Mega Uranium : Fourth Quarter Reports – September 30, 2023 Consolidated Financial Statements of Mega Uranium Ltd. (Audited)

CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2023 AND 2022

(EXPRESSED IN CANADIAN DOLLARS)

Independent auditor's report

To the Shareholders of

Mega Uranium Ltd.

Opinion

We have audited the consolidated financial statements of Mega Uranium Ltd. and its subsidiaries [the "Company"], which comprise the consolidated statements of financial position as at September 30, 2023 and 2022, and the consolidated statements of income (loss) and of comprehensive income (loss), consolidated statements of cash flows and consolidated statements of equity for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at September 30, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards ["IFRS"].

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 consolidated 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 consolidated 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.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming the auditor's opinion thereon, and we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matter below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

A member firm of Ernst & Young Global Limited

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Key audit matter

Equity Accounted Investment in Toro Energy Ltd.

As detailed in note 8 of the consolidated financial statements, the Company has an equity investment in Toro Energy Ltd. ["Toro"] that has a nil carrying amount as at September 30, 2023. The Company accounts for its investment in associate using the equity method, and assesses the investment for indicators of impairment or impairment reversal each reporting period. Toro has a June 30 year end, which differs from the year end of the Company. For the purpose of applying the equity method of accounting, the Company uses the June 30 financial statements of Toro, adjusting for any significant transactions or events between June 30 and the Company's year- end. The Company also makes adjustments to align the accounting policies of Toro, in order to be consistent with the Company's accounting policies.

Auditing management's investment in Toro was complex due to the judgement used by management when determining indicators of impairment or impairment reversal as well as with respect to determining the adjustments necessary for significant transactions or events subsequent to June 30 and to align accounting policies. As the reporting period of the two entities differs by three months, there is judgement required in determining the extent to which adjustments need to be made to the Company's share of Toro's comprehensive income or loss for any significant transactions or events between June 30 and the Company's year-end.

Other information

How our audit addressed the key audit matter

Our audit procedures in relation to the equity accounted investment in Toro included, but were not limited to, the following:

• Analyzed management's determination of any significant events or transactions subsequent to June 30, 2023 that would require adjustment by assessing the financial impact of the events to determine significance.
• Assessed the impact of policy differences between the Company's accounting policies and those of Toro.
• Recalculated the Company's proportionate share of the loss including obtaining external confirmation of the number of shares held by the Company to assess whether the appropriate portion of the loss was being applied to the investment.
• Evaluated management's assessment of both indicators of impairment or reversal of impairment by assessing both internal and external sources of information.
• Evaluated the adequacy of disclosure under IFRS within the consolidated financial statements in relation to this matter.

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

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 audit 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 audit or otherwise appears to be materially misstated.

A member firm of Ernst & Young Global Limited

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We obtained Management's Discussion and Analysis prior to the date of this auditor's report. 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 in this auditor's report. 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 consolidated 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.
• 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.

A member firm of Ernst & Young Global Limited

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• 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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction supervision and performance 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 Blake Langill.

Toronto, Canada

December 19, 2023

A member firm of Ernst & Young Global Limited

MEGA URANIUM LTD.

Consolidated Statements of Financial Position

(In thousands of Canadian dollars, except for securities and per share amounts)

		As at		As at
	September 30,	September 30,
		2023		2022
ASSETS
Current assets	$	347
Cash and cash equivalents (note 4)	$	510
Receivables and prepaid expenses (note 5)		310		703
Marketable securities (note 6)		25,281		18,105
Total current assets		25,938		19,318
Non-current assets		305
Restricted cash (note 7)			311
Equity investment (note 8)		-		760
Long-term investment (note 9)		158,147		97,381
Property, plant and equipment		64		66
Right-of-use asset (note 10)		408		54
Total non-current assets		158,924		98,572
Total assets	$	184,862	$	117,890
EQUITY AND LIABILITIES
Current liabilities	$	1,381
Amounts payable and other liabilities (notes 11 and 14)	$	1,250
Due to broker (note 12)		8,624		1,139
Lease liabilities (note 13)		82		63
Total current liabilities		10,087		2,452
Non-current liabilities		339
Lease liabilities (note 13)			-
Deferred tax liability (note 23)		259		-
Total non-current liabilities		598		-
Total liabilities		10,685		2,452
Equity		283,623
Share capital (note 15)			282,620
Share option reserve (note 16)		67,795		67,204
Accumulated other comprehensive income		128,938		76,214
Deficit		(306,179)		(310,600)
Total equity		174,177		115,438
Total equity and liabilities	$	184,862	$	117,890

Commitments and obligations (note 19)
On behalf of the Board:
"Douglas Reeson"	Director	"Larry Goldberg"	Director

The notes to the consolidated financial statements are an integral part of these statements.

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MEGA URANIUM LTD.

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (In thousands of Canadian dollars, except for securities and per share amounts)

		Year Ended
		September 30,
		2023		2022
Operating expenses	$	3,109
General and administrative expenses (note 17)	$	4,040
Exploration and evaluation expenditures (recovery) (note 18)		496		(138)
Operating loss		(3,605)		(3,902)
Loss from equity investment (note 8)		(727)		(950)
Loss on deemed disposition of equity investment (note 8)		(50)		-
Unrealized gain (loss) on marketable securities		1,165		(7,742)
Realized gain on marketable securities		108		1,337
Gain on sale of mineral properties (note 18)		-		4,835
Finance expenses		(311)		(57)
Other income		55		578
Foreign exchange loss		(7)		(10)
Net loss before taxes		(3,372)		(5,911)
Deferred tax recovery (expense) (note 23)		7,793		(2,477)
Net income (loss) for the year		4,421		(8,388)
Other comprehensive income (loss)
Item that will be reclassified subsequently to the profit and loss:		9
Exchange differences on translation of foreign operations			15
Item that will not be reclassified subsequently to the profit and loss:
Change in fair value of long-term investment, net of tax expense		52,715
of $8,051 (2022 - tax recovery $2,477) (note 9)			(16,220)
Other comprehensive income (loss)		52,724		(16,205)
Total comprehensive income (loss) for the year	$	57,145	$	(24,593)
Income (loss) per common share - basic	$	0.01	$	(0.02)
Income (loss) per common share - diluted	$	0.01	$	(0.02)
Weighted average number of common shares outstanding - basic	360,258,170	354,975,610
Weighted average number of common shares outstanding - diluted	367,605,859	354,975,610

The notes to the consolidated financial statements are an integral part of these statements.

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MEGA URANIUM LTD.

Consolidated Statements of Cash Flows

(In thousands of Canadian dollars, except for securities and per share amounts)

		Year Ended
		September 30,
		2023		2022
Operating activities	$	4,421
Net income (loss) for the year	$	(8,388)
Adjustment for:		727
Loss on equity investment (note 8)			950
Loss on deemed disposition of equity investment (note 8)		50		-
Unrealized loss on marketable securities		(1,165)		7,742
Realized gain on marketable securities		(108)		(1,337)
Proceeds from sale of marketable securities		254		1,624
Purchase of marketable securities		(6,159)		(2,778)
Amortization		95		64
Lease modification		(6)		-
Stock-based compensation		999		1,693
Interest expense		32		10
Gain on sale of mineral properties		-		(4,835)
Deferred tax (recovery) expense		(7,793)		2,477
Other income		-		(373)
Non-cash working capital items:		393
Receivables and prepaid expenses			(396)
Amounts payable and other liabilities		131		200
Due to broker		7,485		1,139
Net cash used in operating activities		(644)		(2,208)
Financing activities		595
Proceeds from exercise of options and warrants			1,502
Lease payments (note 13)		(103)		(66)
Net cash provided by financing activities		492		1,436
Investing activities		(17)
Additional investment in equity investment (note 8)			-
Purchase of property, plant and equipment		(12)		(54)
Net cash used in investing activities		(29)		(54)
Effect of exchange rate changes on cash and cash equivalents held in foreign currencies		18		55
Net change in cash and cash equivalents		(163)		(771)
Cash and cash equivalents, beginning of year		510		1,281
Cash and cash equivalents, end of year	$	347	$	510

The notes to the consolidated financial statements are an integral part of these statements.

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MEGA URANIUM LTD.

Consolidated Statements of Equity

(In thousands of Canadian dollars, except for securities and per share amounts)

							Accumulated
	Number of				Share		other				Total
	common		Share		option	comprehensive		Shareholders'
	shares		capital		reserve		income		Deficit		equity
Balance, September 30, 2021	348,595,639	$	280,117	$	66,512	$	92,419	$	(302,212)	$	136,836
Exercise of stock options	10,339,997		2,503		(1,001)		-		-		1,502
Stock-based compensation	-		-		1,693		-		-		1,693
Net loss for the year	-		-		-		-		(8,388)		(8,388)
Other comprehensive loss	-		-		-		(16,205)		-		(16,205)
Balance, September 30, 2022	358,935,636		282,620		67,204		76,214		(310,600)		115,438
Exercise of stock options	4,050,000		1,003		(408)		-		-		595
Stock-based compensation	-		-		999		-		-		999
Net income for the year	-		-		-		-		4,421		4,421
Other comprehensive income	-		-		-		52,724		-		52,724
Balance, September 30, 2023	362,985,636	$	283,623	$	67,795	$	128,938	$	(306,179)	$	174,177

The notes to the consolidated financial statements are an integral part of these statements. - 4 -

MEGA URANIUM LTD.

Notes to Consolidated Financial Statements Year Ended September 30, 2023

(In thousands of Canadian dollars, except for securities and per share amounts)

1. Nature of business

Mega Uranium Ltd. ("Mega" or the "Company") was incorporated in 1990 under the laws of the Province of Ontario and its shares are publicly traded on the Toronto Stock Exchange (the "TSX") under the symbol "MGA". The Company is domiciled in the Province of Ontario, Canada and its registered office is located at 217 Queen Street West, Suite 401, Toronto, Ontario, Canada, M5V 0R2.

Mega has a uranium resource project and interests in exploration properties in Australia and equity investments in uranium-focused companies.

Mega has not yet determined whether its resource property contains reserves that are economically recoverable. The recoverability of the amounts shown for mineral properties and related expenditures is dependent upon various factors, including the future selling price of uranium, the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete exploration and development, government permitting policies and regulations, and future profitable production or proceeds from property disposition.

In addition to the Company's own exploration and development activities, Mega participates indirectly in the uranium sector through its securities holdings in other companies, including its significant long-term investment in NexGen Energy Ltd. ("NexGen") (NXE:TSX), its equity accounted investment in Toro Energy Limited ("Toro") (TOE:ASX), and marketable securities of other uranium-focused issuers. NexGen is an exploration and development stage entity engaged in the acquisition, exploration and evaluation of uranium properties in Canada. Toro's principal activities include the development of the Wiluna Uranium Project and exploration and evaluation of its tenement holdings.

These consolidated financial statements ("consolidated statements") were approved by the Company's board of directors on December 19, 2023.

2. Basis of preparation

1. Statement of compliance:

These consolidated statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Committee ("IFRIC"). The significant accounting policies are presented in note 3 and have been consistently applied in each of the years presented. Significant accounting estimates, judgments and assumptions used or exercised by management in the preparation of these consolidated statements are presented below.

1. Basis of presentation:

These consolidated statements have been prepared using the historical cost convention, except for some financial instruments, which have been measured at fair value. All monetary references expressed in these notes are references to Canadian dollar amounts ("$") except as otherwise noted.

1. Basis of consolidation:

These consolidated statements include the accounts of Mega and its wholly owned subsidiaries: Maple Resources Inc., Uranium Mineral Ventures Inc. ("UMVI"), Mega Georgetown Pty Ltd., Mega Hindmarsh Holdings Pty Ltd. ("Hindmarsh")., Mega Redport Holdings Pty Ltd., Monster Copper Corporation ("Monster"), Nu Energy Uranium Corporation ("Nu Energy"), and Northern Lorena Resources Ltd. ("Lorena"). The Company has additional indirect subsidiaries that are wholly owned by its subsidiaries.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. Control is achieved when an investor has power over an investee to direct its activities, exposure to variable returns from an investee, and the ability to use the power to affect the investor's returns.

All inter-company transactions and balances have been eliminated upon consolidation.

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