EnCore Energy : Q1 Mar 2024

Unaudited Condensed Interim Consolidated Financial Statements

For the three months ended

March 31, 2024

(In United States Dollars)

enCore Energy Corp.

Condensed Interim Consolidated Statements of Financial Position Unaudited - Prepared by Management

As at March 31, 2024 and December 31, 2023 (In USD unless otherwise noted)

		March 31,	December 31,
		2024	2023
	Note	$	$
Assets
Current assets
Cash		90,090,593	7,493,424
Receivables and prepaid expenses		3,430,001	931,170
Marketable securities	4	17,594,169	16,886,052
Inventory	3	12,794,412	9,077
		123,909,175	25,319,723
Non-current assets
Intangible assets		501,466	513,721
Property, plant, and equipment	5	16,277,181	14,969,860
Marketable securities	4	1,250,405	3,046,787
Mineral properties	7	271,105,464	267,209,138
Mining properties	8	3,720,346	5,301,820
Reclamation deposits	7	-	88,500
Right-of-use asset		387,466	443,645
Restricted cash		7,679,961	7,679,859
Total assets		424,831,464	324,573,053
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities		3,487,113	3,576,194
Uranium loan liability	6	20,282,012	-
Due to related parties	11	138,880	2,520,594
Lease liability - current		176,770	177,641
		24,084,775	6,274,429
Non-current liabilities
Asset retirement obligations	9	10,961,779	10,827,806
Convertible promissory note	10	-	19,239,167
Lease liability - non-current		240,026	295,147
Total liabilities		35,286,580	36,636,549
Shareholders' equity
Share capital	10	382,522,428	328,246,303
Equity portion of convertible promissory note	10	-	3,813,266
Contributed surplus	10	18,976,067	19,185,942
Accumulated other comprehensive income		4,617,590	7,944,347
Equity reserves		20,447,042	-
Non-controlling interests		39,475,915	-
Accumulated deficit		(76,494,158)	(71,253,354)
Total shareholders' equity		389,544,884	287,936,504
Total liabilities and shareholders' equity		424,831,464	324,573,053

Nature of operations and going concern Events after the reporting period

1

16

Approved on behalf of the Board of Directors on May 10, 2024:

"William M. Sheriff"

Director

"William B. Harris"

Director

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

enCore Energy Corp.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss Unaudited - Prepared by Management

(In USD unless otherwise noted)

Three months ended

		March 31,	March 31,
		2024	2023
	Note	$	$
Revenue		30,394,700	-
Cost of goods sold		28,052,288	-
Gross Profit		2,342,412	-
Expenses		363,457	497,493
Accretion	9,10
Amortization and depreciation	5,6,7	518,102	207,180
Depletion	8	1,581,474	-
General administrative costs	11	1,910,497	1,154,925
Professional fees	11	1,562,633	2,113,048
Promotion and shareholder communication		458,568	71,933
Travel		169,445	143,676
Transfer agent and filing fees		163,937	237,764
Staff costs	11	1,942,476	2,441,184
Stock option expense	10,11	1,118,585	866,483
Loss from operations		(7,446,762)	(7,733,686)
Foreign exchange gain (loss)		2,683,358	(3,941)
Gain on divestment of mineral properties	7	24,240	24,240
Gain on sale of uranium investment		-	1,100,500
Gain on disposal of assets		(18,028)	-
Interest expense		(406,567)	(600,000)
Interest income		415,873	320,275
Realized gain on marketable securities	4	251,476	-
Unrealized loss on marketable securities	4	(821,437)	(581,721)
Net loss for the period		(5,317,847)	(7,474,333)
less: net loss for the period attributable to: Non controlling interest shareholders		(77,043)	-
Net loss for the period attributable to: Shareholders of enCore Energy Corp		(5,240,804)	(7,474,333)
Currency translation adjustment of subsidiaries		(3,326,757)	669,480
Comprehensive loss for the period attributable to: Shareholders of enCore Energy Corp	(8,567,561)	(6,804,853)
Loss per share
Weighted average number of common shares outstanding
- basic #		173,486,569	127,199,482
- diluted #		173,486,569	127,199,482

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

enCore Energy Corp.

Condensed Interim Consolidated Statements of Cash Flows Unaudited

(In USD unless otherwise noted)

		March 31,	March 31,
		2024	2023
	Note	$	$
Operating activities
Net loss for the year		(5,317,847)	(7,474,333)
Accretion	7,11,12	363,457	497,493
Amortization and depreciation	5,6,7	518,102	207,180
Depletion	10	1,581,474	-
Foreign exchange (gain) loss		(2,683,358)	3,941
Stock option expense	12,13	1,118,585	866,483
Interest income		-	(320,275)
Gain on divestment of mineral properties	4,7	(24,240)	(24,240)
Gain (loss) on marketable securities - realized	4	(251,476)	581,721
Gain (loss) on marketable securities - unrealized	4	821,437	-
Gain on sale of uranium	3	-	(1,100,500)
Proceeds received from sale of uranium		-	7,023,000
Purchase of uranium	3	-	(14,672,500)
Changes in non-cash working capital items:
Receivables		(1,191,461)	(771,615)
Prepaids and deposits		(1,319,827)	-
Raw materials		(8,653)	-
Uranium inventory		(12,776,682)	-
Deposit - uranium investment	3	-	2,000,000
Restricted cash		-	47,676,777
Uranium loan		20,282,012	-
Accounts payable and accrued liabilities		(558,558)	216,401
Due to related parties	13	(2,368,093)	(345,817)
		(1,815,128)	34,363,716
Investing activities
Acquisition of property, plant, and equipment	6	(1,629,797)	(462,910)
Mineral property expenditures	9	(3,364,302)	(1,484,328)
Proceeds from divestment of mineral properties	9	-	24,240
Proceeds from sale of minority interest in subsidiary	10	60,000,000	-
Proceeds from sale of marketable securities	4	44,557	-
Asset acquisition		-	(54,556,796)
Interest income received		415,873	320,275
Settlement of asset retirement obligation	11	(156,427)	(7,085)
		55,309,904	(56,166,604)
Financing activities
Private placement proceeds	12	10,024,264	25,508,956
Share issue costs	12	(50,554)	(3,423,750)
Proceeds from the At -the-Market (ATM) sales	12	2,022,169	-
Proceeds from exercise of warrants	12	16,933,343	158,918
Proceeds from exercise of stock options	12	900,806	287,584
Lease payments	7	(52,738)	(31,333)
		29,777,290	22,500,375
Effect of foreign exchange on cash		(674,897)	27,156
Change in cash		82,597,169	724,643
Cash, beginning of year		7,493,424	2,512,012
Cash, end of year		90,090,593	3,236,655
Supplemental cash flow information	15

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

enCore Energy Corp.

Condensed Interim Consolidated Statements of Shareholders' Equity

Unaudited

(In USD unless otherwise noted)

				Convertible		Accumulated
			Share	promissory		other				Total
	Number of		subscriptions	note	Contributed	comprehensive	Accumulated	Non-controlling		shareholders'
	shares	Share capital	received	(equity portion)	surplus	income (loss)	Deficit	interest		equity
	#	$	$	$	$	$	$	$	$
January 1, 2023	108,940,051	190,610,250	51,558,624	-	16,218,518	5,530,224	(48,867,377)	-	215,050,239
Private placement	10,615,650	25,508,956	-	-	-	-	-	-	25,508,956
Conversion of subscriptions to shares	23,277,000	51,631,054	(51,631,054)	-	-	-	-	-	-
Share issuance costs	-	(6,487,851)	-	-	1,412,138	-	-	-	(5,075,713)
Shares issued for exercise of warrants	101,041	158,918	-	-	-	-	-	-	158,918
Shares issued for exercise of stock options	213,279	881,576	-	-	(593,992)	-	-	-	287,584
Shares issued for ATM	-	-	-	-	-	-	-	-	-
Stock option expense	-	-	-	-	866,483	-	-	-	866,483
Equity portion of convertible promissory note	-	-	-	3,813,266	-	-	-	-		3,813,266
Conversion of convertible promissory note to shares	-	-	-	-	-	-	-	-	-
Fair value of replacement options for Alta Mesa	-	-	-	-	81,414	-	-
acquisition (Note 9)	-	81,414
Cumulative translation adjustment	-	-	72,430	-	(2,570)	669,480	-	-	739,340
Loss for the year	-	-	-	-	-	-	(7,474,333)	-	(7,474,333)
March 31, 2023	143,147,021	262,302,903	-	3,813,266	17,981,991	6,199,704	(56,341,710)	-	233,956,154
January 1, 2024	165,133,798	328,246,303	-	3,813,266	19,185,942	7,944,347	(71,253,354)	-	287,936,504
Private placement	2,564,102	10,024,264	-	-	-	-	-	-	10,024,264
Conversion of subscriptions to shares	-	-	-	-	-	-	-	-	-
Share issuance costs	-	(50,554)	-	-	-	-	-	-	(50,554)
Shares issued for exercise of warrants	5,579,385	17,153,863	-	-	(220,520)	-	-	-	16,933,343
Shares issued for exercise of stock options	697,754	2,008,746	-	-	(1,107,940)	-	-	-	900,806
Shares issued for ATM	495,765	2,022,169	-	-	-	-	-	-	2,022,169
Stock option expense	-	-	-	-	1,118,585	-	-	-	1,118,585
Equity portion of convertible promissory note	-	-	-	-	-	-	-	-	-
Conversion of convertible promissory note to shares	6,872,143	23,117,637	-	(3,813,266)	-	-	-	-	19,304,371
Non controlling interest	-	-	-	-	20,447,042	-	-	39,475,915	59,922,957
Cumulative translation adjustment	-	-	-	-	-	(3,326,757)	-	-	(3,326,757)
Loss for the period	-	-	-	-	-	-	(5,240,804)	-	(5,240,804)
March 31, 2024	181,342,947	382,522,428	-	-	39,423,109	4,617,590	(76,494,158)	39,475,915	389,544,884

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

enCore Energy Corp.

Notes to the Condensed Interim Consolidated Financial Statements

For the three months ended March 31, 2024 and March 31, 2023 (In USD unless otherwise noted)

1. Nature of operations and going concern
   enCore Energy Corp. was incorporated under the Laws of British Columbia, Canada. enCore Energy Corp., together with its subsidiaries (collectively referred to as the "Company" or "enCore"), is principally engaged in the acquisition, exploration, and development of uranium resource properties in the United States. In Q1 2024, the Company's Rosita project transitioned to production. On February 19, 2024, the Company completed a sale of a 30% interest in the Company's Alta Mesa project to Boss Energy Limited ("Boss Energy'). The Company's common shares trade on the TSX Venture Exchange and directly on a U.S. Exchange under the symbol "EU." The Company's corporate headquarters is located at 101 N Shoreline, Suite 560, Corpus Christi, TX 78401.
   These condensed interim consolidated financial statements (the "financial statements") have been prepared on the going concern basis which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due, under the historical cost convention except for certain financial instruments that are measured at fair value, as detailed in the Company's accounting policies.
   Geopolitical uncertainty
   Geopolitical uncertainty driven by the Russian invasion of Ukraine has led many governments and utility providers to re- examine supply chains and procurement strategies reliant on nuclear fuel supplies coming out of, or through, Russia. Sanctions, restrictions, and an inability to obtain insurance on cargo have contributed to transportation and other supply chain disruptions between producers and suppliers. As a result of this and coupled with multiple years of declining uranium production globally, uranium market fundamentals are shifting from an inventory driven market to one more driven by production.
2. Material accounting policy information Basis of preparation
   These financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IFRS Accounting Standards"), using the same accounting policies as detailed in the Company's annual audited consolidated financial statements for the year ended December 31, 2023, except as stated below, and do not include all the information required for full annual financial statements in accordance with IFRS.
   The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.
   The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the accounting policies. Those areas involving a higher degree of judgment and complexity or areas where assumptions and estimates are significant to the consolidated financial statements are discussed below.
   These financial statements were approved for issuance by the Board of Directors on May 10, 2024.
   Revenue recognition
   The Company supplies uranium concentrates to its customer. Revenue is measured based on the consideration specified in a contract with a customer.
   The Company recognizes revenue when it transfers control, as described below, over a good or service to a customer. Customers do not have the right to return products, except in limited circumstances. The Company's sales

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enCore Energy Corp.

Notes to the Condensed Interim Consolidated Financial Statements

For the three months ended March 31, 2024 and March 31, 2023 (In USD unless otherwise noted)

2. Material accounting policy information (continued) Revenue recognition(continued)

arrangements with its customers are pursuant to enforceable contracts that indicate the nature and timing of satisfaction of performance obligations, including significant payment terms, where payment is usually due in 10 days. Each delivery is considered a separate performance obligation under the contract.

In a uranium supply arrangement, the Company is contractually obligated to provide uranium concentrates to its customers. Company-owned uranium may be physically delivered to either the customer or to conversion facilities (Converters). For deliveries to customers, terms in the sales contract specify the location of delivery. Revenue is recognized when the uranium has been delivered and accepted by the customer at that location. When uranium is delivered to Converters, the Converter will credit the Company's account for the volume of accepted uranium. Based on delivery terms in the sales contract with its customer, the Company instructs the Converter to transfer title of a contractually specified quantity of uranium to the customer's account at the Converter's facility. At this point, control has been transferred and enCore recognizes revenue for the uranium supply.

Inventory

Inventories are uranium concentrates, and converted products including chemical and are measured at the lower of cost and net realizable value. The cost of inventories is based on the first in first out (FIFO) method. Cost includes direct materials, direct labor, operational overhead expenses and depreciation. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Consumable supplies and spares are valued at the lower of cost or replacement value.

Non-controlling interest

The Company applies the requirements of IFRS in accounting for non-controlling interests. A non-controlling interest represents the portion of equity in a subsidiary not attributable, directly or indirectly, to the parent company. The non- controlling interest represented in the financial statements includes the 30% interest Boss obtained in the Alta Mesa JV on February 26, 2024. The initial recognition of the interest was determined by calculating 30% of the total net assets, and the excess contribution was recorded under equity reserves. The subsequent recognition of the non-controlling interest is 30% of the net income of the Alta Mesa entity.

Basis of measurement

These financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value. All dollar amounts presented are in United States Dollars ("U.S. Dollars") unless otherwise specified. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Consolidation

These financial statements incorporate the financial statements of the Company and its controlled subsidiaries. Control is defined as the exposure, or rights, to variable returns from involvement with an investee and the ability to affect those returns through power over the investee. Power over an investee exists when an investor has existing rights that give it the ability to direct the activities that significantly affect the investee's returns. This control is generally evidenced through owning more than 50% of the voting rights or currently exercisable potential voting rights of a Company's share capital. All significant intercompany transactions and balances have been eliminated.

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enCore Energy Corp.

Notes to the Condensed Interim Consolidated Financial Statements

For the three months ended March 31, 2024 and March 31, 2023 (In USD unless otherwise noted)

2. Material accounting policy information (continued) Consolidation (continued)

The Company has a 70% interest in a Joint Venture (JV) with BOSS Energy Limited (Boss). Under the JV agreement the Company retained control both before and after Boss acquired their interest. As such, the Company will continue to consolidate the operations of the JV Co. with an offsetting non-controlling interest being recorded on sub-consolidation.

These consolidated financial statements include the financial statements of the Company and its significant subsidiaries listed in the following table:

Name of	Place of	Ownership	Principal
Subsidary	Incorporation	Interest	Activity
Tigris Uranium US Corp.	Nevada, USA	100%	Mineral Exploration
Metamin Enterprises US Inc.	Nevada, USA	100%	Mineral Exploration
URI, Inc.	Delaware, USA	100%	Uranium Producer
Neutron Energy, Inc. 3	Nevada, USA	N/A	Mineral Exploration
Uranco, Inc.	Delaware, USA	100%	Mineral Exploration
Uranium Resources, Inc. 2	Delaware, USA	N/A	Mineral Exploration
HRI-Churchrock, Inc.	Delaware, USA	100%	Mineral Exploration
Hydro Restoration Corp. 1	Delaware, USA	N/A	Mineral Exploration
Belt Line Resources, Inc.1	Texas, USA	N/A	Mineral Exploration
enCore Energy US Corp.	Nevada, USA	100%	Holding Company
Azarga Uranium Corp.	British Columbia, CA	100%	Mineral Exploration
Powertech (USA) Inc.	South Dakota, USA	100%	Mineral Exploration
URZ Energy Corp.	British Columbia, CA	100%	Mineral Exploration
Ucolo Exploration Corp.	Utah, USA	100%	Mineral Exploration
JV Alta Mesa LLC	Delaware, USA	70%	Uranium Producer
enCore Alta Mesa LLC	Texas, USA	100%	Uranium Producer
Leoncito Plant, LLC	Texas, USA	100%	Mineral Exploration
Leoncito Restoration, LLC	Texas, USA	100%	Mineral Exploration
Leoncito Project, LLC	Texas, USA	100%	Mineral Exploration
Azarga Resources Limited	British Virgin Islands	100%	Mineral Exploration
Azarga Resources (Hong Kong) Ltd.4	Hong Kong	100%	Mineral Exploration

1. Hydro Restoration Corp. and Belt Line Resources, Inc. were divested in April 2023 (Note 4,7).
2. Uranium Resources, Inc. was dissolved in 2023.
3. Neutron Energy, Inc. was divested in July 2023 (Note 4,7).
4. Azarga Resources (Hong Kong) Ltd was later dissolved on April 29, 2024.

Newly adopted accounting standards and interpretations

Effective for annual reporting periods beginning on or after January 1, 2024, the Company adopted the following amendments:

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enCore Energy Corp.

Notes to the Condensed Interim Consolidated Financial Statements

For the three months ended March 31, 2024 and March 31, 2023 (In USD unless otherwise noted)

2. Material accounting policy information (continued)

Newly adopted accounting standards and interpretations (continued)

Presentation of financial statements pertaining to liabilities (IAS 1) - the amendment requires an entity to have the right to defer settlement of a liability for at least 12 months after the reporting period to be classified as non-current.

Disclosure of Accounting Policies (Amendment to IAS 7) - the amendment requires that an entity provides additional disclosures about its supplier finance arrangements relative to the Statement of Cash Flows within the liquidity risk disclosure.

Disclosure of information about international taxes (IAS 12) - the amendment introduces a temporary exception to the requirements to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes and related disclosures.

The adoption of these amendments did not have a material impact on the results of its operations and financial position.

3. Inventory

Purchases of uranium is categorized in Level 1 of the fair value hierarchy as of December 31, 2023 and categorized as inventory as at March 31, 2024.

As at March 31, 2024, the Company held 125,000 pounds of purchased uranium and 34,988 pounds of produced uranium inventory (including concentrate). Costs of inventory consisted of the following:

	$
Balance, December 31, 2023	-
Chemicals used in production	17,730
Purchased uranium	11,712,500
Uranium from production	1,064,182
Balance, March 31, 2024	12,794,412

4. Marketable securities

As at March 31, 2024, the company held 11,308,250 shares of American Future Fuel Corp. All of the shares held are free trading (the "Trading Shares") or will become free trading within the next 12 months. These shares have been classified as a current asset on the consolidated statements of financial position, due to the Company's ability to liquidate those shareholdings within the next 12 months. These shares are carried at a fair value of $3,046,103 (December 31, 2023 - $2,265,794).

In April 2023, the Company divested Belt Line Resources Inc and Hydro Restoration Corp to Nuclear Fuels Inc ("NFI") pursuant to a Share Purchase Agreement whereby the Company received consideration in the form of 8,566,975 common shares (19.9% of the total shareholding in NFI) with a market value of $0.33 per share. The Company exercised significant judgement in the assessment of the interest in NFI specifically when considering the level of decision-making authority, the Company could exercise over NFI and concluded that NFI is an equity investment recorded and measured at fair value through profit and loss (FVTPL).

During the year ended December 31, 2023, NFI was acquired by Uravan Minerals Inc., who renamed themselves Nuclear Fuels Inc. As a result of this transaction the Company received 696,825 additional shares related to a

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enCore Energy Corp.

Notes to the Condensed Interim Consolidated Financial Statements

For the three months ended March 31, 2024 and March 31, 2023 (In USD unless otherwise noted)

4. Marketable securities (continued)

contractual top up right for a total aggregate ownership of 9,327,800 shares (19.9% of the total shareholding in NFI). The cost base of the Company's shareholdings of NFI is $2,802,030.

In January 2024, the Company purchased an additional 1,716,260 units of NFI at a price of C$0.60 per unit. Each unit is comprised of 1 common share and one half of a warrant. This investment maintained the Company's ownership level at 19.9%.

As at March 31, 2024, 6,846,550 of the shares held in NFI are free trading or will become free trading within the next 12 months. These shares have been classified as a current asset on the consolidated statements of financial position, due to the Company's ability to liquidate those shareholdings within the next 12 months. As at March 31, 2024, 4,197,510 of the shares have been classified as a non-current asset on the consolidated statements of financial position, due to the Company's inability to liquidate those shareholdings within the next 12 months. The fair value of the 11,044,060 NFI shares at March 31, 2024 is $3,137,949 (December 31, 2023 - $5,077,980).

In July 2023, the Company divested of Neutron Energy Inc. to Anfield Energy Inc. ("Anfield") pursuant to a Share Purchase Agreement whereby the Company received consideration of C$5,000,000 and 185,000,000 common shares (19.56% of the total shareholding in Anfield). During the three months ended March 31, 2024, the Company sold 15,000,000 of the shares for gross proceeds of C$1,097,950. The remaining shares were classified as a current asset on the consolidated statements of financial position, due to the Company's ability to liquidate those shareholdings within the next 12 months. These shares are carried at a fair value of $12,546,000 (December 31, 2023 - $12,589,065).

In accordance with the Company's accounting policy, each of these common shares is classified as FVTPL, with gains/losses being recognized to the consolidated statements of loss and comprehensive loss.

The following table summarizes the fair value of the Company's marketable securities at March 31, 2024:

		Marketable securities	Warrants	Total
		current	non-current
	Volume
	$	$		$
Balance, December 31, 2022	11,388,250	3,162,361	784,831	-	3,947,192
Additions	194,247,800	7,022,600	2,792,500	-	9,815,100
Reclass from non-current to current	-	787,559	(787,559)	-	-
Change in fair value	-	5,732,355	185,480	-	5,917,835
Foreign exchange translation	-	181,177	71,535	-	252,712
Balance, December 31, 2023	205,636,050	16,886,052	3,046,787	-	19,932,839
Additions	1,716,260	763,564		-	763,564
Disposals	(15,000,000)	(556,125)		-	(556,125)
Reclass from non-current to current	-	746,989	(746,989)	-	-
Change in fair value	-	48,128	(984,630)	115,065	(821,437)
Foreign exchange translation	-	(408,961)	(64,763)	(543)	(474,267)
Balance, March 31, 2024	192,352,310	17,479,647	1,250,405	114,522	18,844,574

The realized gain on marketable securities for the three months ended March 31, 2024 was $251,476 (three months ended March 31, 2023 - nil). The unrealized loss on marketable securities for the three months ended March 31, 2024 was $821,437 (three months ended March 31, 2023 - $581,721).

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