Gungnir Resources : YE 2023 Financial Statements

GUNGNIR

Annual Financial Statements

December 31, 2023 and 2022

(expressed in Canadian dollars)

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Gungnir Resources Inc.

Report on the Audit of the Consolidated Financial Statements

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 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 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.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined that there is the following key audit matter to communicate in our auditor's report.

Key audit matter:

How our audit addressed the key audit matter:

Assessment of impairment indicators of Exploration and evaluation assets

Our approach to addressing the matter included the following procedures, among others:

Refer to note 2(g) - Material accounting policy information: Exploration and evaluation properties; note 4

• Critical accounting estimates and judgements; and note
  6 Exploration and evaluation properties

Management assesses at each reporting period whether there is an indication that the carrying value of exploration and evaluation assets may not be recoverable. Management applies significant judgement in assessing whether indicators of impairment exist that necessitate impairment testing. Internal and external factors, such as (i) a significant decline in the market value of the Company's share price; (ii) changes in the Company's assessment of

Evaluated the reasonableness of management's assessment of impairment indicators, which included the following:

• Assessed the Company's market capitalization in comparison to the Company's net assets, which may be an indication of impairment.
• Assessed the completeness of the factors that could be considered indicators of impairment, including consideration of evidence obtained in other areas of the audit.

whether commercially viable quantities of mineral resources exist within the property; and (iii) changes in metal prices, capital and operating costs, are evaluated by management in determining whether there are any indicators of impairment.

We considered this a key audit matter due to (i) the significance of the exploration and evaluation asset balance and (ii) the significant audit effort and subjectivity in applying audit procedures to assess the factors evaluated by management in its assessment of impairment indicators, which require significant judgement.

• Confirmed that the Company's right to explore its property interests had not expired.
• Obtained management's written representation in respect to the Company's intention of continue advancing its exploration and evaluation assets.
• Assessed the reasonability of the Company's overall financial statement disclosure in respect to its exploration and evaluation assets.

Other Information

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

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

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, and in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the 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 Consolidated Financial Statements

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

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

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

Chartered Professional Accountants

Vancouver, BC, Canada

April 29, 2024

Gungnir Resources Inc.

Statements of Financial Position

(expressed in Canadian dollars)

As at			December 31,		December 31,
			2023		2022
	Note
Assets
Current assets
Cash and cash equivalents	3	$	1,309,657	$	2,498,312
Accounts receivable and prepaids	4		13,268		21,412
			1,322,925		2,519,724
Non-current assets
Deposits	3		29,590		29,183
Reclamation bonds	5		25,496		28,851
Exploration and evaluation properties	6		3,703,950		3,159,305
Total assets			5,081,961		5,737,063
Liabilities and equity
Current liabilities
Accounts payable and accrued liabilities			49,500		51,434
Total liabilities			49,500		51,434
Equity
Share capital	7		33,375,967		33,375,967
Stock-based payment reserve	7		1,109,417		1,067,519
Warrants	7		1,211,948		1,211,948
Contributed surplus	7		6,811,670		6,795,385
Deficit			(37,476,541)		(36,765,190)
Total equity			5,032,461		5,685,629
Total liabilities and equity		$	5,081,961	$	5,737,063

Nature and continuance of operations (Note 1)

Subsequent event (Note 14)

The financial statements were approved by the board of directors on April 29, 2024

See accompanying notes to the financial statements

Gungnir Resources Inc.

Statements of Comprehensive Loss

(expressed in Canadian dollars)

For the Years Ended December 31,	Note		2023		2022
Operating expenses
General and administration	10	$	129,332	$	141,154
Compensation	10		570,475		732,716
Professional fees	10		35,162		86,838
			(734,969)		(960,708)
Other items
Interest income			39,519		8,223
Foreign exchange			(13,143)		(10,510)
Impairment of exploration and	6		(2,758)		-
evaluation assets
Net loss and comprehensive loss		$	(711,351)	$	(962,995)
Weighted average number of shares			119,629,786		114,236,125
outstanding
Basic and diluted loss per share		$	(0.01)	$	(0.01)

See accompanying notes to the financial statements

Gungnir Resources Inc.

Statements of Cash Flows

(expressed in Canadian dollars)

For the Years Ended December 31,		2023		2022
Operating activities
Net loss for the year	$	(711,351)	$	(962,995)
Adjustments for:
Accrued interest		(946)		(555)
Stock-based compensation		58,183		262,395
Foreign exchange		(175)		1,038
Impairment of exploration and evaluation assets		2,758		-
		(651,531)		(700,117)
Net change in non-cash working capital:
GST/VAT and other accounts receivable		7,231		(10,558)
Prepaid expenses		913		26,458
Accounts payable and other accrued liabilities		(4,401)		11,613
Net cash used in operating activities		(647,788)		(672,604)
Financing activity
Issue of units, net of share issue costs		-		2,444,721
Exercise of options		-		30,000
Exercise of warrants		-		25,600
Net cash from financing activities		-		2,500,321
Investing activities

Reclamation Bonds		4,069
Deposits		-
Exploration and evaluation expenditures		(544,936)
Option proceeds		-
Net cash used in investing activities		(540,867)
Net increase (decrease) in cash		(1,188,655)
Cash and cash equivalents, beginning of year		2,498,312
Cash and cash equivalents, end of year	$	1,309,657	$

6,000

(17,250)

(759,549)

250,000

(520,799)

1,306,918

1,191,394

2,498,312

See accompanying notes to the financial statements

Gungnir Resources Inc.

Statements of Changes in Equity

(expressed in Canadian dollars)

	Shares		Share		Stock-based				Contributed				Total
	(Note 7)		Capital		compensation		Warrants		surplus		Deficit		equity
January 1, 2022	97,379,450	$	31,789,790	$	764,552	$	344,264	$	6,789,497	$	(35,802,195)	$	3,885,908
Warrants exercised	332,000		25,600		-		-		-		-		25,600
Re-allocated on exercise of warrants	-		7,497		-		(5,385)		(2,112)		-		-
Options exercised	600,000		30,000		-		-		-		-		30,000
Re-allocated on exercise of options	-		24,000		(24,000)		-		-		-		-
Re-allocated on expiry of options and warrants	-		-		(8,000)		-		8,000		-		-
Private placement - units issued	21,318,336		1,685,131		-		873,069		-		-		2,558,200
Share issue costs	-		(186,051)		72,572				-		-		(113,479)
Stock-based compensation	-		-		262,395		-		-		-		262,395
Net loss	-		-		-		-		-		(962,995)		(962,995)
December 31, 2022	119,629,786	$	33,375,967	$	1,067,519	$	1,211,948	$	6,795,385	$	(36,765,190)	$	5,685,629
Re-allocated on expiry of options and warrants	-		-		(16,285)		-		16,285		-		-
Stock-based compensation	-		-		58,183		-		-		-		58,183
Net loss	-		-		-		-		-		(711,351)		(711,351)
December 31, 2023	119,629,786	$	33,375,967	$	1,109,417	$	1,211,948	$	6,811,670	$	(37,476,541)	$	5,032,461

See accompanying notes to the financial statements

Gungnir Resources Inc.

Notes to the Financial Statements

For the years ended December 31, 2023 and 2022

(expressed in Canadian dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS
   The Company is incorporated in British Columbia, Canada and is involved in the acquisition and exploration of mineral property interests. At the date of these financial statements, the Company has not been able to identify a known body of commercial grade ore on any of its properties and the ability of the Company to recover the costs it has incurred to date on these properties is dependent upon the Company being able to identify a commercial ore body, to finance its exploration and development costs and to resolve any environmental, regulatory, or other constraints which may hinder the successful development of the property. The Company is in the development stage with no major source of operating revenue and is dependent upon equity financing to maintain its current operations. These financial statements have been prepared on the basis of the Company being a going concern and able to realize its assets and discharge its liabilities in the normal course of business.
   The Company will eventually need to seek additional financing to meet its ultimate exploration and development objectives. The Company has a reasonable expectation that additional funds will be available when necessary to meet ongoing exploration and development costs. However, there can be no assurance that the Company will continue to be able to obtain additional financial resources or will achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, the Company will be required to re-evaluate its planned expenditures until additional funds can be raised through financing activities.
   The primary office of the Company is located at 1688 - 152nd Street, Suite 404, Surrey, BC, V4A 4N2.
2. MATERIAL ACCOUNTING POLICY INFORMATION

(a) Statement of Compliance

These financial statements have been prepared in accordance with International Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

(b) Basis of presentation

These financial statements have been prepared on a going concern basis, under the historical cost basis except for financial instruments designated at fair value through profit and loss, which are stated at their fair value. These financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

(c) Significant accounting judgments and estimates

The preparation of these financial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the financial statement date and the reported amounts of revenues and expenses during the period. On an ongoing basis, management evaluates its judgments and estimates by using its experience and other factors it believes to be reasonable. Actual results could differ from those estimates.

These financial statements include estimates which are uncertain, the impacts of which are pervasive and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in future periods if it affects both current and future periods. Significant estimates and judgments include, but are not limited to, valuation of exploration and evaluation properties, inputs used in the valuation of the Company's warrants and stock options and income taxes.

Gungnir Resources Inc.

Notes to the Financial Statements

For the years ended December 31, 2023 and 2022

(expressed in Canadian dollars)

2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

1. Significant accounting judgments and estimates (continued)
2. • Impairment of exploration and evaluation properties. Management applies judgment in determining whether there are indicators of impairment in connection with properties on which costs have been deferred, as described in note 2 (g).
   • Valuation of warrants and stock options. Management makes certain estimates when determining the fair value of warrants and stock options awards, and the number of warrants and stock options that are expected to vest. For warrants issued, these estimates affect their amounts recognized either within assets or equity. For stock option awards, these estimates affect the amounts recognized in the statement of comprehensive income.
   • Income taxes. Income taxes payable and deferred income tax assets and liabilities require management to make judgments in the interpretation and application of the relevant tax laws. The actual amount of income taxes becomes certain only when filed and accepted by the relevant authorities.
3. Functional currency and foreign currency transactions

The functional and presentation currency of the Company is the Canadian dollar. Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on dates of transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

(e) Financial instruments and financial risk

The Company recognizes financial assets and liabilities on the statement of financial position when it becomes party to the contractual provisions of the instrument.

1. Financial assets
   Cash and cash equivalents are classified as subsequently measured at amortized cost. Financial assets at fair value through gain or loss are measured at fair value.
   Amounts receivable, exclusive of GST, are non-interest bearing and are recognized at the face amount, except when fair value is materially different, and are subsequently measured at amortized cost. Amounts receivable recorded are net of lifetime expected credit losses. The Company applies the simplified approach to determining expected credit losses, which requires expected credit losses to be recognized upon initial recognition of the receivables.
   Reclamation bonds are classified as subsequently measured at amortized cost.