InZinc Mining : Year End 2023 Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in Canadian Dollars)

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of

InZinc Mining Ltd.

Opinion

We have audited the accompanying consolidated financial statements of InZinc Mining Ltd. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of loss and comprehensive loss, changes in shareholders' equity, and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, these 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 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 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.

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.

We have determined that there are no key audit matters to communicate in our auditor's report.

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 Accounting Standards, 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 Michael MacLaren.

Vancouver, Canada

Chartered Professional Accountants

April 24, 2024

InZinc Mining Ltd.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian Dollars)

As at December 31,

					2023		2022
	ASSETS
	Current
	Cash and cash equivalents		$	1,617,659	$	1,464,808
	Receivables (Note 4)			33,842		12,861
	Prepaids and advances			25,800		17,627
	Marketable securities (Note 5)			942,546		1,328,076
					2,619,847		2,823,372
	Reclamation deposits (Note 6)			40,000		40,000
	Exploration and evaluation assets (Note 6)		498,660		358,660
				$	3,158,507	$	3,222,032
	LIABILITIES
	Current
	Accounts payable and accrued liabilities (Notes 7 and 10)	$	48,879	$	79,796
	SHAREHOLDERS' EQUITY
	Share capital (Note 8)			18,016,995		18,001,995
	Reserves - share-based (Note 8)			253,470		240,672
	Deficit			(15,160,837)		(15,100,431)
					3,109,628		3,142,236
				$	3,158,507	$	3,222,032
	Nature of operations and going concern (Note 1)
	Subsequent event (Note 8)
	Approved on behalf of the Board:
	"Wayne Hubert"	"John Murphy"
	Wayne Hubert, Director	John Murphy, Director

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

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InZinc Mining Ltd.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Expressed in Canadian Dollars) For the year ended December 31,

		2023		2022
PROPERTY EXPENSES
Exploration and evaluation expenditures (Note 6)	$	631,175	$	1,536,233
BC mineral exploration tax credit (Note 6)		(460,870)		(90,024)
		(170,305)		(1,446,209)
ADMINISTRATIVE EXPENSES
Communication and investor relations		37,855		38,449
Filing and regulatory		20,544		16,129
Office and miscellaneous		76,035		72,967
Professional fees (Note 10)		101,242		103,419
Share-based compensation (Notes 8 and 10)		49,050		153,798
Travel		4,175		8,726
		(288,901)		(393,488)
Operating loss		(459,206)		(1,839,697)
Interest		33,104		-
Realized loss on sale of marketable securities (Note 5)		(99,625)		-
Unrealized gain on marketable securities (Note 5)		429,069		217,430
Loss and comprehensive loss	$	(96,658)	$	(1,622,267)
Loss per common share - basic and diluted	$	(0.00)	$	(0.01)
Weighted average number of common shares
outstanding - basic and diluted	123,366,468	122,674,824

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

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InZinc Mining Ltd.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Expressed in Canadian Dollars)

	Share capital
				Reserves -
	Issued	Amount	share-based	Deficit		Total
Balance at December 31, 2021	122,152,084	$ 17,954,024	$	245,344	$(13,628,163)	$	4,571,205
Shares issued for exploration and
evaluation assets	400,000	22,000		-	-		22,000
Shares issued for option exercise	350,000	25,971		(8,471)	-		17,500
Allocation of expired/forfeited options	-	-		(149,999)	149,999		-
Share-based compensation	-	-		153,798	-		153,798
Loss for the year	-	-		-	(1,622,267)		(1,622,267)
Balance at December 31, 2022	122,902,084	18,001,995		240,672	(15,100,431)		3,142,236
Shares issued for exploration and
evaluation assets	500,000	15,000		-	-		15,000
Allocation of expired/forfeited options	-	-		(36,252)	36,252		-
Share-based compensation	-	-		49,050	-		49,050
Loss for the year	-	-		-	(96,658)		(96,658)
Balance at December 31, 2023	123,402,084	$ 18,016,995	$	253,470	$ (15,160,837)	$	3,109,628

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

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InZinc Mining Ltd.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars) For the year ended December 31,

		2023		2022
OPERATING ACTIVITIES
Loss for the year	$	(96,658)	$	(1,622,267)
Items not involving cash:
Share-based compensation		49,050		153,798
Realized loss on sale of marketable securities		99,625		-
Unrealized gain on marketable securities		(429,069)		(217,430)
Changes in non-cash working capital items:
Receivables		(20,981)		24,115
Prepaids and advances		(8,173)		1,515
Accounts payable and accrued liabilities		(30,917)		5,641
Cash used in operating activities		(437,123)		(1,654,628)
INVESTING ACTIVITIES
Exploration and evaluation assets		(125,000)		(63,315)
Proceeds from sale of marketable securities		714,974		-
Cash provided by (used in) investing activities		589,974		(63,315)
FINANCING ACTIVITY
Proceeds from share issue		-		17,500
Cash provided by financing activity		-		17,500
Change in cash and cash equivalents during the year		152,851		(1,700,443)
Cash and cash equivalents, beginning of the year		1,464,808		3,165,251
Cash and cash equivalents, end of the year	$	1,617,659	$	1,464,808
Cash and cash equivalents:
Cash	$	1,142,816	$	1,464,808
Cash equivalents		474,843		-
	$	1,617,659	$	1,464,808
Supplemental disclosure with respect to cash flows (Note 11)

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

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InZinc Mining Ltd.

Notes to the Consolidated Financial Statements (Expressed in Canadian dollars)

For the year ended December 31, 2023

1. NATURE OF OPERATIONS AND GOING CONCERN

InZinc Mining Ltd. (the "Company") was incorporated on October 24, 1997 under the laws of British Columbia and was continued under the Canada Business Corporations Act in June 2002. The Company's registered and records office is at Suite 2300, Bentall 5, 550 Burrard Street, Box 30, Vancouver, BC, V6C 2B5. The Company's head office is at P.O. Box 48268, Station Bentall Centre, Vancouver, BC, V7X 1A2. The Company is listed on the TSX Venture Exchange ("TSX-V") under the trading symbol IZN.

The Company's principal business activities include the acquisition and exploration of mineral exploration and evaluation assets in Canada. The Company has not yet determined whether its exploration and evaluation assets contain ore reserves that are economically recoverable. The recoverability of the amounts shown for exploration and evaluation assets are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves, and upon future profitable production. To date, the Company has not earned any revenues and is considered to be in the exploration stage.

These consolidated financial statements have been prepared assuming the Company will continue on a going- concern basis. The Company has incurred losses since its inception and the ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and to develop profitable operations. These consolidated financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations.

The continuance of the Company's operations is dependent on obtaining sufficient additional financing in order to realize the recoverability of the Company's investments in exploration and evaluation assets which is dependent upon the existence of economically recoverable reserves and market prices for the underlying minerals. Management closely monitors metal commodity prices, individual equity movements and the stock market to determine the appropriate course of action to be taken by the Company if favourable or adverse market conditions occur. The Company raised capital in the previous periods through private placements of its common shares and from the sale of the West Desert property and in the current period through the sale of marketable securities, with the result that the current working capital balance is an amount that management estimates is sufficient to further operations for the upcoming twelve months.

It is not possible for the Company to predict the duration or magnitude of adverse results resulting from global pandemics or war and their effects on the Company's business or results of operations or its ability to raise funds.

2. BASIS OF PRESENTATION Statement of compliance

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

Approval of the financial statements

These consolidated financial statements were authorized for issue by the Audit Committee and Board of Directors on April 24, 2024.

Basis of presentation

These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments, which are measured at fair value, as explained in the material accounting policies set out in Note 3. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

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InZinc Mining Ltd.

Notes to the Consolidated Financial Statements (Expressed in Canadian dollars)

For the year ended December 31, 2023

2. BASIS OF PRESENTATION (cont'd…)

Functional and presentation currency

These consolidated financial statements are presented in Canadian dollars, unless otherwise noted, which is the functional currency of the parent and of its subsidiary.

Basis of consolidation

These consolidated financial statements of the Company include the accounts of the Company and its wholly- owned subsidiary, N.P.R. (US) Inc., a dormant Nevada corporation. 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. All inter-company transactions and balances have been eliminated upon consolidation.

Significant estimates

The preparation of these consolidated financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported expenses during the period.

Although management uses historical experience and its best knowledge of the amount, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates.

Estimates are made when applying accounting policies. The critical estimates that have the most significant effects on the amounts recognized in the consolidated financial statements are as follows:

Economic recoverability and probability of future economic benefits of exploration and evaluation assets

Management has determined that expenditures incurred on exploration and evaluation assets which were capitalized may have future economic benefits and may be economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including, geologic and other technical information, a history of conversion of mineral deposits with similar characteristics to its own properties to proven and probable mineral reserves, the quality and capacity of existing infrastructure facilities, evaluation of permitting and environmental issues and local support for the project.

Valuation of share-based compensation

The Company uses the Black-Scholes Option Pricing Model for valuation of share-based compensation. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company's earnings and equity reserves.

Significant judgments

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in these consolidated financial statements is, but is not limited to, as follows:

Going concern

The Company has exercised judgment in determining whether its available funds are sufficient to continue operations for twelve months from the end of the reporting period.

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