marketable securities.

(d) Foreign currency

The functional and presentational currency of the Company is the Canadian Dollar. Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on dates of transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated. Gains and losses arising on translation are included in profit or loss for the year.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

(e) Financial Instruments

Financial assets and liabilities are recognized when the Company becomes party to the contracts that give rise to them. The Company determines the classification of its financial assets and liabilities at initial recognition and, where allowed and appropriate, re-evaluates such classification at each financial year end. The Company does not have any derivative financial instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, upon initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Non-derivative financial assets

The Company's non-derivative financial assets comprise of the following:

(i)	Loans and receivables
	Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses. Loans and receivables comprise of cash and cash equivalents, amounts receivable and other assets, and restricted cash.
	Cash and cash equivalents
	Cash and cash equivalents in the statement of financial position is comprised of cash and highly liquid investments held at major financial institutions, having maturity dates of three months or less from the date of purchase, which are readily convertible into known amounts of cash. The Company's cash and cash equivalents are invested in business and savings accounts which are available on demand by the Company for its programs and as such, are subject to an insignificant risk of change in value.

(ii)	Available-for-sale ("AFS") financial assets
	The Company's investments in marketable securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on AFS monetary items, are recognized in other comprehensive income or loss. When an investment is derecognized, the cumulative gain or loss in the investment revaluation reserve is transferred to profit or loss.
	The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate prevailing at the end of the reporting period. Changes in the fair value of AFS equity investments are recognized directly in equity.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Marketable securities are classified as AFS financial assets.

Non-derivative financial liabilities

The Company classifies its non-derivative financial liabilities into the following category:

(i)	Financial liabilities measured at amortized cost
	Such financial liabilities are recognized initially at fair value net of any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.
	Financial liabilities measured at amortized cost comprise of accounts payable and accrued liabilities, balance due to a related party, and loan payable to director.

Impairment of financial assets

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income or loss are reclassified to profit or loss in the period. Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For shares classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

For all other financial assets objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial re-organization.

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of AFS equity securities, impairment losses previously recognized through profit or loss are not reversed through profit or loss. Any increase in fair value of AFS equity securities subsequent to an impairment loss is recognized directly in equity.

(f)	Exploration and evaluation expenditures
	Exploration and evaluation costs are costs incurred to discover mineral resources, and to assess the technical feasibility and commercial viability of the mineral resources found.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Exploration and evaluation expenditures include:

_• the costs of acquiring licenses;

_• costs associated with exploration and evaluation activity; and

_• the acquisition costs of exploration and evaluation assets, including mineral properties.

Exploration and evaluation expenditures until the technical feasibility and commercial viability of extracting a mineral resource has been determined, and a positive decision to proceed to development has been made, are generally expensed as incurred. However, if management concludes that future economic benefits are more likely than not to be realized, the costs of property, plant and equipment for use in exploration and evaluation of mineral resources are capitalized.

Costs incurred before the Company has obtained the legal rights to explore an area are expensed. Costs incurred after the technical feasibility and commercial viability of extracting a mineral resource has been determined and a positive decision to proceed to development has been made are considered development costs and are capitalized.

Costs applicable to established property interests where no further work is planned by the Company may, for presentation purposes only, be carried at nominal amounts.

(g)	Equipment
	Equipment is carried at cost, less accumulated depreciation and accumulated impairment losses.
	The cost of equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
	Depreciation is provided at rates calculated to expense the cost of equipment, less its estimated residual value, using the declining balance method at various rates ranging from 20% to 30% per annum.
	An item of equipment is derecognized upon disposal or when no material future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in profit or loss.
	Where an item of equipment consists of major components with different useful lives, the components are accounted for as separate items of equipment. Expenditures incurred to replace a component of an item of equipment that is accounted for separately, including major inspection and overhaul expenditures, are capitalized.
	Residual values and estimated useful lives are reviewed at least annually.
	As at March 31, 2016, all equipment had been fully depreciated. The Company did not purchase any equipment during the year ended March 31, 2016.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

(h)	Share capital
	Common shares are classified as equity. Transaction costs directly attributable to the issuance of common shares and share purchase options are recognized as a deduction from equity, net of any tax effects.
	When the Company issues common shares for consideration other than cash, the transaction is measured at fair value based on the quoted market price of the Company’s common shares on the date of issuance.
(i)	Loss per share
	Loss per share is computed by dividing losses attributable to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share is determined by adjusting the losses attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares, such as options granted to employees. The dilutive effect of options assumes that the proceeds to be received on the exercise of share purchase options are applied to repurchase common shares at the average market price for the reporting period. Share purchase options are included in the calculation of dilutive earnings per share only to the extent that the market price of the common shares exceeds the exercise price of the share purchase options.
	The effect of anti–dilutive factors is not considered when computing diluted loss per share.
(j)	Share–based payments
	The share purchase option plan allows Company employees and consultants to acquire shares of the Company. The fair value of share purchase options granted is recognized as an employee or consultant expense with a corresponding increase in share-based payments reserve in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee.
	For employees, fair value is measured at the grant date and each tranche is recognized on a straight-line basis over the period during which the share purchase options vest. The fair value of the share purchase options granted is measured using the Black–Scholes option pricing model taking into account the terms and conditions upon which the share purchase options were granted. At the end of each financial reporting period, the amount recognized as an expense is adjusted to reflect the actual number of share purchase options that are expected to vest.
	Share–based payment transactions with non-employees are measured at the fair value of the goods or services received. However, if the fair value cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instruments granted at the date the entity obtains the goods or the counterparty renders the service.
(k)	Income taxes
	Income tax on the profit or loss for the years presented comprises of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for:

• goodwill not deductible for tax purposes;

• the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and

• differences relating to investments in subsidiaries, associates, and joint ventures to the extent that they will probably not reverse in the foreseeable future.

The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the financial position reporting date applicable to the period of expected realization or settlement.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

(l)	Restoration, rehabilitation, and environmental obligations
	An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration or development of a mineral property interest. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized at the start of each project to the carrying amount of the asset, along with a corresponding liability at the time the obligation to incur such costs arises. The timing of the actual rehabilitation expenditure is dependent on a number of factors such as the life and nature of the project or asset, the conditions imposed by the relevant permits and, when applicable, the jurisdiction in which the project or asset is located.
	Discount rates using a pre–tax rate that reflects the time value of money are used to calculate the net present value, where applicable. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either the unit–of–production or the straight-line method. The corresponding liability is progressively increased as the effect of discounting unwinds, creating an expense recognized in profit or loss.
	The operations of the Company have been, and may in the future be, affected from time to time in varying degrees by changes in environmental regulations, including those for site restoration costs.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Both the likelihood of new regulations and their overall effect upon the Company are not predictable.

The Company has no material restoration, rehabilitation and environmental obligations as at March 31, 2016.

(m)	Operating segments
	The Company is operating in a single reportable segment – the acquisition, exploration and development of mineral properties. All assets are held in Canada.
(n)	Government assistance
	When the Company is entitled to receive METC and other government grants, this government assistance is recognized as a cost recovery when there is reasonable assurance of recovery.
(o)	Accounting standards, interpretations and amendments to existing standards
	Accounting standards issued but not yet effective
	Effective for annual periods beginning on or after January 1, 2016:

• Amendments to IAS 1, Presentation of Financial Statements

• Amendments to IAS 16, Property, Plant and Equipment

• Amendments to IAS 27, Separate Financial Statements

• Amendments to IAS 28, Investments in Associates

• Amendments to IAS 38, Intangible Assets

• Amendments to IFRS 10, Consolidated Financial Statements

• Amendments to IFRS 11, Joint Arrangements

• Annual improvements to IFRS 2012 – 2014 Cycle ("AIP 2012-2014")

Effective for annual periods beginning on or after January 1, 2018:

• IFRS 9, Financial Instruments

• IFRS 15, Revenue from Contracts with Customers

Effective for annual periods beginning on or after January 1, 2019:

• IFRS 16, Leases

The Company has not early adopted these new standards or amendments to existing standards and does not expect the impact of these standards on the Company's financial statements to be material.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

3. CASH AND CASH EQUIVALENTS

The Company's cash and cash equivalents are invested in business and savings accounts which are available on demand by the Company.

4. RESTRICTED CASH

Restricted cash represents guaranteed investment certificates held in support of exploration permits. The amounts are refundable subject to the consent of regulatory authorities upon the completion of any required reclamation work on the related projects.

5. AMOUNTS RECEIVABLE AND OTHER ASSETS

		March 31,		March 31,
		2016		2015
Current
Value added taxes refundable	$	15,991	$	30,426
Prepaid insurance		–		61,464
British Columbia Mineral Exploration Tax Credits (BC-METC)		–		880,000
Other receivable (note 6(a))		101,415		–
Total current	$	117,406	$	971,890

6. EXPLORATION AND EVALUATION EXPENSES AND COST RECOVERIES

(a)	Fiscal Year Ending March 31, 2016
	During the year ended March 31, 2016, the Company’s mineral exploration and evaluation activities were primarily focused on its IKE Project located approximately 45 kilometres northwest of BC’s historical mining communities of Gold Bridge and Bralorne and is comprised of the IKE and the Granite, Juno and Galore District Properties (collectively the “IKE Project”). At March 31, 2016, subject to certain third party royalty interests, the Company had a 100% interest in the IKE (which was acquired under an option agreement (note 6(b)), Granite and Juno properties, and had the right to acquire a 70% interest in the Galore property; by way of a new agreement negotiated after the reporting period, the Company can acquire a 100% interest in the Galore property.
	Cost recoveries
	In September 2015 the Company announced that it has entered into an agreement (the "IKE Option Agreement") with Thompson Creek Metals Company Inc. (“Thompson Creek”) pursuant to which Thompson Creek may acquire, through a staged investment process within five years, a 30% ownership interest (“Stage 1 Option”) in mineral claims and crown grants covering the IKE copper- molybdenum-silver porphyry deposit and the surrounding district. Under the terms of the IKE Option Agreement, Thompson Creek also has an option to acquire an additional 20% interest in the IKE Project, subject to certain conditions, including the completion of a Feasibility Study.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Under the terms of the IKE Option Agreement, Thompson Creek can earn an initial 30% interest in the Project under a Stage 1 Option by funding, via the Company in its capacity as project operator, $15 million of expenditures before December 31, 2019 ($3.0 million received). In addition to the funds received from Thompson Creek during the year, the Company incurred an additional $101,415 in exploration expenditures under the IKE Option Agreement that were funded by Thompson Creek after the reporting period; these additional expenditure were recorded in other receivable (note 5).

For each $5 million (the first $5 million of funding completed after the reporting period) of project expenditures funded, Thompson Creek will incrementally earn a 10% ownership interest. Stage 1 Option expenditures can be accelerated by Thompson Creek at its discretion. Amarc will remain as operator during the Stage 1 earn-in period.

(b)	Fiscal Year Ending March 31, 2015
	During the year ended March 31, 2015, the Company incurred sufficient mineral exploration and evaluation expenses to satisfy the minimum total expenditure requirement under a mineral property option agreement for the IKE property signed between the Company and Oxford Resources Inc. (“Oxford”) in December 2013, when Oxford’s interest in the IKE property was represented by an underlying option agreement between Oxford and two private third parties. In July 2014, Oxford assigned its rights in the underlying option agreement to Amarc for a cash consideration of $40,000.
	In June 2015, the Company satisfied all other earn-in conditions of the underlying options agreement, including issuance of common shares (note 9(b)) to the underlying optioners.
(c)	Fiscal Year Ending March 31, 2014
	During the year ended March 31, 2014, the Company recognized a gain of $284,717 upon termination of Galaxie joint venture, as the Company was released from all of its obligations under the terminated joint venture agreement. During the year ended March 31, 2014 and before the termination of the joint venture, the Company paid $ $43,136 for its proportionate share of payments due on the joint venture’s debenture.

7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		March 31,		March 31,
		2016		2015
Accounts payable	$	20,497	$	11,115
Accrued liabilities		1,860		55,184
Total	$	22,357	$	66,299

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

8. DIRECTOR’S LOANS

Summary
Balance, April 1, 2014 and 2013	$	–
Loan advanced(i)		1,000,000
Balance, March 31, 2015		1,000,000
Net amount advanced during the year(ii)		500,000
Deferred financing cost(ii)		(322,143	)
Amortisation of deferred financing cost during the year		56,992
Balance, March 31, 2016	$	1,234,849

Unsecured loans payable to a director		March 31,		March 31,
		2016		2015
Director’s Loan – current(i)	$	1,000,000	$	1,000,000
Director’s Loan – non-current(ii)		234,849		–
Total loans payable to director	$	1,234,849	$	1,000,000

(i)

This loan, when originally advanced in November 2014, was subject to interest at a rate of prime plus 2% per annum and had a due date of November 2015, which was extended for two additional terms of six months each, first to May 2016 for a 7% per annum fixed interest rate and then to November 2016 for a 9% per annum fixed interest rate for the additional terms. Pursuant to this loan, during the year ended March 31, 2015, the Company issued 2,500,000 of its common shares to the lender with the fair value of $187,500, determined with reference to the quoted market price of the shares on the date of issuance.

(ii)

This loan bears interest at 7% per annum and matures in September 2017. Pursuant to this loan, during the year ended March 31, 2016, the Company issued 5,555,555 share purchase warrants to the lender with the fair value of $322,143, determined using the Black Scholes option pricing model and based on the following assumptions: risk-free rate of 0.51%; expected volatility of 130%; expected life of 2 year; share price of Cdn$0.09 and dividend yield of nil.

Finance expenses – director’s loan		Year ended March 31,
		2016		2015		2014
Interest	$	82,614	$	16,302	$	–
Amortization of deferred finance cost		56,992		187,500		–
Total	$	139,606	$	203,802	$	–

9. CAPITAL AND RESERVES

(a)	Authorized share capital
	The Company's authorized share capital consists of an unlimited number of common shares without par value and an unlimited number of preferred shares. All issued common shares are fully paid. No preferred shares have been issued.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

(b)	Issuance of common shares
	Pursuant to a mineral property agreement in respect of the IKE property (note 6), the Company issued 100,000 common shares with an estimated fair value of $12,500 during the year ended March 31, 2016 (year ended March 31, 2015 – 100,000 common shares issued with an estimated fair value of $6,500; year ended March 31, 2015 – 100,000 common shares issued with an estimated fair value of $5,000).
	During the year ended March 31, 2015, the Company issued 2,500,000 of its common shares as a loan bonus (note 8).
(c)	Share purchase option compensation plan
	The Company has a share purchase option compensation plan that allows it to grant up to 10% of the issued and outstanding shares of the Company at any one time, subject to regulatory terms and approval, to its directors, employees, officers, consultants, and service providers. The vesting schedule is determined by the Board of Directors, but share purchase options typically vest over two years. The exercise price of each option may be set equal to or greater than the closing market price of the common shares on the TSX Venture Exchange on the day prior to the date of the grant of the option, less any allowable discounts. Options can have a maximum term of ten years and typically terminate 90 days following the termination of the optionee's employment.
	The following table summarizes the changes in the Company's share purchase options:

Share purchase options (exercise price – $0.32)	Year ended March 31,
	2016	2015		2014
Outstanding – beginning of year	3,051,300	5,155,900		5,438,600
Forfeited	–	(32,100	)	(282,700	)
Expired	–	(2,072,500	)	–
Outstanding – end of year	3,051,300	3,051,300		5,155,900
Exercisable – end of year	3,051,300	3,051,300		5,155,900

Awards typically vest in several tranches ranging from 6 months to 18 months.

As at March 31, 2016, the outstanding options had remaining contractual life of 0.5 years (March 31, 2015 – 1.5 years).

(d)	Share Purchase Warrants
	At March 31, 2016, there were 5,555,555 outstanding share purchase warrants of the Company; these warrants were issued as a loan bonus (note 8) and are exercisable at a price of $0.09 per warrant on or before September 24, 2017. No share purchase warrants were issued during the year ended March 31, 2015 and March 31, 2014.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

10. RELATED PARTY TRANSACTIONS

(a)	Transactions with key management personnel
	Key management personnel (“KMP”) are those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly, and by definition include all directors of the Company.
	Transactions with key management personnel were as follows:

		Year ended March 31,
		2016		2015		2014
Directors fees paid directly by the Company	$	35,000	$	57,000	$	65,000
Directors fees paid to HDSI		187,000		212,000		315,000
Share-based payments		–		–		51,000
Total	$	222,000	$	269,000	$	431,000

The Company has received loans from a director of the Company (note 8).

(b)	Balances and transactions with related entities
	Pursuant to a management agreement between the Company and HDSI, the Company receives technical, geological, corporate communications, regulatory compliance, and administrative and management services from HDSI. HDSI also incurs third party costs on behalf of the Company.

		March 31,		March 31,
		2016		2015
Balance due to HDSI	$	180,476	$	212,642

The following is a summary of transactions with related entities that occurred during the reporting period:

		Year ended March 31,
Transactions with related entities		2016		2015		2015
Services received from HDSI
HDSI employee time charges, based on annually set rates	$	1,389,000	$	2,099,000	$	1,151,000
Directors fees		187,000		212,000		315,000
Information technology services and maintenance fees		111,000		153,000		140,000
Total,	$	1,687,000	$	2,464,000	$	1,606,000
Reimbursement of third party expenses to HDSI	$	73,000	$	76,000	$	62,000

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

11. INCOME TAXES

(a)	Provision for current tax
	No provision has been made for current income taxes, as the Company has no taxable income.
(b)	Provision for deferred tax
	As future taxable profits of the Company are uncertain, no deferred tax asset has been recognized. As at March 31, 2016, the Company had unused non-capital loss carry forwards of approximately $14.4 million (March 31, 2015 – $13.3 million; March 31, 2014 – $11.1 million) in Canada.
	As at March 31, 2016, the Company had resource tax pools of approximately $24.6 million (March 31, 2015 – $24.5 million; March 31, 2014 – $21.8 million) available in Canada, which may be carried forward and utilized to offset future taxes related to certain resource income.

Reconciliation of effective tax rate		March 31,			March 31,			March 31,
		2016			2015			2014
Loss for the year	$	(1,118,779	)	$	(4,884,024	)	$	(2,154,805	)
Total income tax expense		–			–			–
Loss excluding income tax	$	(1,118,779	)	$	(4,884,024	)	$	(2,154,805	)
Income tax recovery using the Company's tax rate		(291,000	)		(1,261,000	)		(560,000	)
Non–deductible expenses and other		3,000			(207,000	)		291,000
Change in deferred tax rates		–			–			(330,000	)
Temporary difference booked to reserve		(4,000	)		(2,000	)		2,000
Deferred income tax assets not recognized		292,000			1,470,000			597,000
	$	–		$	–		$	–

The Company's statutory tax rate was 26% (2015 – 26%; 2014 – 26%) and its effective tax rate is nil (2015 – nil; 2014 – nil).

As at March 31, 2016, the Company had the following deductible temporary differences for which no deferred tax asset was recognized:

		Tax losses		Tax losses		Resource
Expiry		(capital)		(non-capital)		pools		Other
Within one year	$	–	$	–	$	–	$	–
One to five years		–		–		–		370,000
After five years		–		14,405,000		–		1,011,000
No expiry date		1,388,000		–		24,578,000		80,000
Total	$	1,388,000	$	14,405,000	$	24,578,000	$	1,461,000

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

12. SUPPLEMENTARY INFORMATION TO STATEMENT OF LOSS

(a)	Employee salaries and benefits
	The employees’ salaries and benefits included in exploration and evaluation expenses and administration expenses are as follows:

		Year ended March 31,
		2016		2015		2014
Exploration and evaluation expenses	$	748,000	$	1,296,000	$	731,000
General and administration expenses		882,000		1,066,000		884,000
Total	$	1,630,000	$	2,372,000	$	1,615,000

(b)	Office and administration expenses
	Office and administration expenses include the following:

		Year ended March 31,
		2016		2015		2014
Salaries and benefits	$	845,695	$	1,019,118	$	833,735
Insurance		146,802		105,463		98,668
Data processing and retention		111,743		155,634		141,580
Other office expenses		8,382		13,553		30,955
Total	$	1,112,622	$	1,293,768	$	1,104,938

13. FINANCIAL RISK MANAGEMENT

(a)	Capital management objectives
	The Company's primary objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns for shareholders, and to have sufficient liquidity available to fund ongoing expenditures and suitable business opportunities as they arise.
	The Company considers the components of shareholders' equity, as well as its cash and cash equivalents as capital. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue equity, sell assets, or return capital to shareholders as well as issue or repay debt.
	The Company's investment policy is to invest its cash in highly liquid short–term interest–bearing investments having maturity dates of three months or less from the date of acquisition and that are readily convertible to known amounts of cash.
	There were no changes to the Company's approach to capital management during the year ended March 31, 2016.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

The Company is not subject to any externally imposed equity requirements.

(b)	Carrying amounts and fair values of financial instruments
	The Company's marketable securities are carried at fair value, based on quoted prices in active markets.
	As at March 31, 2016 and 2015, the carrying values of the Company's financial assets and financial liabilities approximate their fair values.
(c)	Financial instrument risk exposure and risk management
	The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented treasury policies, counterparty limits, controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:
	Credit risk
	Credit risk is the risk of potential loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets including cash and cash equivalents, and amounts receivable and other assets. The carrying value of these financial assets represent the maximum exposure to credit risk.
	The Company limits the exposure to credit risk by only investing its cash and cash equivalents with high-credit quality financial institutions in business and savings accounts, which are available on demand by the Company for its programs.
	Liquidity risk
	Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The Company ensures that there is sufficient cash in order to meet its short-term business requirements, after taking into account the Company's holdings of cash and cash equivalents.
	At March 31, 2016, the Company’s current liabilities, including the current portion of director’s loans, exceed its cash balance. After the reporting period the Company arranged to extend the maturity date of the director’s loan (note 8) classified as a current liability at March 31, 2016. The Company has sufficient cash and cash equivalents to meet its commitments associated with its financial liabilities in the near term, other than the amounts payable to related parties.
	Interest rate risk
	The Company is subject to interest rate risk with respect to its investments in cash and cash equivalents. The Company’s policy is to invest cash at variable rates of interest and cash reserves are to be maintained in cash and cash equivalents in order to maintain liquidity, while achieving a satisfactory return for shareholders. Fluctuations in interest rates when cash and cash equivalents mature impact interest income earned. As at March 31, 2016 and 2015, the Company’s exposure to interest rate risk was nominal.

Amarc Resources Ltd.

Notes to the Financial Statements

For the years ended March 31, 2016, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Price risk

Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. The Company is subject to price risk in respect of its investments in marketable securities.

The objective of price risk management is to eliminate or limit emerging risk exposures within acceptable parameters, while optimizing return and meeting strategic goals.

As at March 31, 2016 and 2015, the Company’s exposure to price risk was not significant to relation to these Financial Statements.