Amaroq Minerals : Unaudited Condensed Interim Consolidated Financial Statements For the three months ended March 31, 2024

Amaroq Minerals Ltd.

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2024

The attached financial statements have been prepared by Management of

Amaroq Minerals Ltd. and have not been reviewed by the auditor

Amaroq Minerals Ltd.

Consolidated Statements of Financial Position

(Unaudited, in Canadian Dollars)

		As at	As at
	Notes	March 31,	December 31,
	2024	2023
ASSETS		$	$
Current assets
Cash		65,086,851	21,014,633
Due from a related party	3,12	-	3,521,938
Sales tax receivable		144,108	69,756
Prepaid expenses and others		17,469,706	18,681,568
Inventory		2,880,956	680,358
Total current assets		85,581,621	43,968,253
Non-current assets
Deposit		27,944	27,944
Escrow account for environmental rehabilitation		5,697,903	598,939
Financial Asset - Related Party	3,12	4,200,379	-
Investment in equity accounted joint arrangement	3	22,846,379	23,492,811
Mineral properties	4	48,683	48,821
Right of use asset	7	715,898	574,856
Capital assets	5	60,768,906	38,241,559
Total non-current assets		94,306,092	62,984,930
TOTAL ASSETS		179,887,713	106,953,183
LIABILITIES AND EQUITY
Current liabilities			6,273,979
Accounts payable and accrued liabilities		7,258,359
Convertible notes	6	41,551,341	35,743,127
Lease liabilities - current portion	7	112,787	80,206
Total current liabilities		48,922,487	42,097,312
Non-current liabilities	7
Lease liabilities	681,723	577,234
Total non-current liabilities		681,723	577,234
Total liabilities		49,604,210	42,674,546
Equity
Capital stock		206,698,546	132,117,971
Contributed surplus		7,367,374	6,725,568
Accumulated other comprehensive loss		(36,772)	(36,772)
Deficit		(83,745,645)	(74,528,130)
Total equity		130,283,503	64,278,637
TOTAL LIABILITIES AND EQUITY		179,887,713	106,953,183

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Amaroq Minerals Ltd.

Consolidated Statements of Comprehensive Loss

(Unaudited, in Canadian Dollars)

		Three months
		ended March 31,
	Notes	2024	2023
		$	$
Expenses	9
Exploration and evaluation expenses	875,213	1,181,653
General and administrative	10	3,959,226	2,577,035
Loss on disposal of capital assets		-	37,791
Foreign exchange loss (gain)		79,509	(197,004)
Operating loss		4,913,948	3,599,475
Other expenses (income)
Interest income		(15,326)	(231,319)
Gardaq management income and allocated cost	3	(636,326)	-
Share of net losses of joint arrangement	646,432	-
Unrealized loss on derivative liability	6	4,300,213	-
Finance costs	11	8,574	8,737
Net loss and comprehensive loss		(9,217,515)	(3,376,893)

Weighted average number of common shares outstanding - basic
and diluted	290,574,484	263,203,347
Basic and diluted loss per common share	(0.03)	(0.01)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Amaroq Minerals Ltd.

Consolidated Statements of Changes in Equity

(Unaudited, in Canadian Dollars)

		Number of			Accumulated
		common	Capital	Contributed	other		Total
		shares	comprehensive
		outstanding	Stock	surplus	loss	Deficit	Equity
			$	$	$	$	$
Balance at January 1, 2023		263,073,022	131,708,387	5,250,865	(36,772)	(73,694,617)	63,227,863
Net loss and comprehensive loss		-	-	-	-	(3,376,893)	(3,376,893)
Options exercised		208,275	128,758	(150,000)	-	-	(21,242)
Stock-based compensation	8	-	-	451,014	-	-	451,014
Balance at March 31, 2023		263,281,297	131,837,145	5,551,879	(36,772)	(77,071,510)	60,280,742
Balance at January 1, 2024		263,670,051	132,117,971	6,725,568	(36,772)	(74,528,130)	64,278,637
Net loss and comprehensive loss		-	-	-	-	(9,217,515)	(9,217,515)
Share issuance under a fundraising		62,724,758	75,574,600	-	-	-	75,574,600
Share issuance costs		-	(1,047,098)	-	-	-	(1,047,098)
Options exercised - net	8	60,637	53,073	(70,500)	-	-	(17,427)
Stock-based compensation	-	-	712,306	-	-	712,306
Balance at March 31, 2024		326,455,446	206,698,546	7,367,374	(36,772)	(83,745,645)	130,283,503

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Amaroq Minerals Ltd.

Consolidated Statements of Cash Flows

(Unaudited, in Canadian Dollars)

	Notes	Three months ended
	March 31,
		2024	2023
		$	$
Operating activities
Net loss for the period		(9,217,515)	(3,376,893)
Adjustments for:	5
Depreciation	172,763	180,008
Amortisation of ROU asset	7	19,997	19,777
Stock-based compensation	8	712,306	451,014
Unrealized loss on derivative liability	6	4,300,213	-
Loss on disposal of capital assets	5	-	37,791
Share of net losses of joint arrangement	3	646,432	-
Gardaq management income and allocated cost	3,12	(636,326)	8,737
Other expenses		-
Foreign exchange		(195,812)	(216,560)
Changes in non-cash working capital items:		(4,197,942)	(2,896,126)
Sales tax receivable		(74,352)	16,076
Prepaid expenses and others		(988,735)	(515,244)
Trade and other payables		955,992	(127,977)
		(107,095)	(627,145)
Cash flow used in operating activities		(4,305,037)	(3,523,271)
Investing activities
Transfer to escrow account for environmental rehabilitation	5	(5,066,194)	-
Construction in progress and acquisition of capital assets	(21,476,951)	-
Prepayment for acquisition of ROU asset		(5,825)	-
Cash flow used in investing activities		(26,548,970)	-
Financing activities
Share issuance		75,574,600
Share issuance costs	7	(1,047,098)
Principal repayment - lease liabilities	(18,145)	(26,474)
Cash flow from financing activities		74,509,357	(26,474)
Net change in cash before effects of exchange rate changes on cash		43,655,350	(3,549,745)
during the period
Effects of exchange rate changes on cash		416,868	196,583
Net change in cash during the period		44,072,218	(3,353,162)
Cash, beginning of period		21,014,633	50,137,569
Cash, end of period		65,086,851	46,784,407
Supplemental cash flow information
Borrowing costs capitalised to capital assets (note 5)		1,223,021	-
Interest received		15,327	231,319
ROU assets acquired through lease		155,214	-

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Amaroq Minerals Ltd.

Condensed Notes to the interim Consolidated Financial Statements

Three months ended March 31, 2024 and 2023

(Unaudited, in Canadian Dollars)

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION

Amaroq Minerals Ltd. (the "Corporation") was incorporated on February 22, 2017 under the Canada Business Corporations Act. The Corporation's head office is situated at 3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario, M5X 1A4, Canada. The Corporation operates in one industry segment, being the acquisition, exploration and development of mineral properties. It owns interests in properties located in Greenland. The Corporation's financial year ends on December 31. Since July 2017, the Corporation's shares are listed on the TSX Venture Exchange (the "TSX-V"), since July 2020, the Corporation's shares are also listed on the AIM market of the London Stock Exchange ("AIM") and from November 1, 2022, on Nasdaq First North Growth Market Iceland which were transferred on September 21, 2023 on Nasdaq Main Market Iceland ("Nasdaq") under the AMRQ ticker.

These unaudited condensed interim consolidated financial statements for the three months ended March 31, 2024 ("Financial Statements") were approved by the Board of Directors on May 14, 2024

1.1 Basis of presentation and consolidation

The Financial Statements include the accounts of the Corporation and those of its 100% owned subsidiary Nalunaq A/S, company incorporated under the Greenland Public Companies Act. The Financial Statements also include the Corporation's 51% equity pick-up of Gardaq A/S, a joint venture with GCAM LP (Note 3).

The Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") including International Accounting Standard ("IAS") 34, Interim Financial Reporting. The Financial Statements have been prepared under the historical cost convention.

The Financial Statements should be read in conjunction with the annual financial statements for the year ended December 31, 2023, which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies, methods of computation and presentation applied in these Financial Statements are consistent with those of the previous financial year ended December 31, 2023.

2. CRITICAL ACCOUNTING JUDGMENTS AND ASSUMPTIONS

The preparation of the Financial Statements requires Management to make judgments and form assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and reported amounts of expenses during the reporting period. On an ongoing basis, Management evaluates its judgments in relation to assets, liabilities and expenses. Management uses past experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments. Actual outcomes may differ from these estimates under different assumptions and conditions.

In preparing the Financial Statements, the significant judgements made by Management in applying the Corporation accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Corporation's audited annual financial statements for the year ended December 31, 2023.

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Amaroq Minerals Ltd.

Condensed Notes to the interim Consolidated Financial Statements

Three months ended March 31, 2024 and 2023

(Unaudited, in Canadian Dollars)

3. INVESTMENT IN AN ASSOCIATE OR JOINT VENTURE CORPORATION

		As at	As at
		March 31,	March 31,
		2024	2023
		$	$
Balance at beginning of period	23,492,811	-
Share of joint venture's net losses- for 3 months ended March 31	(646,432)	-
Balance at end of period	22,846,379	-
	Original Investment in Gardaq ApS	7,422	-
	Transfer of non-gold strategic minerals licences at cost	36,896	-
	Investment at conversion of Gardaq ApS to Gardaq A/S	55,344	-
	Gain on FV recognition of equity accounted investment in joint
	venture	31,285,536	-
	Investment retained at fair value- 51% share	31,385,198	-
	Share of joint venture's cumulative net losses	(8,538,819)	-
	Balance at end of period	22,846,379	-

The following tables summarize the unaudited financial information of Gardaq A/S as of March 31, 2024.

	As at
	March 31,
	2024
	$
Cash and cash equivalent	17,002,319
Prepaid expenses and other	815,896
Total current assets	17,818,215
Mineral property	92,240
Total Assets	17,910,455
Accounts payable and accrued liabilities	205,922
Financial Liability - Related Party	4,200,379
Capital stock	30,246,937
Deficit	(16,742,783)
Total equity	13,504,154
Total liabilities and equity	17,910,455
	As at
	March 31,
	2024
	$
Exploration and Evaluation expenses	842,840
Interest expense (income)	(2,928)
Foreign exchange loss (gain)	(177,623)
Operating loss	662,289
Other expenses (income)	605,225
Net loss and comprehensive loss	1,267,514

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Amaroq Minerals Ltd.

Condensed Notes to the interim Consolidated Financial Statements

Three months ended March 31, 2024 and 2023

(Unaudited, in Canadian Dollars)

3. INVESTMENT IN AN ASSOCIATE OR JOINT VENTURE CORPORATION (CONT'd)

3.1 Financial Asset - Related Party

Subject to a Subscription and Shareholder Agreement dated 13 April 2023, the Corporation undertakes to subscribe to two ordinary shares in Gardaq (the "Amaroq shares") at a subscription price of GBP 5,000,000 no later than 10 business days after the third anniversary of the completion of the subscription agreement.

Amaroq's subscription will be completed by the conversion of Gardaq's related party balance into equity shares. Gardaq's related party payable balance consists of overhead, management, general and administrative expenses payable to the Corporation. In the event that the related party payable balance is less than GBP 5,000,000, the Corporation shall, no later than 10 business days after the third anniversary of Completion:

1. subscribe to one Amaroq share by conversion of the amount payable to the Corporation,
2. subscribe to one Amaroq share at a subscription price equal to GBP 5,000,000 less the amount payable to the Corporation

In the event that the amount payable to the Corporation exceeds GBP 5,000,000, the Corporation shall subscribe to the Amaroq shares at a subscription price equal to GBP 5,000,000 by conversion of GBP 5,000,000 of the amount due from Gardaq. Gardaq shall not be liable to repay any of the balance payable to the Corporation that exceeds GBP 5,000,000 (equivalent to CAD 8,557,000 as at 31 March 2024). See note 12.1.

4. MINERAL PROPERTIES

	As at		As at
	December 31,	Transfer	March 31,
	2023	2024
	$	$	$
Nalunaq - Au	1	-	1
Tartoq - Au	18,431	-	18,431
Vagar - Au	11,103	-	11,103
Nuna Nutaaq - Au	6,076	-	6,076
Anoritooq - Au	6,389	-	6,389
Siku - Au	6,821	(138)	6,683
Naalagaaffiup Portornga - Strategic Minerals	-	-	-
Saarloq - Strategic Minerals	-	-	-
Sava - Strategic Minerals	-	-	-
Kobberminebugt - Strategic Minerals	-	-	-
Stendalen - Strategic Minerals	-	-	-
North Sava - Strategic Minerals	-	-	-
Total mineral properties	48,821	-	48,683

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Amaroq Minerals Ltd.

Condensed Notes to the interim Consolidated Financial Statements

Three months ended March 31, 2024 and 2023

(Unaudited, in Canadian Dollars)

4.	MINERAL PROPERTIES (CONT'd)
						As at		As at
						December 31,	Additions	March 31,
						2022	2023
						$	$	$
		Nalunaq - Au			1	-	1
		Tartoq - Au			18,431	-	18,431
		Vagar - Au			11,103	-	11,103
		Nuna Nutaaq - Au			6,076	-	6,076
		Anoritooq - Au			6,389	-	6,389
		Siku - Au			6,821	-	6,821
		Naalagaaffiup Portornga - Strategic Minerals	6,334	-	6,334
		Saarloq - Strategic Minerals			7,348	-	7,348
		Sava - Strategic Minerals			6,562	-	6,562
		Kobberminebugt - Strategic Minerals		6,840	-	6,840
		Stendalen - Strategic Minerals		4,837	-	4,837
		North Sava - Strategic Minerals		4,837	-	4,837
		Total mineral properties			85,579	-	85,579
5.	CAPITAL ASSETS
				Field
				equipment	Vehicles and	Equipment	Construc-
				and
				infrastruc-	rolling stock	(including	tion In
				ture	$	software)	Progress	Total
				$	$	$	$
			Three months ended
			March 31, 2024
			Opening net book value	1,537,379	3,312,118	108,822	33,283,240	38,241,559
			Additions	-	-	138	22,699,972	22,700,110
			Disposals	-	-	-	-	-
			Depreciation	(49,594)	(107,571)	(15,598)	-	(172,763)
			Closing net book	1,487,785	3,204,547	93,362	55,983,212	60,768,906
			value
				Field
				equipment	Vehicles and	Equipment	Construc-
				and
				infrastruc-	rolling stock	(including	tion In
				ture	$	software)	Progress	Total
				$	$	$	$
			As at March 31, 2024
			Cost	2,351,041	4,466,971	232,369	55,983,212	63,033,593
			Accumulated	(863,256)	(1,262,424)	(139,007)	-	(2,264,687)
			depreciation
			Closing net book	1,487,785	3,204,547	93,362	55,983,212	60,768,906
			value
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Amaroq Minerals Ltd.

Condensed Notes to the interim Consolidated Financial Statements

Three months ended March 31, 2024 and 2023

(Unaudited, in Canadian Dollars)

5. CAPITAL ASSETS (CONT'd)

Depreciation of capital assets related to exploration and evaluation properties is being recorded in exploration and evaluation expenses in the consolidated statement of comprehensive loss, under depreciation. Depreciation of $157,262 ($164,011 for the three months ended March 31, 2023) was expensed as exploration and evaluation expenses during the three months ended March 31, 2024 and the remaining depreciation was capitalised to Construction in Progress.

As at March 31, 2024, the Corporation had capital commitments, of $88,948,607. These commitments relate to the development of Nalunaq Project, rehabilitation of the Nalunaq mine, construction of processing plant, purchases of mobile equipment and establishment of surface infrastructure.

During first three months of 2024 the Company capitalised borrowing costs of $1,223,021 to construction in progress, which are included in additions.

6. CONVERTIBLE NOTES

		Embedded
	Convertible notes	Derivatives at
	loan	FVTPL	Total
	$	$	$
Balance as at December 31, 2023	11,763,053	23,980,074	35,743,127
Accretion of discount	843,673	-	843,673
Accrued interest	379,348	-	379,348
Fair value change	-	4,300,213	4,300,213
Foreign exchange loss (gain)	284,980	-	284,980

Balance as at December 31, 2023	13,271,054	28,280,287	41,551,341
Non-current portion	-	-	-
Current portion	13,271,054	28,280,287	41,551,341

6.1 Revolving Credit Facility

A $25 million (US$18.5 million) Revolving Credit Facility ("RCF") provided by Landsbankinn hf. and Fossar Investment Bank, with a two-year term expiring on 1 September 2025 and priced at SOFR plus 950bps. Interest is capitalized and payable at the end of the term.

The credit facility is denominated in US Dollars and the SOFR interest rate is determined with reference to the CME Term SOFR Rates published by CME Group Inc. The Landsbankinn hf. and Fosar revolving credit facility carries (i) a commitment fee of 0.40% per annum calculated on the undrawn facility amount and (ii) an arrangement fee of 2.00% on the facility amount where 1.5% is to be paid on or before the closing date of the facility and 0.50% is to be paid on or before the first draw down. The facility is not convertible into any securities of the Corporation.

The facility will be secured by (i) a bank account pledge from the Corporation and Nalunaq A/S, (ii) share pledges over all current and future acquired shares in Nalunaq A/S and Gardaq A/S held by the Corporation pursuant to the terms of share pledge agreements, (iii) a proceeds loan assignment agreement, (iv) a pledge agreement in respect of owner's mortgage deeds and (v) a licence transfer agreement. The Corporation has not yet drawn on this facility.

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