Western Atlas Resources : Financial Statements – First Quarter 2024

Western Atlas

Resources Inc.

Consolidated Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in Canadian dollars)

WESTERN ATLAS RESOURCES INC.

Consolidated Statements of Financial Position

(expressed in Canadian dollars)

		March 31, 2024	December 31, 2023
ASSETS
Current assets
Cash and cash equivalents (Note 3)	$	22,248	$	45,656
Prepaid expenses		7,135		10,120
Accounts receivable		995		1,521
		30,378		57,297
Non-current assets
Exploration and evaluation assets (Note 4)		4,940,627		4,939,304
Total assets	$	4,971,005	$	4,996,601
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	138,081	$	140,317
Accrued compensation		337,341		264,559
Loan Payable		15,000		-
		490,422		404,876
Shareholders' equity
Share capital (Note 6)		9,764,716		9,764,716
Equity reserves		872,041		872,041
Deficit		(6,156,174)		(6,045,032)
		4,480,583		4,591,725
Total liabilities and shareholders' equity	$	4,971,005	$	4,996,601

Going concern (Note 1)

These consolidated financial statements were approved for issue by the Board of Directors on May 24, 2024.

They are signed on the Company's behalf by:
	"Fabio Capponi"		"Susan Rubin"
	Director	Chief Financial Officer

The accompanying notes are an integral part of these consolidated financial state

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WESTERN ATLAS RESOURCES INC.

Consolidated Statements of Loss and Comprehensive Loss

(expressed in Canadian dollars)

	Three months ended		Three months ended
		March 31, 2024		March 31, 2023
Operating expenses
General and administrative expenses	$	23,602	$	23,427
Salaries and benefits (Note 7)		32,921		32,625
Geological consulting		-		35,743
Accounting, audit and advisory services (Note 7)		47,000		47,000
Legal fees		876		-
Property investigation costs		6,738		11,073
Investor relations		-		6,322
Foreign exchange loss		5		233
Net Loss and comprehensive loss for the period	$	111,142	$	156,423

Weighted Average Number of Common Shares Outstanding	117,853,398	117,533,398
Loss per Common share - basic and diluted	$0.00	$0.00

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

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WESTERN ATLAS RESOURCES INC.

Consolidated Statements of Changes in Shareholders' Equity

(expressed in Canadian dollars)

									Total
	Total number		Total share						Shareholders'
	of shares issued		capital		Reserves		Deficit		Equity
Balance December 31, 2022	117,553,398		9,758,716		800,314		(5,369,868)		5,189,162
Net loss	-		-		-		(156,423)		(156,423)
Balance March 31, 2023	117,553,398	$	9,758,716	$	800,314	$	(5,526,291)	$	5,032,739
Balance December 31, 2023	117,853,398		9,764,716		872,041		(6,045,032)		4,591,725
Net loss	-		-		-		(111,142)		(111,142)
Balance March 31, 2024	117,853,398	$	9,764,716	$	872,041	$	(6,156,174)	$	4,480,583

The accompanying notes are an integral part of these consolidated financial statement

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WESTERN ATLAS RESOURCES INC.

Consolidated Statements of Cash Flows

(expressed in Canadian dollars)

	Three months ended	Three months ended
		March 31, 2024		March 31, 2023
Cash flows provided by (used in):
Operating activities
Net loss for the period	$	(111,142)	$	(156,423)
Changes in non-cash working capital items:
Prepaid expenses		2,985		2,985
Accounts receivable		526		3,734
Accounts payable and accrued liabilities		(2,235)		36,416
Accrued compensation		72,781		-
Loan payable		15,000		-
Net cash used by operating activities		(22,085)		(113,288)
Investing activities
Exploration and evaluation assets		(1,323)		(1,716)
Net cash used by investing activities		(1,323)		(1,716)
Net cash decrease for the period		(23,408)		(115,004)
Cash and cash equivalents at beginning of period		45,656		261,646
Cash and cash equivalents at end of period	$	22,248	$	146,642
Supplemental cash flow information (Note 5)

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

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WESTERN ATLAS RESOURCES INC.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2024 and 2023 (expressed in Canadian dollars)

1. Nature of operations and going concern

Western Atlas Resources Inc. (the "Company") is a company domiciled in Canada. The address of the Company's registered office is Suite 1700, Park Place, 666 Burrard Street, Vancouver, BC, Canada V6C 2X8. The Company has one wholly owned subsidiary, Western Atlas Holding Corp., formerly Western Atlas (Nunavut) Holding Corp, which in turn has one wholly owned subsidiaries, 5530 Nunavut Inc., which is domiciled in Canada.

The consolidated financial statements of the Company for both periods presented comprises the Company and its subsidiaries (together referred to as the "Company" and individually as "Company entities"). The Company and its subsidiaries are primarily involved in the discovery, acquisition, and development of mineral deposits in premier mining jurisdictions.

These consolidated financial statements have been prepared on a basis which assumes that the Company will be able to continue its operation as a going concern for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. During the quarter ended March 31, 2024, the Company incurred a net loss of $111,142 (quarter ended March 31, 2023 - $156,423). At March 31, 2024, the Company had not achieved profitable operations, had an accumulated deficit of $6,156,174 (December 31, 2023 - $6,045,032) and expects to incur further losses as it develops its business and explores its mineral property interests. The Company will be required to raise additional financing to maintain its operations; all of the factors indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

The Company is in the process of exploring its exploration and evaluation assets and has not yet determined whether they contain resources that are economically recoverable. The recoverability of amounts shown for exploration and evaluation assets is dependent upon, among other things, the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary mining and environmental permits, and upon future profitable production or proceeds from disposition of the mineral property.

The ability of the Company to carry out its planned business objectives and continue as a going concern is dependent on its ability to raise adequate financing from lenders, shareholders, and other investors, and/or generate operating profitability and positive cash flow from its mineral property interests. There can be no assurances that the Company will be able to obtain the additional financial resources necessary and/or achieve profitability or positive cash flows from its future operations. If the Company is unable to obtain adequate additional financing, the Company would be required to curtail its planned operations and exploration and development activities which may impact the Company's ability to maintain its mineral property interest.

The Company's business may be affected by changes in political and market conditions, such as interest rates, availability of credit, inflation rates, changes in laws, and national and international circumstances. Recent geopolitical events and potential economic global challenges such as the risk of higher inflation and energy crises, may also create further uncertainty and risk with respect to the Company's business.

The consolidated financial statements do not include any adjustments relating to the recorded amounts and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

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WESTERN ATLAS RESOURCES INC.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2024 and 2023 (expressed in Canadian dollars)

2. Basis of preparation

1. Statement of compliance
   These consolidated financial statements have been prepared in accordance with International
   Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
2. Basis of measurement
   The consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments carried at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
3. Functional and presentation currency
   These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its Canadian subsidiaries. The functional currency of Andes Ecosucursal S.A.S. is in US dollars.
4. Use of estimates and judgments
   The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
   Estimates
   Significant areas requiring the use of estimates and assumptions are as follows:
   Share-based compensation
   The fair value of share-based payments is subject to the limitations of the Black-Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions. Because the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the fair value estimate.
   Judgments
   Critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:
   Going Concern
   The assessment of the Company's ability to continue as a going concern and to raise sufficient funds to pay its ongoing operating expenses, meet its liabilities for the ensuing year, and to fund planned and contractual exploration programs, involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

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WESTERN ATLAS RESOURCES INC.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2024 and 2023 (expressed in Canadian dollars)

2. Basis of preparation (continued)

1. Use of estimates and judgments (continued)

Impairment of exploration and evaluation assets

The Company's exploration and evaluation assets represent acquisition and exploration costs relating to the Company's exploration and evaluation assets. At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset, which is the greater of the asset's value in use and fair value less costs to sell. The Company considers both external and internal sources of information in assessing whether there are any indications that the Company's exploration and evaluation assets are impaired.

1. Basis of consolidation
2. 1. Subsidiaries
      Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Company.

Details of the Company's subsidiaries at March 31, 2024 are as follows:

	Place of
Name	Incorporation	Interest	Principal Activity
Western Atlas Holding Corp.	British Columbia,	100%	Mineral exploration
(formerly Western Atlas	Canada		and evaluation
(Nunavut) Holding Corp.)
5530 Nunavut Inc.	Nunavut, Canada	100%	Mineral exploration
			and evaluation

1. Transactions eliminated on consolidation

Inter-company balances and transactions, and any unrealized income and expenses arising from inter-company transactions, are eliminated in preparing the consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

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WESTERN ATLAS RESOURCES INC.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2024 and 2023 (expressed in Canadian dollars)

3. Material accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

1. Financial instruments

The following is the Company's accounting policy for financial instruments under IFRS 9 Financial Instruments ("IFRS 9"):

Financial Instrument	Classification
Cash and cash equivalents	FVTPL
Accounts receivable	Amortized cost
Accounts payable and accrued liabilities	Amortized cost
Accrued compensation	Amortized cost
Loan payable	Amortized cost

1. Financial assets
   Initial recognition and measurement
   The Company recognizes a financial asset when it becomes party to the contractual provisions of the instrument. A financial asset is measured initially at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. On initial recognition, a financial asset is classified as measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss. A financial asset is measured at amortized cost if it meets the conditions that i) the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
   Subsequent measurement
   The subsequent measurement of financial assets depends on their classification as follows:
   Financial assets at fair value through other comprehensive income
   Financial assets measured at fair value through other comprehensive income are carried in the statement of financial position at fair value with changes in fair value included in other comprehensive income. The Company has no financial assets classified as fair value through other comprehensive income.
   Financial assets at fair value through profit or loss
   Financial assets measured at fair value through profit or loss are carried in the statement of financial position at fair value with changes in fair value recognized in profit or loss. The Company classifies cash as fair value through profit or loss.

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WESTERN ATLAS RESOURCES INC.

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2024 and 2023 (expressed in Canadian dollars)

3. Material accounting policies (continued)

Financial assets measured at amortized cost

A financial asset measured at amortized cost is subsequently measured at amortized cost, using the effective interest method and net of any impairment allowance, if necessary. The Company classifies accounts receivable as amortized cost.

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost.

At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve-month expected credit losses. The Company shall recognize in profit or loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

1. Financial liabilities
   Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it expires. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities subsequently measured at amortized cost. All interest-related charges are reported in profit or loss within interest expense, if applicable.
   Financial liabilities at amortized cost
   A financial liability at amortized cost is initially measured at fair value less transaction costs directly attributable to the issuance of the financial liability. Subsequently, the financial liability is measured at amortized cost based on the effective interest rate method. The Company's accounts payable and accrued liabilities are measured at amortized cost.
   Financial liabilities at fair value through profit or loss

A financial liability measured at fair value through profit or loss is initially measured at fair value with any associated transaction costs being recognized in profit or loss when incurred. Subsequently, the financial liability is re-measured at fair value, and a gain or loss is recognized in profit or loss in the reporting period in which it arises. The Company has no financial liabilities classified as fair value through profit or loss.

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