NexGold Mining — Interim / Quarterly Report 2023

Nov 10, 2023

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2023

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022 (Unaudited) (Expressed in Canadian dollars)

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TREASURY METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(Expressed In Canadian Dollars) (Unaudited)

Expressed In Canadian Dollars) (Unaudited)
	September 30	December 31
As at	2023	2022
($)
Assets
Current assets
Cash and cash equivalents (Note 5)	8,253,717	16,020,110
Accounts receivable and prepaid expenses (Note 6)	1,529,248	864,263
Investments (Note 7)	667,537	664,433
Total current assets	10,450,502	17,548,806
Non-current assets
Property and equipment (Note 8)	2,671,288	2,809,429
Mineral properties (Note 9)	103,379,208	103,379,208
Total non-current assets	106,050,496	106,188,637
Total assets	116,500,998	123,737,443
Liabilities
Current liabilities
Accounts payable and accrued liabilities (Note 10)	645,462	1,219,369
Current portion of long-term debt (Note 11)	109,344	6,881,843
Current portion of SRSR payment obligation (Note 12)	1,856,577	1,729,207
Flow through premium (Note 13)	319,261	–
Derivative liability (Note 11)	–	22,738
Total current liabilities	2,930,644	9,853,157
Non-current liabilities
Long-term debt (Note 11)	7,503,372	251,837
Derivative liability (Note 11)	43,030	–
SRSR payment obligation (Note 12)	8,120,974	9,547,091
Total non-current liabilities	15,667,376	9,798,928
Total liabilities	18,598,020	19,652,085
Shareholders' Equity
Capital stock (Note 13)	212,728,372	209,595,606
Warrants (Note 14)	464,995	–
Contributed surplus	27,059,070	26,102,719
Deficit	(141,327,523)	(130,587,928)
Accumulated other comprehensive loss	(1,021,936)	(1,025,039)
	97,902,978	104,085,358
Total liabilities and shareholders’ equity	116,500,998	123,737,443

Nature of Operations and Going Concern (Note 1) Commitments and Contractual Obligations and Contingencies (Note 18)

SIGNED ON BEHALF OF THE BOARD

(Signed) “ Margot Naudie” (Signed) ”James Gowans” Director Director

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

1

TREASURY METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS

(Expressed In Canadian Dollars) (Unaudited)

($)	Three Months Ended Nine Months Ended September 30 September 30
	2023 2022 2023 2022
Expenses Exploration and evaluation (Note 16) Administrative, office and shareholder services Professional fees Salary and benefits (Note 17) Amortization (Note 8) Share-based payments (Note 15) Accretion of long-term debt (Note 11 & Note 12) Finance expense Foreign exchange loss (gain) Loss (gain) on debt and derivative liability (Note 11) Loss on debt modification (Note 11) Write-down of mineralproperties(Note 8)	1,517,731 3,093,079 5,024,085 11,199,979 276,260 460,159 934,071 1,193,977 183,147 39,808 443,540 181,583 470,497 460,818 1,876,428 1,661,819 50,913 60,033 151,702 175,234 196,720 290,046 1,090,305 1,377,841 245,102 363,128 917,507 801,122 46,972 35,277 100,075 222,347 328,378 979,386 (43,602) 1,279,136 (127,967) (63,004) (118,211) (703,329) – – 464,995 – – – – 100,000
Loss before income tax Income from flow-throughpremium	3,187,753 5,718,730 10,840,895 17,489,709 101,300 352,654 101,300 1,973,629
Net Loss for theperiod	(3,086,453) (5,366,076) (10,739,595) (15,516,080)
Loss per share - basic and diluted Weighted average number of shares outstanding	(0.02) (0.04) (0.07) (0.11) 148,331,293 138,148,775 144,096,061 138,019,006

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

2

TREASURY METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OTHER COMPREHENSIVE LOSS

(Expressed In Canadian Dollars) (Unaudited)

($)	Three Months Ended September 30 Nine Months Ended September 30
	2023 2022 2023 2022
Net loss for theperiod	(3,086,453) (5,366,076) (10,739,595) (15,516,080)
Other comprehensive income (loss) Items to be reclassified to profit or loss in subsequent years Fair value on equity investment, net of tax	165,591 (164,383) 3,103 (190,407)
Other comprehensive income (loss) for the period	165,591 (164,383) 3,103 (190,407)
Total comprehensive loss for theperiod	(2,920,862) (5,530,459) (10,736,492) (15,706,487)

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

3

TREASURY METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Expressed In Canadian Dollars) (Unaudited)

						Accumulated
						Other
				Contributed		Comprehensive
($)	Common Shares	Capital Stock	Warrants	Surplus	Deficit	Loss	Total
Balance, January 1, 2022	137,879,334	209,453,412	–	24,598,080	(110,294,403)	(995,647)	122,761,442
Share-based payments – compensation	–	–	–	740,434			740,434
Share-based payments - restricted share units	–	–	–	637,408	–	–	637,408
Restricted share units redeemed (Note 15)	269,441	135,821	–	(135,821)	–	–	–
Net income (loss) for the period	–	–	–	–	(15,516,080)		(15,516,080)
Other comprehensive income (loss) for the period	–	–	–	–	–	(190,407)	(190,407)
Balance, September 30, 2022	138,148,775	209,589,233	–	25,840,101	(125,810,483)	(1,186,054)	108,432,797
Share-based payments – compensation	–	–	–	32,679	–	–	32,679
Share-based payments - restricted share units	–	–	–	236,312	–	–	236,312
Restricted share units redeemed	19,312	6,373	–	(6,373)	–	–	–
Net income (loss) for the period	–	–	–	–	(4,777,445)	–	(4,777,445)
Other comprehensive income (loss) for the period	–	–	–	–	–	161,015	161,015
Balance, December 31, 2022	138,168,087	209,595,606	–	26,102,719	(130,587,928)	(1,025,039)	104,085,358
Share-based payments - compensation (Note 15)	–	–	–	108,938	–	–	108,938
Share-based payments - restricted share units
(Note 15)	–	–	–	981,367	–	–	981,367
Restricted share units redeemed (Note 15)	437,235	133,954	–	(133,954)	–	–	–
Flow-through share issuance (Note 13)	3,115,265	987,539	–	–	–	–	987,539
Issuance of warrants at fair value (Note 14)	–	–	464,995	–	–	–	464.995
Share issued for repayment of SRSR obligation
(Note 12)	6,925,456	2,011,273	–	–	–	–	2,011,273
Returned shares	(22)	–	–	–	–	–	–
Net income (loss) for the period	–	–	–	–	(10,739,595)	–	(10,739,595)
Other comprehensive income (loss) for the period	–	–	–	–	–	3,103	3,103
Balance, September 30, 2023	148,646,021	212,728,372	464,995	27,059,070	(141,327,523)	(1,021,936)	97,902,978

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

4

TREASURY METALS INC. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars) (Unaudited)

	Nine Months Ended	Nine Months Ended
	September 30
($)	2023	2022
Cash and cash equivalents (used in) provided by:
Operating Activities
Net Loss for the period	(10,739,595)	(15,516,080)
Adjustments for:
Amortization	151,702	175,234
Income from flow-through premium	(101,300)	(1,973,629)
Share-based payments (Note 15)	1,090,305	1,377,841
Accretion on long-term debt (Note 11)	171,697	257,787
Accretion on SRSR obligation (Note 12)	745,810	543,335
Loss (gain) on debt and derivative liability (Note 11)	(118,211)	(703,329)
Finance costs	539,651	439,542
Foreign exchange (gain) loss	(43,602)	1,456,574
Loss on debt extinguishment (Note 11)	464,995	–
Write-down of mineral properties	–	100,000
Net change in non-cash working capital items:
Accounts receivable and prepaid expenses	(664,985)	196,783
Accountspayable and accrued liabilities	(573,907)	(776,752)
Net cash flows used in operating activities	(9,077,440)	(14,422,694)
Financing Activities
Proceeds from SRSR obligation	–	10,958,800
Payment of SRSR obligation	–	(648,400)
Proceeds from issuance of shares (Note 13)	1,408,100	–
Payment of lease liabilities	(83,492)	(74,274)
Net cash flows provided by (used in) financing
activities	1,324,608	10,236,126
Investing Activities
Acquisition of property and equipment	(13,561)	(21,443)
Proceeds from sale of royalty	–	14,219,200
Net cash flows provided by (used in) investing
activities	(13,561)	14,197,757
Increase (decrease) in cash and cash
equivalents	(7,766,393)	10,011,189
Cash and cash equivalents, beginning ofperiod	16,020,110	10,090,415
Cash and cash equivalents, end ofperiod	8,253,717	20,101,604
Supplementary cash flow information
Changes in non-cash activities:
Payment of debt with shares (Note 12)	2,011,273	–
Capitalized interest on long-term debt(Note 11)	538,154	426,627

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

5

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

1. NATURE OF OPERATIONS AND GOING CONCERN

Treasury Metals Inc. (the "Company" or "Treasury Metals") is incorporated under the laws of Ontario and listed on the Toronto Stock Exchange under the symbol "TML". The address of the Company's registered office is 15 Toronto Street, Suite 401, Toronto, Ontario, Canada M5C 2E3. The mineral properties of the Company are all located in Canada and are in the exploration stage. The recoverability of the amounts shown on the consolidated statements of financial position for mineral properties is dependent upon the existence of economically recoverable reserves, maintaining beneficial interest in its properties and the underlying mining claims, obtaining the necessary regulatory approvals and permits, the ability to obtain the necessary financing to fulfill its obligations as they arise, the ability to complete the development of the claims, and achieving profitable production or the proceeds from the disposition of the properties. The Company's success depends on the successful development of the properties and corresponding permitting and feasibility study. Based upon its current operating and financial plans, management of the Company believes that it will have sufficient access to financial resources (debt and equity), in the near term, to fund the Company's planned operations and development of the Goliath Gold Complex.

The condensed consolidated financial statements were prepared on a going concern basis, which assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has not generated revenue from operations. On September 30, 2023, the Company's working capital was $7,839,117 (December 31, 2022 – $7,718,387), excluding the derivative liability and flow through premium. For the nine-month period ended September 30, 2023, the Company incurred a net loss of $10,739,595 (September 30, 2022 – net loss of $15,516,080), had cash outflows from operations of $9,077,439 (September 30, 2022 - $14,422,694), had not yet achieved profitable operations, had accumulated losses of $141,327,523 (December 31, 2022 – $130,587,928) and expects to incur further losses in the development of its business. Should the Company be unable to raise sufficient financing to maintain operations, the Company may be unable to realize the carrying value of its net assets. These uncertainties may cast significant doubt upon the Company’s ability to continue as a going concern.

These condensed consolidated interim financial statements do not reflect the adjustments to carrying amounts of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary if the going concern assumption was deemed inappropriate. Such adjustments could be material.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”) and their interpretations issued by the IFRS Interpretations Committee which have been consistently applied.

The accounting policies used in these condensed consolidated interim financial statements are consistent with those disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2022. These condensed consolidated interim financial statements do not include certain information and disclosures normally included in the annual financial statements prepared in accordance with IFRS and should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2022.

These condensed consolidated financial statements were approved by the Company’s Board of Directors on November 9, 2023.

6

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Basis of Consolidation

These condensed consolidated interim financial statements include the financial statements of the Company and its wholly-owned Canadian subsidiary Goldeye Explorations Ltd. for the three and nine months ended September 30, 2023 and 2022.

Functional and Presentation Currency

These condensed consolidated interim financial statements are presented in Canadian dollars which is also the functional currency of the Company and its wholly-owned Canadian subsidiary.

3. ADOPTION OF NEW ACCOUNTING STANDARDS

Standards and amendments issued but not yet effective or adopted

IAS 1, Presentation of Financial Statements. The IASB issued an amendment to IAS 1, Presentation of Financial Statements to clarify one of the requirements under the standard for classifying a liability as noncurrent in nature, specifically the requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period. The amendment includes: (i) specifying that an entity’s right to defer settlement must exist at the end of the reporting period; (ii) clarifying that classification is unaffected by management’s intentions or expectations about whether the entity will exercise its right to defer settlement; (iii) clarifying how lending conditions affect classification; and (iv) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments. The amendment is effective for reporting periods beginning on or after January 1, 2024.

4. ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of these condensed consolidated interim financial statements, in compliance with IFRS, requires the Company’s management to make certain estimates and assumptions that they consider reasonable and realistic. Despite regular reviews of these estimates and assumptions, based on past achievements or anticipations, facts and circumstances may lead to changes in these estimates and assumptions which could impact the reported amount of the Company’s assets, liabilities, equity, or earnings.

The areas which require management to make significant estimates, judgements and assumptions are consistent with those applied and disclosed in the Company’s annual financial statements for the year ended December 31, 2022.

5. CASH AND CASH EQUIVALENTS

5. CASH AND CASH EQUIVALENTS
	September 30	December 31
($)	2023	2022
Cash	1,658,264	9,674,942
Cashable GIC	6,588,648	6,338,363
Funds in trust	6,805	6,805
	8,253,717	16,020,110

7

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

6. ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

6. ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
	September 30	December 31
($)	2023	2022
Advances and prepaid expenses	1,263,702	453,190
Other receivables	63,099	85,755
Harmonized sales tax	202,447	325,318
	1,529,248	864,263

7. INVESTMENTS

The Company's investments are classified as fair value through other comprehensive income ("FVTOCI") and are carried at fair value.

	Number of Shares September 30 2023 Number of Shares December 31 2022
Alaska Energy Metals Corp. – Shares (i) Platinex Inc. – Shares	($) ($) 14,778 7,537 147,778 4,433 16,500,000 660,000 16,500,000 660,000
	667,537 664,433

(i) On March 1, 2023, Millrock Resources Inc changed its name to Alaska Energy Metals Corporation and consolidated its outstanding common shares on the basis of one new common share for every ten common shares held.

8. PROPERTY AND EQUIPMENT

($) Land Buildings(i) Furniture and Equipment Vehicles(ii)	Total
Cost At January 1, 2023 1,496,909 1,535,011 518,705 236,962 Additions – – 13,561 – Disposals – – – –
	3,787,587
	13,561
	–
At September 30, 2023 1,496,909 1,535,011 532,266 236,962	3,801,148
Accumulated amortization At January 1, 2023 – (510,221) (403,963) (63,974) Amortization for the period – (76,209) (38,470) (37,023) Disposals – – – –
	(978,158)
	(151,702)
	–
At September 30, 2023 – (586,430) (442,433) (100,997)	(1,129,860)
Net book value September 30, 2023 1,496,909 948,581 89,833 135,965	2,671,288

– (i) Buildings include right-of-use assets with net book value of $137,075 (December 31, 2022 $186,418).

– (ii) Vehicles include right-of-use assets with net book value of $113,904 (December 31, 2022 $141,472).

8

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

8. PROPERTY AND EQUIPMENT (cont’d)

($) Land Buildings(i) Furniture and Equipment Vehicles(ii)	Total
Cost At January 1, 2022 1,496,909 1,268,916 470,219 209,213 Additions – 266,085 48,486 173,930 Disposals – – – (146,181)
	3,445,257
	488,511
	(146,181)
At December 31, 2022 1,496,909 1,535,011 518,705 236,962	3,787,587
Accumulated amortization At January 1, 2022 – (406,893) (317,085) (164,619) Amortization for the year – (103,328) (86,878) (45,535) Disposals – – – 146,180
	(888,597)
	(235,741)
	146,180
At December 31,2022 – (510,221) (403,963) (63,974)	(978,158)
Net book value at December 31,2022 1,496,909 1,024,790 114,742 172,988	2,809,429

9. MINERAL PROPERTIES

As of September 30, 2023 and December 31, 2022, the accumulated acquisition costs with respect to the Company's interest in mineral properties, consisted of the following:

		Additions, net
	Balance	of recoveries		Balance
	January 1	and write	Sale of SRSR	September 30
	2023	downs(b)	NSR royalty(a)	2023
	($)	($)	($)	($)
Goliath Gold Project (a)	17,519,860	–	–	17,519,860
Goldlund Gold Project (a)	83,906,996	–	–	83,906,996
Weebigee Project	1,952,352	–	–	1,952,352
	103,379,208	–	–	103,379,208

		Additions, net
	Balance	of recoveries		Balance
	January 1	and write	Sale of SRSR	December 31
	2022	downs(b)	NSR royalty(a)	2022
	($)	($)	($)	($)
Goliath Gold Project (a)	24,629,460	–	(7,109,600)	17,519,860
Goldlund Gold Project (a)	91,016,596	–	(7,109,600)	83,906,996
Weebigee Project	1,952,352	–	–	1,952,352
Lara Polymetallic Project	100,000	(100,000)	–	–
	117,698,408	(100,000)	(14,219,200)	103,379,208

Goliath Gold Project

The Goliath Gold Project is in the Kenora Mining Division in northwestern Ontario, 20 km east of the City of Dryden and 325 km northwest of the port City of Thunder Bay.

Goldlund Gold Project

The Goldlund Gold Project is located adjacent to the Goliath Gold Project, in the Kenora Mining Division in northwestern Ontario.

9

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

9. MINERAL PROPERTIES (cont’d)

Goldeye Explorations

In 2016, Treasury Metals completed the acquisition of all the issued and outstanding common shares of Goldeye Explorations Ltd. ("Goldeye"), a public company that held certain properties.

Goldeye is the Weebigee Project in Northwestern Ontario and all the consideration paid at the time of the Goldeye acquisition was allocated to the Weebigee Project.

Weebigee Project

The Weebigee Project is located near Sandy Lake, north of Red Lake in Northwestern Ontario.

Sale of Royalty to Sprott Resource Streaming and Royalty (B) Corp

On April 11, 2022, the Company sold a 2.2% net smelter returns (“NSR”) royalty on the properties that comprise of the Goliath Gold Complex, which includes the Goliath Gold Project, the Goldlund Gold Project and the Miller Project, to Sprott Resource Streaming and Royalty (B) Corp. (“SRSR”) for gross proceeds of $25,178,000 (US$20.0 million). The SRSR NSR applies to sales of precious and base metals from all of the claims which comprise the Goliath Gold Complex.

The Company has an option to buy back 50% of the SRSR NSR based upon the buy-down schedule set out below. Upon the achievement of 1.5 million ounces of gold production, the royalty will automatically reduce by 50% for no additional consideration by the Company. Proceeds will be used to complete ongoing work to deliver a feasibility study for the Goliath Gold Complex and for general corporate and working capital purposes.

The Company has a one-time option (the “Buy-Down Option”) to reduce the applicable NSR percentage by 50% and 50% of any remaining minimum payments, by exercising its option and paying the applicable amount below:

• (i) On or before December 31, 2024 – US$14.0 million (ii) From January 1, 2025 until December 31, 2025 – US$16.0 million

• (iii) From January 1, 2026 until December 31, 2026 – US$17.0 million

• (iv) From January 1, 2027 until December 31, 2027 – US$18.25 million (v) From January 1, 2028 until December 31, 2028 – US$19.5 million

The Buy-Down Option is treated as a financial instrument measured at fair value taking into account the likelihood of the Company exercising the option. As of September 30, 2023, it is unlikely management will exercise the Buy-Down option, and as such, management has ascribed a $nil value to it.

The sale of the royalty has been divided into two parts for accounting purposes. The Company determined the fair value of the financial liability, and the residual of the proceeds was allocated to the sale of the portion of the Goliath Gold Complex.

1. Financial liability of $10,958,800, in accordance with IFRS 9, for the contractual obligation to pay SRSR the minimum payment of US$500,000 beginning on July 11, 2022, payable quarterly in cash or in common shares, until the earlier of December 31, 2027 and the date that commercial production is declared (Note 12).

2. Sale of a portion of the Goliath Gold Complex for $14,219,200 as control over a portion of future gold production is transferred to SRSR for the 2.2% NSR royalty.

10

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
	September 30	December 31
($)	2023	2022
Trade accounts payable	111,459	523,264
Accrued liabilities	534,003	696,105
	645,462	1,219,369

11. LONG-TERM DEBT

The present value of long-term debt at September 30, 2023 and December 31, 2022 is as follows:

	Convertible	Lease	September 30
($)	Debt (a)	Payable (b)	2023
Loan amount	7,467,519	299,054	7,766,573
Unaccreted amount	(132,681)	(21,176)	(153,857)
Carrying value of the debt	7,334,838	277,878	7,612,716
Current portion of the debt	–	(109,344)	(109,344)
Long-term debt	7,334,838	196,543	7,503,372
	Convertible	Lease	December 31
($)	Debt (a)	Payable (b)	2022
Loan amount	6,939,089	390,353	7,329,442
Unaccreted amount	(163,343)	(32,418)	(195,761)
Carrying value of the debt	6,775,746	357,934	7,133,680
Current portion of the debt	(6,775,746)	(106,097)	(6,881,843)
Long-term debt	–	251,837	251,837

(a) Convertible Debt

At September 30, 2023, the convertible debt was $7,334,838 (US$5.4 million) as per a debt agreement signed in June 2016 with Extract Lending LLC and Extract Capital Master Fund Ltd. (together, "Extract"), in addition to the six amendments signed in the subsequent years of which the last ("the sixth amendment") was signed in the second quarter of 2023.

Under the fourth amendment, certain terms of the Company’s convertible debt were changed to allow the Company the ability to pay interest in cash; in kind, capitalizing it to the facility; or by issuing common shares based on the average volume-weighted price of the five consecutive trading days to the interest payment, less a 15% discount. The fifth amendment, signed in 2022, dealt with administrative items, which had no impact of the overall terms of the debt.

The sixth amendment was signed on June 15, 2023. Under IFRS, the sixth amendment was considered an extinguishment of debt. As a result, the debt was fair valued at date of extinguishment and a nil loss was recognised to loss for the period. The sixth amendment resulted in the maturity date of the debt being extended to June 30, 2026, in addition to a change in the interest rate. The interest rate was changed to a fixed interest rate of 9.75% per annum (previously the interest rate was based on a 12-month LIBOR (minimum 200 basis points) plus 6.5%). During the nine-month period ended September 30, 2023, – $538,154 (September 30, 2022 $426,627) of interest has been capitalized to the facility.

As consideration for the amendment, Extract was granted 8,220,655 additional bonus warrants. These warrants can be exercised up to June 15, 2026, at an exercise price of $0.441 per share, with each warrant being exercisable for one common share. The fair value of the warrants was determined to be $464,995 and is recorded as loss on debt modification.

11

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

11. LONG-TERM DEBT (cont’d)

Under the terms of the debt agreement, the debt may be converted at Extract's option in part or in full, at any time, into common shares of the Company at $0.96 per common share. The debt is secured by a general security agreement, a debenture delivery agreement and demand debenture, which is secured by the Goliath Gold Project property, land, and mining claims in Kenora.

($)	September 30, 2023 Convertible Debt Derivative	December 31, 2022
		Convertible Debt Derivative
Beginning balance Accretion Change in Fair value Capitalized interest Foreign exchange adjustment Carrying value prior to amendment Fair value of new instrument Accretion Change in fair value Capitalized interest Foreign exchange adjustment	6,775,746 22,738 163,151 – – (22,738) 327,739 – (155,286) –	5,409,515 710,032 – – – – – – – -
	7,111,350 - (138,502) 138,502 8,546 – – (95,473) 210,415 – 143,029 –	5,409,515 710,032 5,409,515 710,032 357,085 – – (687,294) 602,981 – 406,165 –
Endingbalance	7,334,838 43,030	6,775,746 22,738

Due to the loan being denominated in U.S. dollars, the conversion feature has been presented as a non-cash derivative liability. As at September 30, 2023, the non-cash derivative liability of the debt was assigned a fair value of $43,030 (December 31, 2022 - $22,738) using the Black-Scholes option pricing model with the following assumptions: share price $0.17 (December 31, 2022 - $0.32), dividend yield 0%, expected volatility based on historical volatility 55.78% (December 31, 2022 – 79.8%), a risk free interest rate of 4.94% (December 31, 2022 – 4.03%) and an expected life of 2.75 years (December 31, 2022 – 0.5 years). The fair value loss of $20,292 (2022 – gain of $687,294) has been recognized in the consolidated statements of operations. The effective interest rate of the amended debt is 10.4% (previously 15.7%).

(b) Lease Payable

During the year ended December 31, 2022, the Company entered into a lease agreement for its corporate office with a commencement date of January 1, 2022. The term of the lease is three years and ten months ending on October 30, 2025. The Company also entered into several four-year lease agreements for vehicles to be used at the project site. As of September 30, 2023, the Company is committed to pay $299,054 (December 31, 2022 - $390,353) through monthly payments until the end of the lease agreements.

12. SRSR PAYMENT OBLIGATION

12. SRSR PAYMENT OBLIGATION
	September 30	December 31
($)	2023	2022
Opening balance	11,276,297	–
Initial recognition	–	10,958,800
Accretion	745,810	829,859
Repayment	(2,011,273)	(1,337,150)
Foreign exchange revaluation	(33,283)	824,789
Carrying value of the SRSR payment obligation	9,977,551	11,276,298
Current portion of the SRSR payment obligation	(1,856,577)	(1,729,207)
Long-termportion of SRSRpayment obligation	8,120,974	9,547,091

12

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

12. SRSR PAYMENT OBLIGATION (cont’d)

(a) Sprott Resource Streaming and Royalty Corp

In connection with the sale of royalty to SRSR (see Note 9), the Company is required to make minimum payments of US$500,000 to SRSR, payable quarterly until the earlier of December 31, 2027 and the date that commercial production is declared. The Company may elect to satisfy the payment on the loan in cash or the issuance of common shares of the Company at a price per common share equal to the greater of: (a) a 5% discount to the five-day volume-weighted average price of the five consecutive trading days prior to the date payment is due and (b) the maximum permitted discount by the Toronto Stock Exchange, at the Company’s sole discretion. The minimum payments are secured by a general security agreement and is registered against the Company’s assets.

During the nine-month period ended September 30, 2023, the Company made a payment of US$1,500,000 ($2,011,273) by the issuance of 6,925,456 common shares.

The Company entered into an agreement within the scope of IFRS 9 ‘Financial Instruments’. The initial fair value of the financial liability was determined using a discount rate of 10.2%. After initial recognition, the SRSR obligation is carried at amortized cost using the effective interest rate method. As at September 30, 2023 (December 31, 2022 - $11,276,297), the SRSR obligation was $9,977,551 (US$7.4 million).

13. CAPITAL STOCK

(a) Authorized

Unlimited common shares.

Unlimited common shares.
	Number of	Stated Value
COMMON SHARES	Shares	($)
Balance, January 1, 2022	137,879,334	209,453,412
Restricted share units redeemed (Note 15 (b))	269,441	135,821
Balance, September 30, 2022	138,148,775	209,589,233
Balance, December 31, 2022	138,168,087	209,595,606
Issuance of shares for SRSR payment obligation (i)	6,925,456	2,011,273
Issuance of shares for flow-through common shares (ii)	3,115,265	1,408,100
Flow-through share premium liability	–	(420,561)
Restricted share units redeemed (Note 15)	437,235	133,954
Returned and cancelled shares	(22)	–
Balance, September 30, 2023	148,646,021	212,728,372

• (i) During the period, the Company issued 6,925,456 common shares to Sprott Resource Streaming and Royalty Corporation in relation to the quarterly repayment obligation (see Note 12).

• (ii) On June 1, 2023, the Company issued 3,115,265 Canadian Exploration Expenditures (“CEE”) flowthrough common shares of the Company at a price of $0.452 per share by the way of private placement for gross proceeds of $1,408,100. A value of $420,560 were attributed to the flowthrough share premium liability in connection with the financing.

13

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

14. WARRANTS

The following table reflects the continuity of warrants for the nine-month and three-month periods ended September 30, 2023 and December 31, 2022, respectively:

			Weighted	Weighted
	Number of	Number of	Average	Average
	Warrants at	Warrants at	Exercise Price	Exercise Price
	September 30	December 31	September 30	December 31
	2023	2022	2023	2022
			($)	($)
Balance, beginning of period	18,433,000	24,592,635	1.48	1.54
Issued (a)	8,220,655	–	0.44	–
Expired	(18,433,000)	(6,159,635)	(1.48)	1,71
Balance,end of theperiod	8,220,655	18,433,000	0.44	1.48

The issued and outstanding warrants are comprised as follows:

		Number of
		Warrants at
		September 30	Exercise
Expiry Date	Type	2023	Price
			($)
June 15, 2026	Warrants	8,220,655	0.44
		8,220,655

(a) As part consideration for the sixth debt amendment, signed June 15, 2023, Extract was granted 8,220,655 warrants. The fair value was estimated, at the time of grant, using the Black-Scholes options model with the following assumptions: share price $0.25, dividend yield 0%, expected volatility 53.41%, based on historical volatility, a risk-free interest rate of 3.80% and an expected life of 3.00 years. As a result, the fair value of the warrants was estimated at $464,995 and was charged as an expense of the period.

The weighted average life of the outstanding warrants at September 30, 2023 is 2.96 years (December 31, 2022 – 0.55 years).

15. SHARE-BASED PAYMENTS

On June 29, 2021, Company’s shareholders approved the Omnibus Equity Incentive Plan (the “Incentive Plan”), replacing the previous Stock Option Plan (the “Legacy Plan”). The Legacy Plan continues to be authorized for the sole purpose of facilitating the vesting and exercise of existing awards previously granted under the Legacy Plan; no further awards will be granted under the Legacy Plan. Once the existing awards granted under the Legacy Plan are exercised or terminated, the Legacy Plan will terminate and be of no further force or effect.

The Incentive plan provides flexibility to the Company to grant equity-based incentive awards in the form of stock options and restricted share units (“RSUs”). The Incentive Plan is a “rolling” plan which, subject to the adjustment provisions provided for therein (including a subdivision or consolidation of common shares), provides that the maximum aggregate number of common shares reserved by the Company for issuance and which may be purchased upon the exercise of all stock options or RSUs (and including awards granted under the Legacy Plan) shall not exceed 9.9% of the issued and outstanding common shares from time to time. Limits have also been set in respect of the maximum number of awards that may be issued to Company insiders in any one-year period. As at September 30, 2023, the Company had an additional 3,155,962 (December 31, 2022 – 5,692,327) securities available for issuance under the plan.

14

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

15. SHARE-BASED PAYMENTS (cont’d)

For the period ended September 30, 2023, the Company recognized share-based payments related to stock options ($108,938) and vesting of RSUs ($981,367) totaling $1,090,305 (2022 - $1,377,841).

(a) Options

(a) Options
	Number of Stock Options at September 30 2023 Number of Stock Options at December 31 2022 Weighted Average Exercise Price 2023 Weighted Average Exercise Price 2022
Balance, at beginning of period Options granted Exercised Forfeited	($) ($) 6,688,109 5,585,325 0.95 1.16 670,000 3,418,675 0.32 0.64 – – – – (1,015,961) (2,315,891) 0.83 0.99
Balance at end of theperiod	6,342,148 6,688,109 0.92 0.95

The weighted average life of the outstanding stock options at September 30, 2023 is 0.97 years (December 31, 2022 – 1.59 years).

		Number of	Number of
		Options at	Options at
		September 30	December 31	Exercise
Grant Date	Expiry Date	2023	2022	Price ($)
November 10, 2020	November 10, 2023	1,808,000	1,808,000	1.35
February 5, 2021	November 10, 2023	138,000	198,000	1.35
February 5, 2021	December 7, 2023	600,000	600,000	1.35
March 8, 2021	March 8, 2024	300,000	300,000	0.95
May 31, 2021	May 31, 2024	–	150,000	0.97
June 28, 2021	June 28, 2024	250,000	250,000	0.90
September 7, 2021	September 7, 2024	–	324,754	0.87
February 18, 2022	February 18, 2025	2,011,037	2,366,809	0.70
June 28, 2022	June 28, 2025	390,546	390,546	0.41
July 13, 2022	July 13, 2025	150,000	150,000	0.38
December 19, 2022	December 19, 2025	150,000	150,000	0.32
March 10, 2023	March 10, 2026	319,565	–	0.32
May 17, 2023	May 17, 2026	75,000	–	0.31
July24, 2023	July17, 2026	150,000	–	0.27
		6,342,148	6,688,109

The outstanding stock options are comprised as follows:

On September 30, 2023, 5,263,092 of the outstanding stock options were fully vested and exercisable (December 31, 2022 – 4,534,172).

On July 24, 2023, the Company granted 150,000 stock options to employees to buy common shares at an exercise price of $0.27, each expiring on July 24, 2026. The stock options granted to employees vest 50% on the first and second anniversaries, respectively, of the date of grant. The fair value assigned was estimated using the Black-Scholes option pricing model with the following assumptions: share price $0.27, dividend yield 0%, expected volatility 53.69% based on historical volatility, a risk-free interest rate of 4.13% and an expected life of 3.00 years. As a result, the fair value of the stock options was estimated at $14,464 and will be recognized in the statement of operations over the periods the stock options vest.

15

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

15. SHARE-BASED PAYMENTS (cont’d)

On May 17, 2023, the Company granted 75,000 stock options to employees to buy common shares at an exercise price of $0.31, each expiring on May 17, 2026. The stock options granted to employees vest 50% on the first and second anniversaries, respectively, of the date of grant. The fair value assigned was estimated using the Black-Scholes option pricing model with the following assumptions: share price $0.31, dividend yield 0%, expected volatility 53.15% based on historical volatility, a risk-free interest rate of 3.80% and an expected life of 3.00 years. As a result, the fair value of the stock options was estimated at $9,106 and will be recognized in the statement of operations over the periods the stock options vest.

On March 10, 2023, the Company granted 445,000 stock options to employees to buy common shares at an exercise price of $0.32, each expiring on March 10, 2026. The stock options granted to employees vest 33.3% on date of grant, 33.3% on March 10, 2024 and the remaining balance of 33.4% on March 10, 2025. The fair value assigned was estimated using the Black-Scholes option pricing model with the following assumptions: share price $0.32, dividend yield 0%, expected volatility 60.68% based on historical volatility, a risk-free interest rate of 3.53% and an expected life of 3.00 years. As a result, the fair value of the stock options was estimated at $61,594 and will be recognized in the statement of operations over the periods the stock options vest.

(b) Restricted Share Units (“RSUs”)

For the nine months ended September 30, 2023 and September 30, 2022, the Company recognized sharebased payment expense related to the vesting of RSUs amounting to $981,367 (September 30, 2022 - $637,407) being charged to stock-based compensation expense. RSU’s are exercisable once the RSU’s have vested; as at September 30, 2023, 1,948,676 had vested (September 30,2022 – 246,198).

	Number of
	Units at	Number of	Weighted Fair	Weighted Fair
	September	Units at	Value at	Value at
	30	December 31	September 30	December 31
	2023	2022	2023	2022
			($)	($)
Balance, at beginning ofperiod	1,296,293	–	0.68	–
Rounding adjustment	(1)	–	–	–
Granted	4,757,825	1,623,669	0.31	0.64
Redeemed	(437,235)	(288,752)	0.31	0.49
Forfeited	(399,036)	(38,624)	–	0.70
Balance at end of theperiod	5,217,846	1,296,293	0.41	0.68

On September 12, 2023, the Company granted 42,391 RSUs to directors that have an expiry date of December 31, 2026. The RSUs vest in accordance with the following schedule:(i) 33.34% on the grant date; (ii) 33.33% one year from the grant date; and (iii) 33.33% two years from the grant date. On any date that falls on or after the vesting date but on or before November 30, 2026, the holder may deliver a written conversion notice specifying that the holder elects to receive common shares on the basis of one (1) common share for one (1) RSU; the RSUs cannot be settled in whole or in part for cash. The fair value assigned to the RSUs was estimated using the volume-weighted average price of the common shares on the TSX for the five trading days immediately preceding the grant date and recognized over the vesting period.

On June 28, 2023, the Company granted 375,000 RSUs to directors that have an expiry date of December 31, 2026. The RSUs vest in accordance with the following schedule:(i) 33.34% on the grant date; (ii) 33.33% one year from the grant date; and (iii) 33.33% two years from the grant date. On any date that falls on or after the vesting date but on or before November 30, 2026, the holder may deliver a written conversion notice specifying that the holder elects to receive common shares on the basis of one (1) common share for one (1) RSU; the RSUs cannot be settled in whole or in part for cash. The fair value assigned to the

16

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

15. SHARE-BASED PAYMENTS (cont’d)

RSUs was estimated using the volume-weighted average price of the common shares on the TSX for the five trading days immediately preceding the grant date and recognized over the vesting period.

On March 10, 2023, the Company granted 4,340,434 RSUs to directors, officers and certain employees that have an expiry date of December 31, 2026. The RSUs vest in accordance with the following schedule:(i) 33.34% on the grant date; (ii) 33.33% one year from the grant date; and (iii) 33.33% two years from the grant date. On any date that falls on or after the vesting date but on or before November 30, 2026, the holder may deliver a written conversion notice specifying that the holder elects to receive common shares on the basis of one (1) common share for one (1) RSU; the RSUs cannot be settled in whole or in part for cash. The fair value assigned to the RSUs was estimated using the volume-weighted average price of the common shares on the TSX for the five trading days immediately preceding the grant date and recognized over the vesting period.

16. EXPLORATION AND EVALUATION COSTS

Exploration and evaluation costs comprised of the following costs during the year:

($)	Three months ended Nine months ended
	September 30 2023 September 30 2022 September 30 2023 September 30 2022
Drilling Field programs Salaries and benefits Environmental studies Technical studies Vehicle expenses Site costs and utilities Community relations Legal and other fees Royalty payments	59,022 1,222,442 713,827 3,807,642 18,957 93,055 385,023 158,085 321,157 525,775 1,240,823 1,617,942 515,418 442,992 1,148,139 1,366,998 473,595 459,882 1,049,127 2,348,143 20,759 29,317 60,149 114,282 60,725 46,542 144,477 183,413 42,551 12,909 81,629 94,592 5,547 260,167 96,163 1,404,445 – – 104,728 104,437
	1,517,731 3,093,079 5,024,085 11,199,979

17. KEY MANAGEMENT COMPENSATION

Key management includes the Chief Executive Officer, Chief Financial Officer and members of the Board of Directors of the Company.

The compensation payable to key management is shown below

($)	Three months ended Nine months ended
	September 30 2023 September 30 2022 September 30 2023 September 30 2022
Salaries Directors’ fees (ii) Other cash compensation Share based compensation (RSU) Share based compensation (i)	156,937 151,223 477,059 716,711 28,866 62,500 169,632 184,500 – – 405,346 – 145,122 – 845,643 – – – – 180,896
	330,926 213,723 1,897,680 1,082,107

17

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

17. KEY MANAGEMENT COMPENSATION

• (i) Stock Option compensation is disclosed at fair value.

• (ii) Directors’ fees outstanding at September 30, 2023 is $52,537 (December 31, 2022 - $62,500).

18. COMMITMENTS AND CONTRACTUAL OBLIGATIONS AND CONTINGENCIES

a) Flow-through Financing

The Company is committed to spend $1,408,100 by December 31, 2024 on Canadian exploration expenses ("CEE") as part of the June 1, 2023 flow-through financing. At September 30, 2023, the Company had spent $339,264, leaving a remaining commitment of $1,068,836. All flow-through spending commitments from previous flow-through financings have been fulfilled.

b) Canada Revenue Agency Audit

An audit was commenced by the Canada Revenue Agency (the “CRA”) in December 2016 of the flow-through expenditures incurred by the Company on the Goliath Gold Project, pursuant to the flow-through share financings completed on December 6, 2011, September 21, 2012, May 1, 2013 and December 20, 2013. On March 7, 2018, the Company was advised by the CRA that out of the total of $12.5 million the Company raised through the flow-through share financings and renounced to subscribers, that the CRA had reclassified approximately $1.8 million of CEE to operating expenses and a further $2.2 million of CEE to Canadian Development Expenses (“CDE”). In addition, pursuant to the audit, the CRA notified the Company that it is liable for Part XII.6 tax in the amount of $477,726 in connection with the shortfall from the disallowed CEE.

Subsequently on July 2, 2021, the CRA issued a Notice of Reassessment that reduced the amount of the unpaid Part XII.6 tax to $430,689.

On September 30, 2021, the Company commenced an appeal to the Tax Court of Canada to dispute the CRA’s reclassification of expenses from CEE (Canadian exploration expenses) to CDE (Canadian development expenses) or operating expenses. The Department of Justice filed its Reply pleading on behalf of the Crown on February 9, 2022, and the current litigation timetable requires the parties to proceed with litigation discovery in 2023. Due to the uncertainty of the outcome, no liability has been recorded in the consolidated financial statements.

19. FINANCIAL RISK FACTORS

(c) Capital Management

The Company manages its capital structure and makes appropriate adjustments, based on the funds available to the Company, to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business. The Company considers capital from two perspectives: its working capital position and its capital stock, warrant, and stock option components of its shareholders' equity.

At September 30, 2023, the Company has working capital of $7,839,117 excluding the flow-through share premium liability and derivative liability (December 31, 2022 - $7,718,387); capital stock and contributed surplus total $239,787,443 (December 31, 2022 - $235,698,325).

To effectively manage the Company's capital requirements, management has put in place a rigorous planning, budgeting, and forecasting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company ensures that there

18

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

19. FINANCIAL RISK FACTORS (cont’d)

are sufficient committed loan facilities and planned future capital raises to meet its short-term business requirements, considering its anticipated cash flow from operations and its holding of cash and cash equivalents and marketable securities.

At September 30, 2023, the Company expects its capital resources and projected future cash flows from financing to support its normal operating requirements on an ongoing basis, and planned development and exploration of its mineral properties and other expansionary plans.

The properties in which the Company currently has an interest are in the exploration stage and as such the Company is dependent on external financing to fund its activities. To carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed.

The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

There were no changes in the Company's approach to capital management during the three or nine months ended September 30, 2023.

(d) Risk Disclosures

Exposure to credit and currency risks arises in the normal course of the Company’s business.

(e) Credit Risk

As at September 30, 2023, the Company had a cash and cash equivalents balance of $8,253,717 – (December 31, 2022 $16,020,110). The Company's current policy is to invest excess cash in investment grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks. There is no significant credit risk in respect of receivables.

(f) Interest Rate Risk

The Company has exposure to interest rate risk since the Company’s cashable GIC cash balances are linked to the prime lending rate.

(g) Market Price Risk

The Company has convertible debt and minimum payment obligations denominated in U.S. dollars. The convertible feature of the convertible debt has been classified as a derivative liability. Among other variables, the fair value of the derivative liability is affected by changes in the market price of the Company shares.

(h) Foreign Currency Risk

The Company is exposed to foreign currency risk on financial assets and liabilities that are denominated in a currency other than the Canadian dollar. The currency giving rise to this risk is primarily the U.S. dollar. The balance of net monetary liabilities in such currency as of September 30, 2023 was $14,168,671 (December 31, 2022 - $16,804,266).

19

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

19. FINANCIAL RISK FACTORS (cont’d)

(g) Liquidity Risk

The Company is exposed to liquidity risk primarily because of its trade accounts payable and its debt. The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at September 30, 2023, the Company had a cash and cash equivalents balance of $8,253,717 (December 31, 2022 - $16,020,110) to settle current liabilities of $2,611,385 (December 31, 2022 - $9,830,419), excluding the flow-through share premium liability and derivative liability. All the Company's trade accounts payable have contractual maturities of less than 30 days and are subject to normal trade terms. The Company relies on external financing to generate sufficient operating capital and the management believes it will be able to raise any required funds in the short-term.

(h) Sensitivity Analysis

As at September 30, 2023 and December 31, 2022, the carrying and fair value amounts of the Company's financial instruments are approximately equivalent.

Based on management's knowledge and experience of the financial markets, the Company believes the following movement is "reasonably possible" over a twelve-month period.

• (i) The Company is exposed to interest rate risk on fluctuations on cashable GIC cash balances. A variance of 1% in the prime lending will affect the annual Company's net comprehensive loss by –

• approximately $4,523 (December 31, 2022 $69,391).

• (ii) The Company is exposed to foreign currency risk on fluctuations of balances that are denominated in US currency related to cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, short-term and long-term debt. Sensitivity to a plus or minus 10% change in the foreign exchange rate would affect the net comprehensive loss by $1,416,867 (December 31, 2022 – $1,680,427).

• (iii) The Company is exposed to market risk as it relates to its investments held in marketable securities. If market prices had varied by 10% from their September 30, 2023 fair market value –

• positions, the comprehensive loss would have varied by $66,753 (December 31, 2022 $66,443).

(i) Fair Value Hierarchy

The Company has designated its investments as FVTOCI, which are measured at fair value. The non-cash derivative liability is classified as FVTPL and is measured at fair value with unrealized gains or losses reported in the consolidated statements of operations.

Accounts payable and accrued liabilities, short-term and long-term debt are considered as other financial liabilities, which are measured at amortized cost which also approximates fair value. The fair value of long-term debt approximates their carrying amount due to the effective interest rate being close to the market rate.

The following summarizes the methods and assumptions used in estimating the fair value of the Company's financial instruments where fair value measurement is required. Fair value amounts represent point in time estimates and may not reflect fair value in the future. The measurements are subjective in nature, involve uncertainties and are a matter of significant judgement.

The methods and assumptions used to develop fair value measurements, for those financial instruments where fair value is recognized in the statement of financial position, have been prioritized into three levels as per the fair value hierarchy. Level one includes quoted prices (unadjusted) in active markets for identical

20

TREASURY METALS INC. NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Three and Nine Months Ended September 30, 2023 and 2022 (Expressed in Canadian Dollars) (Unaudited)

19. FINANCIAL RISK FACTORS (cont’d)

assets or liabilities. Level two includes inputs that are observable other than quoted prices included in level one. Level three includes inputs that are not based on observable market data. The carrying value of cash and cash equivalents and investments approximate their fair value.

September 30, 2023	Level One Level Two Level Three
Investments Derivative liability	($) ($) ($)
	667,537 – –
	– (43,030) –
	667,537 (43,030) –
December 31, 2022	Level One Level Two Level Three
Investments Derivative liability	($) ($) ($) 664,433 – – – (22,738) –
	664,433 (222,738) –

There have been no transfers between levels 1, 2, or 3 during the periods.

21