Orea Mining Corp. - Interim / Quarterly Report 2022

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1090 Hamilton Street Vancouver, B.C. V6B 2R9 Canada

Condensed Interim Consolidated Financial Statements (Unaudited)

For the Nine Months Ended June 30, 2022

(Stated in Canadian Dollars)

NOTICE OF NO REVIEW BY AUDITOR

In accordance with National Instrument 51-102 Continuous Disclosure Obligations of The Canadian Securities Administrators we hereby give notice that our condensed interim consolidated financial statements for the nine months ended June 30, 2022, which follow this notice, have not been reviewed by an auditor.

Orea Mining Corp. Condensed Interim Consolidated Statements of Financial Position (Unaudited) (Expressed in thousands of Canadian Dollars)

	June 30,	September 30,
	2022	2021
	($)	($)
Assets
Current Assets
Cash	291	1,241
Marketable securities (note 3)	36	451
Receivables (note 4 and 9)	19	130
Prepaid expenses (note 9)	372	430
	718	2,252
Non-Current Assets
Investment in Compagnie Minière Montagne d’Or SAS (note 5)	-	34,967
Exploration and evaluation assets (note 6)	-	2,658
Property and equipment (note 7)	96	179
	814	40,056
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable (notes 7 & 9)	460	359
Accruedliabilities (note 9)	298	98
	758	457
Non-Current Liabilities
Lease liabilities (note 7)	12	28
	770	485
Shareholders’ Equity
Share capital (note 8)	73,086	72,309
Reserves (note 8e)	7,423	11,535
Deficit	(80,465)	(44,273)
	44	39,571
	814	40,056

Nature of operations and going concern (note 1) Commitments (note 11)

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

Approved by the Board of Directors

“Robert Giustra” “Peter Gianulis” Robert Giustra – Director Peter Gianulis - Director

Orea Mining Corp. Condensed Interim Consolidated Statements of Comprehensive Loss (Unaudited) (Expressed in thousands of Canadian Dollars)

	Three Months Ended June 30, June 30, 2022 2021 ($) ($)	Three Months Ended June 30, June 30, 2022 2021 ($) ($)	Nine Months Ended
			June 30, June 30, 2022 2021 ($) ($)
Operating Expenses Administration and office (note 9) Directors fees (note 9) General exploration (note 6) Investor relations Management fees (note 9) Professional fees Share-based payments (note 8b) Transfer agent and filing fees Travel Amortization (note 7) Costrecoveries (note 9)	439 291 36 36 74 - 11 17 23 23 189 194 - (1) 17 19 1 8 34 22 (136) (39)		1,122 882 108 108 195 19 55 81 68 68 466 669 - 485 89 86 46 39 100 62 (365) (72)
Loss before other items Other Items Unrealized gain (loss) on marketable securities (note 3) Gain (loss) from sale of marketable securities (note 3) Loss from equity accounted investment (note 5) Loss on settlement of note receivable (note 9) Finance expense Other income Bad debt expense Impairment loss on investment in Compagnie Minière Montagne d’Or (note 5) Loss on exploration and evaluation assets (note 6) Foreignexchange gain(loss)	(688) (570) 188 441 (227) 153 (1,109) (65) - - (3) (4) 3 6 - - (29,191) - (3,023) - 2 (2)		(1,884) (2,427) (94) 646 (227) 153 (1,768) (222) - (272) (10) (23) 4 9 - (103) (29,191) - (3,023) - 1 (6)
Net loss for theperiod	(34,048)	(41)	(36,192) (2,245)
Other comprehensive loss: Foreigncurrency translation	(1,450) (145)		(4,316) (3,208)
Comprehensive loss for theperiod	(35,498)	(186)	(40,508) (5,453)
Loss per share (note 8d) Basic Diluted	(0.16) (0.00) (0.16) (0.00)		(0.17) (0.01) (0.17) (0.01)

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

Orea Mining Corp. Condensed Interim Consolidated Statements of Cash Flows (Unaudited) (Expressed in thousands of Canadian Dollars)

	Three Months Ended June 30, June 30, 2022 2021 ($) ($)	Nine Months Ended
		June 30, June 30, 2022 2021 ($) ($)
Operating Activities Net loss for the period Items not involving cash Unrealized loss (gain) on marketable securities (Gain) loss from sale of marketable securities Loss from equity accounted investment Loss from settlement of note receivable Finance expense from lease liabilities Share-based payments Amortization Impairment loss on investment in Compagnie Minière Montagne d’Or Loss on exploration and evaluation assets Unrealizedforeignexchange gain	(34,048) (41) (188) (441) 227 (153) 1,109 65 - - 3 4 - (1) 34 22 29,191 - 3,023 - 91 (9)	(36,192) (2,245) 94 (646) 227 (153) 1,768 222 - 272 10 23 - 485 100 62 29,191 - 3,023 - 76 (44)
Changes in non-cash working capital Receivables and prepaid expenses Accounts payable and accrued liabilities	(558) (554) (10) 53 262 (37)	(1,703) (2,024) 169 (4) 355 (343)
Cash used in operating activities	(306) (538)	(1,179) (2,371)
Investing Activities Exploration and evaluate on asset Sale of marketable securities Equipment	(81) (129) 94 1,225 - (4)	(745) (1,043) 94 1,225 - (5)
Cash from (used in) investing activities	13 1,092	(651) 177
Financing Activities Net proceeds from share offerings Payment of lease liabilities	203 - (32) (25)	981 1,387 (93) (81)
Cash from (used in) financing activities	171 (25)	888 1,306
Effect of foreign exchange on cash	(2) (2)	(8) (14)
Increase (decrease) in cash Cash, beginning of period	(124) 527 415 1,173	(950) (902) 1,241 2,602
Cash, end ofperiod	291 1,700	291 1,700
Other Non-Cash Transactions:

On October 21, 2020 the Company and Allegiant Gold Ltd. (“Allegiant”) settled a note receivable from Allegiant with a face value of $1,604 in exchange for 3,201,766 shares of Allegiant (the “Settlement Shares”) (note 9). The market value of the Settlement Shares received on October 21, 2020 was $1,073.

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

Orea Mining Corp. Condensed Interim Consolidated Statements of Shareholders’ Equity (Unaudited)

(Expressed in thousands of Canadian Dollars except for share amounts)

	Share Capital Number of Shares (000’s) Share Capital ($)	Reserves Share Options and Warrants ($) Accumulated Other Comprehensive Income (Loss) ($) Total ($) Deficit ($) Total ($)
Balance, October 1, 2020 Private placement of units (note 8a) Share-based payments (note 8b) Comprehensiveloss	195,921 70,974 8,784 1,212 - - - -	8,766 5,216 13,982 (41,162) 43,794 175 - 175 - 1,387 485 - 485 - 485 - (3,208) (3,208) (2,245) (5,453)
Balance, June 30, 2021 Balance, October 1, 2021 Private placement of common shares – January 2022 (note 8a) Private placement of common shares – June 2022 (note 8a) Comprehensiveloss	204,705 72,186 205,142 72,309 6,958 647 4,300 130 - -	9,426 2,008 11,434 (43,407) 40,213 9,409 2,126 11,535 (44,273) 39,571 131 - 131 - 778 73 - 73 - 203 - (4,316) (4,316) (36,192) (40,508)
Balance, June 30, 2022	216,400 73,086	9,613 (2,190) 7,423 (80,465) 44

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

Orea Mining Corp. Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the Nine Months Ended June 30, 2022 (Expressed in thousands of Canadian Dollars, except where noted)

1. Nature of Operations and Going Concern

Orea Mining Corp. (the “Company” or “Orea”) was incorporated on May 14, 2003 under the laws of the Province of Saskatchewan, Canada and continued on to British Columbia, Canada on December 29, 2003. On May 14, 2020, the Company changed its name from Columbus Gold Corp. to Orea Mining Corp. The Company is currently listed on the Toronto Stock Exchange (the “TSX” or “Exchange”) and the OTCQX International.

The Company’s principal business activities are the exploration and development of resource properties in South America. The recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production or from proceeds of disposition. The Company’s exploration and evaluation activities are not dependent on seasonality and may operate year-round; however, the Company may adjust the level of exploration and evaluation activities to manage its capital structure in light of changes in global economic conditions. To date, the Company has not received any revenue from mining operations and is considered to be in the exploration stage.

These consolidated financial statements have been prepared on a going concern basis which implies that the Company will continue realizing assets and discharging liabilities in the normal course of business for the foreseeable future. Should the going concern assumption not continue to be appropriate, further adjustments to carrying values of assets and liabilities may be required.

All figures in these consolidated financial statements are expressed in thousands of Canadian Dollars except for share, per share amounts, warrants, per warrant amounts, units, per unit amounts or noted otherwise. References to “US$” are to thousands of US Dollars. At June 30, 2022, the Company had working capital deficiency of $40 (September 30, 2021 – positive working capital of $1,795) and an accumulated deficit of $80,465 (September 30, 2021 - $44,273). Accordingly, the ability of the Company to realize the carrying value of its assets and continue operations as a going concern is dependent upon its ability to raise additional debt or equity to fund ongoing costs of operations and/or secure new or additional partners in order to advance its projects. These material uncertainties may cast significant doubt upon the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recovery of assets and classification of assets and liabilities that may arise should the Company be unable to continue as a going concern.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and has adversely affected global workforces, financial markets, and the general economy. It is not possible for the Company to determine the duration or magnitude of the adverse results of COVID-19. The Company may need to delay or suspend future field work if required by the applicable local Governments relating to COVID-19 measures.

The Company’s head office and principal address is located at 1090 Hamilton Street, Vancouver, British Columbia, V6B 2R9, Canada.

2. Basis of Presentation

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting (“IAS 34”) using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These condensed interim consolidated financial statements have been prepared using the same accounting policies and methods of computation as the most recent annual financial statements for the year ending September 30, 2021. Certain amounts in the prior period have been reclassified to conform with the presentation in the current period.

These condensed interim consolidated financial statements were approved by the Board of Directors and authorized for issue on August 11, 2022.

Changes in Accounting Standards

Certain accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

3. Marketable Securities

	June 30,	September 30,
	2022	2021
	($)	($)
OrgantoFoodsInc. (“Organto”)	36	451
	36	451

During the three and nine months ended June 30, 2022, the Company recorded an unrealized gain on marketable securities of $188 and loss of $94 respectively (2021 – gain of $441 and $646 respectively). During the three and nine months ended June 30, 2022 the Company sold marketable securities and recorded a realized loss of $227 (2021 – gain of $153).

4. Receivables

	June 30,	September 30,
	2022	2021
	($)	($)
Xebra Brands Ltd. (“Xebra”) (note 9)	-	126
Canada Goods and Services Tax	17	-
Other	2	4
	19	130

5. Investment in Compagnie Minière Montagne d’Or SAS ("CMMO")

The Company entered into an agreement with Nord Gold plc (“Nordgold”) on March 13, 2014 (the “Option Agreement”), under which Nordgold was granted the right to acquire a 50.01% interest in the Montagne d’Or Project (formerly known as the “Paul Isnard Project”) in French Guiana, France, which includes the Montagne d’Or gold deposit, mining concessions and the exploration permits, held by the Company’s subsidiary at the time, CMMO.

On January 12, 2016, the Company entered into an agreement with Nordgold to sell a 5% minority interest in the Montagne d’Or Project (the “5% Sale”) for $7,870 (US$6,000) (received). The formal acquisition and transfer of the 5% interest would not occur until Nordgold earned the initial 50.01% interest in the Montagne d’Or Project under the Option Agreement.

On September 14, 2017, the Company’s interest in CMMO was diluted to 49.99% through Nordgold’s successful Option Agreement earn-in, and an additional 5% interest in CMMO was transferred to Nordgold to complete the 5% Sale. A Shareholders’ Agreement was signed between the Company and Nordgold, with the Company retaining a 44.99% interest in CMMO, and Nordgold owning the remaining 55.01% interest.

Upon recognition of Nordgold’s earn-in, the Company recorded the carrying value of its investment in CMMO at its fair value of $36,701, resulting in a gain on deconsolidation of $14,116. The fair value of the Company’s investment in CMMO was determined using the consideration it received for an aggregate interest of 55.01%, which was $44,875 (US$36,000).

The Company accounts for its investment in CMMO as an equity accounted investment. A continuity of the investment in CMMO is shown below:

is shown below:
	($)
Balance, October 1, 2020	38,220
Proportionate share of losses	(265)
Foreignexchangeloss	(2,988)
Balance, September 30, 2021	34,967
Proportionate share of losses	(1,768)
Foreign exchange loss	(4,008)
Impairmentloss	(29,191)
Balance, June 30, 2022	-

5. Investment in Compagnie Minière Montagne d’Or SAS – continued

CMMO’s title to the Montagne d’Or Project was initially held in 8 mining concessions (each, a “Concession”) plus 2 exclusive exploration permits covering a total area of 190 km[2] . Historically, the Concessions were granted to the original applicant and all subsequent title holders in perpetuity, in accordance with a French Imperial Law of the year 1810. As such, when the Concessions were first granted, they had the benefit of never expiring.

In 1994, the French Mining Code was amended to provide that all mining concessions granted under the Imperial Law of 1810 would expire on December 31, 2018, including CMMO’s Concessions, but can be subject to successive extensions not exceeding 25 years. In accordance therewith, and after extensive exploration work, CMMO submitted renewal applications for a 25-year period for the core project Concessions (2 of the 8 Concessions), two years prior to the expiration date. Exploration results did not justify renewal applications for the other 6 Concessions.

Renewal of the two CMMO Concessions involved a national public enquiry, which was carried out in November and December 2018. The Commission of Mines in French Guiana was expected to provide a non-binding opinion to the French Minister of Economy in charge of mines, which makes a renewal decision. The renewal of the Concessions was on the agenda of the Commission of Mines on October 16, 2019, but was removed from the agenda prior to the Commission’s meeting and the Prefect of French Guiana indicated that it would be considered at a future meeting following some complementary legal analysis.

The Mining Code provides that there is an implicit (deemed) refusal of the renewal applications if no response is received by the Minister in charge of mines within two years of the date the applications were submitted. On December 21, 2018, the Minister informed CMMO, and all other holders of former historical concessions in French Guiana, that the assessment of their application might not be finalized upon the deadline and notified each applicant that exceeding this deadline will not preclude an explicit (formal) decision at a later date. The letter stated further that the French Supreme Administrative Court (Conseil d’État) had provided that the operator “may continue its works until an explicit (formal) decision of its request for renewal.” Conditions for renewal include the requirement that the concessions be exploited on December 31, 2018, and the examination by the administrative authority of the technical and financial capacities of the title holder as well as the foreseeable duration of the exploitation of the deposit.

In order to protect its rights to the CMMO Concessions, in February and March 2019, CMMO filed proceedings in the Administrative Court of Cayenne in French Guiana to invalidate any implicit (deemed) refusal as a result of the French government having failed to respond within the prescribed deadline, and to expedite a clear and definitive formal written decision from the Minister in charge of mines. On December 24, 2020, the Administrative Court of Cayenne in French Guiana concluded the implicit refusals were cancelled and ordered the State to extend the Concessions and to set the duration of these extensions within a period of six months from the notification of the court judgement. The Minister of Economy, and a non-governmental organization (NGO) permitted to intervene in the case, had two months to appeal the decision.

The French Government issued a press release on February 3, 2021 announcing that it had filed an appeal with the Administrative Court of Appeal of Bordeaux on January 25, 2021 from the Administrative Court of Cayenne ruling on December 24, 2020, which had ordered the renewal of the Concessions. The press release also reaffirms the Government’s view that the Montagne d’Or Project, as it has been presented to it, is not compatible with the Government’s environmental ambitions.

On July 16, 2021, the Administrative Court of Appeal of Bordeaux rejected the French Government’s appeal and request for a stay of execution of the court rulings of December 24, 2020. In its ruling, the Court of Appeal of Bordeaux concluded that the arguments put forth by the French Government were without merit and that CMMO submitted complete applications and met all requirements for the renewal of the Concessions. An additional court claim was made by CMMO on June 25, 2021, before the Administrative Court of Appeal of Bordeaux to execute the decision of the Administrative Court of Cayenne and for the French Government to pay 10,000 Euro a day in penalties per Concession (20,000 Euro total), for every day that the Concessions are not renewed. The additional court claim was initially withdrawn, although on May 20, 2022 the Administrative Court of Appeal of Bordeaux decided to cancel the withdrawal and to open the judicial procedure on the claim.

5. Investment in Compagnie Minière Montagne d’Or SAS – continued

On October 7, 2021, the Company reported that it was informed that the French Government had filed a final appeal to the French Supreme Court, and on May 10, 2022, that the Supreme Court had admitted the final appeal.

The renewal of the Concessions was reviewed by the Commission of Mines in French Guiana on December 9, 2021. The Commission rendered a non-binding unfavorable mention based on environmental grounds and the new Mining Code. The mention has no effect on the previously rendered decisions by the Administrative Court of Cayenne in French Guiana and the Court of Appeal of Bordeaux, which were in favor of CMMO, and ordered the renewal of the Concessions.

US Sanction Imposed on Nordgold

On June 2, 2022, Nordgold has been sanctioned (the “Nordgold Sanction”) by the U.S. Department of Treasury, Office of Foreign Assets Control (“OFAC”), under Russian Harmful Foreign Activities Sanctions Regulations - 31 CFR part 587. General License No. 37 was also issued.

Under General License No. 37, all transactions prohibited by Presidential Executive Order 14024 that are ordinarily incident and necessary to the wind down of transactions involving Nordgold, or any entity in which Nordgold owns, directly or indirectly, a 50 percent or greater interest, are authorized through 12:01 a.m. eastern daylight time, July 1, 2022, under certain conditions.

On June 28, 2022, OFAC issued a new General License related to Nordgold. Specifically, OFAC issued General License No. 43, which applies to any parties subject to agreements or transactions with Nordgold and its associated entity Severstal. The terms of this new general license thereby extend Orea’s deadline to wind-up its joint-venture with Nordgold until August 31, 2022.

European Union Sanction Imposed on Nordgold Shareholder

On June 3, 2022, Marina Aleksandrovna Mordashova was Sanctioned by the European Union. Mrs. Mordashova became the controlling shareholder of Nordgold on February 28, 2022.

Impairment

As a result of the sanctions on Nordgold and its controlling shareholder, and related uncertainties, the Company has impaired the value of its investment in CMMO to $nil.

6. Exploration and Evaluation Assets

Maripa Gold Project (“Maripa”)

On July 19, 2018, the Company entered into an agreement (the “Maripa Option Agreement”) with a subsidiary of IAMGOLD Corporation (“IAMGOLD”) to acquire up to a 70% interest in Maripa, located in French Guiana, France.

On February 14, 2022, the Company entered into a purchase agreement (the “Maripa Purchase Agreement”) with IAMGOLD whereby the Company is to acquire a 100% interest in Maripa in exchange for 6,000,000 common shares of the Company, and IAMGOLD retaining a 1.5% NSR on Maripa. The closing of the Maripa Purchase Agreement transaction is subject to a number of conditions, including TSX and other regulatory approvals. Concurrent with the closing of the Maripa Purchase Agreement transaction, the Maripa Option will be terminated.

On June 6, 2022, the Company terminated the Maripa Option Agreement and the Maripa Purchase Agreement. Consequently, the Company wrote off the carrying value of Maripa in the amount of $3,023.

10 -

6. Exploration and Evaluation Asset – continued

A summary of the Company’s exploration and evaluation asset for nine months ended June 30, 2022 and year ended September 30, 2021 is set out below:

	Maripa Gold Project
	$
Balance at October 1, 2020	1,701
Drilling	286
Geology and geophysics	44
Salaries and consulting	496
Supplies	74
Equipment	21
Permitting	53
Assays and analysis	77
Other	39
Foreignexchange	(133)
Balance at September 30, 2021	2,658
Drilling	283
Geology and geophysics	30
Salaries and consulting	262
Supplies	32
Equipment	6
Permitting	51
Assays and analysis	46
Transportation	3
Other	32
Foreign exchange	(380)
Loss onexplorationand evaluationassets	(3,023)
Balance atJune 30, 2022	-

Antino Gold Project

On March 17, 2022, the Company announced it signed a formal option agreement (the “FOA”) to acquire up to a 75% interest in the Antino Gold Project (“Antino”) in Suriname, South America with the following key commercial terms:

First Option Stage for 51% Interest o Orea to acquire an initial 51% interest in Antino within three years of the Commencement Date (defined below) by:
- Making cash payments totaling $2,064 (US$1,650), of which only $438 (US$350) is payable within the first year;
- Issuing common shares of Orea totaling 3,400,000;
- Incurring a minimum of $7,504 (US$6,000) in exploration expenditures; and
- Completing a NI 43-101 Technical Report containing a minimum of 500,000 oz of gold in any category.
Second Option Stage for an Additional 19% Interest for a Total of 70%
Orea to acquire an additional 19% interest in Antino, for a total of 70%, within two years of completion of the First Option Stage by:
- Making cash payments totaling $1,876 (US$1,500);
- Issuing common shares of Orea totaling 200,000;
- Incurring a minimum of $12,507 (US$10,000) in exploration expenditures; and
- Completing a positive preliminary economic assessment (PEA).
In the event that Orea does not proceed with the completion of the Second Option Stage, Orea will transfer its interest in Antino back to the optionor.
11 -

6. Exploration and Evaluation Asset – continued

Third Option Stage for an Additional 5% for a Total of 75%
- Orea to acquire an additional 5% interest in Antino, for a total of 75%, within three years of completion of the Second Option Stage by:
  - Incurring a minimum of $12,507 (US$10,000) in exploration expenditures; and
  - Completing a bankable feasibility study (BFS).

The Commencement Date starts when certain conditions have been met, including but not limited to, satisfactory completion of due diligence and regulatory approvals (the “Conditions Precedent”). On June 24, 2022, the FOA was amended whereby the expiry date for the Conditions Precedent to be met was extended to September 16, 2022, in addition to an extension of an initial US$100 payment due within 10 days of the Commencement Date to within 90 days of the Commencement Date.

As not all approvals have yet been obtained as at June 30, 2022, certain expenditures incurred in connection with Antino has been expensed in General Exploration.

7. Property and Equipment

	Office Furniture	Right of
	and Equipment	Use Assets	Total
	($)	($)	($)
Cost
Balance, October 1, 2020	179	122	301
Additions	9	128	137
Foreignexchange	(4)	(2)	(6)
Balance, September 30, 2021	184	248	432
Lease modifications	-	(90)	(90)
Foreignexchange	(4)	(2)	(6)
Balance, June 30, 2022	180	156	336
Accumulated Amortization
Balance, October 1, 2020	(146)	(19)	(165)
Amortization	(14)	(80)	(94)
Foreignexchange	2	4	6
Balance, September 30, 2021	(158)	(95)	(253)
Amortization	(11)	(89)	(100)
Lease modifications	-	106	106
Foreignexchange	5	2	7
Balance, June 30, 2022	(164)	(76)	(240)
Net book value, September 30, 2021	26	153	179
Net book value, June 30, 2022	16	80	96

Lease liability

The estimated fair value of lease liabilities is based on an incremental borrowing rate of 15%. Leases include an office lease and office equipment.

12 -

Orea Mining Corp. Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the Nine Months Ended June 30, 2022 (Expressed in thousands of Canadian Dollars, except where noted)

7. Property and Equipment - continued

	Three Months Ended June 30, June 30, 2022 2021 ($) ($)	Three Months Ended June 30, June 30, 2022 2021 ($) ($)
		June 30, June 30, 2022 2021 ($) ($)
Balance, beginning of period Modification Lease payments Interest expense on lease liability Foreignexchange	113 73 2 128 (32) (25) 3 4 (2) -	153 107 16 131 (93) (81) 10 23 (2) -
Balance, end of period Current portion	84 180 72 118	84 180 72 118
Long-termportion	12 62	12 62

Maturity Analysis

($)

Contractual undiscounted cash flows:
Less than one year	72
Two to three years	12
Total undiscounted lease liabilities as at June 30, 2022	84
Lease liabilities in Consolidated Statements of Financial Position as at June 30, 2022
Current (included in accounts payable)	72
Non-current (includedin leaseliabilities)	12
	84

Amounts Recognized in Consolidated Statements of Comprehensive Income (Loss)

	Three Months Ended June 30, June 30, 2022 2021 ($) ($)	Nine Months Ended
		June 30, June 30, 2022 2021 ($) ($)
Interest expense on lease liabilities Expensesrelating to short-term leases	3 4 1 4	10 23 2 4
	4 8	12 27

8. Share Capital

(a) Common Shares

Authorized - unlimited common shares without par value.

At June 30, 2022, the Company had 216,400,159 (September 30, 2021 – 205,142,425) common shares issued and outstanding.

On June 16, 2022, the Company, the Company completed the first tranche of a non-brokered private placement for gross proceeds of $215. The private placement was for 4,300,000 units at a price of $0.05 per unit. Each unit consisted of 1 common share of the Company, and a full warrant. Each full warrant entitled the holder to purchase one common share of the Company at a price of $0.10. The warrants expire 18 months from the date of issuance. An aggregate $12 and 4,300 shares with a fair value of $73 have been paid in finders’ fees.

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8. Share Capital - continued

On January 25, 2022, the Company completed a non-brokered private placement for gross proceeds of $800. The private placement was for 6,666,667 units at a price of $0.12 per unit. Each unit consisted of 1 common share of the Company, and half a warrant. Each full warrant entitled the holder to purchase one common share of the Company at a price of $0.18. The warrants expire 18 months from the date of issuance. An aggregate $13 and 291,067 shares with a fair value of $35 have been paid in finders’ fees. Total warrants issued have a fair value of $131. Share issue costs totalled $57.

On September 22, 2021, the Company issued 437,500 shares in connection with a warrant exercise (note 8c) for gross proceeds of $105.

On January 21, 2021, the Company closed a private placement, raising gross proceeds of $1,400 through the issuance of 8,235,294 units at a price of $0.17 per unit. Each unit is comprised of one common share and a half warrant. Each full warrant entitles the holder, on exercise, to purchase one share at a price of $0.30 for a period of 18 months from the closing date of the private placement. An aggregate of 548,471 units has been paid in finders’ fees, with a fair value of $93. Total warrants issued have a fair value of $175. Share issue costs totalled $13.

(b) Share Options

The Company has a share option plan and restricted share unit (“RSU”) plan to issue share options and RSUs whereby the total share options and RSUs outstanding may be up to 10% of its issued capital at the time of an applicable option grant. The Board of Directors may from time to time, grant options and RSUs to directors, officers, employees or consultants. The exercise price of an option is not less than the closing price on the Exchange on the last trading day preceding the grant date.

The continuity of the Company's share options is as follows:

		Weighted Average
	Number of	Exercise Price
	Options	($)
Balance, October 1, 2020	6,932,500	0.41
Granted	7,725,000	0.25
Forfeited	(4,300,000)	0.46
Cancelled	(37,500)	0.25
Expired	(645,000)	0.40
Balance, September 30, 2021	9,675,000	0.26
Expired	(500,000)	(0.30)
Balance, June 30, 2022	9,175,000	0.26

A summary of the Company’s options at June 30, 2022 is as follows:

Exercise Price ($)	Options Outstanding Number of Options Outstanding Weighted Average Remaining Contractual Life (Years)	Options Exercisable
		Number of Options Exercisable Weighted Average Remaining Contractual Life (Years)
0.25 0.25 0.30 0.30 0.48	700,000 1.71 7,675,000 3.60 100,000 0.78 650,000 1.18 50,000 0.63	700,000 1.71 7,675,000 3.60 100,000 0.78 650,000 1.18 50,000 0.63
0.25-0.48	9,175,000 3.24	9,175,000 3.24

The fair value of vested share options recognized as an expense during the three and nine months ended June 30, 2022 was $nil (2021 – ($1) and $485 respectively).

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8. Share Capital - continued

The fair value of each share option is estimated on the date of grant using the Black-Scholes Option Pricing Model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatility of the Company’s shares, and other factors. The expected term of share options granted represents the period of time that share options granted are expected to be outstanding. The risk-free rate of periods within the contractual life of the share option is based on the Canadian government bond rate. Assumptions used for share options granted during fiscal 2022 and 2021 are as follows:

	Number of	Expected	Risk Free	Expected	Expected	Fair Value	Total
	Share	Price	Interest	Life	Dividend	Per Option	Fair Value
Grant Date	Options	Volatility	Rate	(Years)	Yield	($)	($)
February3,2021	7,725,000	79%	0.17%	2.96	-	0.06	484

(c) Warrants

The continuity of the Company’s warrants is as follows:

		Weighted Average
	Number of	Exercise Price
	Warrants	($)
Balance, October 1, 2020	9,743,750	0.25
Issued	4,391,882	0.30
Exercised	(437,500)	0.24
Expired	(9,306,250)	0.25
Balance, September 30, 2021	4,391,882	0.30
Issued	7,633,333	0.13
Balance, June 30, 2022	12,025,215	0.20

The fair value of each warrant is estimated on the date of grant using the Black-Scholes Option Pricing Model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatility of the Company’s shares, and other factors. The expected term of warrants issued represents the period of time which those warrants are expected to be outstanding.

The risk-free rate of periods within the contractual life of the warrants is based on the Canadian government bond rate. Assumptions used for warrants issued during 2022 and 2021 are as follows:

		Expected	Risk Free	Expected	Expected	Fair Value	Total Fair
	Number of	Price	Interest	Life	Dividend	per Warrant	Value
Issue Date	Warrants	Volatility	Rate	(Years)	Yield	($)	($)
June 16, 2022	4,300,000	100%	3.20%	1.50	-	0.02	73
January 25, 2022	3,333,333	99%	1.21%	1.50	-	0.04	131
January21,2021	4,391,882	84%	0.17%	1.50	-	0.04	175

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8. Share Capital - continued

As at June 30, 2022, all outstanding warrants are exercisable, have a weighted average exercise price of $0.20 per warrant and a weighted life of 0.84 years.

(d) Loss per Share

	Three Months Ended June 30, June 30, 2022 2021 ($) ($)	Nine Months Ended
		June 30, June 30, 2022 2021 ($) ($)
Basic loss per share Diluted loss per share Net loss for theperiod	(0.16) (0.01) (0.16) (0.01) (34,048) (41)	(0.17) (0.01) (0.17) (0.01) (36,192) (2,245)

(in thousands)	Three Months Ended	Nine Months Ended
		June 30, June 30, 2022 2021
Shares outstanding, beginning of period Effective ofshare offerings	212,100 204,705 709 -	205,142 195,921 4,238 5,180
Basic weighted average number of shares outstanding Effect of dilutive share options Effect ofdilutive warrants	212,809 204,705 - - - -	209,380 201,101 - - - -
Diluted weighted average number of shares outstanding	212,809 204,705	209,380 201,101

As at June 30, 2022, there were 9,175,000 (2021 – 9,668,750) share options and 12,025,215 (2021 – 12,641,882) warrants that were potentially dilutive but not included in the diluted loss per share calculation as the effect would be anti-dilutive.

(e) Reserves

Share Options and Warrants

The share options and warrants reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital.

Accumulated Other Comprehensive Income (Loss)

The accumulated other comprehensive income (loss) reserve records unrealized exchange differences arising from translation of foreign operations that have a functional currency other than the Company’s reporting currency.

9. Related Party Transactions

The Company entered into a cost sharing agreement (the “Xebra Cost Sharing Agreement”) with Xebra effective October 1, 2019, whereby certain overhead and administration costs were shared, which Xebra reimbursed to the Company on a periodic basis and is included in cost recoveries. The Xebra Cost Sharing Agreement was terminated effective August 31, 2020 and replaced with a fixed fee agreement (the “Xebra Services Agreement”), whereby the Company provided certain overhead and administration services in exchange for a fixed fee of $10 per month and a reduction in compensation of $8 per month to a certain officer in common. The Xebra Services Agreement was terminated on November 30, 2020 and replaced with an updated services agreement (the “Updated Services Agreement”) effective January 1, 2021 for $2 per month. Effective June 1, 2021, the Updated Services Agreement was amended whereby the monthly fee is increased to $30 per month, which was further amended effective January 1, 2022 whereby the monthly fee is increased to $40 per month. The Company and Xebra have a director in common, and as a result of the Updated Services Agreement arrangement, certain officers in common.

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9. Related Party Transactions - continued

The Company entered into an office cost reimbursement agreement (the “OCRA”) with Shellron Capital Ltd. (“Shellron”), effective January 1, 2022, whereby the Shellron reimburses the Company for certain office costs totaling $2 per month. The Company and Shellron have certain directors and officers in common.

The Company had a note receivable of $1,604 (the “Grid Note”) from Allegiant, a company with a certain director in common, originally due on the later of March 1, 2019 or when Allegiant has completed one or more equity financings with collective proceeds of a minimum of $4,000 subsequent to the date on which Allegiant lists on the TSX-V. On March 5, 2019, the Company received 1,000,000 common shares (the “Extension Shares”) of Allegiant in exchange for extending the due date of the Grid Note to December 31, 2020 (the “Extended Grid Note”). The fair value of the Extension Shares was $190 at the time of issuance. The fair value of the Extended Grid Note is $1,220, based on a 15% discount rate. The fair value of the Grid Note has been further reduced by the fair value of the Extension Shares, resulting in a carrying value of $1,030 on initial recognition. The Extended Grid Note was to be accreted to its face value of $1,604 by the due date. The Grid Note was non-interest bearing and unsecured.

On October 21, 2020 the Extended Grid Note was settled in exchange for 3,201,766 shares (the “Settlement Shares”) of Allegiant. Consequently, the Company impaired the carrying value of the Extended Grid Note to $1,345, and recorded an impairment charge of $166 which corresponds to the fair value of the Settlement Shares as at September 30, 2020. The market value of the Settlement Shares received on October 21, 2020 was $1,073, resulting in a loss of $272 on settlement. A summary of the Grid Note is presented in the following table:

	($)
Balance, October 1, 2020	1,345
Settlement	(1,073)
Loss onsettlement	(272)
Balance, June 30, 2022 and September 30, 2021	-

The following is a summary of related party transactions:

	Three Months Ended June 30, June 30, 2022 2021 ($) ($)	Nine Months Ended
		June 30, June 30, 2022 2021 ($) ($)
Management fees paid to Columbus Capital Corporation; a company controlled by the Chairman of the Company Management fees paid to the President and CEO of the Company Accounting fees paid to the CFO of the Company Directors’ fees paid or accrued Administration cost recoveries received or accrued from Xebra Administration cost recoveries received or accrued from Allegiant Administration cost recoveries received or accrued from Columbus Capital Corporation Amountsreimbursed or receivable underthe OCRA	23 23 66 66 48 48 36 36 (120) (34) (5) (5) (6) - (6) -	68 68 198 198 144 144 108 108 (330) (58) (14) (14) (10) - (12) -
	36 134	152 446

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9. Related Party Transactions - continued

The following summarizes advances or amounts that remain receivable from or payable to each related party:

	June 30,	September 30,
	2022	2021
	($)	($)
Receivable from Xebra	-	126
Management fees advance (payable) to Columbus Capital Corporation	(4)	8
Directors’ fees payable	(96)	(36)
	(100)	98

10. Segmented Disclosure

The Company has one reportable business segment, being mineral exploration and development. Assets by geographical area are as follows:

	June 30,	September 30,
	2022	2021
	($)	($)
Current assets
Canada	587	2,025
Luxembourg/Panama	27	22
France (French Guiana)	101	205
Colombia	3	-
	718	2,252
Non-current assets
Canada	64	159
Luxembourg/Panama	22	-
France (French Guiana)	8	37,645
Colombia	2	-
	96	37,804
Total assets
Canada	651	2,184
Luxembourg/Panama	49	22
France (French Guiana)	109	37,850
Colombia	5	-
	814	40,056

11. Commitments

The Company has commitments as follows:

	1 year	2-3 years	4-5 years	Total
	($)	($)	($)	($)
Office lease payment	68	11	-	79
Equipment	4	1	-	5
	72	12	-	84

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12. Financial Risk and Capital Management

Financial risk

The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company's financial instruments at June 30, 2022 are summarized below. The Board of Directors periodically reviews with management the principal risks affecting the Company and the systems that have been put in place to manage these risks.

(a) Credit risk

The credit risk exposure on cash is limited to its carrying amount at the date of the statements of financial position. Cash is held as cash deposits with creditworthy banks and an investment firm. The Company has receivables consisting of goods and services tax due from the Federal Government of Canada and trade receivables. Management believes that the credit risk with respect to cash and receivables as it relates to goods and services tax are low, and medium as it relates to remaining other receivables.

(b) Liquidity Risk

Liquidity risk arises from the Company’s general and capital financing needs. The Company manages liquidity risk by attempting to maintain sufficient cash balances. Liquidity requirements are managed based on expected cash flows to ensure that there is sufficient capital in order to meet short term obligations. As at June 30, 2022, the Company has working capital deficiency of $40 (September 30, 2021 – positive working capital of $1,795). Management assessed liquidity risk to be very high.

(i) Foreign Currency Risk

The Company’s functional currency is the Canadian dollar. The Company is exposed to the currency risk related to the fluctuation of foreign exchange rates of its subsidiaries in French Guiana, Panama and Colombia. The Company also has assets and liabilities denominated in US dollars and the European Euro. A significant change in the currency exchange rates between the Canadian dollar relative to the US dollar or European Euro could have an effect on the Company’s results of operations, financial position and/or cash flows. The Company has not hedged its exposure to currency fluctuations.

(ii) Commodity Price Risk

The Company’s ability to raise capital to fund exploration or development activities is subject to risks associated with fluctuations in the market price of gold. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.

(iii) Interest Rate Risk

The Company does not have any interest-bearing debt and is therefore not exposed to interest rate risk.

Sensitivity Analysis

A 1% change in interest rates does not have a material effect on the Company’s profit or loss and equity.

The Company has certain cash balances, receivables and accounts payables in US Dollars and European Euros, currencies other than the functional currency of Company. The Company estimates that a +/-10% change in the value of the Canadian dollar relative to the US dollar and European Euro would have a corresponding effect of approximately $60 to profit or loss.

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12. Financial Risk and Capital Management - continued

Capital Management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its mineral properties and to maintain a flexible capital structure for its projects for the benefit of its stakeholders. As the Company is in the exploration and development stage, its principal source of funds is from the issuance of common shares.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, enter into joint venture property arrangements, acquire or dispose of assets or adjust the amount of cash and investments.

In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The Board of Directors approves the annual and updated budgets. There have been no changes to the Company’s capital management policies and procedures since the end of the most recent fiscal year.

Fair Value

The fair value of the Company’s financial instruments including cash, receivables, and accounts payable approximates their carrying value due to the immediate or short-term maturity of these financial instruments.

The fair value of marketable securities is based on quoted market prices for publicly traded shares.

IFRS 7, Financial Instruments: Disclosure establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:

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 asset 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 has determined the estimated fair values of its financial instruments based upon appropriate valuation methodologies. Marketable securities are classified as Level 1. At June 30, 2022, there were no financial assets or liabilities measured and recognized in the statement of position that would be categorized as Level 2 or Level 3 in the fair value hierarchy above.

			Fair value at
			June 30, 2022
Financial Instrument	Measurement Method	Associated Risks	($)
Cash	FVTPL (Level 1)	Credit and currency	291
Marketable securities	FVTPL (Level 1)	Exchange	36
Receivables	Amortized cost	Credit and concentration	19
Accounts payable	Amortized cost	Currency	(460)
			(114)

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AI assistant

Orea Mining Corp. — Interim / Quarterly Report 2022

45728_rns_2022-08-11_eacc8de5-6b35-4671-87a3-a84ab214b1b9.pdf

NOTICE OF NO REVIEW BY AUDITOR

Approved by the Board of Directors

Orea Mining Corp. Condensed Interim Consolidated Statements of Comprehensive Loss (Unaudited) (Expressed in thousands of Canadian Dollars)

Orea Mining Corp. Condensed Interim Consolidated Statements of Shareholders’ Equity (Unaudited)

1. Nature of Operations and Going Concern

2. Basis of Presentation

Changes in Accounting Standards

5. Investment in Compagnie Minière Montagne d’Or SAS ("CMMO")

5. Investment in Compagnie Minière Montagne d’Or SAS – continued

5. Investment in Compagnie Minière Montagne d’Or SAS – continued

US Sanction Imposed on Nordgold

European Union Sanction Imposed on Nordgold Shareholder

Impairment

6. Exploration and Evaluation Assets

6. Exploration and Evaluation Asset – continued

Antino Gold Project

Lease liability

Orea Mining Corp. Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the Nine Months Ended June 30, 2022 (Expressed in thousands of Canadian Dollars, except where noted)

7. Property and Equipment - continued

8. Share Capital

8. Share Capital - continued

(b) Share Options

8. Share Capital - continued

(c) Warrants

8. Share Capital - continued

(d) Loss per Share

(e) Reserves

Accumulated Other Comprehensive Income (Loss)

9. Related Party Transactions

9. Related Party Transactions - continued

9. Related Party Transactions - continued

10. Segmented Disclosure

11. Commitments

12. Financial Risk and Capital Management

Financial risk

(a) Credit risk

(i) Foreign Currency Risk

Sensitivity Analysis

12. Financial Risk and Capital Management - continued

Capital Management

Fair Value

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Orea Mining Corp. Interim / Quarterly Report 2022