FPX Nickel : Fourth Quarter Report for the year ended December 31, 2023

FPX NICKEL CORP.

Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

(Stated in Canadian dollars, unless otherwise noted)

Independent Auditor's Report

To the Shareholders of FPX Nickel Corp.

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of FPX Nickel Corp. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

We conducted our audits 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 Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our 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.

Key Audit Matters

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

We have determined that there is the following key audit matter to communicate in our auditor's report:

Key audit matter:	How our audit addressed the key audit matter:
Assessment of impairment indicators of Exploration and	Our approach to addressing the matter included the following
evaluation assets.	procedures, among others:
Refer to note 3(c) - Accounting policy Exploration and	Evaluated the reasonableness of management's assessment of
evaluation assets, note 4 - Significant accounting	impairment indicators, which included the following:
judgments and estimates and note 8 - Exploration and
evaluation assets	• Assessed the Company's market capitalization in
Management assesses at each reporting period whether	comparison to the Company's net assets, which may be
there is an indication that the carrying value of exploration	an indication of impairment.
and evaluation assets may not be recoverable. Management
applies significant judgment in assessing whether	• Assessed the completeness of the factors that could be
indicators of impairment exist that necessitate impairment	considered indicators of impairment, including
testing. Internal and external factors, such as (i) a	consideration of evidence obtained in other areas of the
significant decline in the market value of the Company's	audit.
share price; (ii) changes in the Company's assessment of
whether commercially viable quantities of mineral	• Confirmed that the Company's right to explore the
resources exist within the properties; and (iii) changes in	properties had not expired.
metal prices, capital and operating costs, are evaluated by
management in determining whether there are any
indicators of impairment.
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We considered this a key audit matter due to (i) the significance of the exploration and evaluation asset balance and (ii) the significant audit effort and subjectivity in applying audit procedures to assess the factors evaluated by management in its assessment of impairment indicators, which required significant management judgment.

• Obtained management's written representations regarding the Company's future plans for the exploration and evaluation assets.
• Assessed the reasonability of the Company's financial statement disclosure regarding their exploration and evaluation assets.

Other Information

Management is responsible for the other information. The other information comprises the information included in "Management's Discussion and Analysis", but does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audits of the consolidated financial statements, our responsibility is to read the other information, and in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, 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 consolidated 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 Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated 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 consolidated 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.

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• 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 consolidated 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 consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units withing the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

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.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated 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 William Nichols.

CHARTERED PROFESSIONALACCOUNTANTS

Vancouver, BC, Canada

March 13, 2024

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FPX NICKEL CORP.

Consolidated Statements of Financial Position

At December 31, 2023 and 2022

Stated in Canadian dollars

	Note		2023		2022
ASSETS
Current assets		$	28,919,936
Cash and cash equivalents	5	$	18,016,082
Amounts receivable	6		726,530		2,196,988
Prepaid expenses	7		126,387		279,334
			29,772,853		20,492,404
Non-current assets			29,508,787
Exploration and evaluation assets	8			21,469,633
Reclamation deposits	9		188,092		157,970
Right-of-use asset	10(a)		256,543		146,791
Equipment			166,927		-
Total assets		$	59,893,202	$	42,266,798
LIABILITIES AND EQUITY
Current liabilities		$	961,291
Accounts payable and accrued liabilities	17	$	564,361
Lease liability - current portion	10(b)		156,273		90,129
			1,117,564		654,490
Non-current liabilities			1,096,865
Share subscriptions - CO2 Lock Corp.	13			-
Lease liability - non-current portion	10(b)		113,171		63,941
Total liabilities			2,327,600		718,431
Shareholders' equity			93,905,009
Share capital	11			75,319,412
Reserves	12		12,363,520		10,493,703
Deficit			(50,212,807)		(45,872,364)
Total shareholders' equity attributable to shareholders
of FPX Nickel Corp.			56,055,722		39,940,751
Non-controlling interest	13		1,509,880		1,607,616
Total equity			57,565,602		41,548,367
Total liabilities and equity		$	59,893,202	$	42,266,798

Nature and continuance of operations (note 1)

Commitments (note 16)

Subsequent events (notes 11(b) and 21)

The accompanying notes form an integral part of these consolidated financial statements.

Approved and authorized by the Board of Directors
/s/ Peter M.D. Bradshaw		/s/ James S. Gilbert
Director			Director
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FPX NICKEL CORP.

Consolidated Statements of Loss and Comprehensive Loss

At December 31, 2023 and 2022

Stated in Canadian dollars

	Note		2023		2022
EXPENSES		$	138,982
Depreciation	10	$	88,075
General exploration			4,525		360,811
Insurance			37,197		26,106
Management fees and salaries	17		1,672,478		1,052,390
Office and administration			121,705		81,044
Professional fees			479,303		102,393
Research and development			208,022		82,621
Share-based compensation	11		2,172,637		1,367,091
Travel, promotion and communication			741,331		576,647
Trust and filing fees			96,798		116,160
Loss before other items			(5,672,978)		(3,853,338)
OTHER ITEMS			1,429
Gain on dilution of CO2 Lock Corp.	13			-
Finance costs			(34,201)		(14,992)
Foreign exchange loss			(3,023)		(4,838)
Interest income			1,234,735		161,760
Management fee income	8(d)		27,288		-
			1,226,228		141,930
Net loss and comprehensive loss for the year		$	(4,446,750)	$	(3,711,408)
Net loss and comprehensive loss attributable to:		$	(4,340,443)
Shareholders of FPX Nickel Corp.		$	(3,636,103)
Non-controlling interest	13		(106,307)		(75,305)
		$	(4,446,750)	$	(3,711,408)
Basic and diluted loss per share		$	(0.00)	$	(0.02)
Weighted average number of common shares outstanding,			261,262,385
basic and diluted				217,672,521

The accompanying notes form an integral part of these consolidated financial statements.

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FPX NICKEL CORP.

Consolidated Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

Stated in Canadian dollars

	Share Capital			Attributable to
					Shareholders	Non-
					of FPX Nickel	Controlling
	Number	Amount	Reserves	Deficit	Corp.	Interest	Total
	#	$	$	$	$	$	$
Balance, December 31, 2021	213,857,863	62,531,195	9,473,652	(42,236,261)	29,768,586	-	29,768,586
Private placement	24,000,000	12,000,000	-	-	12,000,000	-	12,000,000
Share issue costs	-	(63,823)	-	-	(63,823)		(63,823)
Options exercised	3,450,000	852,040	(347,040)	-	505,000	-	505,000
Share-based compensation	-	-	1,367,091	-	1,367,091	-	1,367,091
Non-controlling interest	-	-	-	-	-	1,682,921	1,682,921
Net loss and comprehensive loss	-	-	-	(3,636,103)	(3,636,103)	(75,305)	(3,711,408)
Balance, December 31, 2022	241,307,863	75,319,412	10,493,703	(45,872,364)	39,940,751	1,607,616	41,548,367
Private placements	30,051,184	18,030,710	-	-	18,030,710	-	18,030,710
Share issue costs	-	(120,433)	-	-	(120,433)	-	(120,433)
Options exercised	2,622,199	675,320	(302,820)	-	372,500	-	372,500
Share-based compensation	-	-	2,172,637	-	2,172,637	-	2,172,637
Dilution of interest in CO2 Lock	-	-	-	-	-	8,571	8,571
Net loss and comprehensive loss	-	-	-	(4,340,443)	(4,340,443)	(106,307)	(4,446,750)
Balance, December 31, 2023	273,981,246	93,905,009	12,363,520	(50,212,807)	56,055,722	1,509,880	57,565,602

The accompanying notes form an integral part of these consolidated financial statements.

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FPX NICKEL CORP.

Consolidated Statements of Cash Flows

For the years ended December 31, 2023 and 2022

Stated in Canadian dollars

	Note		2023		2022
Cash provided by (used in):
Operating activities		$	(4,446,750)
Net loss for the year		$	(3,711,408)
Adjustments for:			138,982
Depreciation				88,075
Share-based compensation	11(c)		2,172,637		1,367,091
Interest expense	10(b)		18,208		-
Gain on dilution of CO2 Lock Corp.	13		(1,429)		-
Changes in non-cash working capital:			(2,118,352)		(2,256,242)
		83,323
Amounts receivable				(908,124)
Prepaid expenses			152,947		(242,184)
Accounts payable and accrued liabilities			(88,040)		189,328
			(1,970,122)		(3,217,222)
Financing activities			18,030,710
Proceeds from financings	11(b)			12,000,000
Share issue costs			(120,433)		(63,823)
Proceeds from exercise of stock options	11(b)		372,500		505,000
Proceeds from financings - CO2 Lock Corp.	13		10,000		1,714,758
Subscriptions advanced - CO2 Lock Corp.	13		1,096,865		-
Share issue costs - CO2 Lock Corp.			-		(31,837)
Repayment of lease liability	10(b)		(122,110)		(83,636)
			19,267,532		14,040,462
Investing activities			(6,167,049)
Exploration and evaluation expenditures				(7,317,809)
Reclamation deposits			(30,122)		(24,373)
Purchase of equipment			(196,385)		-
			(6,393,556)		(7,342,182)
Increase in cash and cash equivalents			10,903,854		3,481,058
Cash and cash equivalents - beginning of year			18,016,082		14,535,024
Cash and cash equivalents - end of year		$	28,919,936	$	18,016,082
Supplemental disclosure of non-cash financing and investing activities:	$	1,165,766
Interest received		$	155,877
Increase (decrease) in accounts payable related to			484,970
exploration and evaluation expenditures				(78,139)
(Decrease) increase in accounts receivable related to			(1,387,136)
exploration and evaluation expenditures				861,485

The accompanying notes form an integral part of these consolidated financial statements.

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FPX NICKEL CORP.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

Stated in Canadian dollars

1. NATURE AND CONTINUANCE OF OPERATIONS
   FPX Nickel Corp. (the "Company" or "FPX Nickel") was incorporated under the Business Corporations Act of Alberta and is listed on the TSX Venture Exchange. The Company's common shares trade under the symbol "FPX" in Canada and on the OTCQB Venture Market in the US under the symbol "FPOCF". FPX Nickel's head office and principal address is Suite 320, 1155 West Pender Street, Vancouver, British Columbia, V6E 2P4.
   The Company is principally engaged in the acquisition and exploration of mineral property interests with a focus on properties containing awaruite (Ni3Fe), a naturally occurring nickel-iron alloy. FPX Nickel holds a 100% interest in five awaruite properties: four in British Columbia and one in the Yukon Territory. The Company's primary project is the Baptiste deposit within its flagship Decar Nickel District in central British Columbia. The Company has not yet determined whether its properties contain mineral reserves where extraction is both technically feasible and commercially viable.
   As at December 31, 2023, the Company had net working capital of $28,655,289 (December 31, 2022 - $19,837,914) and incurred a loss of $4,446,750 for the year ended December 31, 2023 (2022 - $3,711,408). The Company has no operating revenue to date and no operating cash flows to support its activities. As the Company is in the exploration stage, the recoverability of the costs incurred to date on its exploration properties is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of its properties and upon future profitable production or proceeds from the disposition of the properties. With no source of operating cash flow, the Company will periodically have to raise funds to continue operations and, although it has been successful in doing so in the past, there is no assurance it will be able to do so in the future.
   These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern and do not include any adjustments relating to the recoverability and classification of assets and liabilities that would be necessary should the Company be unable to continue in existence. Such adjustments could be material.
2. BASIS OF PREPARATION

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"). These consolidated financial statements were approved and authorized for issuance by the Board of Directors on March 13, 2024.

(b) Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis. In addition, except for cash flow information, these consolidated financial statements have been prepared using the accrual method of accounting.

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FPX NICKEL CORP.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

Stated in Canadian dollars

2. BASIS OF PREPARATION (CONTINUED)

(c) Basis of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiary. Subsidiaries are entities controlled by the Company. Control is defined as the Company having power over the entity, exposure or rights to variable returns from its involvement with the entity, and the ability to use its power to affect the amount of returns. Subsidiaries are included in the consolidated financial statements from the date control commences until the date control ceases. The accounting policies of subsidiaries are changed where necessary to align with the policies adopted by the Company. All intercompany transactions and balances are eliminated on consolidation.

At December 31, 2023, the Company had one subsidiary, CO2 Lock Corp. ("CO2 Lock"), and held an 88.17% (December 31, 2022 - 88.23%) equity interest on an issued and outstanding basis.

(d) Functional currency, presentation currency and foreign currency transactions

1. Functional and presentation currency

The functional currency of the Company and its subsidiary is determined by the currency of the primary economic environment in which the entity operates. The functional currency of the Company and its subsidiary is the Canadian dollar. These consolidated financial statements are presented in Canadian dollars, unless otherwise noted.

1. Foreign currency transactions

Transactions in currencies other than the functional currency of an entity ("foreign currencies") are initially recognized in the functional currency by applying the exchange rates prevailing at the date of the transaction. At the end of each reporting period: (i) monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate prevailing at the date of the statement of financial position; and (ii) non-monetary assets and liabilities denominated in foreign currencies are translated at historical exchange rates, unless the item is measured at fair value, in which case it is translated at the exchange rate in effect at the date when the fair value was determined. Resulting foreign exchange gains and losses are recognized in net loss. Foreign currency gains and losses are reported on a net basis.

1. Comparative information
   Certain comaparative amounts have been reclassified to conform with the current year's financial statement presentation. Such reclassifications were not considered material.

3. MATERIAL ACCOUNTING POLICY INFORMATION

1. Financial instruments
2. 1. Recognition and measurement

The Company recognizes financial assets and liabilities on the statement of financial position when it becomes party to the contractual provisions of the financial instrument. On initial recognition, all financial assets and liabilities are recorded by the Company at fair value, net of attributable transaction costs, except for financial assets and liabilities classified as fair value through profit or loss ("FVTPL") for which transaction costs are expensed in the period in which they are incurred.

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