Bonterra Resources : FS December 31 2023 Final

Bonterra Resources Inc.

Financial Statements

For the Years Ended December 31, 2023 and 2022

(Expressed in Canadian Dollars)

Bonterra Resources Inc.

For the Years Ended December 31, 2023 and 2022

INDEX	Page
Financial Statements
Management's Responsibility for Financial Reporting
Independent Auditor's Report to the Shareholders
Statements of Financial Position	1
Statements of Comprehensive Loss	2
Statements of Changes in Equity	3
Statements of Cash Flows	4
Notes to the Financial Statements	5-31

MANAGEMENT'S RESPONSIBILITY FOR

FINANCIAL REPORTING

The accompanying financial statements of Bonterra Resources Inc. (the "Company") are the responsibility of the management and Board of Directors of the Company.

The financial statements have been prepared by management, on behalf of the Board of Directors, in accordance with IFRS Accounting Standards ("IFRS"). When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances. Financial statements are not precise since they include certain amounts based on estimates and judgments. Management has determined such amounts on a reasonable basis in order to ensure that the financial statements are presented fairly, in all material respects.

The Company maintains systems of internal control that are designed by management to provide reasonable assurance that assets are safeguarded from loss or unauthorized use and to produce reliable accounting records for financial reporting purposes.

The Board of Directors is responsible for reviewing and approving the financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the financial statements together with other financial information of the Company for issuance to the shareholders.

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

"Marc-Andre Pelletier" (signed)		"Pier-EliseHebert-Tremblay" (signed)
Chief Executive Officer		Chief Financial Officer

Crowe MacKay LLP

1100 - 1177 West Hastings Street

Vancouver, BC V6E 4T5

Main [phone]

Fax [phone]

www.crowemackay.ca

Independent Auditor's Report

To the Shareholders of Bonterra Resources Inc.

Opinion

We have audited the financial statements of Bonterra Resources Inc. (the "Company"), which comprise the statements of financial position as at December 31, 2023 and December 31, 2022 and the statements of comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and December 31, 2022, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

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 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 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 is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 to the financial statements which describes the material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the year ended December 31, 2023. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be a key audit matter to be communicated in our report. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Asset retirement obligations

The Company recognizes asset retirement obligations ("ARO") for future reclamation efforts related to current and past sites. The Company's related accounting policy is included in Note 4 and the related estimation uncertainty in Note 5 to the financial statements. As described in Note 16 to the financial statements, the ARO totaled $11.1 million at December 31, 2023. We identified the Company's ARO estimate as a key audit matter.

Why the Matter is a Key Audit Matter

We considered the Company's ARO a key audit matter due to high professional judgment by management when assessing this obligation, including the assessment of the nature and extent of future work to be performed, the future cost of performing the rehabilitation work, the timing of when the rehabilitation will take place and economic assumptions such as the discount rate and inflation rates applicable to future cash outflows associated with rehabilitation activities to bring them to their present value. Auditing these assumptions involved especially challenging and subjective audit judgment due to the nature and extent of audit effort required to address these matters.

How the Key Audit Matter was Addressed in the Audit

In responding to the key audit matter, we performed the following audit procedures, amongst others:

• We obtained an understanding of management's process to develop its ARO estimate;
• We engaged a subject matter expert to assist us in the evaluation of the assumptions, methodology and data used by the Company;
• We evaluated the methodology used, and tested the significant assumptions in the ARO calculations;
• We have reviewed quotations from a few vendors to support the key cost inputs used in the ARO calculations;
• We compared assumptions including the risk-free rate and inflation rate to current market data;
• We performed recalculations to verify the accuracy of the estimate; and
• We evaluated the adequacy of the Company's disclosures relating to ARO.

Other Information

Management is responsible for the other information. The other information comprises:

• Management's Discussion and Analysis

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

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

Responsibilities of Management and Those Charged with Governance for the Financial Statements

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

In preparing the 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 Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 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 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 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 financial statements, including the disclosures, and whether the financial statements represent 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 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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Pejman Mahlooji.

Chartered Professional Accountants

Vancouver, Canada

April 24, 2024

Bonterra Resources Inc.

Statements of Financial Position

(Expressed in Canadian Dollars)

As at,	December 31, 2023		December 31, 2022
Assets
Current
Cash	$	2,793,796	$	7,394,113
Marketable securities (note 7)		60,000		60,000
Receivables (note 8)		1,519,704		2,974,285
Prepaids		120,963		-
		4,494,463		10,428,398
Security and contract deposits (note 9)		3,000,431		1,689,252
Property, plant and equipment (note 10)		19,358,525		20,445,090
	$	26,853,419	$	32,562,740
Liabilities
Current
Trade and other payables (notes 12 and 13)	$	6,987,620	$	6,576,871
Current portion of long-term debt (note 14)		-		51,740
Flow-through premium liability (note 15)		-		3,940,144
		6,987,620		10,568,755
Asset retirement obligations (note 16)		11,100,000		6,534,000
Long-term debt (note 14)		-		645
		18,087,620		17,103,400
Shareholders' Equity
Share Capital (note 17)		277,530,901		277,330,901
Share-based Payments Reserve (note 17)		20,962,388		20,252,388
Deficit		(289,727,490)		(282,123,949)
		8,765,799		15,459,340
	$	26,853,419	$	32,562,740
Going Concern (note 2)
Commitments and Contingent Liabilities (note 20)
Subsequent Events (note 8, 17 and 22)
Approved on behalf of the Board:
"Peter O'Malley"	"Matthew Happyjack"
……………………………… Director	……………………………… Director
Peter O'Malley	Matthew Happyjack

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

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Bonterra Resources Inc.

Statements of Comprehensive Loss

(Expressed in Canadian Dollars)

For the year ended December 31,		2023		2022
Expenses
Exploration and evaluation (notes 10, 11 and 16)	$	11,475,363	$	12,104,075
Mill and mine care and maintenance (note 10)		1,520,774		6,922,600
Salaries, management and director fees (note 13)		1,777,949		2,617,747
Office, general and other		563,369		351,017
Professional fees (note 13)		349,492		654,910
Rent		70,421		66,100
Share-based payments (notes 13 and 17)		710,000		1,657,000
Shareholder communications and investor relations		223,072		329,072
Transfer agent and filings fees		67,686		102,110
Travel		57,934		41,239
Loss Before Other Items		(16,816,060)		(24,845,870)
Other Items		-
Impairment of property, plant and equipment (note 10)			(16,544,757)
Gain on sale of property, plant and equipment (note 10)		28,635		-
Bad debt expense (Note 8)		(150,000)		-
Gold sales, net (note 11)		3,021,120		-
Miscellaneous income (note 11)		2,209,493		270,747
Recovery of flow-through premium liability (note 15)		3,940,144		6,183,856
Net interest income		163,127		299,319
Net Loss and Comprehensive Loss for the year	$	(7,603,541)	$	(34,636,705)
Basic and Diluted Loss Per Share	$	(0.06)	$	(0.28)
Weighted Average Number of Common Shares Outstanding -		126,301		123,382
Basic and Diluted (000's)

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

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Bonterra Resources Inc.

Statements of Changes in Equity

(Expressed in Canadian Dollars)

	Share Capital		Share-based
	Number of				Payments
	Shares		Share Capital		Reserve		Deficit		Total
Balance, December 31, 2021	111,257,000	$	260,730,776	$	18,681,388	$	(247,487,244)	$	31,924,920
Private placements	14,788,500		25,020,060		-		-		25,020,060
Flow-through premium liability	-		(7,126,000)		-		-		(7,126,000)
Share issue costs	-		(1,553,935)		-		-		(1,553,935)
Exercise of options	150,000		174,000		-		-		174,000
Transfer of reserve on exercise of options	-		86,000		(86,000)		-		-
Share-based payments	-		-		1,657,000		-		1,657,000
Net loss and comprehensive loss for the year	-		-		-		(34,636,705)		(34,636,705)
Balance, December 31, 2022	126,195,500		277,330,901		20,252,388		(282,123,949)		15,459,340
Shares issued for services	1,162,115		200,000		-		-		200,000
Share-based payments	-		-		710,000		-		710,000
Net loss and comprehensive loss for the year	-		-		-		(7,603,541)		(7,603,541)
Balance, December 31, 2023	127,357,615	$	277,530,901	$	20,962,388	$	(289,727,490)	$	8,765,799

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

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