Argo Gold : Year End December 31, 2023 Financial Statements

Argo Gold Inc.

Financial Statements

December 31, 2023 and 2022

(in Canadian dollars)

Independent Auditor's Report

To the Shareholders of Argo Gold Inc.:

Opinion

We have audited the financial statements of Argo Gold Inc. (the "Company"), which comprise the statement of financial position as at December 31, 2023, and the statements of loss and comprehensive loss, changes in shareholders' equity and cash flows for the year then ended, and notes to the financial statements, including material accounting policy information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the financial statements, which indicates that the Company incurred a net loss during the year ended December 31, 2023 and, as of that date, the Company had a working capital deficiency and an accumulated deficit. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

MNP LLP

2000, 112 - 4th Avenue SW, Calgary AB, T2P 0H3

1.877.500.0792 T: 403.263.3385 F: 403.269.8450

Impairment assessment for Oil and Gas assets

Key Audit Matter Description

The Company's oil and gas assets represent one of the most significant assets on its statement of financial position and represents 58% of total assets. Refer to Note 7 in the financial statements for details.

Management is required to assess for any indicators of impairment of these assets including an estimate of oil and gas reserves. The quantity of reserves is a significant estimate and includes an assessment of engineering data, projected future rates of production, commodity prices, regulatory changes, operating costs and sustaining capital expenditures. Based on analysis performed, management noted no indicators of impairment as at December 31, 2023.

Given the significance of the assets on the Company's statement of financial position and the significant management judgement involved in assessing for impairment indicators, we have identified this as a key audit matter.

Audit Response

We responded to this matter by performing audit procedures in relation to the impairment assessment for oil and gas assets. Our audit work in relation to this included, but was not restricted to, the following:

• We evaluated management's impairment assessment for each of the assets held. We assessed the considerations made of whether or not there were any indicators of impairment identified in accordance with IAS 36 - Impairment of Assets;
• We reviewed activity to assess whether there was evidence from technical work undertaken to date by management and third parties which would indicate potential impairment triggers;
• We reconciled net carrying value of oil and gas assets to the independent reserve report prepared by management's third-party expert; and
• We assessed the competence of management's expert and the reserve report by reviewing the available report to data obtained elsewhere during the course of the audit and third party publicly available information in order to benchmark the assumptions applied by the expert.

Other Matter

The financial statement for the year ended December 31, 2022 were audited by another auditor who expressed an unmodified opinion on those statements on May 1, 2023.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, 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.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Sergey Fesenko.

Calgary, Alberta

April 30, 2024

Chartered Professional Accountants

Statements of Financial Position As At December 31,

(Expressed in Canadian Dollars)	Notes		2023		2022
Assets
Current assets
Cash		$	74,889	$	7,104
HST receivable			2,190		32,596
Accounts receivable	4		159,321		-
Notes receivable	10		51,253		-
Prepaid expenses			101,090		36,540
Investments	13		-		78,270
Total current assets			388,743		154,510
Non-current assets
Oil and gas properties	7		1,740,203		-
Mineral properties	6		642,750		932,750
Equipment - office	8		3,633		4,904
Total Assets		$	2,775,329	$	1,092,164
Liabililties and Equity
Current liabilities
Accounts payable	4	$	493,610	$	401,927
Accrued liabilities			164,457		76,507
Loan	10		1,109,683		-
Total Current Liabilities			1,767,750		478,434
Long-Term Liabilities
Asset retirement obligation	14		58,452		-
Total Liabilities			1,826,202		478,434
Shareholders' Equity
Share capital	9(b)		15,561,812		14,946,412
Warrant reserve	9(c)		-		438,100
Deficit			(14,612,685)		(14,770,782)
Total Shareholders' Equity			949,127		613,730
Total Liabilities and Shareholders' Equity		$	2,775,329	$	1,092,164
Nature of operations and going concern	Note 1
Commitments and contingencies	Note 11
Approved by the Board of Directors and authorized on April 29, 2024
"Judy Baker"				"George Langdon"
Judy Baker				George Langdon
Director				Director

The accompanying notes form an integral part of these financial statements

Statements of Loss and Comprehensive Loss

For the year ended December 31,

(Expressed in Canadian Dollars)	Notes		2023		2022
Revenue	12	$	952,692	$	-
Expenses
Oil and gas operating expenses			174,070		-
Oil and gas depreciation and accretion	7, 10		111,685		-
Exploration and evaluation	6		71,775		128,697
Management fees	10		60,000		138,625
Consulting fees			(8,301)		186,963
Professional fees			156,064		205,659
Business development			44,074		233,552
Investor relations			58,632		101,006
General and administrative			66,251		155,597
Listing filing and regulatory fees			48,228		84,538
Depreciation - office equipment	8		3,947		3,360
Total Expenses			786,425		1,237,997
Profit (loss) before the undernoted			166,267		(1,237,997)
Bank charges			(1,454)		(1,483)
Part X11.6 taxes			-		(2,400)
Interest income (expense)			1,299		(307)
Interest expense - short-term loan	10		(137,485)
Realized (Loss) on impairment of mineral property			(290,000)		-
Realized (loss) gain on sale of investments	13		(18,630)		(3870)
Change in unrealzed (loss) on value of investments			-		(244,910)
Flow-through share premium recovery	12		-		43,750
Net loss and comprehensive loss for the year			($280,003)		(1,443,742)
Basic earnings per share			(0.00)		(0.02)
Weighted average number of shares outstanding - basic and fully diluted		72,335,581		65,985,581

The accompanying notes form an integral part of these financial statements

Statements of Cash Flows

For the years ended December 31,

(Expressed in Canadian Dollars)	Notes	2023		2022
Cash flows from operating activities
Net loss for the year		($280,003)		($1,447,217)
Adjustments not affecting cash:
Flow-through share premium recovery	11	-		(43,750)
Loss on sale of investment	13	18,630		3,870
Loss on impairment of mineral property		290,000		-
Depletion expense - oil wells	7	109,325		3,360
Depreciation expense - oil wells	7	822		-
Accreation expense - oil and gas	14	1,538		-
Accreation expense - short-term loan		44,388		-
Depreciation expense - office equiment		2,398		-
Change in unrealized loss on value
of investments	13	-		244,910
Operating cash flows before changes in		187,098		(1,238,827)
non-cash working capital
Changes in non-cash working capital
HST receivable		30,406		(9,933)
Accounts receivable and note receivable		(210,574)		-
Prepaid expenses		(64,550)		(1,962)
Accounts payable and accrued liabilities		179,633		443,027
Cash from (used in) operating activities		122,013		(807,695)
Cash flows from investing activities
Proceeds on sale of investments	13	59,640		450
Property, plant and equipment additions	7	(1,794,564)		(7,368)
Cash used in investing activities		(1,734,924)		(6,918)
Cash flows from financing activities
Short term loan	10	1,065,296		-
Cash from subscriptions	9	615,400		-
Cash from financing activities		1,680,696		-
Change in cash during the year		67,785		(814,613)
Cash, beginning of year		7,104		821,717
Cash, end of year	$	74,889	$	7,104

The accompanying notes form an integral part of these financial statements

Statements of Changes in Shareholders' Equity

For the years ended

		Share Capital			Reserves
		Number of						Stock
(Expressed in Canadian Dollars)	Note	Shares		Amount			Warrants	Options		Deficit		Total
Balance at December 31, 2021		65,985,581		14,946,412			1,006,229		-	(13,891,694)		2,060,947
Warrants - expired - December 22, 2022	9(c)(d)	-		-			(568,129)		-	568,129		-
Net loss for the year		-		-			-		-	(1,447,217)		(1,447,217)
Balance at December 31, 2022		65,985,581	$	14,946,412	$	438,100	$	-	(14,770,782)	$	613,730
Warrants - expired - February 5, 2023	9(c)(d)	-		-			(438,100)		-	438,100		-
Shares issued for cash - May 1, 2023	9(b)	3,650,000		365,000			-		-	-		365,000
Share issue costs - May 1, 2023	9(b)	-		(17,600)			-		-	-		(17,600)
Shares issued for cash - November 7, 2023	9(b)	2,700,000		270,000			-		-	-		270,000
Share issue costs - November 7, 2023	9(b)	-		(2,000)			-		-	-		(2,000)
Net loss for the year		-		-			-		-	(280,003)		(280,003)
Balance at December 31, 2023		72,335,581	$	15,561,812	$	-	$	-	($14,612,685)	$	949,127

The accompanying notes form an integral part of these financial statements

Notes to the Financial Statements

For the years ended December 31, 2023 and 2022 (Expressed in Canadian Dollars)

(Audited)

1. NATURE OF OPERATIONS AND GOING CONCERN

Argo Gold (the "Company" or "Argo Gold") was incorporated under the laws of Ontario on December 9, 1995. The Company is listed on the Canadian Stock Exchange ("CSE"), having the symbol ARQ. The Company is currently engaged in the acquisition, exploration, and development of mineral properties, and n the production, exploration and development resource properties in Western Canada. The address of the Company's corporate office and principal place of business is 25 Adelaide Street East, Suite 1400 Toronto, Ontario, M5C 3A1, Canada.

These financial statements have been prepared on a going concern basis, which contemplates that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern, and therefore be required to realize its assets and liquidate its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying financial statements. Such adjustments could be material. It is not possible to predict whether the Company will be able to raise adequate financing or to ultimately attain profitable levels of operations. Changes in future conditions could require material write downs of the carrying values.

The business of exploring for minerals and oil and gas involves a high degree of risk and there can be no assurance that the exploration programs will result in profitable operations. The Company is in the process of exploring oil and gas opportunities and its mineral properties and has not yet determined whether these properties contain mineral reserves that are economically recoverable. The recoverability of amounts shown for mineral properties, and the new acquired oil and gas property is dependent upon the establishment of a sufficient quantity of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development and upon future profitable production or proceeds from the disposition of these assets.

The Company has not realized a profit from operations and has incurred significant expenditures related to property exploration, resulting in a cumulative deficit of $14,612,685 as at December 31, 2023 (December 31, 2022 - $14,770,782). The recoverability of the carrying value of mineral properties, oil wells and the Company's continued existence is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively upon the Company's ability to dispose of its property interests on an advantageous basis. While management has been historically successful in raising the necessary capital, it cannot provide assurance that it will be successful in future financing activities or be able to execute its business strategy.

As at December 31, 2023, the Company had current assets of $388,743 (December 31, 2022 - $154,510) to cover current liabilities of $1,767,750 (December 31, 2022 - $478,434). These events and conditions indicate a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.