Tarku Resources Ltd. — Audit Report / Information 2023

Jan 19, 2024

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Consolidated Financial Statements

September 30, 2023 and 2022

(Expressed in Canadian Dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Tarku Resources Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Tarku Resources Ltd. (the “Company”), which comprise the consolidated statements of financial position as at September 30, 2023 and 2022, and the consolidated statements of loss and comprehensive loss, changes in equity, and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at September 30, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the consolidated Financial Statements section of our report. We 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 other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which indicates that as of September 30, 2023, the Company had a working capital deficit of $472,563 and at that date, the Company also had an accumulated deficit of $9,970,768 which has been funded primarily by the issuance of equity. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its general operating expenses and to continue to explore its mineral properties. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that casts 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 year ended. 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.

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 auditor’s report.

Assessment of Impairment Indicators of Exploration and Evaluation Assets (“E&E Assets”)

As described in Note 4 to the financial statements, the carrying amount of the Company’s E&E Assets was $3,680,520 as at September 30, 2023. As more fully described in Note 3 to the financial statements, management assesses non-financial assets for indicators of impairment at each reporting period.

The principal considerations for our determination that the assessment of impairment indicators of the E&E Assets is a key audit matter are that there was judgment made by management when assessing whether there were indicators of impairment for the E&E Assets, specifically relating to the assets’ carrying amount which is impacted by the Company’s intent and ability to continue to explore and evaluate these assets. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of impairment that could give rise to the requirement to prepare an estimate of the recoverable amount of the E&E Assets.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. Our audit procedures included, but were not limited to:

• Obtaining an understanding of the key controls associated with evaluating the E&E Assets for indicators of impairment.

• Evaluating management’s assessment of impairment indicators.

• Evaluating the intent for the E&E Assets through discussion and communication with management.

• Testing the Company’s additions to E&E Assets for the period by evaluating a sample of recorded expenditures for consistency to underlying records, the capitalization requirements of the Company’s accounting policy and the requirements of the accounting standard.

• Reviewing the Company’s recent expenditure activity.

• Assessing compliance with agreements and expenditure requirements including various property agreements and vouching cash payments on a test basis.

• Obtaining, on a test basis, confirmation of title to ensure mineral rights underlying the E&E Assets are in good standing.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

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

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

We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. 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.

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year ended 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 Glenn Parchomchuk.

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Vancouver, Canada January 17, 2024

Chartered Professional Accountants

Tarku Resources Ltd.

Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

	September 30, 2023	September 30, 2022
Current
Cash and cash equivalents	$ 41,324	$ 535,377
Trade and other receivables	29,281	36,740
Prepaid expenses	12,544	12,771
	83,149	584,888
Non-current
Exploration and evaluation assets(note 4)	3,680,520	3,102,027
Total assets	$3,763,669	$3,686,915
Liabilities
Current
Trade and other payables (note 8)	$ 555,712	$ 295,987
Deferred flow through share premium (note 6)	-	303,731
	555,712	599,718
Non-current
Convertible debenture (note 5)	145,526	389,502
Total Liabilities	701,238	989,220
Equity
Share capital (note 6)	11,446,752	9,955,427
Equity component of debenture (note 5)	41,113	137,043
Shares to be issued	-	10,000
Contributed surplus	1,545,334	1,205,323
Deficit	(9,970,768)	(8,610,098)
	3,062,431	2,697,695
Total liabilities and equity	$3,763,669	$3,686,915

Nature of business and continuance of operations (note 1) Events after the reporting period (note 14)

APPROVED ON BEHALF OF THE BOARD

“Julien Davy” "Kyle Appleby" _____ ______ President, CEO & Director CFO & Director

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

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Tarku Resources Ltd.

Consolidated Statements of Loss and Comprehensive Loss

For the years ended September 30, 2023 and 2022

(Expressed in Canadian Dollars)

2023	2022 $ 93,589 116,301 800,932 173,529 34,751 112,496 137,798
Expenses Administrative expenses $ 82,662 Consulting fees (note 8) 72,000 Exploration costs (notes 4 and 8) 935,502 Investor relations expenses 60,299 Listing and filing fees 54,846 Professional fees 84,032 Share-based compensation(notes 6 and 8) 340,011 (1,629,352) Interest and accretion (note 5) (37,274) Gain on foreign exchange 2,225 Gain on settlement of flow throughpremium(note 6) 303,731
	(1,469,396) (26,545) 826 66,269
Loss and comprehensive loss for theyear $(1,360,670)	$(1,428,846)
Basic and diluted loss per common share $(0.01)	$(0.02)
Weighted average number of common shares outstanding - basic and diluted 102,921,876	73,028,623

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

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Tarku Resources Ltd.

Consolidated Statements of Cash Flows

For the years ended September 30, 2023 and 2022

(Expressed in Canadian Dollars)

		2023 2022
	Operating activities Loss for the year Adjustments: Interest and accretion Gain on settlement of flow through premium Share-based compensation Changes in non-cash working capital items: Prepaid expenses Trade and other receivables Trade and other payables Financing activities Cash received from share issuance Cash received in advance of share issuance Share issue costs Loan repayments Investing activities Additions to exploration and evaluation assets, net of Income Tax Credits received Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Cash and Cash Equivalents consists of: Cash	$ (1,360,670) $ (1,428,846) 37,274 26,545 (303,731) (66,269) 340,011 137,798 227 17,202 7,459 (6,640) 218,179 129,869
		(1,061,251) (1,190,341)
		830,500 2,128,455 - 10,000 (6,355) (92,781) - (60,000)
		824,145 1,985,674
		(256,947) (331,941)
		(256,947) (331,941)
		(494,053) 463,392 535,377 71,985
		$41,324 $535,377
		$41,324 $535,377

Supplemental cash flow information (Note 12)

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

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Tarku Resources Ltd.

Consolidated Statements of Changes in Equity

(Expressed in Canadian Dollars)

				Equity
	Number of		component		Shares to		Contributed
	Shares	Share Capital	of debenture		be issued		Surplus	Deficit	Equity
Balance, September 30, 2021	57,604,038	$ 7,836,847	$	-	$	-	$ 1,044,982	$ (7,181,252)	$ 1,700,577
Private placement	21,284,550	2,128,455		-	10,000		-	-	2,138,455
Flow through share premium	-	(370,000)		-		-	-	-	(370,000)
Property agreement	7,450,000	491,250		-		-	-	-	491,250
Share issue costs	-	(131,125)		-		-	22,543	-	(108,582)
Equity component of convertible debenture	-	-		137,043		-	-	-	137,043
Share based compensation	-	-		-		-	137,798	-	137,798
Net loss and comprehensive loss	-	-		-		-	-	(1,428,846)	(1,428,846)
Balance, September30,2022	86,338,588	$ 9,955,427	$137,043		$10,000		$1,205,323	$ (8,610,098)	$2,697,695
Balance, September 30, 2022	86,338,588	$ 9,955,427	$ 137,043		$ 10,000		$ 1,205,323	$ (8,610,098)	$ 2,697,695
Private placement	17,900,000	840,500		-	(10,000)		-	-	830,500
Property agreement	4,000,000	280,000		-		-	-	-	280,000
Share issue costs	-	(6,355)		-		-	-	-	(6,355)
Shares issued on conversion of debt	3,500,000	377,180		(95,930)		-	-	-	281,250
Share based compensation	-	-		-		-	340,011	-	340,011
Net loss and comprehensive loss	-	-		-		-	-	(1,360,670)	(1,360,670)
Balance, September30,2023	111,738,588	$11,446,752	$41,113		$	-	$1,545,334	$ (9,970,768)	$ 3,062,431

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

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Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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1. Nature of business and continuance of operations

The principal business activity of Tarku Resources Ltd. (the "Company") is the exploration for mineral resources in Arizona, U.S.A, and the province of Quebec. The Company's corporate office is located at 4710 Saint-Ambroise, suite 309B, Montréal, Quebec, H4C 2C7. The Company shares are listed on the TSX Venture Exchange under the symbol TKU, the OTCQB under the symbol TRKUF and the Frankfurt stock exchange under the symbol 7TK.

These consolidated financial statements (“financial statements”) have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its obligations in the normal course of operation. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to twelve months from the end of the reporting period. The use of these principles may not be appropriate. The Company has incurred losses since inception and expects to incur further losses in the development of its business and at September 30, 2023, the Company had a working capital deficit of $472,563 and at that date, the Company also had an accumulated deficit of $9,970,768 which has been funded primarily by the issuance of equity. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its general operating expenses and to continue to explore its mineral properties. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. These factors may cast significant doubt upon the Company’s ability to continue as a going concern. These consolidated financial statements do not reflect the adjustments to the carrying values of the assets and liabilities, the reported expenses and the statements of financial position classifications that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

2. Basis of preparation

• (a) Statement of compliance

The Company’s financial statements for the year ended September 30, 2023 are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the IFRS Interpretations Committee ("IFRIC").

These financial statements were authorized for issue by the Board of Directors on January 17, 2024.

• (b) Basis of consolidation

These financial statements include the financial statements of the Company and the entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of the subsidiary are included in the consolidated financial statements from the date that control commences until the date that control ceases. All intercompany transactions and balances have been eliminated on consolidation.

Subsidiary name	Place of Incorporation	Ownership	Principal activity
Eureka Exploration Inc. ("Eureka")	Quebec	100%	Exploration

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Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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2. Basis of preparation (continued)

• (c) Use of Estimates and Judgments

The preparation of financial statements in compliance with IFRS requires management to make certain judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions.

The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources.

The estimates and underlying assumptions are continuously evaluated and reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the revision affects both current and future periods.

Significant areas requiring the use of management estimates include amounts of provisions, if any, for impairment of exploration and evaluation assets, reclamation and environmental obligations, deferred income taxes, share-based payments, and contingencies reported in the notes to the financial statements.

Significant areas requiring the use of management judgments include recognition of impairment of exploration and evaluation assets, reclamation and environmental obligations, deferred income taxes, share-based payments, classification of financial instruments, assessment of the going concern assumption, and disclosure of contingencies reported in the notes to the financial statements.

• (d) Basis of Measurement

These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as fair value through profit or loss (“FVTPL”) which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

These consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the Company and its subsidiary.

3. Significant Accounting Policies

• (a) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of change in value.

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Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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3. Significant Accounting Policies (continued)

• (b) Exploration and evaluation assets

Exploration expenditures are expensed as incurred until an economic feasibility study has established the presence of proven and probable reserves and development of the project has commenced, at which time exploration and development expenditures incurred on the project thereafter are capitalized.

Costs incurred relating to the acquisition and claim maintenance of mineral properties, including option payments and annual fees to maintain the project in good standing, are capitalized and deferred by project until the project to which they relate is sold, abandoned, impaired or placed into production.

The Company assesses its capitalized mineral project costs for indications of impairment on a regular basis and when events and circumstances indicate a risk of impairment. A project is written down or written off when the Company determines that an impairment of value has occurred or when exploration results indicate that no further work is warranted.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers, or title may be affected by undetected defects.

• (c) Mineral tax credit

Mining exploration tax credits for certain exploration expenditures in Quebec are treated as a reduction of the exploration costs. The amounts are accounted for on an accrual basis.

(d) Reclamation and environmental obligations

The Company recognizes liabilities for statutory, contractual or legal obligations associated with the reclamation of exploration and evaluation assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The Company records the present value of the estimated costs of legal and constructive obligations required to restore the exploration sites in the period in which the obligation is incurred. Upon initial recognition of the liability, the corresponding asset retirement cost is added to the carrying amount of the related asset and the cost is amortized as an expense over the economic life of the asset using either the unit-of-production method or the straight-line method, as appropriate. Following the initial recognition of the asset retirement obligation, the carrying amount of the liability is increased for the passage of time and adjusted for changes to the amount or timing of the underlying cash flows needed to settle the obligation.

As at September 30, 2023 and 2022, the Company has no asset retirement obligations and accordingly, has not recorded an asset retirement obligation in the financial statements.

(e) Impairment of non-financial assets

At the end of each reporting period the carrying amounts of non-financial assets are reviewed to determine whether there is any indication that those assets are impaired. Impairment is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. The impairment loss is recognized in profit or loss for the period.

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Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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3. Significant Accounting Policies (continued)

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount had no impairment loss been recognized. A reversal of an impairment loss is recognized immediately in profit or loss.

• (f) Income taxes

Income tax expense comprises of current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that they relate to a business combination or items recognized directly in equity or in other comprehensive income/loss.

Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years.

Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss.

Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which the deferred tax asset can be utilized. At the end of each reporting period the Company reassesses unrecognized deferred tax assets. The Company recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

• (g) Share Capital

Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company’s common shares, flow-through shares, share warrants and options are classified as equity instruments.

Incremental costs directly attributable to the issue of new shares or options are recognized as a deduction from equity, net of tax.

Flow-through shares

Resource expenditure deductions for income tax purposes related to exploratory activities funded by flow-through share arrangements are renounced to investors in accordance with income tax legislation. Pursuant to the terms of the flow-through share agreements, these shares transfer the tax deductibility of qualifying resource expenditures to investors. On issuance, the Company bifurcates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability, and ii) share capital. Upon expenses being renounced, the Company derecognizes the liability and recognizes a deferred tax liability for the amount of tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred tax is recognized as a tax provision.

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Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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3. Significant Accounting Policies (continued)

The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Look-back Rule, in accordance with Government of Canada flow-through regulations. When applicable, this tax is accrued until qualifying expenditures are incurred.

Valuation of equity units issued in private placements

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component.

The fair value of the common shares issued in the private placements was determined to be the more easily measurable component and were valued at their fair value, as determined by the closing quoted bid price on the announcement date. The balance, if any, was allocated to the attached warrants. Any fair value attributed to the warrants is recorded as contributed surplus. If the warrants expire unexercised, the value attributed to the warrants is transferred to deficit.

(h) Earnings (loss) per common share

Basic earnings/loss per share is computed by dividing the net income or loss applicable to common shares of the Company by the weighted average number of common shares outstanding for the relevant period.

Diluted earnings/loss per common share is computed by dividing the net income or loss applicable to common shares by the sum of the weighted average number of common shares issued and outstanding and all additional common shares that would have been outstanding, if potentially dilutive instruments were converted.

For the years ended September 30, 2023 and 2022, this calculation proved to be anti-dilutive.

(i) Share-based payments

Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

The grant date fair value is recognized in profit or loss over the vesting period, described as the period during which all the vesting conditions are to be satisfied.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss, unless they are related to the issuance of shares. Amounts related to the issuance of shares are recorded as a reduction of share capital.

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Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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3. Significant Accounting Policies (continued)

When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of nontransferability, exercise restrictions, and behavioural considerations.

All equity-settled share-based payments are reflected in share-based payment reserve of contributed surplus, until exercised. Upon exercise, shares are issued from treasury and the amount reflected in share-based payment reserve of contributed surplus is credited to share capital, adjusted for any consideration paid.

Where a grant of options is cancelled or settled during the vesting period, excluding forfeitures when vesting conditions are not satisfied, the Company immediately accounts for the cancellation as an acceleration of vesting and recognizes the amount that otherwise would have been recognized for services received over the remainder of the vesting period. Any payment made to the employee on the cancellation is accounted for as the repurchase of an equity interest except to the extent the payment exceeds the fair value of the equity instrument granted, measured at the repurchase date. Any such excess is recognized as an expense.

(j) Financial instruments

The Company classifies its financial instruments based on the purpose for which they were acquired, in one of the following categories: amortized cost; fair value through other comprehensive income (loss) (“FVOCI”) or fair value through profit or loss (“FVTPL”). 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. Financial liabilities are classified as those to be measured at amortized cost unless they are designated as those to be measured at FVTPL (an irrevocable election at the time of recognition). Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs.

Financial assets

The Company will classify financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss, based on its business model for managing the financial asset and the financial asset’s contractual cash flow characteristics. The three categories are defined as follows:

i) Amortized cost - a financial asset is measured at amortized cost if both of the following conditions are met:

• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

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

ii) Fair value through other comprehensive income - financial assets are classified and measured at fair value through other comprehensive income if they are held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

iii) Fair value through profit or loss - any financial assets that are not held in one of the two business models mentioned are measured at fair value through profit or loss. When, and only when, the Company changes its business model for managing financial assets it must reclassify all affected financial assets.

13

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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3. Significant Accounting Policies (continued)

The Company’s financial assets are comprised of cash and cash equivalents and trade and other receivables. Cash is measured at fair value and receivables and deposits are measured at amortized cost.

Financial liabilities

The Company’s liabilities include trade and other payables and convertible debenture which are measured at amortized cost.

Impairment

The Company assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For receivables, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial recognition of the receivables.

• (k) New standards, amendments and interpretations not yet adopted

There are no IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company

4. Exploration and evaluation assets

Silver Strike project, Arizona

On October 12, 2020, the Company signed an earn-in and joint venture agreement (the “First Agreement”) with Mansfield Martin and associated parties (the “Vendors”), to earn up to a 75% interest over 3 years in the project by funding project expenditures of up to US$3,000,000 as follows:

• Tarku would acquire 25% of the Property after spending US$1,000,000 in exploration expenses within the first year of earn-in period

• Tarku would acquire an additional 26% (total of 51%) of the Property after spending an additional US$1,000,000 in exploration expenses and the production of a NI 43-101 report on the Property within the first 2 years of earn-in period

• Tarku would acquire an additional 24% (total of 75%) of the Property after spending an additional US$1,000,000 for a cumulative US$3,000,000 in exploration expenses within the first 3 years of earn-in period.

In addition, in accordance with the First Agreement, on April 30, 2021, Tarku issued 3,000,000 common shares to the Vendors. The shares are subject to resale restrictions of 4 equal periods of 6 months each and a right of first refusal will allow Tarku the opportunity to place these shares with existent shareholders at prevailing market prices.

At each anniversary date over the 3 years, Tarku was to pay US$175,000 to the Vendors, of which a minimum of US$50,000 will be a cash payment and US$125,000 will be paid either in shares or in cash at the Company’s discretion.

On February 1, 2022, EXLA Resources Ltd. (“EXLA”) announced it had entered into a binding agreement to purchase the underlying interests in the Property from the Vendors. On February 23, 2022, the Company entered into a new agreement (the “Second Agreement”) with EXLA which provided the Company with immediate 100% ownership of the Property from EXLA.

14

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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4. Exploration and evaluation assets (continued)

The Second Agreement terminated the First Agreement and allowed Tarku to immediately acquire 100% of the 140 mining titles in Silver Strike, now held by EXLA, in return for the following consideration:

• 7,000,000 Tarku’ Shares (the “First Tranche Shares”) issued to EXLA (issued February 25, 2022), which will give EXLA a 9.65% interest in Tarku and

• Issued to EXLA debentures being comprised of an aggregate $500,000 principal amount of a 6% convertible unsecured subordinated debenture due in 5 years. Each debenture is convertible at a price of $0.10.

• Granted EXLA a first right of refusal (ROFR) allowing EXLA the right to maintain its ownership position by participating in subsequent Tarku financings;

• Awarded EXLA a two percent (2%) NSR on the Property, one percent (1%) of which can be repurchased by Tarku for USD$1,000,000.

Tarku also has options to acquire an additional 33 patented claims in the historical area of Tombstone under agreements between third parties and the Vendors, namely the Rohe, Corkran, and Turner Options (the "Options"). These agreements are separate and independent from the First Agreement and Second Agreements. These Options require various cash payments with a total cost of US$ 700,000. The payments are spread out until October 2021 (completed) for the Corkran Option, July 2023 (paid) for the Turner Option, and July 2025 for the Rohe Option. Tarku also issued 50,000 shares for the Corkran Option. At the end of each Option acquisition, the patented claims will be added to the Property.

Max Lithium

On March 1, 2023, The Company acquired a 100% interest in 28 claims (19.25 km2) forming the MAX Lithium property in exchange for the issuance of 4,000,000 common shares of the Company. The property is located in Quebec, Canada.

Apollo gold project, Quebec

The Company owns 100% of the Apollo gold project located 50 kilometers east from Matagami, Quebec.

Admiral gold project, Quebec

The Company owns 100% of the Admiral gold project located 25 kilometers east from Matagami, Quebec.

Atlas gold project, Quebec

The Company owns 100% of the Atlas gold project located 50 kilometers east from Matagami, Quebec.

15

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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4. Exploration and evaluation assets (continued)

The following is a summary of changes to exploration and evaluation assets for the year ended September 30, 2023 and the year ended September 30, 2022:

	Balance at			Balance at
	September	Acquisitions	Impairment	September 30,
Projects	30, 2022	and renewals	and disposal	2023
Silver Strike	$ 2,722,857	$ 298,494	$ -	$ 3,021,351
Max Lithium	-	280,000	-	280,000
Apollo	176,256	-	-	176,256
Admiral	43,028	-	-	43,028
Atlas	159,885	-	-	159,885
	$ 3,102,027	$ 578,494	$-	$ 3,680,520

	Balance at			Balance at
	September	Acquisitions	Impairment	September
Projects	30, 2021	and renewals	and disposal	30, 2022
Silver Strike	$ 1,367,743	$ 1,355,114	$ -	$ 2,722,857
Apollo	173,562	2,695	-	176,256
Admiral	43,028	-	-	43,028
Atlas	159,885	-	-	159,885
	$1,744,219	$1,357,809	$-	$3,102,027

The following is a summary of exploration and evaluation expenditures for the year ended September 30, 2023:

					Silver
	Apollo	Atlas	**Max Lithium **	Matagami	Strike	**Total **
Data compilation and planning	$ -	$ -	$ -	$ 2,625	$ -	$ 2,625
Drilling and field programs	616,875	-	-	-	-	616,875
Analysis	145,176	-	-	-	-	145,176
Geological consulting	8,550			11,050	11,484	31,084
Geological prospecting and survey	4,038	-	6,622	-	-	10,660
IP/Magnetic survey	-	-	-	-	-	-
Property costs	5,055	4,615	582		42,740	52,992
Project management	36,000	36,000	36,000	18,000	18,000	144,000
Exploration input tax credit	(68,080)	-	-	-	-	(68,080)
Total exploration expenditures	$ 747,614	$ 40,615	$ 43,374	$ 31,675	$ 72,224	$ 935,502

16

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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4. Exploration and evaluation assets (continued)

The following is a summary of exploration and evaluation expenditures for the year ended September 30, 2022:

					Silver
	Apollo	Atlas	Admiral	Matagami	Strike	Total
	$	$	$	$
Data compilation and planning	360	360	360	1,200	$ 9,955	$ 12,235
Geological consulting	6,039	6,039	6,039	-	64,694	82,810
Geological prospecting and
survey	56,951	56,951	56,951	-	-	170,854
IP/Magnetic survey	-	-	-	-	299,266	299,266
Property costs	-	-	-	-	68,149	68,149
Project management	28,800	28,800	28,800	28,800	28,800	144,000
Other	9,801	6,434	(299)	-	7,682	23,617
	$	$	$	$
Total exploration expenditures	101,951	98,584	91,851	30,000	$ 478,546	$800,932

Exploration input tax credits (“ITC”) are received from the Quebec government for qualifying exploration work. Expenditures incurred to satisfy flow through share issuance does not qualify for the ITC.

5. Convertible debenture

The Company issued a $500,000 convertible debenture in accordance with the EXLA Agreement (note 4). The debenture is convertible into common shares at a price of $0.10, is unsecured, bears an annual interest rate of 6% and has a 5-year term.

The convertible debenture has been classified into its separate debenture liability and equity portions in the Company’s consolidated financial statements by the fair value method using an effective interest of 12% when valuing the liability first. This resulted in an initial amount of $362,957 being allocated to the liability portion and $137,043 being allocated to the equity portion. The carrying value of the debenture will be accreted up to its face value over the term to maturity.

On April 19, 2023, $150,000 of the principal was converted into 1,500,000 common shares, and on June 28, 2023, $200,000 of the principal was converted into 2,000,000 common shares.

Opening balance Issuance - original face value of convertible debenture Less: Equity portion of convertible debenture Conversion to shares – liability portion Add: interest and accretion	September 30, 2023 September 30, 2022
	$ 389,502 $ - - 500,000 - (137,043) (281,250) 37,274 26,545
	$145,526 $389,502

17

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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6. Share capital

(a) Authorized

Unlimited common shares with no par value

Issued

• (i) On October 15, 2021, the Company issued 50,000 shares in accordance the Corkran Option (note 4).

• (ii) On December 3, 2021, the Company closed a private placement for gross proceeds of $750,000. The private placement consisted of 7,500,000 flow-through shares at $0.10 per share. The Company paid $38,500 in cash as a commission and issued 385,000 finders’ warrants, exercisable at $0.15 per common share until December 3, 2023. The finders’ warrants were valued at $13,934 using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 1.01%, expected life of 2 years, annualized volatility of 133%, and a dividend rate of nil. Other issue costs amounted to $6,774.

• (iii) On December 15, 2021, the Company issued 400,000 common shares for a property settlement agreement.

• (iv) On February 25, 2022, the Company issued 7,000,000 shares in accordance with the EXLA agreement (see note 4). The shares were issued at a fair market value of $0.065 for a total value of $455,000.

• (v) On April 13, 2022, the Company closed a non-brokered private placement for gross proceeds of $638,455. The private placement consisted of 6,384,550 units at $0.10 per unit. Each unit consisted of one common share and one half of one common share purchase warrant. Each whole warrant entitles the holder to acquire one common share at a price of $0.15 per common share for a period of twenty-four months. No value was attributed to the warrant component of the units sold. The Company paid $3,000 in cash as a commission.

• (vi) On September 9, 2022, the Company closed a non-brokered private placement for gross proceeds of $740,000. The private placement consisted of 7,400,000 flow through shares at $0.10 per share. The Company paid $44,500 in cash as a commission, and issued 434,000 broker warrants, exercisable to purchase one common share at an exercise price of $0.15 until September 9, 2024. The finders’ warrants were valued at $8,609 using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 3.76%, expected life of 2 years, annualized volatility of 121%, and a dividend rate of nil. Other issuance costs amounted to $15,808.

• (vii) On December 21, 2022, the Company closed a non-brokered private placement for gross proceeds of $550,000. The private placement consisted of 13,750,000 units at $0.04 per unit. Each unit is comprised of one common share and one common share purchase warrant. Each whole warrant entitles the holder to acquire one common share at a price of $0.08 for a period of 36 months. No value was attributed to the warrant component of the units sold.

18

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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6. Share capital (continued)

• (viii) On March 3, 2023, the Company closed a non-brokered private placement for gross proceeds of $290,500. The private placement consisted of 4,150,000 units at $0.07 per unit. Each unit is comprised of one common share and one common share purchase warrant. Each whole warrant entitles the holder to acquire one common share at a price of $0.12 for a period of 24 months. No value was attributed to the warrant component of the units sold.

• (ix) On March 4, 2023, the Company issued 4,000,000 common shares for the acquisition of the Max Lithium project (note 4)

• (x) See note 5 for 3,500,000 common shares issued on conversion of debt.

(b) Stock option Plan

The Company has a stock option plan (the "Plan") whereby options to purchase common shares are granted by the board of directors to directors, officers, employees and consultants to the Company. Under the terms of the Plan, the Company has reserved an amount of common shares for options up to 10% of the issued and outstanding number of common shares. Options granted under the Plan are non-transferable; expire no later than the tenth anniversary of the date the option is granted and must comply with the requirements of the regulatory authorities. Options granted under the Plan are subject to vesting terms determined by the board.

A summary of the changes to outstanding and exercisable stock options during the year ended September 30, 2023 and the year ended September 30, 2022 is presented below.

	September 30, 2023 September 30, 2022
	Options Weighted Ave Price Options Weighted Ave Price
Beginning of year Options granted Options expired Options cancelled	5,886,922 $ 0.14 4,502,306 $ 0.15 3,940,000 0.10 1,500,000 0.10 - - (115,384) (0.10) - - - -
End ofyear	9,826,922 $ 0.12 5,886,922$ 0.14

On February 18, 2022, the board of directors of the Company approved the grant of 1,500,000 stock options, pursuant to the Plan, to officers and directors. The options are exercisable at $0.10 per share, vest immediately and, if not exercised, expire February 16, 2027, subject to earlier expiration in accordance with the Plan and applicable policies of the TSX Venture Exchange.

The fair value of options issued on February 18, 2022, using the Black-Scholes option pricing model, was $137,798 which was allocated to the share-based compensation expense with a corresponding increase in contributed surplus. Assumptions used in the pricing model for the year are as follows: risk-free interest rate of 1.73%, expected life of 5 years, annualized volatility of 154%, and a dividend rate of nil.

19

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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6. Share capital (continued)

On December 21, 2022, the board of directors of the Company approved the grant of 500,000 stock options, to a consultant of the Company. The options are exercisable at $0.10 per share, vest immediately and, if not exercised, expire December 21, 2027, subject to earlier expiration in accordance with the Plan and applicable policies of the TSX Venture Exchange.

On March 1, 2023, the board of directors of the Company approved the grant of 3,440,000 stock options, to directors, officers and consultants of the Company. The options are exercisable at $0.10 per share, vest immediately and, if not exercised, expire December 21, 2027, subject to earlier expiration in accordance with the Plan and applicable policies of the TSX Venture Exchange.

The fair value of options issued on December 21, 2022 and March 1, 2023, using the Black-Scholes option pricing model, was $340,011 which was allocated to the share-based compensation expense with a corresponding increase in contributed surplus. Assumptions used in the pricing model for the year are as follows: risk-free interest rate of 3.07%, expected life of 5 years, annualized volatility of 148%, and a dividend rate of nil.

At September 30, 2023, the following table summarizes information about options outstanding:

Grant date	Number of options Expiry date Exercise price	Exercisable
March 13, 2019 July 30, 2020 November 11, 2020 February 18, 2022 December 21, 2022 March 1, 2023	376,922 March 13, 2024 $ 0.10 810,000 July 30, 2025 $ 0.11 3,200,000 November 11, 2025 $ 0.17 1,500,000 February 16, 2027 $ 0.10 500,000 December 21, 2027 $ 0.10 3,440,000 March 1, 2028 $ 0.10 9,826,922	376,922 810,000 3,200,000 1,500,000 500,000 3,440,000
		9,826,922

The Weighted average expiry date is 3.13. The weighted average exercise price is $0.14.

(c) Warrants

During the year ended September 30, 2023 and the year ended September 30, 2022, the Company had the following warrant activities:

	Number of	Exercise	Weighted Average
	Warrants	Price	Exercise Price
Balance, September 30, 2021	24,360,956		$ 0.12
Issued	4,011,275	$ 0.15
Exercised	(10,548,456)	$ 0.09
Balance, September 30, 2022	17,823,775		$ 0.15
Issued	13,750,000	$ 0.08
Issued	4,150,000	$ 0.12
Balance,September 30,2023	35,723,775		$0.12

20

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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6. Share capital (continued)

At September 30, 2023, the following table summarizes information about warrants outstanding:

Total issued and outstanding	Warrants Expiry Exercise Outstanding Date Price
Balance, September 30, 2023	13,812,500 May 1, 2024 $0.15 385,000 Dec 3, 2023 $0.15 3,192,275 Apr 13, 2024 $0.15 434,000 Sept 9, 2024 $0.15 13,750,000 Dec 21, 2025 $0.08 4,250,000 Mar 3, 2025 $0.12
	35,723,775 $0.12

• (d) Other income on settlement of flow-through premium liability

During the year ended September 30, 2022, the Company closed a flow-through financing and recorded a total premium received on flow-through shares in the amount of $370,000, which was recorded as a liability to be reversed to profit and loss as the eligible expenditures were incurred. As at September 30, 2022, the Company had reduced the liability (based on expenditures incurred) to $303,731 and accordingly, had recorded other income of $66,269. During the year ended September 30, 2023, the $303,731 liability was reduced and recorded as other income.

7. Commitments and contingencies

• (a) The Company renounced $740,000 of qualifying exploration expenditures to the shareholders effective December 31, 2022. Under the “look back” provision governing flow-through shares, the $740,000 of the amount has to be spent by December 31, 2023.

8. Related party transactions

The Company had the following related party transactions during the years ended September 30, 2023 and September 30, 2022:

• (a) The Chief Executive Officer (the “CEO”) and director of the Company provided consulting services to the Company. Fees incurred during the period were $168,000 (2022 - $168,000). At September 30, 2023, $241,448 (September 30, 2022 - $96,193) is recorded in trade and other payables. Included in trade and other payables is also $55,580 for expenses paid by the CEO on behalf of the Company.

• (b) The Chief Financial Officer and director of the Company provided consulting services to the Company. Fees incurred during the period were $48,000 (2022 - $48,000). At September 30, 2023, $63,080 (September 30, 2022 - $33,880) is recorded in trade and other payables.

21

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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8. Related party transactions (continued)

Key Management Compensation:

	2023	2022
Consulting fees	$ 72,000	$ 72,000
Exploration expense	144,000	144,000
Share-based compensation to directors and officers	190,804	137,798
	$ 406,804	$ 353,798

9. Segmented information

The Company operates in one operating segment, being the exploration of mineral properties. The Company’s exploration and evaluation assets by geographic location are as follows:

	September 30, 2023	September 30, 2022
Arizona, U.S.A	$ 3,021,350	$ 2,722,857
Quebec, Canada	659,170	379,170
	$3,680,520	$3,102,027

10. Capital management

The Company includes cash and cash equivalents and equity, comprising of issued common shares, contributed surplus and deficit, in the definition of capital.

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management but relies on the expertise of the Company’s management to sustain future development of the business.

The properties in which the Company currently has an interest are in the exploration stage; as such the Company is dependent upon external financings to fund activities. In order to carry out planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the year ended September 30, 2023. The Company was not subject to any externally imposed capital requirements.

22

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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11. Financial risk management

The Company is exposed in varying degrees to a variety of financial instrument related risks by virtue of its activities. The overall financial risk management program focuses on preservation of capital and protecting current and future Company assets and cash flows by reducing exposure to risks posed by the uncertainties and volatilities of financial markets.

The types of risk exposure and the way in which such exposures are managed are as follows:

Credit Risk - The Company’s credit risk is primarily attributable to its liquid financial assets. The Company limits exposure to credit risk on liquid financial assets through maintaining its cash and cash equivalents with high-credit quality financial institutions. The Company does not have financial assets that are invested in asset backed commercial paper.

Liquidity Risk – The Company ensures that there is sufficient capital in order to meet short term business requirements.

Interest rate risk – In respect to the Company’s financial assets, the interest rate risk mainly arises from the interest rate impact on our cash and cash equivalents and convertible debentures. For the year ended September 30, 2023, every 1% fluctuation in interest rates up or down would have had little impact on net loss.

Commodity price risk – The value of the Company’s mineral resource properties is related to the price of various commodities and the outlook for them. Commodity prices have historically fluctuated widely and are affected by numerous factors outside of the Company’s control, including, but not limited to, industrial retail demand, central bank lending, forward sales by producers and speculators, level of worldwide production and short-term changes in supply and demand.

September 30, 2023	Level 1	Level 2	Level 3	Total
Assets:
Cash and cash equivalents	$ 41,324	$-	$-	$ 41,324

Fair Value - The Company has various financial instruments comprised of cash and cash equivalents, trade and other receivables and trade and other payables.

For disclosure purposes, all financial instruments measured at fair value are categorized into one of three hierarchy levels, described below. Each level is based on the transparency of the inputs used to measure the fair values of assets and liabilities:

Level 1 – Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2 – Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3 – Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

23

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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12. Supplemental cash flow information

Non-cash investing and financing activities

During the year ended September 30, 2023,

• The Company issued 3,500,000 common shares with a value of $350,000 upon the conversion of $350,000 of debt. $95,930 of the amount was allocated against the equity component of the debt.

• The Company issued 4,000,000 shares in accordance with the Max Lithium property agreement with a fair value of $280,000.

• Exploration costs remaining in accounts payable of $76,163.

During the year ended September 30, 2022,

• The Company issued broker warrants with a fair value of $22,543.

• The Company issued 7,450,000 shares in accordance with the property agreements with a fair value of $491,250.

• The Company obtained $500,000 in convertible debt in connection to a property agreement whereby $362,957 was allocated to the debt component and $137,043 was allocated to the equity component.

• Share issue costs remaining in accounts payable of $15,801.

• Exploration costs remaining in accounts payable of $34,617.

• Flow through share premium of $370,000.

13. Income taxes

• (a) For the years ended September 30, 2023 and 2022, a reconciliation of income taxes at statutory rates with reported taxes is as follows:

	2023	2022
Loss before income taxes for the year	$ (1,360,670)	$ (1,428,846)
Statutorytax rate	26.5%	26.50%
Income tax recovery	(361,000)	(379,000)
Change in statutory and other	(6,000)	6,000
Permanent differences	10,000	19,000
Impact of flow through share	196,000	-
Share issue costs	(1,000)	(34,000)
Adjustment to prior years provision
versus statutory tax returns and expiry	37,000	-
of non-capital losses
Unrecognized deductible temporary differences	125,000	388,000
Deferred income tax expense (recovery)	$ -	$ -

24

Tarku Resources Ltd. Notes to the Consolidated Financial Statements For the years ended September 30, 2023 and 2022 (Expressed in Canadian dollars)

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13. Income taxes (continued)

• (b) The component of the Company's deferred income tax asset is a result of the origination and reversal of temporary differences and is comprised of the following:

	September 30, 2023	September 30,2022
Exploration and evaluation assets	$ 726,000	$ 682,000
Share issue costs	32,000	55,000
Non-capital losses carried forward	1,309,000	1,205,000
Deferred tax assets	2,067,000	1,942,000
Unrecognized deferred taxassets	(2,067,000)	(1,942,000)
Net deferred tax assets	$ -	$ -

The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have not been included on the statement of financial position are as follows:

		Expiry Date			Expiry Date
	2023	Range		2022	Range
Temporary Differences
Share issue costs	$ 121,000	2040 to 2046	$	206,000	2040 to 2045
Exploration and evaluation assets	$ 2,741,000	No expiry date		2,572,000	No expiry date
Non-Capital losses	$4,941,000	2031 to 2042		4,549,000	2031 to 2041

Tax attributes are subject to review, and potential adjustment, by tax authorities.

14. Events after the reporting period

On December 18, 2023, the Company closed a non-brokered private placement (the “Private Placement”) for aggregate gross proceeds of $375,000. This Private Placement is comprised of 15,000,000 FlowThrough Shares of the Company at a price of $0.025 per share.

The Company paid finder’s fees in a cash commission equal to 7% of aggregate proceeds from the sale of flow-through shares sourced by the finder totaling $22,750, as well as finder’s warrants (the “Finder’s Warrants”) in an amount of 910,000 which is equal to 7% of the aggregate number of flow-through shares sourced by the finder pursuant to the Private Placement. Each Finder’s Warrant is exercisable to purchase one Common Share at an exercise price of $0.05 until December 18, 2025.

25