NGEx Minerals — Audit Report / Information 2022

Apr 1, 2023

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Independent auditor’s report

To the Shareholders of NGEx Minerals Ltd.

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of NGEx Minerals Ltd. and its subsidiaries (together, the Company) as at December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS).

What we have audited

The Company’s consolidated financial statements comprise:

• the consolidated statements of financial position as at December 31, 2022 and 2021;

• the consolidated statements of comprehensive loss for the years then ended;

• the consolidated statements of cash flows for the years then ended;

• the consolidated statements of changes in equity for the years then ended; and

• the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

PricewaterhouseCoopers LLP PricewaterhouseCoopers Place, 250 Howe Street, Suite 1400, Vancouver, British Columbia, Canada V6C 3S7 T: +1 604 806 7000, F: +1 604 806 7806

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	How our audit addressed the key audit matter
Assessment of impairment indicators of	Our approach to addressing the matter included
mineral properties	the following procedures, among others:
Refer to note 3(b)– Summary of significant	● Assessed the judgments made by
accounting policies– Critical accounting	management in determining whether there
estimates, assumptions and judgments and note 6	were impairment indicators, which included
– Mineral properties to the consolidated financial	the following:
statements.

• Obtained, for a sample of mining claims, by reference to government registries and other regulatory bodies and vouching payments of required fees, evidence to support the right to explore the area.

The carrying value of mineral properties amounted to $3.9 million as at December 31, 2022 which all related to the Los Helados project. At each reporting date, management reviews the Company’s mineral properties for indicators of impairment, which requires management to exercise key judgments, including but not limited to (i) the Company’s right to explore the mineral properties, (ii) whether the Company has further plans or budgets for substantive expenditures for the ongoing exploration and evaluation of the mineral properties, (iii) the impact of exploration and evaluation results to date with respect to the mineral properties, and (iv) the likelihood that the carrying value of the mineral properties will be recovered in the future through development or sale of the assets. If indicators of impairment are identified, management would further review the carrying values of the applicable mineral properties to determine if their carrying values exceed their fair value.

• Read board minutes and obtained budget approvals to evidence continued and planned substantive expenditures for the ongoing exploration and evaluation of the mineral properties, which included evaluating results of management’s current-year work programs and management’s longer-term plans .

• Assessed whether the exploration for and evaluation of mineral resources have not led to the discovery of commercially viable quantities of mineral resources, or whether sufficient data exists to indicate that the carrying value of mineral properties is unlikely to be recovered in full from successful development or sale, based on evidence obtained in other areas of the audit.

No impairment indicators were identified by management as at December 31, 2022.

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Key audit matter How our audit addressed the key audit matter We considered this a key audit matter due to (i) the significance of the carrying value of the mineral properties balance and (ii) the judgments made by management in its assessment of indicators of impairment related to mineral properties, which have resulted in a high degree of subjectivity in performing procedures related to these judgments applied by management.

Other information

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

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

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

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Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Ranbir Gill.

/s/PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, British Columbia March 31, 2023

NGEx Minerals Ltd. Consolidated Statements of Financial Position (Expressed in Canadian Dollars)

		December 31,	December 31,
	Note	2022	2021
ASSETS
Current assets:
Cash		$ 23,249,241	$ 21,000,042
Receivables and other assets	5	4,300,559	929,612
		27,549,800	21,929,654
Non-current assets:
Receivables and other assets	5	840,337	242,199
Equipment		18,723	23,968
Mineral properties	6	3,902,697	3,537,087
		4,761,757	3,803,254
TOTAL ASSETS		32,311,557	25,732,908
LIABILITIES
Current liabilities:
Trade payables and accrued liabilities		7,327,951	1,955,816
Non-current liabilities:
Due to exploration partner	8	630,460	393,719
Accrued liabilities	5	338,600	-
		969,060	393,719
TOTAL LIABILITIES		8,297,011	2,349,535
SHAREHOLDERS’ EQUITY
Share capital	9	97,613,481	67,523,831
Contributed surplus		4,347,722	1,616,855
Deficit		(75,658,411)	(43,243,149)
Accumulated other comprehensive loss		(2,288,246)	(2,514,164)
TOTAL SHAREHOLDERS’ EQUITY		24,014,546	23,383,373
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY		$32,311,557	$25,732,908

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

On behalf of the Board:

/s/David F. Mullen Director

/s/Wojtek A. Wodzicki Director

NGEx Minerals Ltd. Consolidated Statements of Comprehensive Loss (Expressed in Canadian Dollars)

NGEx Minerals Ltd. Consolidated Statements of Comprehensive Expressed in Canadian Dollars)	Loss
			Year ended
			December 31,
	Note	2022	2021
Expenses
Exploration and project investigation	11	$ 28,923,845	$ 5,664,896
General and administration:
Salaries and benefits		1,872,580	874,855
Share-based compensation	10c	2,353,238	487,837
Management fees		169,540	128,640
Professional fees		212,163	199,698
Travel		107,704	33,893
Promotion and public relations		438,943	87,223
Office and general		341,479	241,957
Operating loss		34,419,492	7,718,999
Other expenses (income)
Interest income		(249,330)	(25,680)
Financing costs		50,303	136,436
Foreign exchange gain		(60,965)	(28,059)
Net monetary loss (gain)	4	(54,798)	54,923
Gain on use of marketable securities, net	15	(1,975,356)	(2,477,478)
Other losses	8	212,531	33,431
Other expenses		73,385	44,162
Net loss		32,415,262	5,456,734
Other comprehensive loss
Items that may be reclassified
subsequently to net loss:
Foreign currency translation
adjustment		(310,220)	686,032
Impact of hyperinflation	4	84,302	(56,277)
Comprehensive loss		$32,189,344	$6,086,489
Basic and diluted loss per common share		$ 0.20	$ 0.04
Weighted average common shares
outstanding		159,625,957	130,091,342

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

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NGEx Minerals Ltd. Consolidated Statements of Cash Flows (Expressed in Canadian Dollars)

				Year ended
			December 31,
	Note	2022		2021
Cash flows used in operating activities
Net loss for the year		$ (32,415,262)	$	(5,456,734)
Adjustments to reconcile net loss to net operating
cash flows:
Depreciation		12,275		8,811
Share-based compensation	10c	2,927,355		574,076
Finance costs		50,303		136,436
Foreign exchange gain		(35,756)		(28,473)
Net monetary loss		146,507		103,588
Other losses	8	212,531		33,431
Write-down of non-current taxes receivable		73,142		-
Net changes in working capital and other items:
Receivables and other		(3,159,149)		(892,418)
Trade payables and accrued liabilities		5,031,376		1,493,954
		(27,156,678)		(4,027,329)
Cash flows from (for) financing activities
Proceeds from equity financings	9	30,000,000		25,000,000
Share issuance costs	9	(635,780)		(715,891)
Drawdown of credit facility		1,781,000		3,201,050
Repayment of credit facility	7	(1,769,950)		(3,174,495)
Proceeds from option exercises		495,847		58,225
Payments made on behalf of exploration partner		(36,254)		(11,915)
		29,834,863		24,356,974
Cash flows used in investing activities
Mineral properties and related expenditures	6	(126,220)		(125,756)
		(126,220)		(125,756)
Effect of exchange rate change on cash		(302,766)		(102,665)
Increase in cash during the year		2,249,199		20,101,224
Cash, beginning of the year		$ 21,000,042		$ 898,818
Cash, end of the year		$ 23,249,241	$	21,000,042
Non-cash Financing Activities (Note 7)

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

3

NGEx Minerals Ltd. Consolidated Statements of Changes in Equity (Expressed in Canadian Dollars)

						Accumulated
						Other		Total
		Number of		Contributed		Comprehensive	Shareholders’
	Note	Shares	Share Capital	Surplus	Deficit	Loss		Equity
Balance, January 1, 2021		124,793,652	$ 43,053,810	$ 1,058,841	$ (37,786,415)	$ (1,884,409)		$ 4,441,827
Share-based compensation		-	-	574,076	-	-		574,076
Shares issued pursuant to the equity
financings		31,250,000	25,000,000	-	-	-		25,000,000
Share issuance costs		-	(715,891)	-	-	-		(715,891)
Shares issued pursuant to credit facility		146,026	111,625	-	-	-		111,625
Shares issued pursuant to stock option
exercises		101,666	74,287	(16,062)	-	-		58,225
Net loss and other comprehensive loss		-	-	-	(5,456,734)	(629,755)		(6,086,489)
Balance, December 31, 2021		156,291,344	$ 67,523,831	$ 1,616,855	$ (43,243,149)	$(2,514,164)	$	23,383,373
Balance, January 1, 2022		156,291,344	$ 67,523,831	$ 1,616,855	$ (43,243,149)	$ (2,514,164)	$ 23,383,373
Share-based compensation	10c	-	-	2,927,355	-	-		2,927,355
Shares issued pursuant to the equity
financings	9	15,000,000	30,000,000	-	-	-		30,000,000
Share issuance costs	9	-	(635,780)	-	-	-		(635,780)
Shares issued pursuant to credit facility	7	15,352	33,095	-	-	-		33,095
Shares issued pursuant to stock option
exercises	10b	816,834	692,335	(196,488)	-	-		495,847
Net loss and other comprehensive loss		-	-	-	(32,415,262)	225,918		(32,189,344)
Balance, December 31, 2022		172,123,530	$ 97,613,481	$ 4,347,722	$ (75,658,411)	$(2,288,246)	$	24,014,546

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

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

1. NATURE OF OPERATIONS AND LIQUIDITY RISK

NGEx Minerals Ltd. (the “Company” or “NGEx Minerals”) was incorporated on February 21, 2019, under the laws of the Canada Business Corporations Act in connection with a plan of arrangement, which was completed on July 17, 2019.

The Company’s principal business activities are the acquisition, exploration and development of mineral properties located in South America. The Company’s registered office is located at Suite 2000, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8, Canada. The Company’s common shares trade on the TSX Venture Exchange (the "TSXV") under the symbol "NGEX".

These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes that it will be able to meet its existing obligations and commitments and fund ongoing operations in the normal course of business for at least twelve months from December 31, 2022. The Company anticipates the need for further funding to advance its South American exploration projects beyond the current exploration campaigns, as appropriate. Historically, capital requirements have been primarily funded through equity financing, joint ventures, disposition of mineral properties and investments, and the use of short-term credit facilities extended by its major shareholders, such as Zebra Holdings and Investments S.à.r.l. (“Zebra”) and Lorito Holdings S.à.r.l. (“Lorito”). Zebra and Lorito are companies controlled by a trust settled by the late Adolf H. Lundin. Zebra and Lorito report their respective security holdings in the Company as joint actors, as the term is defined by Canadian securities regulations, and are related parties by virtue of their combined shareholding in the Company in excess of 20%.

Management is confident that additional funding will be secured to fund planned expenditures for at least twelve months from December 31, 2022. Factors that could affect the availability of financing include the progress and results of ongoing exploration at the Company’s mineral properties, the state of international debt and equity markets, as may be impacted by inflation and investor perceptions and expectations with respect to the global copper, gold, and/or silver markets. There can be no assurance that such financing will be available in the amount required at any time or for any period or, if available, that it can be obtained on terms satisfactory to the Company. If necessary, depending on the amount of funding raised, the Company may explore opportunities to defer the timing of certain discretionary expenditures and the Company’s planned initiatives and other work programs may be postponed, or otherwise revised.

2. BASIS OF PRESENTATION

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. These consolidated financial statements are prepared on a historical cost basis except for certain financial assets, which are measured at fair value.

Certain prior year comparatives have been reclassified to align with current year presentation. Specifically, interest income is now separately presented on the consolidated statements of comprehensive loss.

These consolidated financial statements were authorized for issuance by the Board of Directors of the Company on March 31, 2023.

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Consolidation

The consolidated financial statements of the Company include the following subsidiaries:

Subsidiaries	Jurisdiction	Nature of operations
Suramina Resources Inc.	Canada	Holding company
NGEx Argentina Holdings Inc.	Canada	Holding company
NGEx RioEx Holdings Inc.	Canada	Holding company
Frontera Holdings (Bermuda) I Ltd.	Bermuda	Holding company
Frontera Holdings (Bermuda) II Ltd.	Bermuda	Holding company
Frontera Holdings (Bermuda) III Ltd.	Bermuda	Holding company
Urupampa S.A.	Uruguay	Holding company
RioEx Uruguay S.A.	Uruguay	Holding company
Minera Frontera del Oro SPA.	Chile	Exploration company
Desarrollo de Prospectos Mineros Peruanos S.A.C.	Peru	Exploration Company
Pampa Exploracion S.A.	Argentina	Exploration company
RioEx S.A.	Argentina	Exploration company

The Company consolidates an entity when it has power over that entity, is exposed, or has rights, to variable returns from its involvement with that entity and has the ability to affect those returns through its power over that entity.

All the Company’s subsidiaries are wholly-owned and all intercompany balances, transactions, including income and expenses arising from inter-company transactions, are eliminated in preparing the consolidated financial statements.

b) Critical accounting estimates, assumptions and judgements

The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates, assumptions and judgements that affect the reported amounts of assets, liabilities and expenditures on the financial statements. These estimates, assumptions and judgements are based on management’s best knowledge of the relevant facts and circumstances taking into account previous experience. Actual results could differ and such differences could be material. Estimates, assumptions and judgements are reviewed on an ongoing basis and are based on historical experience and other facts and circumstances. Revisions to estimates, assumptions and judgements, and the resulting effects on the carrying amounts of the Company’s assets and liabilities, are accounted for prospectively. Information about estimates, assumptions, judgments and other sources of estimation uncertainty as at December 31, 2022, that have a risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next year are provided below:

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

Valuation of mineral properties – The Company carries the acquisition costs of its mineral properties at cost less any provision for impairment. At each reporting date, the Company reviews its mineral properties for indicators of impairment, which requires the Company to exercise key judgements, including but not limited to, the Company’s right to explore the mineral property, whether the Company has further plans or budgets for substantive expenditures for the ongoing exploration and evaluation of the mineral property, the impact of exploration and evaluation results to date with respect to the mineral property, and the likelihood that the carrying value of the mineral property will be recovered in the future through development or sale of the asset. If indicators of impairment are identified, the Company would further review the carrying values of the applicable mineral properties to determine if their carrying values may exceed their fair value, which also requires the Company to make significant judgments and estimates. The judgments and estimates mentioned above are subject to various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the mineral properties.

The Company has determined that no indicators of impairment exist for its mineral properties as of December 31, 2022.

c) Foreign currency translation

These consolidated financial statements are presented in Canadian dollars, which is the Company’s functional and presentation currency. The functional currencies of its material subsidiaries, which have operations in Chile and Argentina, are the Chilean peso and the Argentine peso, respectively.

For the Company’s Argentine subsidiaries, which are affected by hyperinflationary accounting as described in Notes 3n and 4 below, and use the Argentine peso as their functional currency, the results and financial position of this subsidiary are translated into the presentation currency using the exchange rate prevailing at the date of the statement of financial position.

The results and financial position of all other subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities for each statement of financial position presented are translated using the exchange rate prevailing at the date of that statement of financial position.

• Income, expenses, and other comprehensive income for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions).

• All resulting exchange differences are recognized as a separate component of equity and in other comprehensive income.

d) Mineral properties and exploration expenditure

The Company capitalizes acquisition costs for property rights, including payments for exploration rights and estimated fair value of exploration properties acquired as part of an acquisition.

7

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

Mineral exploration costs and maintenance payments are expensed prior to the determination that a property has economically recoverable ore reserves. When it has been established that a mineral property is considered to be sufficiently advanced to the development stage, with economic viability and technical feasibility demonstrated, all further expenditures for the current period and subsequent periods are capitalized as incurred and subsequently amortized on a units of production based on proven and probable reserves of the assets to which they relate.

e) Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows (cashgenerating units, or “CGU’s”). Value in use is determined as the present value of future cash inflows expected to be derived from a CGU using a pre-tax discount rate that reflects the current time value of money and the risks specific to that CGU.

Non-financial assets that have been previously impaired are reviewed for possible reversal of the impairment at each reporting date.

f) Financial instruments

(i) Recognition

The Company measures and classifies its financial assets based on its business model for managing its financial assets and the contractual cash flow characteristics of those financial assets. Financial assets are classified into three measurement categories on initial recognition: those measured at fair value through profit or loss, those measured at fair value through other comprehensive income (“OCI”) and those measured at amortized cost.

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Investments in marketable securities, such as equity instruments of publicly listed entities, are required to be measured at fair value through profit or loss, unless the Company makes an irrevocable election to present subsequent changes in the fair value of such instruments through OCI. The Company has not elected to measure any of its marketable securities through OCI.

(ii) Derecognition

The Company derecognizes financial assets when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all the associated risk and rewards of ownership to another entity. A financial liability is derecognized when the obligation under the liability is discharged, canceled or expired. Gains and losses on derecognition of financial assets and liabilities are generally recognized in the consolidated statement of comprehensive loss.

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

(iii)Impairment

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized costs based on a probability-weighted estimate of credit losses over the expected life of the financial asset.

At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the expected credit losses are reversed after the impairment was recognized.

g) Cash

Cash includes cash on hand, and deposits held with financial institutions with a fixed deposit term of three months or less, net of bank overdrafts.

h) Equipment

Equipment is carried at cost less accumulated depreciation and impairment losses. The cost of an asset consists of its purchase price, any directly attributable costs of bringing the asset to the working condition and location of its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Depreciation of each asset is calculated using the straight line method to allocate its cost less its residual value over its estimated useful life. The depreciation rates and methods for the Company’s equipment are as follows:

Vehicles/Mobile Equipment Straight line over 5 years

The assets’ residual values, depreciation methods, and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

When an asset is disposed of, the difference between the net sale proceeds and its carrying amount is recognized as a gain or loss within net loss on the consolidated statement of comprehensive loss.

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

i) Current and deferred income tax

The Company follows the liability method of accounting for income taxes. Under the liability method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, unused tax losses and other income tax deductions. Deferred income tax assets are recognized for deductible temporary differences, unused tax losses and other income tax deductions to the extent that it is probable the Company will have taxable income against which those deductible temporary differences, unused tax losses and other income tax deductions can be utilized.

Deferred income tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply when the related assets are realized or the liabilities are settled. The measurement of deferred income tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover and settle the carrying amounts of its assets and liabilities, respectively. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period in which the change is substantively enacted.

j) Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

k) Share-based compensation

The Company has a share-based compensation plan, whereby it is authorized to grant share options to officers, employees, directors, and other eligible persons. The fair value of the options is measured at the date the options are granted, using the Black-Scholes option-pricing model with assumptions for risk-free interest rates, dividend yields, volatility of the expected market price of the common shares and an expected life of the options. The fair value less estimated forfeitures is charged over the vesting period of the related options as an expense on its financial statements.

l) Provisions

Provisions for restructuring costs and legal claims are recognized when: the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligations using the pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognized as interest expense.

10

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

m) Segment reporting

As the Company primarily focuses its activity on the exploration and development of mineral properties, its operating and reportable segments are the Los Helados Project, the Company’s exploration projects in Argentina, other exploration projects, and the Company’s corporate administration function. Operating segments are components of an entity that engage in business activities from which they incur expenses and whose operating results are regularly reviewed by a chief operating decision maker to make resource allocation decisions and to assess performance. The Chief Executive Officer, the chief operating decision-maker for the Company, obtains and reviews operating results of each operating segment on a monthly basis.

n) Hyperinflation

The Company applies IAS 29, Financial Reporting in Hyperinflationary Economies, which outlines the use of the hyperinflationary accounting to consolidate and report its Argentine operating subsidiaries.

Argentine subsidiaries’ non-monetary assets and liabilities, shareholders’ equity and comprehensive loss items from the transaction date when they were first recognized into the current purchasing power which reflects a price index current at the end of the reporting period before being included in the consolidated financial statements. To measure the impact of inflation on its financial position and results, the Company has elected to use the Wholesale Price Index (Indice de Precios Mayoristas or “IPIM”) for periods up to December 31, 2016, and the Retail Price Index (Indice de Precios al Consumidor or “IPC”) thereafter. These price indices have been recommended by the Government Board of the Argentine Federation of Professional Councils of Economic Sciences (“FACPCE”).

As the consolidated financial statements of the Company have been previously presented in Canadian dollars, a stable currency, the comparative period amounts do not require restatement.

o) Adoption of new accounting policy

On January 1, 2022, the Company adopted IAS 16, Property, plant and equipment. IAS 16 has been amended to provide clarity with respect to the treatment of net proceeds generated from selling any items produced while bringing an item of property, plant and equipment to the location and condition necessary for it to be capable of operating in the manner intended by the entity. Specifically, the amendments prohibit entities from deducting amounts resulting from the selling of items produced during this phase from the cost of property, plant and equipment. Instead, an entity shall recognize such sales proceeds and related costs in profit or loss.

The adoption of the amendments to IAS 16 have not had an impact on the Company’s financial results for the year ended December 31, 2022.

p) New accounting pronouncements

The IASB and/or the IFRS Interpretations Committee have issued new standards and amendments, or interpretations to existing standards, which were not yet effective and not applied by the Company as at December 31, 2022. The Company continues to evaluate these changes to determine their impact, if any.

11

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

IAS 1, Presentation of Financial Statements

The IASB published Non-current Liabilities with Covenants (Amendments to IAS 1) to clarify how covenants with which an entity must comply within 12 months after the reporting period affect the classification of the related liability. Effectively, liabilities are to be classified as either current or noncurrent, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if the entity has a substantive right to defer settlement for at least 12 months at the end of the reporting period. These amendments are effective January 1, 2024, with early adoption permitted. Retrospective application is required on adoption.

The IASB has also issued amendments to IAS 1 and the IFRS Practice Statement 2, Making Materiality Judgements, to provide guidance on the application of materiality judgments with respect to an entity’s accounting policy disclosures. These amendments to IAS 1 replace previous requirements to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’ accounting policies. These amendments are effective January 1, 2023, with early adoption permitted. Prospective application is required on adoption.

The Company does not expect adoption of these amendments to have a material impact on its consolidated financial statements.

4. HYPERINFLATION

Argentina was designated a hyperinflationary economy as of July 1, 2018, for accounting purposes.

The Company recognized a loss of $84,302 for the year ended December 31, 2022 (2021: gain of $56,277) in relation to the impact of hyperinflation within other comprehensive income. The hyperinflationary gains and losses are generally the impact of two opposing factors:

• Gains are driven by the hyperinflationary impacts on capital injected into the Argentine subsidiaries during the period (“Gain on Capital Injected”).

• Losses are largely the result of depreciation of the Argentine peso relative to the Canadian dollar during the period, and its impact upon translation of the Argentine subsidiaries’ accounts into the Canadian dollar reporting currency (“Loss on Translation”).

For the year ended December, 2022, although capital was injected into the Company’s Argentine subsidiaries, the Loss on Translation was the dominant factor due to continued depreciation of the Argentine peso relative to the Canadian dollar, which resulted in net hyperinflationary loss for the year.

As a result of changes in the IPC and changes to the Company’s net monetary position, the Company recognized a net monetary gain of $54,798 for the year ended December 31, 2022 (2021: loss of $54,923), to adjust transactions recorded during the year into a measuring unit current as of December 31, 2022.

The level of the IPC at December 31, 2022, was 1,134.59 (December 31, 2021: 582.5), which represents an increase of approximately 95% over the IPC at December 31, 2021, and an approximate 34% increase over the average level of the IPC during the year ended December 31, 2022.

12

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

5. RECEIVABLES AND OTHER ASSETS

	December 31,	December 31,
	2022	2021
Current
Taxes receivable	108,932	49,076
Other receivables and advances	2,857,214	193,059
Other prepaid expenses and deposits	1,334,413	687,477
	4,300,559	929,612
Non-current
Taxes receivable	-	86,489
Deferred surface access rights	840,337	155,710
	840,337	242,199

Receivable from Exploration Partner

As at December 31, 2022, current other receivables and advances includes $2,730,489 (2021: $nil) receivable from the Company’s exploration partner at the Los Helados properties (Note 6).

Deferred Surface Access Rights

Reduced Surface Access Rights Agreements

Historically, the Company has had a contractual agreement with the owners of the surface rights covering the Los Helados properties, which gave the Company access over these surface rights for exploration, development, and mining through to closure of any mining operation, in exchange for certain payments which are linked to project activities and certain development milestones (the “Original Surface Access Agreement”). The Original Surface Access Agreement provided for minimum annual payments of US$0.5 million which covered basic access to the property and minimal surface disturbance such as road maintenance.

On January 26, 2021, the Original Surface Access Agreement was mutually terminated by the Company and the holders of the surface rights and replaced with a reduced surface access agreement with an effective period of three years (the “Reduced Surface Access Agreement”). The Reduced Surface Access Agreement resulted in decreased payments receivable by the holders of the surface rights in return for a reduction in permitted activities by the Company at the Los Helados properties over its term. As a result, the payments by the Company to the holders of the surface rights were reduced to a total of US$400,000 over the term of the Reduced Surface Access Agreement, with US$200,000 paid upon execution in January 2021 and the remainder paid in January 2022.

As the payments related to the Reduced Surface Access Agreement provide the Company the benefit of access for the period ending January 26, 2024, the contractual amount was initially deferred and has been amortized over the life of the agreement.

13

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

On November 22, 2022, the Company and the owners of the Los Helados surface rights negotiated an amendment to the Reduced Surface Access Agreement, whereby the term of the agreement was extended to January 26, 2026, in exchange for a US$250,000 payment upon execution, and additional payments of US$250,000 in each November 22, 2023, and 2024 (the “Extension Agreement”). Accordingly, as at December 31, 2022, the payment of US$250,000 due in November 2023 has been recognized within current trade payables and accrued liabilities, and the payment of US$250,000 due in November 2024 has been recognized within non-current accrued liabilities. As at December 31, 2022, each of the current and non-current portions of the contractual liability had a Canadian dollar equivalent of approximately $338,600.

Similar to above, all contractual amounts with respect to the Extension Agreement were initially deferred and will be amortized over the term of the agreement ending January 26, 2026. In addition, the term over which the remaining undeferred amounts with respect to the Reduced Surface Access Agreement will be amortized was prospectively extended to January 26, 2026.

The pro rata portion of deferred amounts relating to the 12 months ending December 31, 2023, have been classified as a current asset, whereas all other deferred amounts have been classified as non-current.

Temporarily Restored Surface Access Rights

On November 30, 2021, the Company and the owners of the surface rights at Los Helados executed a temporary restoration of the Company’s surface access rights as outlined in the Original Surface Access Agreement (the “2021-2022 Restored Rights Agreement”). Pursuant to the 2021-2022 Restored Rights Agreement, the Company paid US$300,000 to the holders of the Los Helados surface rights in exchange for reinstated surface access from date of execution until December 31, 2022. The amounts paid with respect to the 2021-2022 Restored Rights Agreement were initially deferred and have been amortized through the Consolidated Statements of Comprehensive Loss.

On November 22, 2022, the Company and the owners of the Los Helados surface access rights further restored the Company’s surface access rights on a temporary basis with an additional agreement (the “2023 Restored Rights Agreement”). The 2023 Restored Rights Agreement allows the Company to carry on drilling and exploration activities at Los Helados during the year ending December 31, 2023, in exchange for a payment of US$450,000. As the incremental payment related to the temporary reinstatement of surface access rights provides the Company the benefit of access up to December 31, 2023, the amount paid has been deferred as a current asset as at December 31 2022.

Non-current Taxes Receivable

Pursuant to local regulations, the Company is entitled to a refund of certain value added taxes (“VAT”) paid in Argentina. While the Company continues to expect full payment of the amounts claimed, the timing of receipt of the refunds has become increasingly uncertain due to ongoing delays which have now exceeded the Company’s prior expectations and experiences.

Accordingly, during the year ended December 31, 2022, the Company has written off the balance of its non-current taxes receivable to $nil, with the resulting in an impairment charge recognized within exploration and project investigation costs for the year.

14

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

6. MINERAL PROPERTIES

	Los Helados
	Project	Total
January 1, 2021	$ 4,105,871	$ 4,105,871
Additions	125,756	125,756
Effect of foreign currency translation	(694,540)	(694,540)
December 31, 2021	$ 3,537,087	$ 3,537,087
Additions	126,220	126,220
Effect of foreign currency translation	239,390	239,390
December 31, 2022	$ 3,902,697	$ 3,902,697

Los Helados Project

The Company’s primary mineral property assets are the Los Helados properties and the La Rioja properties (together, the “Los Helados Project”), which are comprised of adjacent mineral titles in Region III, Chile, and the San Juan Province in Argentina.

The Company is the majority partner and operator of the Los Helados Project, which is subject to a Joint Exploration Agreement (“JEA”) with its exploration partner, Nippon Caserones Resources Co. Ltd. (“NCR”). NCR became the Company’s partner on April 1, 2020, when Pan Pacific Copper Co. Ltd. transferred its interest in the Los Helados Project to NCR, a subsidiary of JX Nippon Mining and Metals Corporation, a Tokyo-based mining and smelting company that also currently operates the Caserones Mine, located approximately 12 kilometres from the Los Helados properties. NCR’s interest in the Caserones Mine is held through a subsidiary that is subject to a recently announced agreement whereby Lundin Mining Corporation will acquire a controlling stake.

As at December 31, 2022, the Company held an approximate 69% interest in the underlying Los Helados properties, which are located in Region III, Chile, and a 60% interest in the La Rioja properties, located in the adjacent San Juan Province in Argentina. The Company had sole funded 100% of the expenditures related to the Los Helados properties as the result of elections by the exploration partner pursuant to the JEA not to fund its share of expenditures for the period from September 1, 2015, to August 31, 2022. The sole funding of expenditures at the Los Helados properties during this period resulted in dilution of NCR’s interest, and corresponding increases to the Company’s interest, resulting in the amounts noted above.

The foregoing notwithstanding, NCR elected to exercise its right to fund its pro rata share of qualifying expenditures related to the Los Helados properties for the period from September 1, 2022, to August 31, 2023. Amounts contributed or contributable by NCR with respect to its funding commitment for the Los Helados properties are recorded as reductions to exploration and project investigation costs and total $2,624,306 for the year ended December 31, 2022.

15

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

Valle Ancho Properties

In November 2022, the Company secured a 100% interest in the Valle Ancho and Interceptor properties (collectively, the “Valle Ancho Properties”), located in Catamarca, Argentina, by making its formal submissions to the Province of Catamarca to evidence its completion of the US$8.0 million minimum expenditure requirement.

Potro Cliffs

The Company holds a 100% interest in Potro Cliffs, an exploration target located in San Juan Province, Argentina. Potro Cliffs lies along the same major north-northeast structural trend that controls the Filo del Sol deposit located approximately 7 km to the south and the Los Helados deposit located approximately 10 km to the north.

7. CREDIT FACILITIES

On February 19, 2021, the Company obtained an unsecured US$3.0 million credit facility (the “2021 Facility”) from Zebra and Lorito to provide financial flexibility to fund ongoing exploration and for general corporate purposes. Zebra and Lorito are related parties of the Company by virtue of their combined shareholding in the Company in excess of 20%.

As consideration for the 2021 Facility, Zebra and Lorito received 40,000 common shares upon execution thereof (the “2021 Commitment Shares”) and was entitled to receive an additional 600 common shares each month, for every US$50,000 in principal outstanding, prorated accordingly for the number of days outstanding.

During the year ended December 31, 2022, the Company made no draws against the 2021 Facility (2021: US$2,550,000), which matured on February 19, 2022, with no amounts drawn or owing. No interest was payable in cash during its term.

On September 28, 2022, the Company obtained a new unsecured US$3.0 million credit facility (the “2022 Facility”, and together with the 2021 Facility, the “Facilities”) from Zebra and Lorito to provide financial flexibility to fund ongoing exploration and for general corporate purposes.

As consideration for the 2022 Facility, Zebra and Lorito received 12,500 common shares upon execution thereof (the “2022 Commitment Shares”) and was entitled to receive an additional 200 common shares each month, for every US$50,000 in principal outstanding, prorated accordingly for the number of days outstanding.

During the year ended December 31, 2022, the Company drew a total of US$1,300,000 against the 2022 Facility, and the amount was fully repaid in October 2022 following the completion of an equity financing (Note 9). The repayment had a Canadian dollar equivalent of approximately $1.8 million. As at December 31, 2022, no amount remained drawn or outstanding against the 2022 Facility, which matures on September 28, 2023. No interest is payable in cash during its term.

16

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

As a result of the amounts previously drawn against the Facilities, during the year ended December 31, 2022, 15,352 common shares were issued to Zebra and Lorito (2021: 146,026 common shares), and the Company has recognized $16,741 (2021: $108,291) in financing costs through the consolidated statement of comprehensive loss. In addition, $19,688 has been deferred within prepaid expenses and other deposits as at December 31, 2022, which relates to a portion of the 2022 Commitment Shares.

All common shares issued in conjunction with the facilities are subject to a four-month hold period under applicable securities laws.

8. DUE TO EXPLORATION PARTNER

The Company has an obligation to fund a partner’s share of exploration expenditures related to the La Rioja properties (the “Obligation”). In accordance with the terms of the JEA between the Company and the partner, NCR, the Company has elected to settle the Obligation through funding NCR’s share of exploration expenditures, which remained US$3.4 million as at December 31, 2022, and has no defined timeline for settlement.

The Company considered the estimated timeframe required to expend the remaining US$3.4 million on behalf of NCR at the La Rioja properties and has presented the remaining obligation as a non-current liability, discounted to its present value at an annual effective rate of 8% (2021: 8%).

As at December 31, 2022, the Company reviewed the nature and timing of future expenditures at the La Rioja properties and increased its expected annual funding of NCR’s share of future exploration expenditures from US$25,600 to US$38,340 based on its best estimate of exploration activities to be conducted on the project. This revision reduces the estimated timeframe for the settlement of the Obligation. The effect of this change in future estimated expenditures at the La Rioja properties is an increase in the amount due to exploration partner by $212,531, with a corresponding amount recognized within other losses on the consolidated statement of comprehensive loss for the year ended December 31, 2022.

9. SHARE CAPITAL

The Company has authorized an unlimited number of voting common shares without par value.

On October 25, 2022, the Company closed a non-brokered private placement, pursuant to which the Company sold an aggregate of 15,000,000 common shares at a price of $2.00 per common share, generating aggregate gross proceeds of $30.0 million (the “Financing”). Share issuance costs related to the Financing totaled $0.6 million, and included professional fees, regulatory fees, and 5% finders’ fees payable in cash on approximately $11.6 million of the gross proceeds from the Financing.

The common shares issued under the Financing were subject to a hold period, which expired on February 26, 2023.

17

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

10. SHARE OPTIONS

a) Share option plan

The Company has a share option plan adopted by the Board of Directors on May 7, 2019, and amended May 19, 2022, which reserves an aggregate of 10% of the issued and outstanding shares of the Company for issuance upon the exercise of options granted. The granting, vesting and terms of the share options are at the discretion of the Board of Directors.

b) Share options outstanding

Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

prices are as follows:
	Number of	Weighted
	shares issuable	average
	pursuant to	exercise price
	share options	per share
Balance at January 1, 2021	8,135,000	$ 0.57
Options granted	2,280,000	0.68
Exercised	(101,666)	0.57
Expired or forfeited	(1,152,500)	0.81
Balance at December 31, 2021	9,160,834	$ 0.56
Options granted	4,640,000	1.98
Exercised	(816,834)	0.61
Expired or forfeited	(270,000)	1.59
Balance at December 31, 2022	12,714,000	$ 1.06

On January 11, 2022, the Company granted a total of 1,760,000 share options to officers, employees, directors and other eligible persons at an exercise price of $1.65 per share. In addition, on September 7, 2022, the Company granted a total of 2,595,000 share options to officers, employees, directors and other eligible persons at an exercise price of $2.08 per share, and on November 29, 2022, the Company granted an additional 285,000 share options to officers, employees, directors and other eligible persons at an exercise price of $3.16 per share.

The Company uses the Black-Scholes option pricing model to estimate the fair value for all options granted and the resulting stock-based compensation. The weighted average assumptions used in this pricing model, and the resulting fair values per option, for the 4,640,000 share options granted during the year ended December 31, 2022, are as follows:

(i)	Risk-free interest rate:	2.29%
(ii)	Expected life:	5 years
(iii)	Expected volatility:	61.08%
(iv)	Expected dividends:	nil
(v)	Fair value per option:	$1.06

18

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

The following table details the share options outstanding and exercisable as at December 31, 2022:

Exercise price $0.475 $0.54 $0.68 $1.65 $2.08 $3.16	Outstanding options Options outstanding Weighted average remaining contractual life (Years) Weighted average exercise price 3,010,000 1.66 $0.475 2,380,000 2.84 $0.54 2,972,333 2.91 $0.68 1,510,000 3.96 $1.65 2,556,667 4.61 $2.08 285,000 4.84 $3.16 12,714,000 3.11 $1.058	Exercisable options
		Options exercisable Weighted average remaining contractual life (Years) Weighted average exercise price
		3,010,000 1.66 $0.475 2,380,000 2.84 $0.54 1,522,335 2.25 $0.68 503,334 3.96 $1.65 829,998 4.61 $2.08 95,000 4.84 $3.16 8,340,667 2.57 $0.79

c) Share-based compensation

		Year ended
		December 31,
	2022	2021
Exploration and project investigation	574,117	86,239
General and administration	2,353,238	487,837
	2,927,355	574,076

11. EXPLORATION AND PROJECT INVESTIGATION

Due to the geographic location of the Company’s current mineral property interests, the Company’s business activities generally fluctuate with the seasons, with increased exploration activities during the summer months in South America. As a result, a general recurring trend is the increase in exploration expenditures, and therefore net losses, for the fourth quarter and first quarter of a fiscal year, relative to the second and third quarters.

The Company expensed the following exploration and project investigation costs for the years ended December 31, 2022 and 2021:

19

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

Year ended December 31,	Los Helados Project Potro Cliffs Valle Ancho Other Total
2022 2021	Land holding and access costs 416,851 22 22,503 27,684 467,060 Drilling, fuel, camp costs and field supplies 11,225,277 1,893 1,423,143 - 12,650,313 Roadwork, travel and transport 4,961,496 17,374 778,753 37 5,757,660 Engineering and conceptual studies 303,666 - - - 303,666 Consultants, geochemistry and geophysics 1,099,791 - 228,012 - 1,327,803 Environmental and community relations 142,996 25,202 88,971 - 257,169 VAT and other taxes 3,171,718 52,909 859,429 18,751 4,102,807 Office, field and administrative salaries, overhead and other administrative costs 1,279,451 347,285 1,708,337 28,725 3,363,798 Share-based compensation 460,431 8,794 103,381 1,511 574,117 COVID related health and safety 975 - 118,477 - 119,452
	Total 23,062,652 453,479 5,331,006 76,708 28,923,845
	Land holding and access costs 400,219 - 8,010 30,174 438,403 Drilling, fuel, camp costs and field supplies 261,069 - 1,194,990 21 1,456,080 Roadwork, travel and transport 142,014 - 673,076 122 815,212 Consultants, geochemistry and geophysics 112,765 - 515,605 65,575 693,945 Environmental and community relations 39,442 - 16,728 - 56,170 VAT and other taxes 104,478 - 540,916 7,913 653,307 Office, field and administrative salaries, overhead and other administrative costs 260,259 - 1,039,153 31,423 1,330,835 Share-based compensation 20,409 - 60,542 5,288 86,239 COVID-19-related health and safety - - 134,705 - 134,705 Total 1,340,655 - 4,183,725 140,516 5,664,896

20

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

12. RELATED PARTY TRANSACTIONS

Under the normal course of operations, the Company may undertake transactions or hold balances with related parties. Other than those related party transactions identified elsewhere in these consolidated financial statements, during the year ended December 31, 2022, the Company has also engaged with Josemaria Resources Inc. (“Josemaria”) and Filo Mining Corp. (“Filo Mining”), related parties by way of directors, officers and shareholders in common, and MOAR Consulting Inc. (“MOAR”), an exploration consulting firm, of which a director of the Company is the president.

Josemaria ceased to be a related party of the Company following the acquisition of all of its issued and outstanding common shares by Lundin Mining Corporation, which closed on April 28, 2022.

a) Related party services

The Company has cost sharing arrangements with Josemaria and Filo Mining. Under the terms of these arrangements, the Company may, from time to time, provide management, technical, administrative and/or financial services (collectively, “Management Services”) to Josemaria and Filo Mining, and vice versa. In addition, the Company may, from time to time, engage MOAR to provide exploration consultation. These transactions were incurred in the normal course of operations, and are summarized as follows:

		Year ended
	December 31,
	2022	2021
Management Services to Josemaria	-	83,524
Management Services to Filo Mining	364,343	591,415
Management Services from Josemaria	-	(42,058)
Management Services from Filo Mining	(902,414)	(549,787)
Exploration Consultation from MOAR	(12,750)	(57,000)

b) Related party balances

The amounts due from (to) related parties, and the components of the consolidated statements of financial position in which they are included, are as follows:

		December 31,	December 31,
	Related Party	2022	2021
Receivables and other assets	Josemaria	-	27,996
Receivables and other assets	Filo Mining	112,163	24,343
Accounts payable and accrued liabilities	Josemaria	-	(1,667)
Accounts payable and accrued liabilities	Filo Mining	(186,449)	(15,113)

21

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

c) Key management compensation

The Company’s key management personnel have the authority and responsibility for overseeing, planning, directing and controlling its activities and consist of the Board of Directors and members of the executive management team. Total compensation expense for key management personnel, and the composition thereof, is as follows:

		Year ended
		December 31,
	2022	2021
Salaries and other payments	572,667	474,000
Short-term employee benefits	17,514	14,000
Directors fees	92,458	82,000
Stock-based compensation	1,983,771	458,478
Short-term incentive bonuses	690,000	-
Severance	-	75,000
	3,356,410	1,103,478

13. INCOME TAXES

Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to the loss for the year. These differences result from the following items:

		Year ended
	December 31,
	2022	2021
Loss before taxes	32,415,262	5,456,734
Combined Canadian federal and provincial statutory
income tax rates	27.00%	27.00%
Income tax recovery based on the above rate	8,752,121	1,473,318
Changes to income tax balances and other items that have
not been recognized	(9,310,039)	671,598
Impacts of changes and differences in foreign tax and
currency rates	642,557	(3,048,874)
Non-deductible expenses andpermanent differences	(84,639)	903,958
Total income tax recovery	-	-

22

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

The Company’s unrecognized deductible temporary differences and unused tax losses for which no deferred tax asset has been recognized consist of the following:

		Year ended
		December 31,
	2022	2021
Non-capital losses carried forward	2,978,119	1,896,749
Mineral properties and related expenditures	25,671,833	17,870,945
Other	253,303	154,632
	28,903,255	19,922,326

As at December 31, 2022, the non-capital loss carry-forwards and their respective expiration dates are as follows:

Year	Canada	Argentina	Other	Total
2023	-	183,421	23,453	206,874
2024	-	10,733	37,843	48,576
2025	-	11,279	32,868	44,147
2026	-	252,168	23,985	276,153
2027 and	onwards 9,068,643	955,064	17,591	10,041,298
	9,068,643	1,412,665	135,740	10,617,048

14. SEGMENTED INFORMATION

The Company is principally engaged in the acquisition, exploration and development of mineral properties in South America. The information regarding mineral properties and exploration and project investigation costs presented in Notes 6 and 11, respectively, represent the manner in which management reviews its business performance. Materially all of the Company’s mineral properties and exploration and project investigation costs relate to South America, particularly Chile and Argentina. The net gains on the use of marketable securities are allocated to the underlying projects for which the funding was provided. Materially all of the Company’s administrative costs are incurred by the Canadian parent, where materially all of the Company’s cash is held in the normal course of business until it is required to be deployed to the Company’s South American subsidiaries in support of ongoing and planned work programs.

23

NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

The following are summaries of the Company’s current and non-current assets, current liabilities, and net losses by segment:

	Los Helados Project Valle Ancho & Potro Cliffs Corporate Total
As at December 31, 2022	Current assets 8,301,240 536,267 18,712,293 27,549,800 Non-current receivables and other assets 840,337 - - 840,337 Equipment - 18,723 - 18,723 Mineral properties 3,902,697 - - 3,902,697
	Total assets 13,044,274 554,990 18,712,293 32,311,557 Current liabilities 6,044,223 432,919 850,809 7,327,951 Non-current accrued liabilities 338,600 - - 338,600 Due to exploration partner - - 630,460 630,460
	Total liabilities 6,382,823 432,919 1,481,269 8,297,011
	Los Helados Project Valle Ancho Corporate Total
As at December 31, 2021	Current assets 1,077,512 2,472,602 18,379,540 21,929,654 Non-current receivables and other assets 155,710 86,489 - 242,199 Equipment - 23,968 - 23,968 Mineral properties 3,537,087 - - 3,537,087
	Total assets 4,770,309 2,583,059 18,379,540 25,732,908 Current liabilities 537,961 1,158,217 259,638 1,955,816 Due to exploration partner - - 393,719 393,719
	Total liabilities 537,961 1,158,217 653,357 2,349,535

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

Year ended December 31,	Los Helados Project Valle Ancho & Potro Cliffs Corporate Other Total
2022 2021	Exploration and project investigation 23,062,652 5,784,485 - 76,708 28,923,845 Gain on use of marketable securities (57,155) (1,918,201) - - (1,975,356) General and administration and other items 84,312 24,842 5,357,619 - 5,466,773
	Netloss 23,089,809 3,891,126 5,357,619 76,708 32,415,262
	Los Helados Project Valle Ancho Corporate Other Total
	Exploration and project investigation 1,340,655 4,183,725 - 140,516 5,664,896 Gain on use of marketable securities - (2,477,478) - - (2,477,478) General and administration and other items 78,883 110,868 2,079,565 - 2,269,316
	Net loss 1,419,538 1,817,115 2,079,565 140,516 5,456,734

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

15. USE OF MARKETABLE SECURITIES

From time to time, the Company may acquire and transfer marketable securities to facilitate intragroup funding transfers between the Canadian parent and its Argentine operating subsidiaries.

The Company does not acquire marketable securities or engage in these transactions for speculative purposes. In this regard, under this strategy, the Company generally uses marketable securities of large and well-established companies, with high trading volumes and low volatility. Nonetheless, as the process to acquire, transfer and ultimately sell the marketable securities occurs over several days, some fluctuations are unavoidable.

As the marketable securities are acquired with the intention of a near term sale, they are considered financial instruments that are held for trading. Accordingly, all changes in the fair value of the instruments, between acquisition and disposition, are recognized through profit or loss.

As a result of having utilized this mechanism for intragroup funding for the year ended December 31, 2022, the Company realized a net gain of $1,975,356 (2021: gain of $2,477,478). The net gain for the year ended December 31, 2022 was comprised of a favorable foreign currency impact of $2,269,711 (2021: $2,943,625 ) and a trading loss of $294,355 (2021: loss of $466,147 ), including the impact of fees and commissions.

16. CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to pursue the development of its mineral properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the definition and management of capital, the Company considers the items included in shareholders’ equity to be capital.

The Company manages the capital structure and makes adjustments, as necessary, in light of changes in economic conditions and the risk characteristics of its assets. In order to maintain or adjust the capital structure, the Company may attempt to issue new shares or debt instruments, acquire or dispose of assets, or to bring in joint venture partners.

To facilitate the management of its capital requirements, the Company may prepare expenditure plans and budgets that are updated as necessary depending on various factors, including, but not limited to, successful capital deployment and general industry conditions.

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

17. FINANCIAL INSTRUMENTS AND MANAGEMENT OF FINANCIAL RISKS

The Company has estimated the fair values of its financial instruments based on appropriate valuation methodologies. These values are not materially different from their carrying value.

The Company classifies the fair value of its financial instruments according to the following hierarchy based on the amount of observable inputs used to value the instrument:

• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2 – inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Company’s financial instruments consist of cash, receivables and other assets, trade payables and accrued liabilities, amounts owing against the Facilities, if any, non-current accrued liabilities and the amounts due to its exploration partner. Other than for the amounts due to its exploration partner, the carrying values of the Company’s financial instruments are considered to be reasonable approximations of fair value due to their short-term nature. For amounts due to its exploration partner, the Company revalues the liability from time to time based on revisions to the timing and amounts of expected future settlement, which the Company believes is a reasonable approximation of fair value. Between revaluations, the liability is accreted.

As at December 31, 2022, the Company’s financial instruments are exposed to the following financial risks, including credit, liquidity and currency risks:

• (i) Credit risks associated with cash is minimal as the Company deposits the majority of its cash with a large Canadian financial institution that has been accorded a strong investment grade rating by a primary rating agency.

• (ii) Liquidity risks associated with the inability to meet obligations as they become due is minimized through the management of its capital structure as explained on Note 16 and by maintaining good relationships with significant shareholders and creditors, such as Zebra and Lorito. The Company also closely monitors and reviews its costs to date and actual cash flows on a monthly basis.

The maturities of the Company’s financial liabilities as at December 31, 2022, are as follows:

		Less than	1-5	More than
	Total	1 year	years	5 years
Accounts payable and
accrued liabilities	7,327,951	7,327,951	-	-
Non-current accrued liabilities	338,600		338,600	-
Due to explorationpartner	4,582,690	-	-	4,582,690
Total	12,249,241	7,327,951	338,600	4,582,690

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NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated)

In accordance with the terms of a JEA between the Company and the partner, NCR, the Company has elected to settle the Obligation through funding NCR’s share of exploration expenditures, which remained US$3.4 million as at December 31, 2021, and has no defined timeline for settlement. The Obligation has been discounted and recorded at its present value at an annual effective rate of 8%.

• (iii) Foreign currency risk can arise when the Company or its subsidiaries transact or have net financial assets or liabilities which are denominated in currencies other than their respective functional currencies.

At December 31, 2022, the Company’s largest foreign currency risk exposure existed at the level of its Chilean operating subsidiary, where the Company held a net financial asset position denominated in US dollars having a Canadian dollar equivalent of approximately $6.1 million. A 10% change in the foreign exchange rate between the US dollar, and the Chilean Peso, the subsidiary’s functional currency, would give rise to increases/decreases of approximately $611,000 in financial position/comprehensive loss.

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