Rathdowney Resources Ltd. — Audit Report / Information 2023

Apr 27, 2024

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RATHDOWNEY RESOURCES LTD.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in Canadian dollars, unless otherwise stated)

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Independent Auditor’s Report

To the Shareholders of Rathdowney Resources Ltd.

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Rathdowney Resources Ltd. (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of comprehensive loss, cash flows and changes in equity (deficiency) for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects the consolidated financial position of the Company as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audits 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 are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the consolidated financial statements, which indicates that the Company is dependent upon its ability to alleviate its working capital deficiency by obtaining adequate, or restructured, financing or by otherwise developing profitable operations in the future. These conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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 of the current period. 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.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our report.

Other Information

Management is responsible for the other information. The other information comprises the information included in “Management’s Discussion and Analysis”, but does not include the consolidated financial statements and our auditor’s report thereon.

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, and in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits 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.

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.

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

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 audits.

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 James D. Gray.

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CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, BC, Canada April 26, 2024

Rathdowney Resources Ltd. Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

		December 31	December 31	December 31	December 31
	Notes		2023		2022
ASSETS
Current assets
Cash	4	$	50,330	$	76,289
Amounts receivable and other assets	5		47,983		102,443
Total current assets			98,313		178,732
Non-current assets
Equipment	3		1,877		3,785
Total non-current assets			1,877		3,785
Total assets		$	100,190	$	182,517
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Amounts payable and other liabilities		$	121,624	$	304,035
Loans payable	7		2,884,334		1,866,777
Balance payable to related parties	10		11,581,155		10,468,707
Total current liabilities			14,587,113		12,639,519
Shareholders' deficiency
Share capital	8		59,416,043		59,416,043
Reserves			4,887,607		4,885,754
Accumulated deficit			(78,790,573)		(76,758,799)
Total shareholders'deficiency			(14,486,923)		(12,457,002)
Total liabilities and shareholders' deficiency		$	100,190	$	182,517

Nature of operations and going concern (note 1) Events after the reporting date (note 17)

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

/s/ Rene Carrier

/s/ Barry Coughlan

Rene Carrier Director

Barry Coughlan Director

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Rathdowney Resources Ltd. Consolidated Statements of Comprehensive Loss

(Expressed in Canadian dollars)

Notes	Year Ended December 31,	Year Ended December 31,
	2023 2022
Expenses Exploration Engineering Geological Site activities Sustainability Travel Administration Legal, accounting and audit Office and administration Shareholder communications Travel Trust and filing Share-based payments 9 Administration	1,192,546 $ 1,236,431 $
	117,531 133,620 681,104 221,089 39,202	36,775 108,227 561,070 524,519 5,840
	687,761 945,242
	193,889 416,128 52,303 2,310 23,131	258,905 474,397 174,187 8,796 28,957
	– –
	–	–
Loss before the following: Interest income Other income Finance expenses 7 Foreign exchange loss	1,880,307 2,181,673 (3,632) (2,292) (3,207) – 143,075 55,819 15,231 10,573
Loss before income tax Income tax expense	2,031,774 2,245,773 – –
Loss for the year	2,031,774 $ 2,245,773 $
Other comprehensive loss (income) Items that may be subsequently reclassified to net loss Foreign currency translation adjustment	1,853 $ (1,109) $
Total other comprehensive loss (income)	1,853 $ (1,109) $
Total comprehensive loss	2,033,627 $ 2,244,664 $
Basic and diluted lossper share	0.01 $ 0.01 $
Weighted average number of common shares outstanding	230,427,450 230,427,450

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

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Rathdowney Resources Ltd. Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

Notes	Notes	Year ended December 31,
		2023 2022
Cash flows from (used in) operating activities: Loss for the year Adjustments for: Depreciation 3 Finance expenses 7 Interest income Amounts receivable and other assets Amounts payable and other liabilities Balance payable to related parties		(2,031,774) $ (2,245,773) $ 1,908 1,911 143,075 55,819 (3,632) (2,292)
	Amounts receivable and other assets Amounts payable and other liabilities Balance payable to related parties	(1,890,423) (2,190,335) 54,460 (32,283) (182,411) 89,523 1,112,448 1,129,690
Cash used in operating activities		(905,926) (1,003,405)
Cash flows from investing activities: Interest received		3,632 2,292
Cash provided by investing activities		3,632 2,292
Cash flows from financing activities: Loan proceeds 7		874,482 466,583
Cash provided by financing activities		874,482 466,583
(Decrease) in cash Effect of exchange rate fluctuations		(27,812) (534,530) 1,853 (1,109)
Cash, beginning of year		(25,959) (535,639) 76,289 611,928
Cash,end ofyear		50,330 $ 76,289 $

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

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Rathdowney Resources Ltd.

Consolidated Statements of Changes in Equity (Deficiency)

(Expressed in Canadian dollars)

	Notes Share capital Number of shares Amount Accumulated deficit Investment revaluation reserve ~~Foreign~~ currency translation reserve ~~Share~~ purchase warrants reserve ~~Equity settled~~ employees benefits reserve Total shareholders' equity (Deficiency) Reserves
Balance at January 1, 2022 Other comprehensive loss for the year Loss for theyear	230,427,450 59,416,043 $ (74,513,026) $ (3,592,857) $ 221,903 $ 3,546,883 $ 4,710,934 $ (10,210,120) $ – – – – (1,109) – – (1,109) – – (2,245,773) – – – – (2,245,773)
Balance at December 31,2022	230,427,450 59,416,043 $ (76,758,799) $ (3,592,857) $ 220,794 $ 3,546,883 $ 4,710,934 $ (12,457,002) $
Balance at January 1, 2023 Other comprehensive income for the year Loss for theyear	230,427,450 59,416,043 $ (76,758,799) $ (3,592,857) $ 220,794 $ 3,546,883 $ 4,710,934 $ (12,457,002) $ – – – – 1,853 – – 1,853 – – (2,031,774) – – – – (2,031,774)
Balance at December 31,2023	230,427,450 59,416,043 $ (78,790,573) $ (3,592,857) $ 222,647 $ 3,546,883 $ 4,710,934 $ (14,486,923) $

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

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Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

1. Nature of Operations and Going Concern

Rathdowney Resources Ltd. ("Rathdowney” or the “Company") is a public company incorporated on April 3, 2008, under the laws of the Province of British Columbia, Canada. The address of the Company's corporate office is the 14th Floor, 1040 West Georgia Street, Vancouver, BC, Canada V6E 4H1.

The consolidated financial statements (the “Financial Statements”) of the Company as at for the year ended December 31, 2023, comprise the Company and its subsidiaries (together referred to as the "Group" and individually as "Group entities"). Rathdowney Resources Ltd. is the ultimate legal parent entity of the Group.

The Group is in the process of advancing its mineral property interests and has not yet determined whether its mineral property interests contain economically recoverable mineral reserves. The Group has outlined mineral resources and completed a Preliminary Economic Assessment (“PEA”), and if the Group‘s on-going technical work confirms certain projections described in the PEA, the Project could possibly be economic.

The Group's continuing operations are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Group to obtain the necessary financing to continue the exploration and development of its mineral property interests and to obtain the permits necessary to mine, and on future profitable production or proceeds from the disposition of its mineral property interests. General market conditions for junior exploration companies have resulted in depressed equity prices. These Financial Statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future.

As at December 31, 2023, the Group had cash of $50,330 (December 31, 2022 –$76,289 ), a working capital deficiency, and a shareholders’ deficiency. Of the total current liabilities of the Group at December 31, 2023 $14,465,489 (December 31, 2022 – $12,335,484) are payable to related parties (notes 7 & 10). These Financial Statements have been prepared on the basis of a going concern, which assumes that the Group will be able to raise sufficient funds to continue its exploration and development activities and satisfy its obligations as they come due. The Group has prioritized the allocation of its financial resources to meet key corporate and Olza’s Project expenditure requirements in the near term. Additional financing will be required in order to progress any material expenditures at the Olza Project and for working capital requirements. Additional financing may include any of or a combination of debt, equity and/or contributions from possible new Olza Project participants. There can be no assurances that the Group will be successful in obtaining additional financing. If the Group is unable to raise the necessary capital resources and generate sufficient cash flows to meet obligations as they come due, the Group may, at some point, consider reducing or curtailing its operations. As such, there is material uncertainty that raises substantial doubt about the Group’s ability to continue as a going concern.

The Group is continually seeking opportunities for additional funding and has reasonable expectation that it will succeed in raising additional funds when necessary. However, there can be no assurance that the Group will obtain the required additional financial resources to continue its current operational base. If the Group is unable to obtain adequate additional financing, it will need to curtail its expenditures further, until additional funds can be raised through financing activities. Management believes that it is able to maintain its core mineral rights in good standing for the next 12-month period.

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Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

These Financial Statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Group be unable to continue as a going concern.

2. Material Accounting Policy Information

The accounting policies set out below have been applied consistently to all periods presented in these Financial Statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Group.

(a) Statement of compliance

These Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and interpretations issued by the IFRS Interpretations Committee ("IFRIC") that are effective for the Group’s reporting for the year ended December 31, 2023.

These Financial Statements were authorized for issuance on April 26, 2024 by the Board of Directors.

(b) Basis of preparation

These Financial Statements have been prepared on the historical cost basis, except for marketable securities that are measured at fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting, except for cash flow information. The accounting policies set out below have been applied consistently to all periods presented in these Financial Statements.

(c) Basis of consolidation

These consolidated financial statements include the accounts of the Group and the subsidiaries that it controls. Control is achieved when the Group is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Intercompany balances and transactions including any unrealized income and expenses arising from intercompany transactions are eliminated upon consolidation.

At December 31, 2023, the Company had ownership interests in the following subsidiaries:

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Rathdowney Resources Ltd.

Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

Name of Subsidiary	Place of Incorporation	Principal Activity	Ownership Interest
Rathdowney Resources (Luxembourg) S.à r.l.	Grand Duchy of Luxembourg	Holds interest in Rathdowney Polska Sp. z o.o	100 %
Rathdowney Polska Sp. z o.o	Republic of Poland	Mineral exploration company	100 %

(d) Property, plant, and equipment

Property, plant, and equipment ("PPE") are carried at cost, less accumulated depreciation and any accumulated impairment losses.

The cost of an item of PPE consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for 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 expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.

Depreciation is provided at rates calculated to write off the cost of property, plant, and equipment, less their estimated residual value, using the declining balance method at various rates ranging from 10% to 30% per annum.

An item of PPE is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the item. Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in profit or loss.

Where an item of plant and equipment consists of major components with different useful lives, the components are accounted for as separate items of plant and equipment. Expenditures incurred to replace a component of an item of PPE that is accounted for separately, including major inspection and overhaul expenditures, are capitalized.

Depreciation methods, residual values, and estimated useful lives are reviewed at least annually and adjusted if appropriate.

(e) Impairment of non-financial assets

At each reporting date, the carrying amounts of the Group's assets are reviewed to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.

The recoverable amount is the greater of fair value less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss. For an asset that does not generate largely independent cash

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Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount to a maximum of the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. Such reversals of impairment losses are recognized in profit or loss.

(f) Share capital and warrants

Common shares and warrants (note 8) are classified as equity. Transaction costs directly attributable to the issue of common shares and warrants are recognized as a deduction from equity, net of any tax effects. Where units comprising of common shares and warrants are issued (note 8), the proceeds, and any transaction costs are apportioned between the common shares and warrants according to their relative fair values.

Upon conversion of the warrants into common shares, the carrying amount, net of a pro rata share of the transaction costs, is transferred to common share capital.

(g) Financial Instruments

On initial recognition, a financial asset is classified as measured at: amortized cost; fair value through other comprehensive income ("FVTOCI") (debt / equity investment); or fair value through profit or loss ("FVTPL"). A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.

The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.

Classification of financial assets

Amortized cost

For a financial asset to be measured at amortized cost, it need to meet both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The Group’s financial assets at amortized cost comprise of amounts receivable, and cash. Fair value through other comprehensive income ("FVTOCI")

For a debt investment to be measured at FVTOCI, it needs to meet both of the following conditions and is not designated as at FVTPL:

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Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Equity instruments at FVTOCI

On initial recognition, the Group may irrevocably elect to present subsequent changes in the instrument’s fair value in other comprehensive income ("OCI") provided it is not held for trading. This election is made on an investment-by-investment basis.

Fair Value through profit or loss ("FVTPL")

All financial assets not classified as measured at amortized cost or FVTOCI are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost, or at FVTOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

The following accounting policies apply to the subsequent measurement of financial assets:

Financial assets at FVTPL	These assets are subsequently measured at fair value.
	Net gains and losses, including any interest or dividend
	income,are recognised inprofit or loss.
Financial assets at amortized	These assets are subsequently measured at amortized
cost	cost using the effective interest method. The amortized
	cost is reduced by impairment losses (see below).
	Interest income, foreign exchange gains and losses and
	impairment are recognised in profit or loss. Any gain or
	loss on derecognition is recognised inprofit or loss.
Debt investments at FVTOCI	These assets are subsequently measured at fair value.
	Interest income calculated using the effective interest
	method, foreign exchange gains and losses and
	impairment are recognised in profit or loss. Other net
	gains and losses are recognised in OCI. On
	derecognition, gains and losses accumulated in OCI are
	reclassified toprofit or loss.
Equity investments at FVTOCI	These assets are subsequently measured at fair value.
	Dividends are recognised as income in profit or loss
	unless the dividend clearly represents a recovery of part
	of the cost of the investment. Other net gains and losses
	are recognised in OCI and are never reclassified to profit
	or loss.

Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the investments have been impacted. For marketable securities classified as

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Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

FVTOCI, a significant or prolonged decline in the fair value of the securities below their cost is considered to be objective evidence of impairment.

(h) Exploration and evaluation expenditures

Exploration and evaluation expenditures

Exploration and evaluation expenditures are expenditures incurred by the Group in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

Exploration and evaluation expenditures are expensed as incurred. Acquisition costs are capitalized as mineral property interests.

Exploration and evaluation expenditures include the cash consideration and the estimated fair market value of common shares on the date of issuance or as otherwise provided under the relevant agreements.

Costs for properties for which the Group does not possess unrestricted ownership and exploration rights, such as option agreements, are expensed in the period incurred or until a feasibility study has determined that the property is capable of commercial production.

Administrative expenditures related to exploration activities are expensed in the period incurred.

Mineral property interests

Expenditures incurred by the Group in connection with the exploration for and evaluation of mineral resources after the technical feasibility and commercial viability of extracting a mineral resource are demonstrable are capitalized. Such amounts are then amortized over the estimated useful life of the property following the commencement of commercial production, or are written off if the property is sold, allowed to lapse, or abandoned, or when an impairment has been determined to have occurred.

Impairment of mineral property interests

Mineral property interests are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, or (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, mineral property interests attributable to that area of interest are first tested for impairment and then reclassified to mineral property and development assets within property, plant, and equipment.

Recoverability of the carrying amount of mineral property interests is dependent upon successful development and commercial exploitation, or alternatively, the sale of such mineral property interests.

• (i) Share-based payments

• (i) Share purchase options granted to the Group’s employees and consultants

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Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

Share-based payments to employees and others providing similar services are measured at the fair value of the instruments at the grant date. The fair value determined at the grant date is charged to operations over the vesting period, based on the Company's estimate of equity instruments that will eventually vest. The Group revises the estimate on each reporting date and the effect of the change is recognized in profit or loss.

Share-based payment transactions with other parties are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

(ii) Deferred Share Unit ("DSU") Plan

The Company adopted and operates a DSU plan for its non-executive directors. The Company determines whether to account for DSUs as equity-settled or cash-settled based on the terms of the contractual arrangement. The fair value of DSUs granted is recognized as an employee expense with a corresponding increase in the Equity Reserve if deemed equity-settled or a liability is raised if cash-settled at grant date.

The fair value is estimated using the quoted market price of the Company’s common shares at grant date and expensed over the vesting period as share-based compensation in the statement of loss and comprehensive loss until they are fully vested. If the DSUs are cash-settled, the expense and liability are adjusted each reporting period for changes in the quoted market price of the Company’s common shares.

(j) Rehabilitation and site restoration

An obligation to incur rehabilitation and site restoration costs arises when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property interest. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized at the start of each project, as soon as the obligation to incur such costs arises. These costs are charged against earnings over the life of the operation.

The Group has no material rehabilitation and site restoration costs, as the disturbance to date has been minimal.

(k) Income tax

Income tax expense on the profit or loss for the year presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and adjusted for taxes payable in respect of previous years.

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Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

Deferred tax

Deferred tax is determined using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for: (i) goodwill not deductible for tax purposes, (ii) the initial recognition of assets or liabilities that affect neither accounting, nor taxable profit, and (iii) differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(l) Foreign currencies

The functional currency is the currency of the primary economic environment in which the entity operates and has been determined for each entity within the Group. The functional and presentation currency of the Company is the Canadian Dollar.

A foreign operation is a subsidiary, associate, joint venture or branch whose activities are based or conducted in a country or currency other than those of the reporting entity. Rathdowney Resources (Luxembourg) (“Lux”) and Rathdowney Polska (“Polska”) are considered as foreign operations for the purpose of these Financial Statements. The functional currency of Lux is the Euros (EUR) and Polska is the Zloty (PLN).

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on dates of transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

The results and financial position of entities within the Group which have a functional currency that differs from that of the Group are translated into Canadian Dollars as follow (i) assets and liabilities of foreign operations are translated into the presentation currency (Canadian Dollar) at the closing exchange rates at the reporting date; (ii) income and expenses of foreign operations are translated into the Canadian Dollar using the average rates for the period; (iii) the foreign currency differences are recognised in other comprehensive income or loss and accumulated in the foreign currency translation reserve within equity.

(m) Earnings (loss) per share

The Company presents basic and diluted loss per share ("LPS") data for its common shares. Basic LPS is calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted LPS is determined by adjusting the profit or loss attributable to common

• 15 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares.

• (n) Significant accounting estimates and judgments

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Specific areas where significant estimates or judgments exist are:

Estimates:

• inputs used in accounting for share-based payments and warrants (notes 8 and 9);

• unrecognized deferred tax asset for temporary differences (note 12); and

• • depreciation rates for equipment (note 3).

Certain new standards, interpretations, amendments and improvements to existing standards were issued by the IASB. The following were adopted by the Group on January 1, 2023:

IAS 1, Presentation of Financial Statements ("IAS 1") and IFRS Practice Statement 2, Making Materiality Judgements - Disclosure of Accounting Policies (the "Practice Statement"): In February 2021, the IASB issued amendments to IAS 1 and the Practice Statement to provide guidance on the application of materiality judgments to accounting policy disclosures. The amendments to IAS 1 replace the requirement to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’ accounting policies. Guidance and illustrative examples are added in the Practice Statement to assist in the application of materiality concept when making judgments about accounting policy disclosures. The adoption of these amendments did not impact the Financial Statements.

IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors ("IAS 8"): In February 2021, the IASB issued amendments to IAS 8 – Definition of Accounting Estimates to help entities to distinguish between accounting policies and accounting estimates. The amendments clarify that accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty" and that a change in accounting estimate that results from new information or new developments is not the correction of an error. In addition, the effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from

• 16 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

the correction of prior period errors. The adoption of these amendments did not impact the Financial Statements.

The following has not yet been adopted by the Group:

Judgments:

• functional currency of the Company and its subsidiaries (note 2(l))

• • going concern (note 1)

• (o) Recent Accounting Pronouncements

IAS 1, Classification of Debt with Covenants as Current or Non-current : In October 2022, the IASB issued amendments to IAS 1 titled " Non-current Liabilities with Covenants ". These amendments seek to improve the information that an entity provides when its right to defer settlement of a liability is subject to compliance with covenants within 12 months after the reporting period. These amendments to IAS 1 override but incorporate the previous amendments, Classification of Debt as Current or Non-current , issued in January 2020, which clarified that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if an entity has a substantive right to defer settlement for at least 12 months at the end of the reporting period. The amendments are effective January 1, 2024, with early adoption permitted. Retrospective application is required on adoption. The Group does not expect these amendments to have a material effect on its consolidated financial statements.

3. Equipment

Year ended	Computer	Fittings &
December 31, 2023	Equipment	Equipment	Total
Cost
Beginning and ending balance	$ 80,860	$ 20,665	$ 101,525
Derecognition of equipment	(9,330)	(1,443)	(10,773)
Endingbalance	71,530	19,222	90,752
Accumulated depreciation
Beginning balance	$ 80,070	$ 17,670	$ 97,740
Derecognition of equipment	(9,330)	(1,443)	(10,773)
Charge for theyear	410	1,498	1,908
Endingbalance	71,150	17,725	88,875
Carrying amount
Balance at December 31, 2023	$ 380	$ 1,497	$ 1,877

• 17 -

Rathdowney Resources Ltd.

Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

Year ended	Computer	Fittings &
December 31, 2022	Equipment	Equipment	Total
Cost
Beginningand endingbalance	$ 80,860	$ 20,665	$ 101,525
Accumulated depreciation
Beginning balance	$ 79,659	$ 16,170	$ 95,829
Charge for theyear	411	1,500	1,911
Endingbalance	80,070	17,670	97,740
Carrying amount
Balance at December 31, 2022	$ 790	$ 2,995	$ 3,785

Depreciation has been included in the loss for the year and has been classified as exploration expenses – site activities.

4. Cash

The Group’s cash at December 31, 2023, and December 31, 2022, consisted of cash on hand and was invested in business accounts.

5. Amounts Receivable and Other Assets

	December 31,	December 31,
	2023	2022
Government taxes refundable	$ 26,557	$ 73,229
Prepaid expenses	21,426	29,214
Total	$ 47,983	$ 102,443

6. Mineral Property Interests

The Company holds interests in mineral exploration concessions in the Republic of Poland.

Poland

In 2010, Rathdowney acquired the contiguous Zawiercie and Rokitno exploration concessions, collectively named "Project Olza", located in the Upper Silesian zinc-lead mining district in the Republic of Poland through its wholly-owned subsidiary.

The Rokitno concession was issued to Rathdowney Polska by the Ministry of the Environment in May 2010 and the Zawiercie concession was issued in July 2010. Those permits, allowed for exploration for zinc and lead for a period of five years. The permits and the associated usufruct agreements grant right of surface access to the permit holder; however, this must be undertaken by arrangement with individual landowners, who must be informed in writing in advance of any drilling activity on their land.

• 18 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

Rathdowney Polska obtained access to the historical geological information on its Rokitno and Zawiercie concessions via the Polish government. Additionally, Rathdowney Polska has submitted updates to the documentation of geological work completed required (in addition to other legal requirements) for the subsequent granting/renewal of a concession for mineral exploitation by the Minister of Environment. In November 2014, the Zawiercie and Rokitno concessions were renewed to May 2020. In October 2020, the Zawiercie concession was renewed for an additional five years until October 2025.

As part of the concession renewal process, Rathdowney submitted an annexure (Anneks 4) to the Zawiercie concession. The granted annexure enlarged the area of the Zawiercie concession so as to capture the prospective exploration area associated with the former Rokitno concession. Rathdowney’s property now consists of the enlarged Zawiercie concession number 34/2010 / p, comprising an area of 71.43 square kilometres.

7. Loans Payable

2023

During the year ended December 31, 2023, the Company entered into loan agreements with Hunter Dickinson Services inc (“HDSI“) for an aggregate principal amount of $874,482. Those loans bear interest at a rate of CIBC prime plus 4% per annum and are payable at the earliest of a) December 31, 2024, b) immediately on demand.

Subsequent to December 31,2023, the Company entered into unsecured loan agreements with HDSI for an additional aggregate amount of $227,190 (note 17)

2022

During the year ended December 31, 2022, the Company entered into loan agreements with a directors for an aggregate principal amount of $283,720 and have a maturity term of two years and bear interest at a rate of 5% per annum.

During the year ended December 31, 2022, the Company entered into a loan agreements with HDSI for an aggregate principal amount of $40,000. The loan bear interest at a rate of 10% per annum and is payable at the earliest of a) date of completion of a funding transaction; b) the one year anniversary of the advance of the principal amount of the aforementioned loan; or c) immediately on demand.

During the year ended December 31, 2022, the Company entered into several loan agreements with HDSI for an aggregate principal amount of $142,863. Those series of loans bear interest at a rate of CIBC prime plus 4% per annum and are payable at the earliest of a) date of completion of a funding transaction; b) the one year anniversary of the advance of the principal amount of the aforementioned loan; or c) immediately on demand

• 19 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

The continuity of the Loans is as follows:

The continuity of the Loans is as follows:
	December 31,	December 31,
	2023	2022
Balance at the beginning of the year1	$ 1,866,777	$ 1,344,375
Loans received1	874,482	466,583
Interest accrued during the year2	143,075	55,819
Total	$ 2,884,334	$ 1,866,777

Notes to the table:

1. The Group entered into unsecured loan agreements with certain of its directors. Refer to note 10 for other transactions involving parties related to the Company.

2. The loans interest rates varies from 5% to 10% per annum with some having interest of CIBC prime plus 4% per annum and are due on demand.

8. Capital and Reserves

(a) Authorized share capital

At December 31, 2023, and December 31, 2022, the authorized share capital was comprised of an unlimited number of common shares without par value.

(b) Share purchase warrants

The following summarizes share purchase warrants (each warrant redeemable for one common share) at the beginning and end of the year:

Exercise price per common share($) Expirydate	Year ended December 31, 2023
	Beginning balance Issued Exercised Expired Ending balance
Warrants issuedpursuant toprivateplacement
0.11 April 29, 2025 7,613,934 – – – 7,613,934 0.11 May 20, 2025 1,555,000 – – – 1,555,000 0.10 August 06, 2026 28,821,996 – – – 28,821,996 0.10 October 26, 2026 10,142,857 – – – 10,142,857
Grand Total 48,133,787 – – – 48,133,787

• 20 -

Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

Rathdowney Resources Ltd.

Exercise price per common share($) Expirydate	Year ended December 31, 2022
	Beginning balance Issued Exercised Expired Ending balance
Warrants issuedpursuant toprivateplacement
0.11 April 29, 2025 7,613,934 – – – 7,613,934 0.11 May 20, 2025 1,555,000 – – – 1,555,000 0.10 August 06, 2026 28,821,996 – – – 28,821,996 0.10 October 26, 2026 10,142,857 – – – 10,142,857
Grand Total 48,133,787 – – – 48,133,787

9. Equity-Settled Share-Based Payments

(a) Share purchase option compensation plan

The Company has a share purchase option plan approved by the Board of Directors (the "Board") that allows it to grant options, subject to regulatory terms and approval, to the Company's officers, directors, employees and service providers. The share purchase option plan (the "Rolling Option Plan") is based on the maximum number of eligible shares equaling a rolling percentage of up to 10% of the Company's outstanding common shares, at any given time. Pursuant to the Rolling Option Plan, if outstanding share purchase options are exercised or expire, or the number of issued and outstanding common shares of the Company increases, then the number of share purchase options available to grant under the plan increases proportionately. The exercise price of each share purchase option is set by the Board at the time of grant. Share purchase options can have a maximum term of ten years and typically terminate 90 days following the termination of the optionee's employment or engagement. Vesting is at the discretion of the Board at the time the share purchase options are granted.

Pursuant to the Group’s incentive plan the Group had nil outstanding options as of December 31, 2023 and 2022.

(b) Deferred Share Units ("DSUs")

The Company has a DSU plan approved by the Company’s shareholders in November 2015 which allows the Board, at its discretion, to award DSUs to non-executive directors for services rendered to the Company and also provides that non-executive directors may elect to receive up to 100% of their annual compensation in DSUs. The aggregate number of DSUs outstanding pursuant to the Plan from time to time shall not exceed 4,000,000 Shares unless and until such number is increased in the manner provided for in the plan. The maximum number of Shares issuable pursuant to all Security Based Compensation Arrangements, at any time, including all DSUs, options or other rights to purchase or otherwise acquire Shares that are granted to Insiders shall not exceed 10% of the total number of outstanding Shares. DSUs are payable when the non-executive director ceases to be a director including in the

• 21 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

event of death. DSUs are representative of Common Shares of the Company on a 1:1 basis and may be settled in Shares issued from treasury, by the delivery to the former director of Shares purchased by the Company in the open market, payment in cash, or any combination thereof, at the discretion of the Company.

As at December 31, 2023 and December 31, 2022 a total of 4,000,000 DSUs were issued and outstanding, respectively.

10. Related Party Transactions

The components of the balance payable to related parties, other than loans payable (note 7), are as follows:

re as follows:
	December 31,	December 31,
	2023	2022
Key management personnel (note 10(a))	$ 2,374,902	$ 2,155,642
Hunter Dickinson Services Inc. (note 10(b))	9,206,253	8,313,065
Total	$ 11,581,155	$ 10,468,707

(a) Key management personnel

Key management personnel ("KMP") consist of directors and officers of Rathdowney and its material subsidiaries.

Note 7 includes the details of certain loans from directors.

Transactions with key management personnel, other loans payable, were as follows:

	Year ended December 31	Year ended December 31	Year ended December 31
		2023	2022
Employee benefits:
Amounts paid or payable to HDSI for services of KMP
employed by HDSI	$	396,275	$ 422,650
Amounts paid or payable to KMP or to an entity owned by a
KMP		229,762	258,077
		626,037	680,727
Share-basedpayments		–	–
Total	$	626,037	$ 680,727

Short-term employee benefits include salaries, director’s fees and amounts paid to HDSI (note 10 (b)) for services provided to the Company and its subsidiaries by HDSI personnel who serve as executive directors and officers for the Company. Certain key management personnel are paid through private companies controlled by them, which provide technical or administrative services to the Company at market rates.

• 22 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

• (b) Entities with significant influence over the Group

The Company's management believes that certain entities have the power to participate in the financial or operating activities of the Group. Several directors and other key management personnel of those entities, who are close business associates, are also key management personnel of the Group.

Hunter Dickinson Services Inc. ("HDSI")

HDSI is a private company with certain directors and other key management personnel in common with the Company. David Copeland, a director of the Company, is also a director of HDSI.

Pursuant to an agreement dated July 2, 2010, HDSI provides geological, corporate development, corporate communications, administrative and management services to the Company at annually agreed rates. HDSI also incurs third party costs on behalf of the Company.

Transactions with HDSI were as follows:

Company. Transactions with HDSI were as follows:
	Year ended December 31 2023 2022
Services rendered by HDSI: Technical Environmental and community relations Geological Site activities General and administrative Management, financial & administration Shareholder communication	$ 425,749 $ 411,832
	3,380 46,799 375,570	84,890 32,740 294,202
	192,452 203,561
	160,094 32,358	186,386 17,175
Total	$ 618,201 $ 615,393
Reimbursement of third party expenses Conferences and travel Information technology Insurance Office supplies and other	$ 232,455 $ 257,093
	13,072 132,000 46,304 41,079	7,285 132,000 63,514 54,294

Notes to table

1. Includes payments made for the use of offices and shared space of $35,762 (2022 - $32,514). In April 2021, the Company signed an office use agreement effective May 1, 2021, for a five-year term ending April 29, 2026. As of December 31, 2023, the remaining undiscounted commitment was $52,212.

2. 23 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

11. Employees Benefits Expenses

The amount of employees' salaries and benefits (including share-based payments) included within various expenses are:

within various expenses are:
	Year ended	December 31
	2023	2022
General administration	$ 296,475	$ 425,548
Exploration and evaluation	770,756	661,539
Total	$ 1,067,231	$ 1,087,087

12. Taxation

(a) Provision for current tax

No provision has been made for current income taxes, as the Group has no taxable income.

Reconciliation of effective tax rate	2023	2022
(Loss) for the year	$ (2,031,774)	$ (2,245,773)
Total income tax expense	–	–
(Loss)excludingincome tax	$(2,031,774)	$(2,245,773)
Income tax (recovery) using the Company's domestic tax rate	$ (549,000)	$ (606,000)
Effect of tax rates in foreign jurisdictions	187,000	92,000
Permanent differences and other	542,000	429,000
Expired losses	–	–
Difference in statutory tax rates	–	–
Change in unrecognized temporarydifferences	(180,000)	85,000
	$ –	$ –

The Group’s domestic tax rate for the year was 27% (2022 – 27%) and the effective tax rate was nil % (2022 – nil %).

(b) Provision for deferred tax

As at December 31, 2023, the Group had unused non-capital tax loss carry forwards of approximately $ 5,754,000 (2022 – $ 6,929,000) in Canada and approximately $ 10,778,000 (2022 - $11,123,000) in Poland.

• 24 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

Recognized deferred tax assets and liabilities

	2023	2022
Deferred income tax assets
Unused tax losses	$ 284,116	$ 239,997
Other	–	–
	$ 284,116	$ 239,997
Deferred income tax liabilities
Unrealized foreign exchange	$ (283,759)	$ (239,755)
Equipment and other	(357)	(242)
	$(284,116)	$(239,997)
Deferred income tax assets(liabilities), net	$ –	$ –

As of December 31, 2023 the Group had the following temporary differences in respect of which no deferred tax asset was recognized:

Expiry	Polish Tax	Other Tax Losses	Other deductible
	Losses		temporary
			differences
One to five years	$ 10,778,000	$ –	$ 3,000
After five years	–	5,754,000	–
No expiry date	–	18,820,000	–
Total	$10,778,000	$24,574,000	$3,000

As future taxable profits of the Group are uncertain, no deferred tax asset has been recognized. Should the Group realize taxable profits in the future, deferred tax assets may be recognized at that time.

13. Financial Risk Management

(a) Overview

The Group has exposure to credit risk, liquidity risk and market risk from its use of financial instruments.

The Board has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board is responsible for developing and monitoring the Group's risk management policies.

The Group's risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

• 25 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

There were no changes in the Group's approach to financial risk management from the previous year.

The Board oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

(b) Credit risk

Credit risk is the risk of potential loss to the Group if the counterparty to a financial instrument fails to meet its contractual obligations. The Group's credit risk is primarily attributable to its liquid financial assets, including cash and cash equivalents, and amounts receivable and other assets. The carrying values of those liquid assets represent the maximum exposure to credit risk.

Cash

The Group limits its exposure to credit risk by only investing with top tier and high-credit quality financial institutions in business and savings accounts, which are available on demand by the Group.

(c) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. In the management of liquidity risk, the Group maintains a balance between continuity of funding and the flexibility through the use of borrowings. Management closely monitors the liquidity position and expects to have adequate sources of funding to finance the Group’s projects and operations. The directors of the Group are of the opinion that, taking into account the Group's cash reserves and external financial resources, the Group has sufficient working capital for its current obligations.

The Groups financial liabilities are comprised of amounts payable and other liabilities and balances payable to related parties, which are due within 12 months of the reporting date, and loans payable, which are due more than 12 months from the reporting date. The carrying amounts of the Group’s financial liabilities represent the Group’s contractual obligations.

(d) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

Interest Rate Risk

The Group is subject to cash flow interest rate risk with respect to its investments in cash equivalents.

The Group's financial assets bearing variable interest rates are available on demand.

The Group does not enter into interest rate derivatives.

• 26 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

Sensitivity analysis

A hypothetical 10 basis point decrease in interest rates with regards to the Group's monetary financial assets and liabilities would increase net loss for the year ended December 31, 2023 by approximately $633 (2022 – approximately $3,441).

Currency Risk

In the normal course of business, the Group entities enter into transactions for the purchase of supplies and services, and raise equity financing denominated in currencies other than their respective functional currencies. As a result, the Group is subject to foreign exchange risk from fluctuations in foreign exchange rates. The Group has not entered into any derivative or other financial instruments to mitigate this foreign exchange risk.

The Group's exposure to foreign currency risk was as follows:

CAD equivalent	December 31, 2023
	EUR PLN USD
Cash Amounts receivable and other assets Amountspayable and other liabilities	$ 2,378 $ 47,252 $ 115 – 19,174 – (24,371) (61,829) –
Net exposure	$(21,993) $ 4,597 $ 115
CAD equivalent Cash Amounts receivable and other assets Amountspayable and other liabilities Net exposure	December 31, 2022
	EUR PLN USD
	$ 21,540 $ 30,481 $ 112 – 63,560 – (40,732) (210,086) (6)
	$(19,192) $(116,045) $ 106

A ten percent increase of the Canadian dollar against the Euro ("EUR"), Polish zloty ("PLN") and US dollar ("USD") during the year ended December 31, 2023 would have increased net loss by approximately $1,728 (2022 – increased net loss by approximately $13,513). This analysis assumes that all other variables, including interest rates, remain constant.

Exchange rates used:

CAD	Average for theyear As at December 31
	2023 2022 2023 2022
EUR 1 USD 1 PLN 1	$ 1.4595 $ 1.3703 $ 1.4622 $ 1.4505 1.3495 1.3017 1.3247 1.3554 0.3215 0.2931 0.3365 0.3096

• 27 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

(e) Capital management

The Group's policy is to maintain a strong capital base to sustain future development of the business.

The capital structure of the Group consists of net assets (total cash and cash equivalents offset by total current liabilities) and equity of the Group (comprising issued capital, reserves and accumulated deficit).

There were no changes in the Group's approach to capital management from the previous year.

The Group is not subject to any externally imposed capital requirements.

(f) Fair value

At December 31, 2023 and 2022, the fair values of the Group's financial assets and financial liabilities approximate their carrying amounts.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

14. Loss Per Share

The calculation of basic and diluted loss per share for the year ended December 31, 2023 was based on the following:

based on the following:
	Year ended	December 31
	2023	2022
Loss attributable to shareholders	$ 2,031,774	$ 2,245,773
Weighted average number of shares outstanding	230,427,450	230,427,450

The weighted average number of shares is based on the weighted average number of shares of the Company outstanding during that year.

For the year ended December 31, 2023 and 2022, basic and diluted loss per share does not include the effect of employee share purchase options outstanding (2023 –nil, 2022 – nil), non-employee share purchase options and warrants (2023 – 48,133,787, 2022 – 48,133,787) and DSUs (2023 – 4,000,000, 2022 – 4,000,000), as they were anti-dilutive.

15. Operating Segments

The Group operates in a single reportable operating segment – the acquisition, exploration and development of mineral properties. All of the Group's non-current assets are held in Canada and Europe.

• 28 -

Rathdowney Resources Ltd. Notes to the Consolidated Financial Statements For the year ended December 31, 2023 and 2022 (Expressed in Canadian dollars, unless otherwise stated)

16. Commitments and Contingencies

(a) Short-term Lease Commitments

As of December 31, 2023, the Group has short-term lease commitments of $11,493 with fixed monthly payment over the remaining term.

(b) Office Use Commitment

The Company has an office use agreement with HDSI (note 10(b)) ending April 29, 2026. At December 31, 2023 the total remaining undiscounted commitment was $52,512. This commitment is a flow through cost at market rates. The following table summarizes the commitment schedule:

	Total
Less than one year	$ 22,355
One to five years	30,157
Total	$ 52,512

17. Subsequent Event

After the end of the reporting period, the Company entered into loan agreements with HDSI for an additional aggregate principal amount of $227,190 bearing interest at a rate of CIBC prime plus 4% per annum and are payable at the earliest of a) December 31, 2024, b) immediately on demand.

• 29 -