Euromax Resources : Consolidated Financial Statements – Q1 2024

UNAUDITED CONDENSED CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

For the three months ended March 31, 2024 and 2023

Expressed in Canadian dollars

NOTICE OF NO AUDIT OR REVIEW OF INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim financial statements of the Company have been prepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.

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Euromax Resources Ltd.

Condensed consolidated interim statements of profit or loss and comprehensive income or loss - unaudited

(Expressed in Canadian dollars)

		Three months ended March 31,
	Note	2024	2023
		$000s	$000s
Operating expenses		(224)
Accounting, legal and professional		(231)
Depreciation	6	(11)	(11)
Office and general		(46)	(70)
Salaries, director and consultant fees		(220)	(225)
Share-based payments recovery/(expense)		450	(405)
Social responsibility and other project related costs		(7)	(28)
(Loss)/Gain on foreign exchange		(857)	449
Operating loss		(915)	(521)
Finance expense	6	(844)	(786)
Fair value gain on financial liabilities	9 (b)	4	6
Net finance loss		(840)	(780)
Loss for the period		(1,755)	(1,301)
Other comprehensive income, net of tax:
Items that are or may be reclassified subsequently to profit or loss
Translation adjustment on foreign subsidiaries		35	347
Total other comprehensive income, net of tax		35	347
Total comprehensive loss for the period		(1,720)	(954)
Loss per common share
Basic and diluted	5	(0.00)	(0.00)
Weighted average number of common shares outstanding
Basic and diluted	5	490,743,028	452,803,374

See accompanying notes to the condensed consolidated interim financial statements.

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Euromax Resources Ltd.

Condensed consolidated interim statements of financial position - unaudited

(Expressed in Canadian dollars)

		As at
		March 31,	December 31,
	Note	2024	2023
		$000s	$000s
ASSETS
Current		161
Cash and cash equivalents		617
Other receivables		32	59
Other current assets		24	35
Total current assets		217	711
Non-current assets		194
Land and property, plant and equipment		203
Mineral right interests	7	37,948	38,102
Total assets		38,359	39,016
LIABILITIES
Current		355
Trade and other payables		272
Gold purchase advance payments	10	15,234	14,903
Share-based payment liabilities	11 (c)	840	1,290
Loans and borrowings	9	27,348	27,667
Lease liability		53	53
Total current liabilities		43,830	44,185
Non-current liabilities		79
Lease liability		90
Total liabilities		43,909	44,275
EQUITY	8	82,544
Share capital	82,119
Equity reserve		17,869	18,294
Convertible loan reserve	9 (b)	1,429	1,334
Currency translation reserve		3,420	3,385
Accumulated losses		(110,812)	(110,391)
Total deficit		(5,550)	(5,259)
Total liabilities and equity		38,359	39,016
Nature of operations	1
Subsequent events	13

Approved on behalf of the Board of Directors

Signed "Tim Morgan-Wynne"

Tim Morgan-Wynne, Director

See accompanying notes to the condensed consolidated interim financial statements.

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Euromax Resources Ltd.

Condensed consolidated interim statements of changes in equity - unaudited

(Expressed in Canadian dollars)

For the three months ended March 31, 2024 and 2023						Currency
		Share capital		Equity	Convertible	translation	Accumulated	Total
	Note	Number of shares	Amount	reserve	loan reserve	reserve	losses	equity
			$000s	$000s	$000s	$000s	$000s	$000s
Balance on January 1, 2023		353,421,200	78,899	15,828	1,245	3,168	(108,072)	(8,932)
Total comprehensive loss for the period
Loss for the period			-	-	-	-	(1,301)	(1,301)
Other comprehensive income for the period			-	-	-	347	-	347
Total comprehensive loss for the period			-	-	-	347	(1,301)	(954)
Transactions with owners of the Company
Common shares issued, net of issue costs	8	101,250,000	1,582	2,253	-	-	-	3,835
Conversion of the convertible notes	8	35,342,120	1,638	-	-	-	-	1,638
Equity-settledshare-based payments			-	3	-	-	-	3
Derecognition of the equity component of convertible loan	9 (b)		-	-	(1,245)	-	1,245	-
Equity component of convertible loan	9 (b)		-	-	1,334	-	-	1,334
Total transactions with owners of the Company			3,220	2,256	89	-	1,245	6,810
Balance on March 31, 2023		490,013,320	82,119	18,084	1,334	3,515	(108,128)	(3,076)
Balance on January 1, 2024		490,013,320	82,119	18,294	1,334	3,385	(110,391)	(5,259)
Total comprehensive loss for the period
Loss for the period			-	-	-	-	(1,755)	(1,755)
Other comprehensive income for the period			-	-	-	35	-	35
Total comprehensive loss for the period			-	-	-	35	(1,755)	(1,720)
Transactions with owners of the Company
Exercised equity-settledshare-based payments	8	1,702,651	425	(425)	-	-	-	-
Derecognition of the equity component of convertible loan	9 (b)		-	-	(1,334)	-	1,334	-
Equity component of convertible loan	9 (b)		-	-	1,429	-	-	1,429
Total transactions with owners of the Company			425	(425)	95	-	1,334	1,429
Balance on March 31, 2024		491,715,971	82,544	17,869	1,429	3,420	(110,812)	(5,550)

See accompanying notes to the condensed consolidated interim financial statements.

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Euromax Resources Ltd.

Condensed consolidated interim statements of cash flows - unaudited

(Expressed in Canadian dollars)

		Three months ended March 31,
		2024	2023
	Note	$000s	$000s
OPERATING ACTIVITIES
Loss before tax		(1,755)	(1,301)
Add back:
Depreciation	6	11	11
Finance expense	6	844	786
Share-based payments (recovery)/expense		(450)	405
Unrealised foreign exchange loss/(gain)		860	(404)
Expensed transaction costs associated with convertible loans	9 (b)	67	67
Fair value gain on financial liabilities	9 (b)	(4)	(6)
Changes in non-cash working capital items:
Decrease in other receivables and prepayments and deposits		38	-
Increase/(Decrease) in trade and other payables		84	(149)
Cash used in operating activities		(305)	(591)
FINANCING ACTIVITIES
Proceeds from shares issued	8	-	4,015
Share issue costs	8	-	(113)
Transaction costs associated with convertible loans	9 (b)	(134)	(134)
Transaction costs associated with convertible notes		-	(19)
Payment of lease liabilites		(13)	(13)
Interest paid		(2)	(2)
Cash (used)/provided in financing activities		(149)	3,734
Effect of exchange rate changes on cash		(2)	(17)
Net change in cash and cash equivalents		(454)	3,143
Cash and cash equivalents, beginning of the period		617	24
Cash and cash equivalents, end of the period		161	3,150

See accompanying notes to the condensed consolidated interim financial statements.

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Euromax Resources Ltd.

Notes to the condensed consolidated interim financial statements - unaudited

(Expressed in Canadian dollars, except number of common shares and per share amounts)

1. Nature of operations
   Euromax Resources Ltd. ("Euromax" or the "Company") was incorporated under the Business Corporation Act ("British Columbia") and established as a legal entity on May 1, 1990. The registered address of the Company is located at 700 West Georgia St, Suite 2200, Vancouver, British Columbia, Canada V7Y 1K8.
   These condensed consolidated interim financial statements include the accounts of Euromax and of its wholly- owned subsidiaries (collectively, the "Group"). The Group operates with the objective of becoming the leading gold and base metal mining company in Europe. The Group operates in one sector in the mining industry, i.e. the exploration and development of mineral right interests.
   Following a voluntary application to delist from the TSX, from January 9, 2024 Euromax's common shares have been re-listed on TSX Venture Exchange (the "TSXV"). Euromax's common shares are also listed on the OTC Pink Market under the trading symbol "EOXFF". Euromax's share options and warrants are not listed.
   These condensed consolidated interim financial statements were authorised for issue by the Company's board of directors on May 22, 2024.
2. Basis of preparation and statement of compliance
   These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34 Interim Financial Reporting. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, which were prepared in accordance with IFRS as issued by the IASB.
   The Group has applied the same accounting policies and methods of computation in these condensed consolidated interim financial statements as it did in the audited consolidated financial statements for the year ended December 31, 2023.
3. Going concern
   These condensed consolidated interim financial statements have been prepared on a going concern basis which assumes the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.
   At March 31, 2024, the Group had net liabilities of $5.6 million (December 31, 2023: $5.3 million) and a net
   working capital deficiency of $43.6 million (December 31, 2023: $43.5 million), including cash of $0.161 million
   (December 31, 2023: $0.617 million). The Group's $43.6 million working capital deficiency at March 31, 2024 largely results from:
4. • Convertible loans of $27.3 million (at December 31, 2023: $27.7 million) with European Bank for Reconstruction and Development ("EBRD") (the "EBRD convertible loan") and with CC Ilovitza ("CCI" a member of the CCC Group) (the "CCI convertible loan"), both mature on February 28, 2025 and therefore classified as current liabilities (see Note 9); and
   • Gold purchase advance payments of $15.2 million (December 31, 2023: $14.9 million) received from Royal Gold, AG ("Royal Gold") (see Note 10) which are repayable within 60 days of receiving a termination notice to the Gold Purchase and Sale Agreement.

These two items are classified as current liabilities as at this time contractual repayment may be required within the next twelve months. Both convertible loans are convertible into the Company's common shares at the election of EBRD and CCI on or before their maturity (see Note 9 for more details). As at the date of these condensed consolidated interim financial statements no termination or repayment notice has been received from Royal Gold.

Subsequent to March 31, 2024, during May 2024 the Group closed a non-brokered private placement (the "2024 Private Placement") for gross proceeds of US$0.913 million (see Note 13).

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Euromax Resources Ltd.

Notes to the condensed consolidated interim financial statements - unaudited

(Expressed in Canadian dollars, except number of common shares and per share amounts)

3. Going concern (continued)

The Company's board of directors has reviewed the Group's forecasts for the period ended December 31, 2025, in which are included all committed costs for maintaining the Ilovica-Shtuka copper project (the "Ilovica-Shtuka Project") in the Republic of North Macedonia ("Macedonia" or the "Country"), and are prepared based on the following major assumptions:

• the convertible loans which have potential contractual cash outflows at February 28, 2025 of $30.6 million will either be converted into the Company's common shares or further extended to mature beyond the forecast period; and
• neither termination nor repayment notices will be received from Royal Gold for the period ended December 31, 2025.

Based on these forecasts, the directors have identified that further funding will be required to:

• cover the committed costs for maintaining the Ilovica-Shtuka Project from August 2024 and going forward, including covering the local legal costs for the ongoing and potential administrative processes until the final approval of the request for the merger of the Group's two exploitation concessions (the "Merger") (see Note 7);
• repay the gold purchase advance payments, if termination or repayment notice is received from Royal Gold;
• repay both convertible loans, if neither are further extended in 2025 or converted into the Company's common shares; and
• ultimately construct and bring the Ilovica-Shtuka Project into commercial production.

The directors note that the level of funding required is dependent on both the outcome and duration of the administrative process for getting approval of the Merger.

Given the above factors, the Group will need to raise additional funds from August 2024 either through equity (supported by existing shareholders or new shareholders) or by further debt which is not guaranteed.

These events are outside of the Group's control, and as such, a material uncertainty exists which may cast significant doubt about the Group's continued ability to operate as a going concern and therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. The directors have a reasonable expectation that the Group will be able to raise the required funds and therefore prepared these condensed consolidated interim financial statements on a going concern basis.

These condensed consolidated interim financial statements do not include any adjustments that may result from the outcome of these uncertainties.

4. Critical accounting judgements and key sources of estimation uncertainty

The preparation of these condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these judgements and estimates. In preparing these condensed consolidated interim financial statements, the significant judgements and estimates made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements for the year ended December 31, 2023.

These condensed consolidated interim financial statements have been prepared on a going concern basis which assumes the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.

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Euromax Resources Ltd.

Notes to the condensed consolidated interim financial statements - unaudited

(Expressed in Canadian dollars, except number of common shares and per share amounts)

5.	Loss per share
			Three months ended March 31,
			2024	2023
			$000s	$000s
		Net loss for the period after tax	(1,755)	(1,301)
		Basic weighted average number of common shares	490,743,028	452,803,374
		Basic and diluted loss per share	(0.00)	(0.00)
	For the three months ended March 31, 2024 and 2023, because there would be further reduction in loss per
	share resulting from the assumption that share options, share purchase warrants and convertible loan are
	exercised or converted, all these instruments are considered as anti-dilutive and are ignored in the
	computation of loss per share. As there were no other instruments that may have a potential dilutive impact,
	the basic and diluted loss per share were the same for the three months ended March 31, 2024 and 2023.

6.	Operating segments
	The Group's principal business is the exploration and development of mineral right interests. The Group's
	board of directors (the Group's Chief Operating Decision Maker) has arranged the Group's operating segments
	by both type of business and by geographic region. No operating segments have been aggregated in arriving
	at the reportable segments of the Group.
	The Group's reportable segments are as follows:
			Reportable	Operations				Geografic location
			segments
			Macedonia	exploration and development of mineral right interests	Republic of North Macedonia
			Corporate	corporate operations				Canada and UK
	The following is an analysis of the Group's profit or loss before tax, assets and liabilities by operating segments
	and the Group's consolidated loss before tax.
					Macedonia	Corporate			Total
		Three months ended		March 31,	March 31,	March 31,	March 31,		March 31,		March 31,
		In thousands $		2024	2023	2024		2023		2024	2023
		Finance expense		(3)	-	(841)		(786)		(844)	(786)
		Depreciation		(11)	(11)	-		-		(11)	(11)
		Profit/(loss) for the period		(725)	214	(1,030)		(1,515)		(1,755)	(1,301)
					Macedonia	Corporate			Total
		As at		March 31,	December 31,	March 31, December 31,		March 31,	December 31,
		In thousands $		2024	2023	2024		2023		2024	2023
		Assets		38,272	38,407	87		609		38,359	39,016
		Liabilities		255	219	43,654		44,056		43,909	44,275

7. Mineral right interests

Macedonia

On July 11, 2007 the Group acquired an option to earn a 100% interest in the Ilovica-Shtuka Project. After completing an agreed exploration programme and the vendor not exercising its back-in right in January 2012, the Group acquired a 100% interest in the Ilovica-Shtuka Project.

The Ilovica-Shtuka Project consists of two adjacent properties, exploitation concessions Ilovica 6 and Ilovica 11. Under the rules and regulations of the Minerals Law in Macedonia, the exploitation concession Ilovica 6 was granted on July 24, 2012, while the exploitation concession Ilovica 11 granted on January 13, 2016. Both exploitation concessions have an initial term of 30 years and subject to a state royalty of 2% of the market value of metals contained in concentrate.

On January 6, 2016 the Group announced the Feasibility Study (the "FS") for the Ilovica-Shtuka Project, prepared in compliance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43- 101"), while during 2017 the Environmental and Social Impact Assessment Study (the "ESIA") was completed under international standards, which could facilitate the financing of the Ilovica-Shtuka Project's construction as well as meets the requirements of various project stakeholders.

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Euromax Resources Ltd.

Notes to the condensed consolidated interim financial statements - unaudited

(Expressed in Canadian dollars, except number of common shares and per share amounts)

7. Mineral right interests (continued)

Macedonia (continued)

During 2017 and 2018, the Ministry of Economy (the "MoE") positively responded on the request for the merger of both exploitation concessions Ilovica 6 and Ilovica 11 (or the Merger), submitted in January 2016. However, during 2019, the Government of the Republic of North Macedonia challenged the legal validity of the Group's exploitation concession Ilovica 6, leading to the Government's termination of that concession in December 2019. This Termination Decision was appealed by the Group, leading to a series of court cases and decisions from 2019 to 2023. Following the positive decisions of the administrative courts that annulled the termination of the exploitation concession on Ilovica 6 on the basis that the Merger represents an administrative preliminary matter, the final approval for the Merger was granted on June 27, 2023, by the Government of the Republic of North Macedonia, as announced on July 4, 2023 in the Official Gazette. However, on July 25, 2023, the Government reversed its decision and withdrew the Merger approval, as announced on July 26, 2023 in the Official Gazette. The Group filed a lawsuit against this subsequent Government decision which was made without any legal basis. The Administrative Court rejected Group's lawsuit, and accordingly the case has been transferred for decision by the Higher Administrative Court. Despite this decision, the Administrative Court did not challenge the fact that all legal conditions for the Merger approval have been met. Until this is resolved, either by acceptance of the Group's lawsuit or by new approval by the Government, the Group remains in the process of waiting for the Merger approval.

During 2017, a Strategic Environmental Impact Assessment was approved by the MoEPP (required for urbanisation process of the mine footprint), and a commission within the MoEPP issued a Compliance Report for the Environmental Impact Assessment Study (the "EIA") and recommended a formal approval to be granted by the MoEPP. However, the final approval of the EIA has not been granted at the date of these consolidated interim financial statements.

The option for recovering the investment and potential damages from the Ilovica-Shtuka Project by initiating an international arbitration under the arbitration rules of the International Centre of the Settlement of Investment Disputes ("ICSID") in Washington D.C., USA will remain as an available alternative for the Group under the bilateral agreement between Republic of North Macedonia and the Swiss Federal Council for protection of investments.

Based on the assumption for positive resolution of the administrative process for reaching the approval of the Merger, as material trigger for further development of the Ilovica-Shtuka Project, the Group believes that as at March 31, 2024 there is no need for impairment of the carrying amount of the mineral right interest for the Ilovica-Shtuka Project, as presented below.

A summary of changes to the Group's mineral right interests in the three months ended March 31, 2024 and 2023 is set out below.

	Macedonia
	Ilovica-Shtuka Project
Balance, January 1, 2023	$000s
37,483
Other items:
Exchange differences	763
Balance, March 31, 2023	38,246
Balance, January 1, 2024	38,102
Other items:	(154)
Exchange differences
Balance, March 31, 2024	37,948

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