Sarama Resources Ltd. — Annual Report 2022

Mar 29, 2023

Sarama Resources Ltd

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

As at and for the year ended December 31, 2022

(Expressed in United States Dollars)

Corporate Directory2
Independent Auditor's Report3
Management's Responsibility for Financial Information7
Consolidated Statement of Financial Position 8
Consolidated Statement of Profit or Loss and Other Comprehensive Income 9
Consolidated Statement of Cash Flows 10
Consolidated Statement of Changes in Equity11
Notes to the Consolidated Financial Statements 12

DIRECTORS

Simon Jackson (Chairman) Andrew Dinning (CEO) Adrian Byass (Non-executive Director) Steven Zaninovich (Non-executive Director)

REGISTERED OFFICE

Suite 2200, HSBC Building 885 West Georgia Street Vancouver BC, Canada, V6C 3E8

AUSTRALIAN BRANCH OFFICE

Unit 8, 245 Churchill Avenue Subiaco, Western Australia 6008 P: +61 8 9363 7600 F: +61 8 9382 4308

BURKINA FASO OFFICE

Sarama Mining Burkina SUARL Quartier Ouaga 2000, secteur 15 Zone B, Rue du Général Tiemoko Marc Garango, 13 B.P. 60 Ouagadougou 13, Ouagadougou, République du Burkina Faso

LEGAL ADVISORS

Canada

Cassels Brock & Blackwell LLP Suite 2200, HSBC Building 885 West Georgia Street Vancouver BC, Canada, V6C 3E8

Australia

Hamilton Locke Level 27, Central Park 152/158 St Georges Terrace Perth, Western Australia, Australia 6000

AUDITORS

HLB Mann Judd Level 4, 130 Stirling Street Perth, Western Australia, Australia 6000

SHARE REGISTRY

Canada TSX Trust Company 100 Adelaide Street West, Suite 301 Toronto, Ontario M5H4H1 Canada

Australia

Computershare Investor Services Pty Limited Level 11, 158 St Georges Terrace Perth, Western Australia, Australia 6000

TSX.V CODE : SWA

ASX CODE : SRR

WEBSITE

www.saramaresources.com

INDEPENDENT AUDITOR'S REPORT

To the members of Sarama Resources Ltd

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Sarama Resources Ltd ("the Company") and its controlled entities ("the Consolidated Entity"), which comprises the consolidated statement of financial position as at 31 December 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial report of the Consolidated Entity presents fairly, in all material respects, the consolidated financial position of the Consolidated Entity as at 31 December 2022, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ('IFRS').

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial report section of our report.

We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ('IESBA Code') together with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA code. We believe that the audit evidence we have obtained in sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 1 in the financial report, which indicates that a material uncertainty exists that may cast significant doubt on the Consolidated Entity'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 judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

We have fulfilled the responsibilities described in our Auditor's responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements.

The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

Key Audit Matter	How our audit addressed the key audit matter
Share-based paymentsRefer to Note 7
The Consolidated Entity has in place anumber of share-based paymentarrangements with various parties.We considered share-based payments to bea key audit matter as we consider it asignificant risk under auditing standards, itrequires a degree of judgement and itinvolved the most communication with keymanagement personnel.	Our audit procedures included, but were notlimited to, the following:-Obtained an understanding of the keyprocesses involved with management'streatment of share-based payments;-Considered the treatment of the sharebased payment arrangements entered intoby the Consolidated Entity to ensure theseare consistent with accounting standardrequirements;-Reviewed the treatment of vestingconditions in relation to the amountsrecorded for share-based payments duringthe period.-Considered the appropriate treatment ofshare-based payment arrangements aseither equity or a financial liability; and-Assessed the Consolidated Entity'svaluation of such share-based paymentsand reviewed the model and assumptionsused.
Investment in associateRefer to Note 5
The Consolidated Entity has a 17.58%holding in Joint Venture BFI Inc., which holdsthe exploration and evaluation assetpertaining to the Karankasso Project inBurkina Faso.We considered the treatment of theinvestment in an associate to be a key auditmatter as we consider it is a significant riskunder auditing standards, it required a degreeof judgement and it involved the mostcommunication with key managementpersonnel.	Our audit procedures included, but were notlimited to, the following:-Obtained an understanding of the keyprocesses involved with management'streatment of its investment in an associatedentity;-Considered the existence of significantinfluence over the entity's investment;-Reviewed the financial statements of theassociate and determined the existence ofany indicators of impairment;-Ensured the associate has current tenureacross its areas of interest in accordancewith IFRS 6; and-Ensured any impairment has beenappropriately recorded and disclosed.

Information other than the financial report and auditor's report thereon

The directors are responsible for the other information. The other information comprises the information included in the Consolidated Entity's annual report for the year ended 31 December 2022, but does not include the financial report and our auditor's report thereon.

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

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

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

Responsibilities of management and those charged with governance for the financial report

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

In preparing the financial report, management is responsible for assessing the ability of the Consolidated Entity to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have 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 financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is 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 International Standards on Auditing 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 this financial report.

As part of an audit in accordance with International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial report, 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 Consolidated Entity's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors' 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 Consolidated Entity'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 financial report 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 Consolidated Entity to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

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

We also provide the directors 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 the directors, we determine those matters that were of most significance in the audit of the financial report 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.

HLB Mann Judd M R Ohm Chartered Accountants Partner

Perth, Western Australia 29 March 2023

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION

The accompanying consolidated financial statements and all other financial information included in this report are the responsibility of management. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"). Financial statements include certain amounts based on estimates and judgments. When alternative methods exist, management has chosen those it deems most appropriate in the circumstances to ensure that the consolidated financial statements are presented fairly, in all material respects.

Management maintains appropriate systems of internal control, consistent with reasonable cost, to give reasonable assurance that its assets are safeguarded, and the financial records are properly maintained.

The Board of Directors is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal control. The Audit Committee, which is comprised of three Directors, all of whom are nonmanagement and independent, meets with management to review the consolidated financial statements to satisfy itself that management is properly discharging its responsibilities to the Directors, who approve the consolidated financial statements.

Management recognizes its responsibility for conducting the Company's affairs in compliance with established financial reporting standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

(signed) "Andrew Dinning" (signed) "Lui Evangelista" Director, President and CEO CFO March 29, 2023 March 29, 2023

Sarama Resources Ltd An Exploration Stage Company Consolidated Statement of Financial Position Expressed in United States Dollars

	Note	As atDecember 31,2022$	As atDecember 31,2021$
ASSETS
Current assets
Cash and cash equivalents	3	843,085	1,033,345
Security deposits		23,857	25,420
Other receivables		23,381	81,648
Prepayments	15	82,580	178,965
Total current assets		972,903	1,319,378
Non-current assets
Other receivables		130,342	-
Plant and equipment	4	90,042	18,286
Investment in associate	5	1,836,171	1,836,171
Royalty		23,131	23,131
Total non-current assets		2,079,686	1,877,588
Total assets		3,052,589	3,196,966
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	16	651,374	205,668
Financial liabilities		41,417	267,701
Termination Agreement - Barrick	6	-	1,140,183
Total current liabilities		692,791	1,613,552
Non-current liabilities
Provision for employee entitlements		14,193	339,213
Total non-current liabilities		14,193	339,213
Total liabilities		706,984	1,952,765
EQUITY
Share capital	7(b)	57,693,133	52,817,012
Share-based payments reserve	7(d)	4,960,313	4,532,735
Accumulated losses		(60,307,841)	(56,105,546)
Total equity		2,345,605	1,244,201
Total liabilities and equity		3,052,589	3,196,966

These financial statements are authorised for issue by the Board of Directors on March 29, 2023.

They are signed on the Company's behalf by:

(Signed) "Andrew Dinning" Andrew Dinning, Director

(Signed) " Simon Jackson" Simon Jackson, Director

Sarama Resources Ltd An Exploration Stage Company Consolidated Statement of Profit or Loss and Other Comprehensive Income Expressed in United States Dollars

	Note	Year endedDecember 31,2022	Year endedDecember 31,2021
Income
Interest income		17,979	868
Fair value gain on warrants carried at fair value through profit or loss		226,284	179,397
Total income		244,263	180,265
Expenses
Accounting and audit		19,894	32,485
Depreciation		4,046	2,184
Directors' fees		102,675	111,159
Exploration expenditure as incurred		2,390,519	941,172
Finance charges		49,829	127,787
Foreign exchange loss/(gain)		337,511	19,738
Insurance		70,278	71,369
Marketing and investor relations		205,359	111,430
Office and general		183,940	130,956
Professional fees		155,538	71,948
Salaries		687,504	650,983
Stock–based compensation	7(d)	188,063	513,112
Travel		51,402	3,561
Total expenses		4,446,558	2,787,884
Loss before income tax		(4,202,295)	(2,607,619)
Income tax benefit		-	-
Loss for the period		(4,202,295)	(2,607,619)
Other comprehensive income		-	-
Total comprehensive loss for the period		(4,202,295)	(2,607,619)
Basic and diluted loss per share	13	(3.3) cents	(2.8) cents
Weighted average number of sharesBasic and diluted		126,337,042	94,283,852

Sarama Resources Ltd An Exploration Stage Company Consolidated Statement of Cash Flows Expressed in United States Dollars

		Year endedDecember 31,2022	Year endedDecember 31,2021
	Note
Cash flows used in operating activitiesPayments to suppliers and employeesPayments for exploration and evaluationPayment to Barrick – Termination AgreementInterest paidInterest received		(1,379,367)(2,414,762)(1,000,000)(190,012)17,979	(1,131,791)(969,478)--868
Net cash used in operating activities	14	(4,966,162)	(2,100,401)
Cash flows used in investing activitiesPurchase of plant and equipment	4	(97,848)	(2,745)
Net cash used in investing activities		(97,848)	(2,745)
Cash flows from financing activitiesCommon shares and warrants issued for cashPayment of share issue costs		5,835,600(616,628)	1,625,563(76,947)
Net cash generated by financing activities		5,218,972	1,548,616
Net increase / (decrease) in cash and cashequivalents		154,962	(554,530)
Net foreign exchange differences		(345,222)	(31,738)
Cash and cash equivalents at beginning of the year		1,033,345	1,619,613
Cash and cash equivalents at end of the year		843,085	1,033,345

Sarama Resources Ltd An Exploration Stage Company Consolidated Statement of Changes in Equity Expressed in United States Dollars

	Numberof commonshares	Sharecapital(note 7)	Share-basedpaymentsreserve	Accumulatedlosses	Total
		$	$	$	$
Balance at January 1, 2021	90,099,894	51,715,494	4,019,623	(53,497,927)	2,237,190
Loss attributed to shareholders ofthe CompanyExchange differences on	--	--	--	(2,607,619)-	(2,607,619)-
translation of foreign operationsTotal comprehensive loss for theyearTransactions with owners intheir capacity as owners:	-	-	-	(2,607,619)	(2,607,619)
Issue of shares	9,727,037	1,625,563	-	-	1,625,563
Share issuance costsFair value of share issue ascribedto warrants and recorded as	-	(76,947)	-	-	(76,947)
financial liability (7(b))Stock-based compensation -	-	(447,098)	-	-	(447,098)
options (7(d)(i))	-	-	513,112	-	513,112
Balance at December 31, 2021	99,826,931	52,817,012	4,532,735	(56,105,546)	1,244,201
Loss attributed to shareholders ofthe CompanyExchange differences on	--	--	--	(4,202,295)-	(4,202,295)-
translation of foreign operationsTotal comprehensive loss for theyearTransactions with owners intheir capacity as owners:	-	-	-	(4,202,295)	(4,202,295)
Issue of shares (7(b))Fair value of broker warrants	38,095,238	5,835,600	-	-	5,835,600
(7(b))	-	-	239,515	-	239,515
Share issuance costs (7(b))Stock-based compensation -options (7(d)(i))	--	(959,479)-	-188,063	--	(959,479)188,063
Balance at December 31, 2022	137,922,169	57,693,133	4,960,313	(60,307,841)	2,345,605

1. NATURE OF OPERATIONS

Sarama Resources Ltd (the "Company") was incorporated under the laws of the Province of British Columbia, Canada on April 8, 2010.

Statement of compliance

These consolidated financial statements have been prepared in United States Dollars.

The board of directors of the Company have approved these consolidated financial statements on March 29, 2023.

Business Activities

The consolidated entity, consisting of Sarama Resources Ltd. and its subsidiaries is in the exploration stage and its principal business activity is the sourcing and exploration of mineral properties. As at December 31, 2022, the Company is in the process of exploring its principal mineral properties and has not yet determined whether the properties contain gold reserves that are economically recoverable.

The consolidated financial statements for the year ended December 31, 2022, comprise the accounts of Sarama Resources Ltd and its subsidiaries and the Company's interest in equity accounted investments.

Basis of Presentation

These consolidated financial statements have been prepared under the historical cost convention except for financial assets and liabilities at fair value through profit or loss and in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and Interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

Going Concern

The financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

As disclosed in the financial statements for the year ended December 31, 2022, the consolidated entity recorded a net loss of $4,202,295 and had a net cash outflow from operating and investing activities of $5,064,010. As at December 31, 2022, the consolidated entity had available cash of $843,085 and a surplus of current assets over current liabilities of $280,112.

The Directors have reviewed cashflow forecasts for the upcoming period and assessed that the consolidated entity will need to complete a capital raising to support forecast future cashflows over the relevant period of twelve months from the anticipated date of signing of these financial statements. A process is currently being conducted to determine the likely timely and quantum of this future capital raising.

Should this capital raising not eventuate, or not eventuate on a sufficiently timely basis, there is a material uncertainty that may cast significant doubt as to whether the consolidated entity will continue as a going concern and realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Standards and Interpretations applicable to December 31, 2022

In the year ended December 31, 2022, the Directors have reviewed all the new and revised Standards and Interpretations issued by the IASB that are relevant to the consolidated entity and effective for the current annual reporting period. As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the consolidated entity and, therefore, no material change is necessary to the consolidated entity's accounting policies.

b) Standards and Interpretations in issue not yet adopted

The Directors have also reviewed all the new and revised Standards and Interpretations in issue not yet adopted for the year ended 31 December 2022. As a result of this review the Directors have determined that there is no material impact of the Standards and Interpretations in issue not yet adopted on the consolidated entity and, therefore, no change is necessary to the consolidated entity's accounting policies.

c) Basis of Consolidation

The consolidated financial statements incorporate the assets and liabilities of the Company as at December 31, 2022 and the results of all subsidiaries for the year then ended.

Subsidiaries are all entities (including special purpose entities) over which the Company has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company.

d) Foreign Currency Translation

(i) Functional and Presentation Currency

Items included in the financial statements of each of the Company's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in United States dollars ("USD"), which is the Company's functional and presentation currency.

(ii) Transactions and Balances

Monetary assets and liabilities of the Company are translated into USD at the exchange rate in effect on the statement of financial position date while non-monetary assets and liabilities, revenues and expenses are translated using exchange rates in effect at the time of each transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

All foreign exchange gains and losses are presented separately in profit or loss for the financial year.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair-value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

(iii) Functional Currency

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

• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that balance sheet,
• income and expenses for each statement of comprehensive income/(loss) are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case, income and expenses are translated at the dates of the transactions), and

• all resulting exchange differences are recognised in other comprehensive income.

e) Financial Instruments

Cash and cash equivalents are classified as current assets and include short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. The Company places the majority of its cash holdings with an Australian financial institution which has a high credit rating.

Non-derivative financial assets and liabilities

The Company has the following non-derivative financial assets and liabilities:

i. Receivables

Receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are initially recognised at fair value, less any directly attributable transaction costs. Subsequent to initial recognition, receivables are measured at amortised cost using the effective interest method, less any impairment losses.

ii. Financial assets at fair value through profit or loss (FVTPL)

Financial assets that are held within a different business model other than 'hold to collect' or 'hold to collect and sell' are categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL. Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.

iii. Amounts payable and other accrued liabilities Such financial liabilities are recognised initially at fair value, net of any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method if significant.

f) Exploration and Evaluation Assets

Mineral exploration and evaluation costs are expensed as incurred based upon each area of interest. Acquisition costs will normally be expensed but will be assessed on a case by case basis and if appropriate may be capitalised. These acquisition costs are only carried forward to the extent that they are expected to be recouped through the successful development or sale of the tenement. Accumulated acquisition costs in relation to an abandoned tenement are written off in full against profit or loss in the year in which the decision to abandon the tenement is made. Where a decision has been made to proceed with development in respect of a particular area of interest, all future costs are recorded as a development asset.

g) Impairment of Plant and Equipment

At the end of each reporting period, the carrying amounts of the Company's plant and equipment is reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of these assets is estimated in order to determine the extent of the impairment, if any. The recoverable amount is determined as the higher of the fair value less costs to sell for the asset and the asset's value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax 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 recognised within profit or loss for the period. For an asset that does not generate largely independent cash 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, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

h) Plant and Equipment

The cost of all plant and equipment is stated at historical cost less depreciation and impairment charges. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Assets are depreciated over their estimated useful service lives using the straight-line method at the following periods:

Office equipment	4 years
Plant and equipment	3 years
Motor vehicles	4 years

Depreciation expense relating to plant and equipment in Burkina Faso, Mali and Liberia is capitalised and forms part of exploration and evaluation assets. Depreciation expense for plant and equipment in Australia is recognised as an expense through profit or loss.

i) Stock-based Compensation

The fair value of share purchase options or warrants granted is determined by the Black-Scholes option pricing model using estimates for the volatility of the trading price of the Company's stock, the expected lives of share purchase options awarded, the fair value of the Company's shares and the risk-free interest rate.

For employees, the fair value of the options is measured at the date of the grant. For non-employees, the fair value of the options is measured on the earlier of the date on which the counterparty performance is complete or the date the performance commitment is reached or the date at which the equity instruments are granted if they are fully vested and non-forfeitable. The estimated fair value of awards of share purchase options is charged to expense over the vesting period, with offsetting amounts to equity. If the share purchase options are granted for past services, they are expensed immediately. If the share purchase options are forfeited prior to vesting, no amounts are charged to expense. If share purchase options are exercised, then the fair value of the options is reclassed from stock-based compensation reserve to share capital.

At each reporting date, the amount recognised as an expense is adjusted to reflect the actual number of share purchase options or warrants that are expected to vest. The corresponding entry is recognised in the stock-based compensation reserve.

j) Basic and Diluted Earnings per Share

The Company presents basic and diluted earnings per share data for its common shares, calculated by dividing the result attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings per share does not adjust the profit attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive.

k) Share Warrants

In accordance with IFRS, an obligation to issue shares for a price that is not fixed in the Company's functional currency, and that does not qualify as a rights offering, must be classified as a derivative liability and measured at fair value through profit or lossin accordance with the requirements of IAS 32 Financial Instruments: Presentation. The financial liability will be accounted for at fair value through profit or loss until such time that the warrants are exercised or lapse, at which point the liability will be transferred to equity.

l) Income Taxes

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

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is provided using the balance sheet 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: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and differences relating to investments in subsidiaries, associates, and joint ventures to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the financial position reporting date applicable to the period of expected realisation or settlement.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.

m) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments.

n) Critical Estimates and Judgements

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continually evaluated and are based on management experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. Information about significant areas of estimation uncertainty considered by management in preparing the financial statements is described below.

(i) Measurement of warrants and stock options

The Company determines the fair value of both warrants and options classified as liabilities at fair value through profit or loss using the Black-Scholes Model. Note 7 provides detailed information about the key assumptions used in the determination of the fair value of warrants.

3. CASH AND CASH EQUIVALENTS

	December 31, 2022$	December 31, 2021$
Cash at bank and in hand	57,889	671,029
Deposits at call	785,196	362,316
	843,085	1,033,345

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made on a rolling overnight basis and earn interest at the respective short-term deposit rates.

The Company's exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are disclosed in Note 9.

4. PLANT AND EQUIPMENT

	December 31, 2022
	Plant andEquipment	MotorVehicles	OfficeEquipment	Total
	$	$	$	$
Opening net book value	11,947	-	6,339	18,286
Additions	11,247	57,041	29,560	97,848
Depreciation	(6,171)	(10,746)	(9,175)	(26,092)
Closing net book value	17,023	46,295	26,724	90,042
Cost	253,030	215,347	316,639	785,016
Accumulated Depreciation	(236,007)	(169,052)	(289,915)	(694,974)
Closing net book value	17,023	46,295	26,724	90,042

	December 31, 2021
	Plant andEquipment	MotorVehicles	OfficeEquipment	Total
	$	$	$	$
Opening net book value	18,206	-	14,465	32,671
Additions	-	-	2,745	2,745
Depreciation	(6,259)	-	(10,871)	(17,130)
Closing net book value	11,947	-	6,339	18,286
Cost	241,783	158,306	287,079	687,168
Accumulated Depreciation	(229,836)	(158,306)	(280,740)	(668,882)
Closing net book value	11,947	-	6,339	18,286

5. INVESTMENT IN ASSOCIATE

The Company has determined that it has significant influence over Joint Venture BFI Inc., a joint venture focussed on the exploration and evaluation of the Karankasso Project ("the Project") in Burkina Faso, as it holds 17.58% (2021: 17.52%) of the voting power as well as holding 2 out of the 4 Board positions. The Company's interest is accounted for using the equity method in the consolidated financial statements. Summarised financial information of the joint venture, based on IFRS financial statements, and a reconciliation with the carrying amount of the investment in the consolidated financial statements are set out below. The Company has not made any additional contributions during the year ended December 31, 2022.

Summarised statement of financial position of Joint Venture BF1 Inc.:

	December 31, 2022$	December 31, 2021$
Current assets	352,053	564,088
Non-current assets	17,409,166	17,224,838
Current liabilities	(30,738)	-
Non-current liabilities	(5,498,025)	(5,556,469)
Equity	12,232,456	12,232,457
Reconciliation to carrying amount of investment
Company's share of equity	2,150,466	2,143,126
Plus additional contributions	1,365,851	1,365,851
	3,516,317	3,508,977
Notional premium on acquisition by JV	(1,680,146)	(1,672,806)
Karankasso Project Joint Venture– at cost	1,836,171	1,836,171

The notional premium is due to the joint venture recording a higher value of the equity contributed by the Company upon transfer to the joint venture.

6. TERMINATION AGREEMENT – BARRICK

On May 14, 2019, the Company announced that it had executed a definitive agreement (the "Agreement") with Acacia Mining plc ("Acacia") that provides for the termination of the 2014 earn-in agreement between the two companies in respect of the South Houndé Project (or the "Project") in south-western Burkina Faso. The Agreement provides for Sarama to resume operatorship and regain a 100% interest in the Project.

On November 18, 2019, the Company announced that it had renegotiated certain terms of the Agreement resulting in an immediate return to 100% ownership of the Project and the reduction of the trailing reimbursement payment. The Company agreed to waive certain closing conditions and, in return, Barrick TZ Ltd ("Barrick"), formerly Acacia, agreed to amend and reduce the total trailing reimbursement from $2 million to $1 million, payable 12 months from the date of the amendment.

On June 24, 2020, the Company announced that Barrick agreed to defer the $1 million payable on November 18, 2020 to January 15, 2022 inclusive of interest at an annual rate of 10%. On November 18, 2021, Barrick agreed to further defer the $1 million payable by an additional year to January 15, 2023 ("Maturity date") inclusive of interest at an annual rate of 12.5% effective from November 18, 2021. The Company is required to repay the liability, inclusive of accrued interest, if it completes any financing with gross proceeds of US$ 3.5 million or greater prior to the maturity date. Due to the Company completing its equity raising on April 22, 2022, in relation to its dual listing on the ASX, it paid Barrick $1,190,012, inclusive of accrued interest, in May 2022.

7. SHARE CAPITAL

(a) Authorised Share Capital

At December 31, 2022, the authorised share capital comprised an unlimited number of common shares without par value.

(b) Issued Share Capital

	2022Number of	2022	2021Number of	2021
Details	shares	$	shares	$
Balance at January 1	99,826,931	52,817,012	90,099,894	51,715,494
Issue of shares under private placement(i),(ii)	38,095,238	5,835,600	9,727,037	1,625,563
Share issuance costs	-	(959,479)	-	(76,947)
Fair value warrants issued	-	-	-	(447,098)
Balance December 31 (net of costs)	137,922,169	57,693,133	99,826,931	52,817,012

• (i) Private Placement – Dual Listing on Australian Securities Exchange ("ASX")
  • On April 22, 2022 the Company announced that it had raised A$8,000,000 and issued 38,095,238 CHESS Depositary Interests ("CDIs") over common shares in the capital of the Company at an issue price of A$0.21 per CDI, in relation to its dual listing on the ASX. Underlying each CDI is a newly issued common share of the Company and each CDI therefore represents a beneficial interest in 1 common share of the Company. The Lead Manager for the ASX listing process, Euroz Hartleys Limited, received 2,500,000 Broker warrants at an exercise price of A$0.273 each and expiring three years from the date of issue. It also received a capital raising fee of 6% of total gross funds raised, excluding any funds subscribed for under an agreed Chairman's list, at a management fee of 2%, and a separate management fee of A$75,000. The Company commenced trading on the ASX on May 2, 2022.
• (ii) Private Placement - 2021

On July 29, 2021 the Company announced that it had raised C$2,042,678 and issued 9,727,037 units (the "Units") at a price of C$0.21 per Unit. Each Unit is comprised of one common share of the Company and one-half of one common share purchase warrant (each full warrant, a "Warrant"), with each Warrant being exercisable to purchase one common share of the Company at an exercise price of C$0.28 until July 28, 2024. The Company issued an aggregate of 9,727,037 common shares and 4,863,517 Warrants.

(c) Company Stock Option Plan

The Company has a stock option plan (the "Plan") that provides for the issuance of up to 10% of the issued and outstanding shares of the Company. The board of directors is authorised to set the exercise price, expiry date, and vesting provisions for each grant, subject to the policies of the TSX Venture Exchange. The plan provides for a maximum grant period of ten years. Options can be exercised at any time prior to their expiry date. Details are as follows:

	Consolidation (7(c)(i))	Pre Share		Post ShareConsolidation
		Exercise		Exercise	Expiry Date
Grant Date	No.	Price	No.	Price
January 16, 2020 (fully vested)	10,800,000	C$0.07	3,599,999	C$0.21	January 16, 2023
June 24, 2020 (fully vested)	1,500,000	C$0.08	500,000	C$0.24	June 23, 2023
	12,300,000		4,099,999
January 14, 2021 (fully vested)			3,158,336	C$0.35	January 14, 2024
January 19, 2022 (fully vested)			2,721,665	C$0.20	January 19, 2025
			9,980,000

On January 19, 2022, the Company issued 2,721,665 options to directors, officers and employees of the company, exercisable at C$0.20 and expiring 3 years after issue.

No options were exercised in the year ended December 31, 2022 (year ended December 31, 2021: Nil).

1,441,665 options expired in the year ended December 31, 2022 at a weighted average exercise price and life of C$0.18 and 3 years respectively (year ended December 31, 2021: 2,746,666 options expired at a weighted average exercise price and life of C$0.32 and 2.9 years respectively).

(i) Share Consolidation:

On October 7, 2020, Sarama implemented a consolidation of its issued and outstanding Shares on a 3 old for 1 new share basis (the "Share Consolidation"). No fractional shares were issued as a result of the Share Consolidation. The Consolidation was approved by the Board pursuant to the new Articles of the Company approved by shareholders at the Company's annual and special general meeting held on September 17, 2020.

(d) Stock-Based Compensation

(i) Options

For the year ended December 31, 2022, the expense incurred relating to stock-based compensation on the grant of options was $188,063 (December 31, 2021: $513,112).

For the year ended December 31, 2022, the Company granted stock options to its directors, officers, employees and consultants and estimated the stock-based compensation as follows:

	January 19,
	2022
Total options granted	2,721,665
Exercise price	C$0.20
Estimated fair value of compensation recognised	$188,063
Balance to be recognised over remaining vesting	$nil
period
Estimated fair value per option	$0.08

The fair value of the stock-based compensation recognised in the accounts has been estimated using the Black-Scholes Option-Pricing Model with the following assumptions:

	January 19,
	2022
Share price of underlying security on date of grant	C$0.17
Risk-free interest rate	1.38%
Expected dividend yield	0%
Expected stock price volatility	91.3%
Expected option life in years	3 years

The share price volatility is based on historical data and reflects the assumption that historical volatility over a period similar to the life of the option is indicative of future trends, which may not necessarily be indicative of exercise patterns that may occur.

(ii) Warrants

The Company has issued warrants as part of its capital raising and exploration programs. The details of all warrants still on issue are detailed below.

Pre Share Consolidation

(7(c)(i))

Warrant issue	TotalWarrantsIssued	ExercisePrice	Estimatedfair value ofwarrants	Estimatedfair valueper warrant	Expiry Date
		(C$)	(C$)	(C$)
Acquisition Warrants issuedMay 23, 2019	2,500,000	$0.10	183,912	$0.074	May 23, 2024
Acquisition Warrants issuedMay 23, 2019	2,500,000	$0.20	162,184	$0.065	May 23, 2024
Total	5,000,000		346,096	$0.069

Post Share Consolidation

	TotalWarrants	ExercisePrice	Estimatedfair value of	Estimatedfair value	Expiry Date
Warrant issue	Issued		warrants	per warrant
		(C$)	(C$)	(C$)
Acquisition Warrants issued	833,333	$0.30	183,912	$0.222	May 23, 2024
May 23, 2019
Acquisition Warrants issued	833,333	$0.60	162,184	$0.195	May 23, 2024
May 23, 2019
Broker Warrants issued April
22, 2022	2,500,000	$A0.273	303,345	$0.121	April 22, 2025
Sub Total	4,166,666		649,441	$0.156
Shareholder Warrants issued	4,863,517	$0.28	561,822	$0.115	July 28, 2024
July 28, 2021
Total	9,030,183		1,211,263	$0.134

5,000,000 warrants were issued to Acacia on May 23, 2019, as part consideration of definitive agreement executed by the Company and Acacia on May 14, 2019, that provides for the termination of the 2014 earn-in agreement between the two companies in respect of the South Houndé Project. 2,500,000 warrants were issued at an exercise price of C$0.10 and 2,500,000 warrants were issued at an exercise price of C$0.20, expiring on May 23, 2024. Post Share Consolidation the warrants have been converted to 833,333 warrants at exercise price of C$0.30 and 833,333 warrants at exercise price of C$0.60, respectively.

2,500,000 broker warrants were issued on April 22, 2022, to the Lead Manager of the ASX listing process, Euroz Hartleys Limited, at an exercise price of A$0.273 each and expire on April 22, 2025.

4,863,517 shareholder warrants were issued on July 28, 2021, in relation to a private placement conducted by the Company. The warrants are exercisable at C$0.28 and expire on July 28,2024.

The fair value of the broker and acquisition warrants are recognised within the share-based payments reserve, within the equity section of the financial statements, in accordance with IFRS 2. The fair value of shareholder warrants are recognised as a financial liability in the financial statements in accordance with IAS 32.

The fair value of the warrants recognised in the financial statements has been estimated using the Black-Scholes Option-Pricing Model at inception with the following assumptions:

Warrant issue	Price ofSecurity onissue date	Risk –freeinterestrate	Expecteddividendyield	Expectedstockpricevolatility	Remainingwarrantlife
Acquisition Warrants issued May 23, 2019Broker Warrants issued April 22, 2022	C$0.10C$0.18	1.55%2.70%	0%0%	105%76%	17 months28 months
Shareholder Warrants issued July 28, 2021	C$0.28	0.55%	0%	105%	19 months

8. INCOME TAXES

A reconciliation of the income tax at statutory rates is asfollows:	December 31,2021$	December 31,2020$
Loss for the year before income tax	(4,202,295)	(2,607,619)
"Prima facie" income tax benefit at 27% (2021: 27%)Tax effect of permanent differences:	(1,134,620)	(704,057)
Stock – based payments	50,777	138,540
Foreign exchange (gains) / losses	92,621	5,618
Fair value gain on warrants carried at fair value throughprofit or lossCapital raising costsNon-deductible exploration expensesDeferred tax assets not brought to accountIncome tax benefit	(61,097)(54,959)42,0401,065,238-	(48,437)(21,991)70,004560,323-
Deferred tax assets and liabilitiesDeferred tax assets and liabilities are attributable to thefollowing:Deferred tax liabilities:	-	-
Deferred tax assets
Tax losses	4,066,394	3,866,618

Exploration expenditure	9,045,543	8,863,565
	13,111,937	12,730,183
Deferred tax assets not recognised	(13,111,937)	(12,730,183)
Deferred tax assets recognised at December 31	-	-

Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect
of the following items:
Tax losses - Canada	3,931,306	3,725,834
Tax losses - Burkina Faso	135,088	140,784
Exploration expenditure	9,045,543	8,863,565
	13,111,937	12,730,183

9. FINANCIAL INSTRUMENTS

The Company is exposed to financial risks through the normal course of its business operations. The key risks impacting the Company's financial instruments are considered to be foreign currency risk, interest rate risk, liquidity risk, credit risk and equity price risk. The Company's financial instruments exposed to these risks are cash and short-term deposits, receivables, trade payables and investments in foreign operations.

The executive management team monitors the financial instrument risk to which it is exposed and assesses the impact and likelihood of those risks on an ongoing basis. Where material, these risks are reported and reviewed by the board of directors.

(a) Fair Values

The fair value of the Company's financial instruments approximates their carrying values due to the immediate or short-term maturity of these financial instruments. The Company's financial assets and liabilities are measured and recognised at fair value as at December 31, 2022 according to the following fair value measurement hierarchy:

• (a) quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities (level 1),
• (b) quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability (level 2), and
• (c) prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity) (level 3).
• (b) Financial Instrument Risk Exposure

Foreign currency risk

The Company has international operations in West Africa, namely Burkina Faso, Mali and Liberia and an administrative office in Western Australia. The multiple locations expose the Company to foreign exchange risk as detailed below:

• Canadian dollar (CAD) primary source of Company funding and its corporate and regulatory costs.
• Australian dollar (AUD) administrative costs in Western Australia.
• Euro and Communauté Financiére Africaine Francs (CFA) funding of African operations.

Management's policy is to actively manage foreign exchange risk. Management mitigates foreign exchange risk by continuously monitoring forecasts and spot prices of foreign currency and holding foreign currency based on expected future expenditure commitments.

The carrying amounts of the Company's financial assets and liabilities are denominated in USD, except as set out below:

	As at December 31, 2022
	AUD$	CAD$	Euro€
Cash and cash equivalents	1,182,363	16,690	21,018
Payables	69,844	19,801	31,106
		As at December 31, 2021
	AUD$	CAD$	Euro€
Cash and cash equivalents	590,768	527,656	150,336
Payables	120,552	257	-

Sensitivity

Based on the financial instruments held as at December 31, 2022, had the US dollar weakened/strengthened by 10% against the AUD, CAD or Euro, with all other variables held constant, the Company's losses/gains for the year would have been mainly as a result of foreign exchange gains/losses in translation of foreign denominated currencies. The following table summarises the sensitivity of the Company's cash and cash equivalents to changes in foreign exchange rates.

The Company's exposure to other foreign exchange movements is not material.

	As at December 31, 2022
	AUD$	CAD$	Euro€
USD Strengthened by 10%	(68,940)	209	981
USD Weakened by 10%	84,260	(255)	(1,199)
		As at December 31, 2021
	AUD$	CAD$	Euro€
USD Strengthened by 10%	(31,047)	(37,762)	(15,504)
USD Weakened by 10%	37,946	46,153	18,949

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable.

The Company has reduced its credit risk by holding all of its cash and cash equivalents with an Australian financial institution, whose Moody's Investor Service rating is Aa3, except for working capital requirements in West Africa.

Liquidity risk

Ultimate responsibility for liquidity risk rests with the Board of Directors, who oversee a liquidity risk management framework for the management of the Company's funding and liquidity requirements.

The Company manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring there are adequate funds available to meet its operating and growth objectives. The Company relies on issuance of shares to fund exploration programs and will most likely issue additional shares in the future.

Interest rate risk

The Company is exposed to interest rate risk as entities in the Company deposit funds at both short-term fixed and floating rates of interest. Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Cash bears interest at variable rates. The fair value of cash approximates its carrying value due to the immediate or short-term maturity of this financial instrument.

Other current financial assets and liabilities are not exposed to interest rate risk because they are non-interest bearing.

10. CAPITAL MANAGEMENT

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

The Company manages its capital structure and makes adjustments to it in accordance with the objectives stated above, as well as responding to changes in economic conditions and the risk characteristics of the underlying assets. There were no changes in the Company's approach to capital management during the year ended December 31, 2021. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the company, is reasonable. The Company is not subject to externally imposed capital requirements.

The properties in which the Company currently has interests are in the exploration stage, as such, the Company does not recognize revenue from its exploration properties. The Company's historical source of capital has consisted of the issue of equity securities and warrants. In order for the Company to carry out planned exploration and development and pay for administrative costs, the Company will spend its working capital and expects to raise additional amounts externally as needed.

The Company is exposed to various funding and market risks which could curtail its access to funds.

11. SUBSIDIARIES

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 2:

Name of entity	Country ofIncorporation	Class of shares	FunctionalCurrency	Equity holding%
				2022	2021
Sarama Investments Ltd	British Virgin Islands	Ordinary	USD	100	100
SaramaInvestments(No.2)	British Virgin Islands	Ordinary	USD	100	100
Limited
Sarama Investments Mali Limited	British Virgin Islands	Ordinary	USD	100	100
Vasto Mining Limited	British Virgin Islands	Ordinary	USD	100	100
Burkina Faso Holdings Limited	British Virgin Islands	Ordinary	USD	100	100
SWABFNo.3Investments	British Virgin Islands	Ordinary	USD	100	100
Limited
Sarama Mining Burkina SUARL	Burkina Faso	Ordinary	USD	100	100
Sarama Faso SARL	Burkina Faso	Ordinary	USD	100	100
SWA SARL	Burkina Faso	Ordinary	USD	100	100
Eburnean Resources Limited –	Burkina Faso	Ordinary	USD	100	100
Burkina SARL
Pedsam Mining Limited (Liberia)	Liberia	Ordinary	USD	100	100

12. SEGMENT REPORTING

The Company consider the Board of Directors to be the chief decision maker.

The Company has one business segment, being the acquisition, exploration and potential development of mineral properties. The Company has operations in one geographic area, being Burkina Faso.

As at and for the year ended December 31, 2022
	Burkina Faso	Other	Total
	$	$	$
Segment current assets	35,533	937,370	972,903
Segment non-current assets
Plant and equipment	79,590	10,452	90,042
Investment in Associate	1,836,171	-	1,836,171
Receivables – non-current	130,342	-	130,342
Royalty	-	23,131	23,131
	2,046,103	33,583	2,079,686
Segment total assets	2,081,636	970,953	3,052,589
Segment liabilities	37,994	668,990	706,984
Segment Loss
Loss for the period from continuingoperations	2,390,519	1,811,776	4,202,295

As at and for the year ended December 31, 2021

	Burkina Faso$	Other$	Total$
Segment current assets	128,391	1,190,987	1,319,378
Segment non-current assets
Plant and equipment	14,731	3,555	18,286
Investment in Associate	1,836,171	-	1,836,171
Royalty	-	23,131	23,131
	1,850,902	26,686	1,877,588
Segment total assets	1,979,293	1,217,673	3,196,966
Segment liabilities	36,235	1,916,530	1,952,765
Segment Loss
Loss for the periodfrom continuingoperations	941,172	1,666,447	2,607,619

13. BASIC AND DILUTED LOSS PER SHARE

	December 31, 2022	December 31, 2021
	Cents per share	Cents per share
Basic and diluted loss per share	(3.3)	(2.8)
	$	$
Net loss used in calculating basic/diluted loss pershare	(4,202,295)	(2,607,619)
Weighted average number of shares on issue duringthe period used in the calculation of basic loss pershare	126,337,042	94,283,852

Diluted loss per share as at December 31, 2022 is the same as basic loss per share as it is unlikely that the warrants will be converted into common shares.

14. NOTES TO THE STATEMENT OF CASH FLOWS

Reconciliation of loss after tax to net cash flows from operations

	December 31, 2022$	December 31, 2021$
Loss for the year	(4,202,295)	(2,607,619)
DepreciationFinance charges	26,09249,829	17,131127,787
Fair value gain on warrants carried at fair value through profit orlossStock–based compensation	(226,284)188,063	(179,397)513,112
Movements in provisions, salary benefitsNet exchange differences – (gain)/loss	97,541344,848	18,35820,809
Net cash outflows used in operating activities before change inworking capitalChange in working capital	(3,722,206)(1,243,956)	(2,089,819)(10,582)
Net cash outflows used in operating activities	(4,966,162)	(2,100,401)

15. PREPAYMENTS

December 31, 2022	December 31, 2021
$	$
-	103,336
49,458	55,168
33,122	20,461
82,580	178,965

16. ACCOUNTS PAYABLE & ACCRUED LIABILITIES

	December 31, 2021
	$
	160,452
457,905	45,215
	-
651,374	205,667
	December 31, 2022$193,469

Employee leave entitlements have been reclassified to current liabilities from non-current liabilities due to employees becoming entitled to long service leave.

17. RELATED PARTY TRANSACTIONS

Parent Entity

Sarama Resources Ltd is the parent entity.

Subsidiaries Interests in subsidiaries are set out in Note 11.

Associates

Interests in associates are set out in Note 5.

Transactions with related parties

The following remuneration was paid to Key Management Personnel

Year	Salary(2)$	Directors'Fees$	Stock-basedcompensation$	Pension value(1)$	All othercompensation$	Totalcompensation$
2022	704,549	102,675	171,364	54,603	-	1,033,191
2021	707,487	111,159	468,434	52,790	-	1,339,870

Notes:

(1) The Company is required by applicable law in Australia to make an annual contribution of 10.5% (10.5% from July 1, 2022) of gross annual salary to the nominated superannuation funds of Australian employees. Subject to the prevailing legislation, employees are able to elect a higher rate at which the Company contributes. The Company contributes to superannuation funds of Australian resident named executive officers (NEO) at a rate of 10% of base salary per year, in addition to the base salary. The Company does not provide defined benefit plans or other pension entitlements for any of its employees.

(2) The salaries of key management personnel are paid in Australian and Canadian dollars and are therefore subject to currency variation when converted to United States dollars.

Receivable from and payable to related parties The following transactions occurred with related parties:

	December 31, 2022	December 31, 2021
	$	$
Current payables:Directors' fees	27,836	29,057

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates

18. CONTINGENT LIABILITY: DEFINITIVE AGREEMENT WITH BARRICK TO REGAIN 100% OWNERSHIP OF SOUTH HOUNDE PROJECT

On May 14, 2019, the Company announced that it had executed a definitive agreement (the "Agreement") with Acacia Mining plc ("Acacia") that provides for the termination of the 2014 earn-in agreement between the two companies in respect of the South Houndé Project (or the "Project") in south-western Burkina Faso. The Agreement provides for Sarama to resume operatorship and regain a 100% interest in the Project.

Key commercial terms to this Agreement that are considered a contingent liability are that Sarama will grant Barrick the right to commercial production-based payments consisting of:

• o US$1,000,000 on production of 10,000 oz gold;
• o US$1,000,000 on production of a further 5,000 oz gold;
• o royalty payments, capped at gold production of 1Moz Au, according to sliding-scale royalty rates of:
  • 1.0% for gold price ≤US$1300/oz;
  • 1.5% for gold prices >US$1300/oz and ≤US$1500/oz; and
  • 2.0% for gold prices >US$1500/oz;

As the Company cannot be certain whether it will enter into commercial production, the obligation to pay commercial production-based payments to Barrick is not recorded in the financial statements and is presented as a contingent liability.

19. CONTINGENT LIABILITY: TAX ASSESSMENT – BURKINA FASO

The Company is subjected to a tri-annual taxation audit pursuant to Burkina Faso taxation laws and regulations. The Company's most recent audit was undertaken in the fourth quarter of 2021. As a result of this audit, the Burkina Faso taxation authorities have identified several matters as potentially attracting additional tax liabilities which have not been accounted for by the Company. The Company disputes the basis for, or quantum of, the related tax claims and has commenced the process for this to be reviewed. The review process requires filing of dispute materials with the relevant government authorities which was filed on May 6, 2022. The Company has yet to receive any further communication since the filing. Should that review process resolve in an outcome considered unsatisfactory, the Company may challenge the outcome by commencing court proceedings in Burkina Faso. The Company considers that the above process is common in Burkina Faso and the Company has been through a similar process in its previous tri-annual audits. The Board has assessed the likely outcomes of the process and concluded that the likely outcome is not considered to be material to the Company's financial position.

20. ASX INFORMATION

Sarama's admission to the official list of ASX was conditional on, amongst other things, Sarama undertaking to ASX to include the following information in each annual report:

• 1. Sarama is incorporated in British Columbia under the Business Corporations Act, with incorporation number BC0878074.
• 1. Sarama is not subject to chapters 6, 6A, 6B and 6C of the Corporations Act 2001 (Cth) (Corporations Act) dealing with the acquisition of its shares (including substantial holdings and takeovers).
• 1. There are no limitations under the laws of Canada on the right to acquire outstanding securities of the Company, except that:
  • (a) The Investment Canada Act may require pre-closing review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian." A "non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians. The Investment Canada Act also creates a national security regime pursuant to which any level of investment in the Company by foreign state-owned enterprises and foreign state-influenced private investors may be subject to review and could be prohibited if the Government of Canada determines that the investment could be injurious to Canadian national security.
  • (b) The Competition Act (Canada) may require pre-closing notification to and approval by the Competition Bureau (Canada) for certain acquisitions of more than 20% of the shares of the Company, where certain party and transaction size thresholds are met. In some cases, the Commissioner of Competition may seek to block or dissolve such a merger in proceedings before the Competition Tribunal (Canada).
  • (c) Applicable Canadian securities laws contain comprehensive requirements relating to "takeover bids", which apply to any offer to purchase, solicitation of an offer to sell, acceptance of an offer to sell or any combination of the foregoing, which is made to one or more persons whose last address as shown on the books of the Company is in Canada, where the securities subject to the offer, together with the offeror's own securities, constitute in the aggregate 20% or more of the outstanding shares of the Company.
• 1. There are no limitations the organising documents of the Company on the right to acquire outstanding securities of the Company.
• 1. As at 31 December 2022, to the best of Sarama's knowledge based on the available information, the substantial holders in Sarama (within the meaning of section 671B of the Corporations Act) are as follows:

Holder	Fully paid equity securities in which the Holder and its associatehave a relevant interest
	Number	%
Sun Valley Gold LLC	15,433,333	11.19%
Silver Lake Resources	10,706,636	7.76%
Jia Zhai	9,414,000	6.83%