Q2 2024 Financial Results

Toronto, Ontario, Aug. 14, 2024 (GLOBE NEWSWIRE) --

(“Amaroq” or the “Corporation” or the “Company”)

Q2 2024 Financial Results

TORONTO, ONTARIO – 14 August 2024 - Amaroq Minerals Ltd. (AIM, TSXV, NASDAQ Iceland: AMRQ), an independent mine development company with a substantial land package of gold and strategic mineral assets in Southern Greenland, presents its Q2 2024 financials. A conference call for analysts and investors will be held today at 14:00 BST (13:00 GMT, 09:00 EST), details of which can be found further down in this announcement. All dollar amounts are expressed in Canadian dollars unless otherwise noted.

Eldur Olafsson, CEO of Amaroq, commented:

"Progress at Nalunaq is advancing smoothly, and we remain on track to achieve first gold production later this year. The completion of the main building works marks a significant milestone, and we are now focused on installing the key components of the processing plant. A standout achievement this quarter was receiving approval from the Greenlandic Government for our Environmental and Social Impact Assessments. Upholding the highest standards of environmental and social responsibility is fundamental to our mission as we bring Nalunaq into production.

"Our exploration efforts across our gold and strategic minerals targets are also progressing well. At Nalunaq, the Target Block resource expansion program is underway, with drill crews now fully mobilized on-site. At Stendalen, we have successfully completed the camp construction, and drilling operations have begun, informed by promising results from recently completed ground geophysics.

"Additionally, we are pleased to announce a significant post-period development: the successful arrangement of a substantial increase and extension of our debt financing package with Landsbankinn. This new arrangement simplifies the structure of the facility while securing more favorable rates."

Q2 2024 Corporate Highlights

• Amaroq group liquidity of $62.2 million consisting of cash balances, undrawn revolving credit facilities, undrawn revolving credit overrun facility less trade payables ($96.3 million as of March 31, 2024).
• Gold business working capital before convertible note liability of $50.5 million that includes prepaid contractors on the Nalunaq project of $19.6 million as of June 30, 2024 ($78.2 million that includes prepaid contractors on the Nalunaq project of $17.5 million as of March 31, 2024)
• The Gardaq Joint Venture that comprises the Strategic Minerals business has available liquidity of $13.5 million as of June 30, 2024 ($17 million as of March 31, 2023).
• Amaroq continues to develop opportunities in Servicing and Hydro to enhance local procurement options and support the transition towards cleaner energy sources.

Post-Period Highlights

• In July 2024, the Company agreed heads of terms, subject to final documentation, with Landsbankinn for US$35 million in three Revolving Credit Facilities, securing a substantial increase and extension to its current debt facilities.
• On 6 August 2024, Ellert Arnarson joined the Company as Chief Financial Officer (CFO).

Q2 2024 Operational Highlights

• Permitting: The Government of Greenland approved the Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA) for the Nalunaq project in June 2024. The Company is now working with stakeholders on the Impact Benefit Agreement (IBA), which it aims to have in place by the end of the year.
• Contracting and Procurement: Procurement of all key contract packages is 92% complete. Contracts for the flotation recovery and dry stack tailings sections (“phase two”) building and equipment has commenced and will be completed by the end of Q3 2024. The remaining contracts are also expected to be concluded in Q3 2024.
• Engineering: Process plant detail design and engineering for phase one was 96% complete at the end of Q2, with all packages issued to the market. Engineering for phase two of the process plant building has commenced and will be completed by the end of Q3 2024.
• Construction: Plant pad earthworks and civil construction was 100% complete. The plant building structural steel is 100% complete and cladding is 94% complete. Mechanical installation of the crushing circuit is 68% complete and installation of the civil foundations for the retaining walls, stockpile reclaimer and stacker conveyor have commenced. The TMM and light vehicle workshop construction is complete and electrical installation was 78% complete. Foundations for the new accommodation unit were 25% complete. Overall process plant construction is 56% complete.
• Mining: Mine Development has progressed as new equipment has arrived to site, including two new ST7 scoops and one new Jumbo drill. The ramp has been completed to 732 m and the first ore round was blasted on June 30th. Amaroq has continued the sump development which is 75% complete. Both Mine Arc refuge stations have been commissioned. The leaky feeder communication system was installed from 300 to the 720 ml. Construction of the underground main heating system on 300ml portal has commenced. The exhaust raise fans for Target Block have been commissioned in preparation for the development of the exploration drift as drilling is planned to commence in September.
• Nalunaq Exploration: All additional 75 vein sampling from historical core housed at Nalunaq has been completed and submitted to ALS for assaying. Drill crews and equipment for surface exploration drilling targeting expanded mineralization at the Target Block, have been mobilised to site.
• Strategic Minerals: Amaroq has mobilised three drill rigs and a semi-permanent 40 person camp in order to enact an expanded drilling programme at Stendalen, which has now commenced.
  
  
  
  

Nalunaq Project KPIs

• 103,680 total hours worked during Q2 2024
• Daily average of 96 people working on site at Nalunaq in Q2 2024
• Ratio of Greenlandic personnel at Nalunaq was 51% in Q2 2024
  
  
  
  

Outlook

• Activities at Nalunaq remain on track to deliver first gold in Q4 2024. An additional accommodation wing is due to be added in Q3 2024 to accommodate up to 120 people on site.
• The Ni-Cu exploration programme continues at the Stendalen copper-nickel discovery with an expanded drilling programme targeting the sulphide zone.

Exploration activities overview

Gold projects:

• Nalunaq
  • All additional 75 vein sampling from historical core housed at Nalunaq has been completed and submitted to ALS for assaying.
  • Drill crews and equipment for surface exploration drilling to enlarge the mineralised zone at the Target Block have mobilised to site.
  • Following completion of the underground rehabilitation, exploration will now be conducted from underground as well as surface. The 2024 exploration programme aims to provide additional information and data on the Mountain Block and Target Block extensions to the Main Vein as well as assessing continuity and form of the 75 Vein. Underground drilling locations have been designed and a rig is to be mobilised for operations in Q4 2024.

• Vagar and Surrounding Areas
  • Amaroq intends to continue its target generation programmes in the regions near to Nalunaq and Vagar licences.

Strategic Minerals:

• Sava Copper Belt (Sava/North Sava)
  • Geological field team have commenced a programme of mapping and sampling across the copper belt area assessing both potential porphyry and magmatic Cu-Ni targets.
  • Following the identification of a copper/molybdenum porphyry system at Target West, the Company intends to continue additional porphyry target generation across the Sava and North Sava licences as well as regionally across the Copper Belt targeting areas that hold the greatest potential to host porphyry related systems.
  • Further assessment of the prospectivity of the epithermal copper/gold mineralisation at Target North is also planned.

• Stendalen
  • Following the new Copper-Nickel discovery made at Stendalen, Amaroq has mobilised three drill rigs and a semi-permanent camp to site to facilitate an expanded drilling programme.
  • Following the successful completion of a ground geophysics programme, a more robust conductive target within the interpreted Feeder Zone has been defined which will be the focus of the 2024 drilling programme, which commenced post-period in August.
  • In addition, the Company has commenced planning for a downhole geophysics programme to provide further confidence to the overall extend and geometry of the intrusion and associated sulphide mineralisation.
  • Leveraging off the data from this discovery, ground studies will also assess the potential for further target areas regionally.
    
    
    
    
• Kobberminebugt
  
  
  
  
  • Amaroq continues to review the results of the detailed geophysical programme conducted over the Kobberminebugt licence in 2023. Specific geophysical targets will be interpreted, and target generation activities will take place during Summer 2024.

• Nunarsuit
  • Geophysical data collected during 2023 is currently being fully assessed and Amaroq aims to conduct a targeted field programme on the licence during Summer of 2024. Initial targets will include specific geophysical anomalies as well as outcropping niobium bearing pegmatites.

Details of conference call

A conference call for analysts and investors will be held today at 14:00 BST (13:00 GMT, 09:00 EST), including a management presentation and Q&A session.

To join the meeting, please register at the below link:

Amaroq Financial Results

The following selected financial data is extracted from the Financial Statements for the six months ended June 30, 2024.

Financial Results

	Six months ended June 30
	2024 $	2023 $
Exploration and evaluation expenses	(748,040)	(3,459,846)
Site development costs	-	(1,825,564)
General and administrative	(8,294,917)	(5,383,216)
Gain on loss of control of subsidiary	-	31,340,880
Share of 6-months loss of an equity-accounted joint arrangement	(1,909,817)	(1,639,482)
Unrealized gain on derivative liability	5,291,615	-
Net (loss) income and comprehensive (loss) income	(3,988,193)	19,980,808
Basic and diluted (loss) income per common share	(0.013)	0.07

Financial Position

	As at June 30	As at March 31
	2024 $	2024 $
Cash on hand	31,663,204	65,086,851
Total assets	177,950,773	179,887,713
Total current liabilities (before convertible notes liability)	8,490,107	7,371,146
Total current liabilities (including convertible notes liability)	41,932,965	48,922,487
Shareholders’ equity	135,365,745	130,283,503
Working capital-gold business (before convertible notes liability)	50,534,953	78,210,475
Working capital-gold business (after convertible notes liability)	17,092,095	36,659,134
Gold business liquidity (excludes $17.0 and $18.7M ring-fenced for strategic mineral exploration as of March 31, 2024 and Dec 31, 2023)	62,153,117	96,303,850

Conditional Awards under RSU Plan

Amaroq further announces that it made a conditional award (the “Award”) under the Restricted Share Unit Plan (the “RSU Plan”) to the Chief Financial Officer Ellert Arnarson whose appointment became effective on 06 August 2024. The Award consists of a conditional right to receive value if the future performance targets, applicable to the Award, are met. Any value to which the participant is eligible in respect of the Award will be granted as Restricted Share Units (each an “RSU”), with each RSU entitling the participant to receive common shares in the Company. Each RSU will be granted under, and governed in accordance with, the rules of the Company's Restricted Share Unit Plan (the “RSU Plan”) available on the Company's website at

The details of the Award are as follows:

• Initial price: share price on the date of appointment being C$1.04;
• Hurdle rate: 10% p.a. above the Initial Price;
• Pool: value equal to 10% of the growth in value above the Hurdle rate;
• Individual allocation: 12% of the pool;
• Measurement date: 31 December 2025, a single measurement date based on the 3 months average share price;
• RSU Grant date: Q1 2026;
• Vesting: 100% vests Q1 2027.
  
  
  
  

PDMR Dealing Notification Form of provided in accordance with Article 19 of the EU Market Abuse Regulation 596/2014 can be found below.

******************

DEALING NOTIFICATION FORM

FOR USE BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITY

AND THEIR CLOSELY ASSOCIATED PERSONS

1.	Details of the person discharging managerial responsibilities/person closely associated
a)	Name:	Ellert Arnarson
2.	Reason for the notification
a)	Position/status:	Chief Financial Officer
b)	Initial notification/Amendment	Initial notification
3.	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	Amaroq Minerals Ltd.
b)	LEI:	213800Q21S5JQ6WKCE70
4.	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the financial instrument, type of instrument:   Identification code:	Restricted Share Units (“RSU”), with each RSU entitling the participant to receive common shares in the Company
b)	Nature of the transaction:	Award under Restricted Share Unit Plan
c)	Price(s) and volume(s):	Price(s)                        Volume(s)      Nil                                  12% of the Total Pool
d)	Aggregated information: Aggregated volume: Average price:	n/a
e)	Date of the transaction(s):	August 14, 2024
f)	Place of the transaction	XOFF

Enquiries:

Amaroq Minerals Ltd. 

Eldur Olafsson, Executive Director and CEO

 

Eddie Wyvill, Corporate Development

+44 (0)7713 126727

Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)

Callum Stewart

Varun Talwar

Simon Mensley

Ashton Clanfield

+44 (0) 20 7710 7600 

Panmure Liberum (UK) Limited (Joint Broker)

Scott Mathieson

Kieron Hodgson

+44 (0) 20 7886 2500

Camarco (Financial PR)

Billy Clegg

Elfie Kent

Fergus Young

+44 (0) 20 3757 4980 

For Company updates:

Follow @Amaroq_minerals on X (Formerly known as Twitter)

Follow Amaroq Minerals Inc. on LinkedIn

Further Information: 

About Amaroq Minerals 

Amaroq Minerals' principal business objectives are the identification, acquisition, exploration, and development of gold and strategic metal properties in South Greenland. The Company's principal asset is a 100% interest in the past producing Nalunaq Gold mine which is due to go into production towards the end of 2024. The Company has a portfolio of gold and strategic metal assets in Southern Greenland covering the two known gold belts in the region as well as advanced exploration projects at Stendalen and the Sava Copper Belt exploring for Strategic metals such as Copper, Nickel, Rare Earths and other minerals. Amaroq Minerals is continued under the Business Corporations Act (Ontario) and wholly owns Nalunaq A/S, incorporated under the Greenland Public Companies Act.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Glossary

Ag	silver
Au	gold
Bt	Billion tonnes
Cu	copper
g	grams
g/t	grams per tonne
km	kilometers
Koz	thousand ounces
m	meters
Mo	molybdenum
MRE	Mineral Resource Estimate
MT	Magnetotelluric data
Nb	niobium
Ni	nickel
oz	ounces
REE	Rare Earth Elements
t	tonnes
Ti	Titanium
t/m3	tonne per cubic meter
U	uranium
USD/ozAu	US Dollar per ounce of gold
V	Vanadium
Zn	zinc

Inside Information

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 on Market Abuse ("UK MAR"), as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, and Regulation (EU) No. 596/2014 on Market Abuse ("EU MAR").

Qualified Person Statement

The technical information presented in this press release has been approved by James Gilbertson CGeol, VP Exploration for Amaroq Minerals and a Chartered Geologist with the Geological Society of London, and as such a Qualified Person as defined by NI 43-101.

Amaroq Minerals Ltd.

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended June 30, 2024

The attached financial statements have been prepared by Management of Amaroq Minerals Ltd. and have not been reviewed by the auditor

		As at June 30,	As at December 31,
	Notes	2024	2023
		$	$
ASSETS
Current assets
Cash		31,663,204	21,014,633
Sales tax receivable		199,790	69,756
Prepaid expenses and others		19,593,779	18,681,568
Inventory		7,768,077	680,358
Total current assets		59,224,850	40,446,315
Non-current assets
Deposit		177,944	27,944
Escrow account for environmental rehabilitation		5,716,288	598,939
Financial Asset - Related Party	3,13	4,975,422	3,521,938
Investment in equity accounted joint arrangement	3	21,582,994	23,492,811
Mineral properties	4	48,683	48,821
Right of use asset	7	682,555	574,856
Capital assets	5	85,542,037	38,241,559
Total non-current assets		118,725,923	66,506,868
TOTAL ASSETS		177,950,773	106,953,183
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities		8,375,316	6,273,979
Convertible notes	6	33,442,858	35,743,127
Lease liabilities – current portion	7	114,791	80,206
Total current liabilities		41,932,965	42,097,312
Non-current liabilities
Lease liabilities	7	652,063	577,234
Total non-current liabilities		652,063	577,234
Total liabilities		42,585,028	42,674,546
Equity
Capital stock	8	207,202,359	132,117,971
Contributed surplus		6,716,481	6,725,568
Accumulated other comprehensive loss		(36,772)	(36,772)
Deficit		(78,516,323)	(74,528,130)
Total equity		135,365,745	64,278,637
TOTAL LIABILITIES AND EQUITY		177,950,773	106,953,183
Subsequent events	16

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

		Three months ended June 30,		Six months ended June 30,
	Notes	2024	2023	2024	2023
		$	$	$	$
Expenses
Exploration and evaluation expenses	10	127,173	(2,278,193)	(748,040)	(3,459,846)
Site development costs		-	(1,825,564)	-	(1,825,564)
General and administrative	11	(4,335,691)	(2,806,181)	(8,294,917)	(5,383,216)
Gain (loss) on disposal of capital assets		-	-	-	(37,791)
Foreign exchange gain (loss)		514,521	(171,828)	435,012	25,175
Operating gain (loss)		(3,693,997)	(7,081,766)	(8,607,945)	(10,681,242)
Other income (expenses)
Interest income		25,866	240,268	41,192	471,588
Gardaq management income and allocated cost		578,568	506,640	1,214,894	506,640
Gain on loss of control of subsidiary	3	-	31,340,880	-	31,340,880
Share of net loss of joint arrangement	3	(1,263,385)	(1,639,482)	(1,909,817)	(1,639,482)
Unrealized gain on derivative liability	6	9,591,828	-	5,291,615	-
Finance costs	12	(9,558)	(8,839)	(18,132)	(17,576)
Net income (loss) and comprehensive income (loss)		5,229,322	23,357,701	(3,988,193)	19,980,808
Weighted average number of common shares outstanding - basic		326,825,939	263,281,297	308,700,211	263,242,536
Weighted average number of common shares outstanding – diluted		364,748,474	273,398,692	308,700,211	273,359,931
Basic earnings (loss) per share	14	0.016	0.09	(0.013)	0.08
Diluted earnings (loss) per common share	14	0.014	0.09	(0.013)	0.07
Effect of dilution		0.002	-	-	0.01
Share options		7,261,353	10,117,395	7,261,353	10,117,395

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

Amaroq Minerals Ltd.

Consolidated Statements of Changes in Equity

(Unaudited, in Canadian Dollars)

	Notes	Number of common shares outstanding	Capital Stock	Contributed surplus	Accumulated other comprehensive loss	Deficit	Total Equity
			$	$	$	$	$
Balance at January 1, 2023		263,073,022	131,708,387	5,250,865	(36,772)	(73,694,617)	63,227,863
Net income and comprehensive income		-	-	-	-	19,980,808	19,980,808
Options exercised, net		208,275	128,758	(150,000)	-	-	(21,242)
Stock-based compensation	9	-	-	902,028	-	-	902,028
Balance at June 30, 2023		263,281,297	131,837,145	6,002,893	(36,772)	(53,713,809)	84,089,457
Balance at January 1, 2024		263,670,051	132,117,971	6,725,568	(36,772)	(74,528,130)	64,278,637
Net loss and comprehensive loss		-			-	(3,988,193)	(3,988,193)
Shares issued under a fundraising	8	62,724,758	75,574,600		-		75,574,600
Shares issuance costs	8	-	(1,218,285)		-		(1,218,285)
Options exercised - net		1,023,918	728,073	(745,500)	-		(17,427)
Stock-based compensation	9	-	-	736,413	-		736,413
Balance at June 30, 2024		327,418,727	207,202,359	6,716,481	(36,772)	(78,516,323)	135,365,745

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

	Notes	Six months ended June 30,
		2024	2023
		$	$
Operating activities
Net (loss) income for the period		(3,988,193)	19,980,808
Adjustments for:
Depreciation	5	347,881	352,763
Amortisation of ROU asset	7	53,340	39,774
Stock-based compensation	9	736,413	902,028
Gain on loss of control of subsidiary	3	-	(31,340,880)
Unrealized loss on derivative liability	6	(5,291,615)	-
Loss on disposal of capital assets		-	37,791
Share of net losses of joint arrangement	3	1,909,817	1,639,482
Gardaq management income and allocated cost	3,13	(1,214,894)	(506,640)
Interest income		(41,192)	(471,588)
Other expenses		(17,427)	-
Foreign exchange		(667,577)	(47,985)
Finance costs		18,132	17,576
		(8,155,315)	(9,396,871)
Changes in non-cash working capital items:
Sales tax receivable		(130,033)	17,004
Due from related party	3,13	(175,663)	(1,712,863)
Prepaid expenses and others		(8,015,367)	(1,580,751)
Accounts payable and accrued liabilities		2,100,537	1,734,337
		(6,220,526)	(1,542,273)
Cash flow used in operating activities		(14,375,841)	(10,939,144)
Investing activities
Transfer to escrow account for environmental rehabilitation		(5,066,193)	-
Construction in progress and acquisition of capital assets	5	(45,078,383)	-
Prepayment for acquisition of ROU asset		(5,825)	-
Deposit		(150,000)	-
Cash flow used in investing activities		(50,300,401)	-
Financing activities
Proceeds from issuance of shares	8	75,574,600	-
Shares issuance costs	8	(1,218,285)	-
Lease payments	7	(63,932)	(53,173)
Interest received		41,192	471,588
Cash flow from financing activities		74,333,575	418,415
Net change in cash before effects of exchange rate changes on cash during the period		9,657,333	(10,520,729)
Effects of exchange rate changes on cash		991,238	53,012
Net change in cash during the period		10,648,571	(10,467,717)
Cash, beginning of period		21,014,633	50,137,569
Cash, end of period		31,663,204	39,669,852
Supplemental cash flow information
Borrowing costs capitalised to capital assets (note 5)		2,569,838	-
ROU assets acquired through lease		155,214	-
Options exercised		728,073	-

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

  1.    NATURE OF OPERATIONS, BASIS OF PRESENTATION

Amaroq Minerals Ltd. (the “Corporation”) was incorporated on February 22, 2017, under the Canada Business Corporations Act. As of June 19, 2024, the Corporation completed its continuance from the Canada Business Corporations Act into the Province of Ontario under the Business Corporations Act (Ontario). The Corporation’s head office is situated at 100 King Street West, Suite 3400, First Canadian Place, Toronto, Ontario, M5X 1A4, Canada. The Corporation operates in one industry segment, being the acquisition, exploration and development of mineral properties. It owns interests in properties located in Greenland. The Corporation’s financial year ends on December 31. Since July 2017, the Corporation’s shares are listed on the TSX Venture Exchange (the “TSX-V”). Since July 2020, the Corporation’s shares are also listed on the AIM market of the London Stock Exchange (“AIM”) and from November 1, 2022, on Nasdaq First North Growth Market Iceland which were transferred on September 21, 2023 on Nasdaq Main Market Iceland (“Nasdaq”) under the AMRQ ticker.

These unaudited condensed interim consolidated financial statements for the six months ended June 30, 2024 (“Financial Statements”) were approved by the Board of Directors on August 14, 2024.

1.1    Basis of presentation and consolidation

The Financial Statements include the accounts of the Corporation and those of its 100% owned subsidiary Nalunaq A/S, company incorporated under the Greenland Public Companies Act. The Financial Statements also include the Corporation’s 51% equity share of Gardaq A/S, a joint venture with GCAM LP (Note 3).

The Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) including International Accounting Standard (“IAS”) 34, Interim Financial Reporting. The Financial Statements have been prepared under the historical cost convention.

The Financial Statements should be read in conjunction with the audited annual financial statements for the year ended December 31, 2023, which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies, methods of computation and presentation applied in these Financial Statements are consistent with those of the previous financial year ended December 31, 2023.

  2.    CRITICAL ACCOUNTING JUDGMENTS AND ASSUMPTIONS

The preparation of the Financial Statements requires Management to make judgments and form assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and reported amounts of expenses during the reporting period. On an ongoing basis, Management evaluates its judgments in relation to assets, liabilities and expenses. Management uses past experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments. Actual outcomes may differ from these estimates under different assumptions and conditions.

In preparing the Financial Statements, the significant judgements made by Management in applying the Corporation accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Corporation’s audited annual financial statements for the year ended December 31, 2023.

3.        INVESTMENT IN AN ASSOCIATE OR JOINT VENTURE CORPORATION

	As at     June 30, 2024	As at     June 30, 2023
	$	$
Balance at beginning of period	23,492,811	-
Original investment in Gardaq ApS	-	7,422
Transfer of non-gold strategic minerals licences at cost	-	36,896
Investment at conversion of Gardaq ApS to Gardaq A/S	-	55,344
Gain on FV recognition of equity accounted investment in joint venture	-	31,285,536
Share of joint venture’s net losses for six months ended June30	(1,909,817)	(1,639,482)
Balance at end of period	21,582,994	29,745,716

Original investment in Gardaq ApS	7,422	7,422
Transfer of non-gold strategic minerals licences at cost	36,896	36,896
Investment at conversion of Gardaq ApS to Gardaq A/S	55,344	55,344
Gain on FV recognition of equity accounted investment in joint venture	31,285,536	31,285,536
Investment retained at fair value- 51% share	31,385,198	31,385,198
Share of joint venture’s cumulative net losses	(9,802,204)	(1,639,482)
Balance at end of period	21,582,994	29,745,716

The following tables summarize the unaudited financial information of Gardaq A/S.

	As at    June 30, 2024	As at    June 30, 2023
	$	$
Cash and cash equivalent	13,483,026	29,337,924
Prepaid expenses and other	2,741,424	64,645
Total current assets	16,224,450	29,402,569
Mineral property	117,576	92,240
Total assets	16,342,026	29,494,809
Accounts payable and accrued liabilities	339,675	243,939
Financial liability - related party	4,975,422	2,218,604
Total liabilities	5,315,097	2,462,543
Capital stock	30,246,937	30,246,937
Deficit	(19,220,008)	(3,214,671)
Total equity	11,026,929	27,032,266
Total liabilities and equity	16,342,026	29,494,809

3.        INVESTMENT IN AN ASSOCIATE OR JOINT VENTURE CORPORATION (CONT’d)

	As at     June 30, 2024	As at     June 30, 2023
	$	$
Exploration and Evaluation expenses	2,799,464	2,751,253
Interest expense (income)	(4,640)	-
Foreign exchange loss (gain)	(369,405)	(43,222)
Operating loss	2,425,419	2,708,031
Other expenses	1,319,319	506,640
Net loss and comprehensive loss	3,744,738	3,214,671

3.1 Financial Asset – Related Party

Subject to a Subscription and Shareholder Agreement dated 13 April 2023, the Corporation undertakes to subscribe to two ordinary shares in Gardaq (the “Amaroq shares”) at a subscription price of GBP 5,000,000 no later than 10 business days after the third anniversary of the completion of the subscription agreement.

Amaroq’s subscription will be completed by the conversion of Gardaq’s related party balance into equity shares. Gardaq’s related party payable balance consists of overhead, management, general and administrative expenses payable to the Corporation. In the event that the related party payable balance is less than GBP 5,000,000, the Corporation shall, no later than 10 business days after the third anniversary of Completion:

(a)   subscribe to one Amaroq share by conversion of the amount payable to the Corporation,

(b)   subscribe to one Amaroq share at a subscription price equal to GBP 5,000,000 less the amount payable to the Corporation

In the event that the amount payable to the Corporation exceeds GBP 5,000,000, the Corporation shall subscribe to the Amaroq shares at a subscription price equal to GBP 5,000,000 by conversion of GBP 5,000,000 of the amount due from Gardaq. Gardaq shall not be liable to repay any of the balance payable to the Corporation that exceeds GBP 5,000,000 (equivalent to CAD 8,647,100 as at 30 June 2024). See note 13.1.

During the six-month period ended 30 June 2024, the Corporation determined that the financial asset should be reclassified to the non-current asset category since the amount will be settled during April 2026. As a result, an amount of $4,975,422 has been reclassified to non-current assets as at 30 June 2024 ($3,521,938 reclassified as at 31 December 2023, nil as at 31 December 2022).

  4.    MINERAL PROPERTIES

	As at December 31, 2023	Transfer	As at June 30, 2024
	$	$	$
Nalunaq - Au	1	-	1
Tartoq - Au	18,431	-	18,431
Vagar - Au	11,103	-	11,103
Nuna Nutaaq - Au	6,076	-	6,076
Anoritooq - Au	6,389	-	6,389
Siku - Au	6,821	(138)	6,683
Total mineral properties	48,821	(138)	48,683

  4.   MINERAL PROPERTIES (CONT’d)

	As at December 31, 2022	Transfers	As at June 30, 2023
	$	$	$
Nalunaq - Au	1	-	1
Tartoq - Au	18,431	-	18,431
Vagar - Au	11,103	-	11,103
Nuna Nutaaq - Au	6,076	-	6,076
Anoritooq - Au	6,389	-	6,389
Siku - Au	6,821	-	6,821
Naalagaaffiup Portornga - Strategic Minerals	6,334	(6,334)	-
Saarloq - Strategic Minerals	7,348	(7,348)	-
Sava - Strategic Minerals	6,562	(6,562)	-
Kobberminebugt - Strategic Minerals	6,840	(6,840)	-
Stendalen - Strategic Minerals	4,837	(4,837)	-
North Sava - Strategic Minerals	4,837	(4,837)	-
Total mineral properties	85,579	(36,758)	48,821

  5.   CAPITAL ASSETS

	Field equipment and infrastructure	Vehicles and rolling stock	Equipment (including software)		Construction in progress		Total
	$	$	$		$		$
Six months ended June 30, 2024
Openingnetbookvalue	1,537,379	3,312,118	108,822		33,283,240		38,241,559
Additions	-	47,254	138		47,600,967		47,648,359
Depreciation	(99,187)	(217,499)	(31,195)		-		(347,881)
Closing net book value	1,438,192	3,141,873	77,765		80,884,207		85,542,037
	Field equipment and infrastructure	Vehicles and rolling stock		Equipment (including software)	Construction in progress	Total
	$	$		$	$	$
As at June 30, 2024
Cost	2,351,042	4,514,225		232,231	80,884,207	87,981,705
Accumulated depreciation	(912,850)	(1,372,352)		(154,466)	-	(2,439,668)
Closing net book value	1,438,192	3,141,873		77,765	80,884,207	85,542,037

  5.   CAPITAL ASSETS (CONT’d)

	Field equipment and infrastructure	Vehicles and rolling stock	Equipment (including software)	Construction In progress	Total
	$	$	$	$	$
December 31, 2023
Openingnetbookvalue	1,735,752	3,742,384	216,385	7,522,085	13,216,606
Additions	-	-	-	25,761,155	25,761,155
Disposals	-	-	(80,983)	-	(80,983)
Adjustment	-	-	43,054	-	43,054
Depreciation	(198,373)	(430,266)	(69,634)	-	(698,273)
Closing net book value	1,537,379	3,312,118	108,822	33,283,240	38,241,559
	Field equipment and infrastructure	Vehicles and rolling stock	Equipment (including software)	Construction In progress	Total
	$	$	$	$	$
As at December 31, 2023
Cost	2,351,041	4,466,971	232,231	33,283,240	40,333,483
Accumulated depreciation	(813,662)	(1,154,853)	(123,409)	-	(2,091,924)
Closing net book value	1,537,379	3,312,118	108,822	33,283,240	38,241,559

Depreciation of capital assets related to exploration and evaluation properties is being recorded in exploration and evaluation expenses in the consolidated statement of comprehensive loss, under depreciation. Depreciation of $316,879 ($321,265 for the six months ended June 30, 2023) was expensed as exploration and evaluation expenses during the six months ended June 30, 2024.

As at June 30, 2024, the Corporation had capital commitments, of $50,977,087. These commitments relate to the development of Nalunaq Project, rehabilitation of the Nalunaq mine, construction of processing plant, purchases of mobile equipment and establishment of surface infrastructure.

During the first six months of 2024 the Corporation capitalised borrowing costs of $2,569,838 to construction in progress, which are included in additions.

  6.   CONVERTIBLE NOTES

	Convertible notes loan	Embedded Derivatives at FVTPL	Total
	$	$	$
Balance as at December 31, 2023	11,763,053	23,980,074	35,743,127
Accretion of discount	1,811,142	-	1,811,142
Accrued interest	758,696	-	758,696
Fair value change	-	(5,291,615)	(5,291,615)
Foreign exchange loss	421,508	-	421,508
Balance as at June 30, 2024	14,754,399	18,688,459	33,442,858
Non-current portion	-	-	-
Current portion	14,754,399	18,688,459	33,442,858

6. CONVERTIBLE NOTES (CONT’d)

	Convertible notes loan	Embedded Derivatives at FVTPL	Total
	$	$	$
Balance as at December 31, 2022	-	-	-
Gross proceeds from issue	30,431,180	-	30,431,180
Embedded derivative component	(19,443,663)	19,443,663	-
Transaction costs	(362,502)	-	(362,502)
Accretion of discount	949,062	-	949,062
Accrued interest	508,576	-	508,576
Fair value change	-	4,536,411	4,536,411
Foreign exchange loss (gain)	(319,600)	-	(319,600)
Balance as at December 31, 2023	11,763,053	23,980,074	35,743,127
Non-current portion	-	-	-
Current portion	11,763,053	23,980,074	35,743,127

6.1 Revolving Credit Facility

A $25 million (US$18.5 million) Revolving Credit Facility (“RCF”) was entered into with Landsbankinn hf. and Fossar Investment Bank on September 1, 2023, with a two-year term expiring on September 1, 2025 and priced at the Secured Overnight Financing Rate (“SOFR”) plus 950bps. Interest is capitalized and payable at the end of the term.

The RCF is denominated in US Dollars and the SOFR interest rate is determined with reference to the CME Term SOFR Rates published by CME Group Inc. The RCF carries (i) a commitment fee of 0.40% per annum calculated on the undrawn facility amount and (ii) an arrangement fee of 2.00% on the facility amount where 1.5% has been paid on the closing date of the facility and 0.50% is to be paid on or before the first draw down. The facility is not convertible into any securities of the Corporation.

The facility will be secured by (i) a bank account pledge from the Corporation and Nalunaq A/S, (ii) share pledges over all current and future acquired shares in Nalunaq A/S and Gardaq A/S held by the Corporation pursuant to the terms of share pledge agreements, (iii) a proceeds loan assignment agreement, (iv) a pledge agreement in respect of owner’s mortgage deeds and (v) a licence transfer agreement. The Corporation has not yet drawn on this facility.

This facility will be replaced by the new revolving credit facilities that are expected to be finalized subsequent to the interim financial reporting date (see note 16).

6.    CONVERTIBLE NOTES (CONT’d)

6.2 Convertible notes

Convertible notes represent $30.4 million (US$22.4 million) notes issued to ECAM LP (US$16 million), JLE Property Ltd. (US$4 million) and Livermore Partners LLC (US$2.4 million) on September 1, 2023 with a four-year term and a fixed interest rate of 5%. The conversion price of $0.90 per common share is the closing Canadian market price of the Amaroq shares on the day, prior to the closing day of the Debt Financing.

The convertible notes are denominated in US Dollars and will mature on September 30, 2027, being the date that is four years from the convertible note offering closing date. The principal amount of the convertible notes will be convertible, in whole or in part, at any time from one month after issuance into common shares of the Corporation ("Common Shares") at a conversion price of $0.90 (£0.525) per Common Share for a total of up to 33,812,401 Common Shares. The Corporation may repay the convertible