Oceanic Iron Ore : March/31 Financials

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended

March 31, 2024 and 2023

Unaudited - Expressed in Canadian Dollars, unless otherwise noted

NOTICE OF DISCLOSURE OF NON-AUDITOR REVIEW OF THE CONDENSED CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

Pursuant to National-Instrument51-102, Part 4, subsection 4.3(3)(a) issued by the Canadian Securities administrators, if an auditor has not performed a review of the interim financial statements, the interim financial statements must be accompanied by a notice indicating that the interim financial statements have not been reviewed by an auditor.

The accompanying condensed consolidated interim financial statements of Oceanic Iron Ore Corp. (the "Company") have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IFRS") including International Accounting Standard 34 - Interim Financial Reporting ("IAS 34") and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these condensed consolidated interim financial statements.

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Oceanic Iron Ore Corp.

Condensed Consolidated Interim Statements of Financial Position (Unaudited - Expressed in Canadian Dollars)

		As at		As at
	Notes	March 31, 2024		December 31, 2023
Assets
Current
Cash	$	217,015	$	269,513
Receivables		1,229		6,319
Prepaid expenses and deposits		15,857		13,552
		234,101		289,384
Mineral properties	3	44,499,871		44,453,858
Total assets	$	44,733,972	$	44,743,242
Liabilities
Current
Accounts payable and accrued liabilities	$	323,252	$	343,279
Due to related parties	7	525,911		475,690
Current portion of advance royalty payable	3	228,148		219,529
Convertible debentures	4	3,787,114		3,449,747
		4,864,425		4,488,245
Non-current portion of advance royalty payable	3	445,167		423,652
Total liabilities		5,309,592		4,911,897
Shareholders' equity
Share capital	5	62,460,557		62,367,906
Reserves	5	11,344,364		11,334,926
Deficit		(34,380,541)		(33,871,487)
Total shareholders' equity		39,424,380		39,831,345
Total liabilities and shareholders equity	$	44,733,972	$	44,743,242
Nature of operations and going concern	1
Commitments	6
Subsequent events	9
Approved by the Board:
" Steven Dean "	Director
" Gordon Keep "	Director

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

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Oceanic Iron Ore Corp.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Unaudited - Expressed in Canadian Dollars except per share and share amounts)

		Three months ended Three months ended
	Notes		March 31, 2024		March 31, 2023
Expenses
Consulting and management fees	7	$	73,750	$	73,750
Directors' fees	7		7,500		7,500
License and insurance			4,420		6,575
Office and general			4,824		5,411
Professional fees			22,975		3,933
Rent	7		2,667		2,667
Share-based compensation	5, 7		9,438		-
Transfer agent and regulatory			11,590		6,253
Wages and benefits	7		1,975		2,720
Loss from operations			(139,139)		(108,809)
Other expenses
Loss on change in fair value of derivative liabilities	4		(253,524)		(988,873)
Convertible debenture accretion expense	4		(116,391)		(133,175)
Total other expenses			(369,915)		(1,122,048)
Net loss and comprehensive loss		$	(509,054)	$	(1,230,857)
Loss per common share
Basic and diluted		$	(0.00)	$	(0.01)
Weighted average number of common shares outstanding
Basic and diluted			108,027,900		101,246,491

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

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Oceanic Iron Ore Corp.

Condensed Consolidated Interim Statements of Changes in Equity (Unaudited - Expressed in Canadian Dollars except share amounts)

	Notes	Shares		Share capital		Reserves		Deficit		Total equity
Balance - January 1, 2024		106,517,653	$	62,367,906	$	11,334,926	$	(33,871,487)	$	39,831,345
Share-based payments - stock options	5c	-		-		9,438		-		9,438
Shares issued on settled debenture interest	4	1,544,185		92,651		-		-		92,651
Net loss for the period		-		-		-		(509,054)		(509,054)
Balance - March 31, 2024		108,061,838	$	62,460,557	$	11,344,364	$	(34,380,541)	$	39,424,380
		Shares		Share capital		Reserves		Deficit		Total equity
Balance - January 1, 2023		99,727,021	$	61,886,678	$	11,243,969	$	(33,923,085)	$	39,207,562
Shares issued on settled restricted share units	5b	227,491		18,313		(18,313)		-		-
Shares issued on settled debenture interest	4	2,438,134		187,077		-		-		187,077
Net loss for the period		-		-		-		(1,230,857)		(1,230,857)
Balance - March 31, 2023		102,392,646	$	62,092,068	$	11,225,656	$	(35,153,942)	$	38,163,782

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

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Oceanic Iron Ore Corp.

Condensed Consolidated Interim Statements of Cash Flows (Unaudited - Expressed in Canadian Dollars)

	Notes	Three months ended	Three months ended
		March 31, 2024		March 31, 2023
Operating activities		$	(509,054)	$	(1,230,857)
Net loss
Adjustments for:	5c		9,438		-
Share-based payments
Loss on change in fair value of derivative liabilities	4		253,524		988,873
Convertible debenture accretion expense	4		116,391		133,175
Net changes in non-cash working capital balances:
Receivables			5,500		236
Prepaid expenses and deposits			(2,305)		6,344
Accounts payable and accrued liabilities			33,541		(10,394)
Due to related parties			50,221		56,602
Cash used in operating activities		$	(42,744)	$	(56,021)
Investing activities
Mineral property expenditures	3		(9,754)		(28,631)
Cash used in investing activities			(9,754)		(28,631)
Financing activities
Cash used in financing activities			-		-
Change in cash			(52,498)		(84,652)
Cash, beginning of period			269,513		662,818
Cash, end of period		$	217,015	$	578,166
Non-cash investing and financing activities
Accretion of advance royalty payable			30,134		30,134
Settlement of convertible debenture interest			92,651		187,077
Issuance of common shares for settlement of restricted share units			-		18,313
Transaction costs recovery on convertible debentures			(60,103)		-

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

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Oceanic Iron Ore Corp.

Notes to the Condensed Consolidated Interim Financial Statements For the three months ended March 31, 2024 and 2023

(Unaudited - Expressed in Canadian Dollars, unless otherwise noted)

1. NATURE OF OPERATIONS AND GOING CONCERN
   Oceanic Iron Ore Corp. ("Oceanic" or the "Company") is an exploration-stage company engaged in the acquisition and exploration of iron ore properties in Québec, Canada. The Company was incorporated on March 8, 1986 under the British Columbia Business Corporations Act. The Company maintains its head office at 595 Burrard Street, Suite 3083, Vancouver, British Columbia. The Company's registered/records office is located at 1500 - 1055 West Georgia Street, Vancouver, British Columbia. Its common shares are traded on the TSX Venture Exchange under the symbol "FEO".
   The Company acquired a 100% interest in certain mining claims (the "Property") located near Ungava Bay, Québec, Canada, in November 2010. The Company is currently conducting exploration activities on the Property. The Property comprises three project areas: Hopes Advance (also referred to as the "Hopes Advance Project" throughout), Morgan Lake and Roberts Lake, which cover over 33,159 hectares and 795 claim cells with iron formation and are located within 20 to 50 km from tidewater. The Company operates as a single reportable segment, being the exploration of the Property. All of the Company's non-current assets are located in Canada.
   While these condensed consolidated interim financial statements ("Interim Financial Statements) have been prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business as they come due, certain conditions and events result in a material uncertainty casting significant doubt on the validity of this assumption. For the three months ended March 31, 2024, the Company had no revenues and had negative cash flows from operations. As at March 31, 2024, the Company had an accumulated deficit of $34,380,541 and a working capital deficit of $4,630,324.
   The Company's ability to continue on a going concern basis for and beyond the next twelve months depends on its ability to successfully raise additional financing for continued operations and for the necessary capital expenditures required to achieve planned principal operations. The Company continues to pursue a number of options to improve its financial capacity, including securing a strategic partner to further advance the Hopes Advance project. While 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 acceptable to the Company.
   These Interim Financial Statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate, and these adjustments could be material.
2. BASIS OF PRESENTATION
   These Interim Financial Statements have been prepared in accordance with IAS 34. These Interim Financial Statements do not include all disclosures required by IFRS for annual audited financial statements. Accordingly, they should be read in conjunction with the notes to the Company's audited annual consolidated financial statements (the "Annual Financial Statements") as at and for the years ended December 31, 2023 and 2022. The accounting policies applied in these Interim Financial Statements are the same as those applied in Note 3 of the Company's Annual Financial Statements, except as described below.
   In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1), which amended IAS 1, Presentation of Financial Statements ("IAS 1"). The Company accounts for its convertible debentures (Note 4) as derivative liabilities and not as equity instruments.

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Oceanic Iron Ore Corp.

Notes to the Condensed Consolidated Interim Financial Statements For the three months ended March 31, 2024 and 2023

(Unaudited - Expressed in Canadian Dollars, unless otherwise noted)

2. BASIS OF PRESENTATION (continued)

Prior to the amendment, IAS 1 stipulated that the terms of a liability that could, at the option of the counterparty, result in the settlement of the liability by the issue of equity instruments of the Company, did not affect the classification of the liability (as either current or non-current). This stipulation was removed from IAS 1 as part of the amendment and rather the amended IAS 1 focuses on the Company's right to defer settlement (whether by repayment or conversion by the counterparty) for at least twelve months following the relevant reporting date.

Prior to the amendment to IAS 1, the Company classified its convertible debentures as non-current liabilities as the maturity dates of these instruments were at least twelve months beyond the relevant reporting dates and the ability of the counterparties to convert the debentures into equity instruments of the Company would not impact the classification under the former IAS 1. However, with the removal of the stipulation (described above) from IAS 1, and because the conversion of the convertible debentures may occur at the sole discretion of the counterparties, the Company is considered to not have the right to defer settlement (by conversion into equity instruments of the Company) for at least 12 months.

The amendments became effective January 1, 2024 and were applied retrospectively. As a result of the adoption of the amendments to IAS 1, the Company reclassified the carrying value of its convertible debentures (for both the current and prior periods) from non-current derivative liabilities to current derivative liabilities.

These Interim Financial Statements have been prepared on a historical cost basis, except for certain financial instruments which have been measured at fair value. In addition, these Interim Financial Statements have been prepared using the accrual basis of accounting, except for cash flow information. These Interim Financial Statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiary. Certain prior period amounts have been reclassified to conform to the presentation in the current period. These Interim Financial Statements include the accounts of the Company and its inactive subsidiary incorporated in Canada.

These Interim Financial Statements were approved by the board of directors on May 27, 2024.

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Oceanic Iron Ore Corp.

Notes to the Condensed Consolidated Interim Financial Statements For the three months ended March 31, 2024 and 2023

(Unaudited - Expressed in Canadian Dollars, unless otherwise noted)

3. MINERAL PROPERTIES - UNGAVA BAY

1. Acquisition costs

Acquisition costs - beginning of period

Additions during the period

Additional advance royalty payable

Accretion of advance royalty payable

Acquisition costs - end of period

	Three months ended		Year ended
	March 31, 2024		December 31, 2023
$	20,267,104	$	20,066,674
	-		76,678
	30,134		123,752
$	20,297,238	$	20,267,104

b) Exploration costs

		Three months ended		Year ended
Cumulative exploration costs - beginning of period		March 31, 2024		December 31, 2023
$	24,186,754	$	24,111,768
Expenditures during the period
Permitting and claims		11,475		66,690
Equipment, supplies & rentals		3,000		6,000
Office and accommodation		1,404		1,758
Transportation		-		538
Exploration expenditures for the period		15,879		74,986
Cumulative exploration costs - end of period	$	24,202,633	$	24,186,754
Grand total - mineral properties
$	44,499,871	$	44,453,858

Under the terms of the acquisition of the Property, the Company must pay advance net smelter royalty ("NSR") payments of $200,000 per year until the commencement of commercial production. The aggregate advance NSR payments will then be credited against all future NSR payments payable from production. The advance NSR payments included in the purchase price represent the present value of advance payments to the royalty holders until the estimated date of commencement of commercial production.

A 1% NSR is payable to 154619 Canada Inc. ("154619") and a 1% NSR is payable to SPG Royalties Inc. ("SPG"). The Company discounted the advance NSR payments using a discount rate of 20% per annum, representing the estimated rate of return of similar investments. The advance royalty liability will be accreted up to the date of ultimate NSR advance payment, resulting in an increase to mineral property acquisition costs and the advance royalty payable.

The total estimated future undiscounted NSR payments as at March 31, 2024 and December 31, 2023 was $1,050,000. For the three months ended March 31, 2024 and 2023, accretion of the advance royalty payable totaled $30,134. As at March 31, 2024, the total advance royalty payable was $673,315 (December 31, 2023: $643,181), with $228,148 (December 31, 2023: $219,529) recognized as a current liability and $445,167 (December 31, 2023: $423,652) recognized as a non-current liability.

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Oceanic Iron Ore Corp.

Notes to the Condensed Consolidated Interim Financial Statements For the three months ended March 31, 2024 and 2023

(Unaudited - Expressed in Canadian Dollars, unless otherwise noted)

4.	CONVERTIBLE DEBENTURES
				Series A		Series B		Series C		Series D
	Opening balance - January 1, 2023		Debentures		Debenture	Debentures	Debentures		Total
		$	1,695,354	$	1,075,996	$	800,646	$	937,997	$	4,509,993
	Transaction costs			-		(49,597)		-		-		(49,597)
	Interest expense and accretion			101,598		113,240		130,832		162,671		508,341
	Amortization of transaction costs			-		4,701		7,663		18,576		30,940
	Interest settlements			(64,600)		(71,188)		(132,393)		(104,734)		(372,915)
	Partial redemption of convertible debenture			-		-		-		(15,000)		(15,000)
	(Gain) loss on change in fair value of derivative liabilities			(653,918)		182,490		41,696		(732,283)		(1,162,015)
	Balance - December 31, 2023	$	1,078,434	$	1,255,642	$	848,444	$	267,227	$	3,449,747
	Opening balance - January 1, 2024	$	1,078,434	$	1,255,642	$	848,444	$	267,227	$	3,449,747
	Transaction costs recovery			-		-		-		60,103		60,103
	Interest expense and accretion			26,604		27,143		32,688		20,821		107,256
	Amortization of transaction costs			-		2,480		1,916		4,739		9,135
	Interest settlements through share issuance			(16,150)		(17,797)		(33,098)		(25,606)		(92,651)
	Loss on change in fair value of derivative liabilities			7,635		24,176		117,074		104,639		253,524
	Balance - March 31, 2024	$	1,096,523	$	1,291,644	$	967,024	$	431,923	$	3,787,114

The convertible debentures are secured with a first ranking charge at any time against the assets of the Company, ranking pari-passu with the current secured debenture holders. Interest on the convertible debentures may be settled in cash or common shares quarterly, at the election of the Company, at the market price of the common shares at the time of the interest settlement. During the three months ended March 31, 2024 and 2023, the Company settled $92,651 and $187,077 of debenture interest by issuing 1,544,185 and 2,438,134 common shares, respectively.

The Series A Debentures, with a face value of $760,000, were convertible into units at a conversion price of $0.07 per unit during the first year of their term, following which (on September 26, 2023) the conversion price increased to $0.10 per unit. Each unit will be comprised of one common share and one share purchase warrant exercisable into one common share of the Company at a price of $0.07 per common share. The Series A Debentures bear interest at 8.5% per annum over a five-year term and mature on September 26, 2027.

The Series B Debenture, with a face value of $837,500, is convertible into units at a conversion price of $0.10 per unit. Each unit will be comprised of one common share and one share purchase warrant exercisable into one common share of the Company at a price of $0.07 per common share. The Series B Debenture bears interest at 8.5% per annum over a five-year term and matures on November 29, 2028.

The Series C Debentures, with a face value of $1,557,548, are convertible into units at a conversion price of $0.19 per unit. Each unit will be comprised of one common share and one share purchase warrant exercisable into one common share of the Company at a price of $0.19 per common share. The Series C Debentures bear interest at 8.5% per annum over a five-year term and mature on March 10, 2026.

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