Patagonia Gold : Q1 2023 Financial Statements

Patagonia Gold Corp.

Condensed Interim Consolidated Financial Statements (Unaudited) For the Three Months Ended March 31, 2023 and 2022

(All amounts in thousands of United States Dollars unless otherwise stated)

Index
Condensed Interim Consolidated Statements of Financial Position	2
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss	3
Condensed Interim Consolidated Statements of Changes in Equity	4
Condensed Interim Consolidated Statements of Cash Flows	5
Notes to the Condensed Interim Consolidated Financial Statements	6 - 24

1

Patagonia Gold Corp.

Condensed Interim Consolidated Statements of Financial Position

Unaudited - See Notice to Reader

(Stated in thousands of U.S. dollars)

			March 31,		December 31,
Current assets	Note		2023		2022
				231
Cash		$	587	$
Receivables	11		1,560		2,021
Inventories	5		4,345		4,653
Total current assets			6,492		6,905
Non-current assets					14,893
Mineral properties	6		14,838
Mining rights	8		16,150		16,163
Property, plant and equipment	10		10,328		10,644
Goodwill			4,009		4,009
Other financial assets	9		7		9
Other receivables	12		1,605		1,671
Total non-current assets			46,937		47,389
Total assets		$	53,429	$	54,294
Current liabilities					8,945
Bank indebtedness	13	$	9,081	$
Accounts payable and accrued liabilities	14		4,486		5,953
Accounts payable with related parties	14, 18		251		285
Current portion of long-term debt	15		283		386
Total current liabilities			14,101		15,569
Non-current liabilities					20,019
Long-term debt	15		22,670
Reclamation and remediation obligations	7		3,798		4,069
Deferred tax liabilities			2,346		1,837
Total non-current liabilities			28,814		25,925
Total liabilities			42,915		41,494
Shareholders' equity					11,244
Capital stock	17		11,294
Contributed surplus			190,110		190,026
Accumulated deficit			(208,487)		(205,926)
Accumulated other comprehensive income			19,159		18,960
Total shareholders' equity attributable to the parent			12,076		14,304
Non-controlling interest			(1,562)		(1,504)
Total shareholders' equity			10,514		12,800
Total liabilities and shareholders' equity		$	53,429	$	54,294

Going concern (note 3)

Subsequent events (note 26)

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

Approved on Behalf of the Board of Directors

Signed "Christopher van Tienhoven _ , Director	___Signed "Cristian Lopez Saubidet___, Director

2

Patagonia Gold Corp.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

For the Three Months Ended March 31, 2023 and 2022

Unaudited - See Notice to Reader

(Stated in thousands of U.S. dollars)

	Note		2023		2022
			$'000		$'000
Revenue		$	3,046	$	4,185
Cost of sales	5		(3,693)		(3,968)
Gross profit (loss)			(647)		217
Operating expenses:
Exploration expenses			(1,165)		(1,937)
Repairs and maintenance			(169)		(170)
Depreciation, depletion and amortization	19		(172)		(628)
Administrative expenses	20		(1,157)		(1,091)
Share-based payments expense	17		(84)		(90)
Interest expense			(584)		(658)
Total operating expenses			(3,331)		(4,574)
Other income/(expenses)
Interest income			137		95
Gain/(loss) on foreign exchange			(116)		718
Accretion expense	7		(76)		(47)
Other income	22		1,928		783
Total other income			1,873		1,549
Net loss - before income taxes			(2,105)		(2,808)
Income tax expense			(514)		(335)
Net loss		$	(2,619)	$	(3,143)
Attributable to non-controlling interest			(58)		(63)
Attributable to equity share owners of the parent			(2,561)		(3,080)
Other comprehensive income (loss) net of tax			(2,619)		(3,143)
Change in fair value of investment	9		(2)		(2)
Foreign currency translation adjustment			201		(100)
Total other comprehensive income (loss)			199		(102)
Total comprehensive loss		$	(2,420)	$	(3,245)
Weighted average number of common shares outstanding - basic
and diluted	16		470,661,930		466,566,441
Net loss per share - basic and diluted	16	$	(0.006)	$	(0.007)

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

3

Patagonia Gold Corp.

Condensed Interim Consolidated Statements of Changes in Equity

For the Three Months Ended March 31, 2023 and 2022

Unaudited - See Notice to Reader

(Stated in thousands of U.S. dollars)

			Accumulated
			other		Total	Non-
		Accumulated	comprehensive	Contributed	Attributable	controlling
	Capital stock	deficit	income	surplus	to parent	interest	Total
Balance - January 1, 2022	11,244	(201,710)	19,877	189,677	19,088	(1,392)	17,696
Net loss	-	(3,080)	-	-	(3,080)	(63)	(3,143)
Other comprehensive loss	-	-	(102)	-	(102)	-	(102)
Share based payments (note 17)	-	-	-	90	90		90
Balance - March 31, 2022	11,244	(204,790)	19,775	189,767	15,996	(1,455)	14,541
Balance - January 1, 2023	11,244	(205,926)	18,960	190,026	14,304	(1,504)	12,800
Net loss	-	(2,561)	-	-	(2,561)	(58)	(2,619)
Other comprehensive income	-	-	199	-	199	-	199
Shares issued to settle debt (note 17)	50	-	-	-	50	-	50
Share based payments (note 17)	-	-	-	84	84	-	84
Balance - March 31, 2023	11,294	(208,487)	19,159	190,110	12,076	(1,562)	10,514

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

4

Patagonia Gold Corp.

Condensed Interim Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2023 and 2022

Unaudited - See Notice to Reader

(Stated in thousands of U.S. dollars)

	Note		2023				2022
Cash flow from operating activities
Net loss		$	(2,619)	$	(3,143)
Items not affecting cash
Depreciation of property, plant and equipment	10		293				338
Depletion of mineral properties	6		55				455
Amortization of mining rights	8		25				25
Share based payment expense	17		84				90
Provisions	7		(347 )			2
Write-down of inventory	5		562				149
Interest payable			351				172
Accretion expense	7		76				47
Deferred tax expense			514				335
Net change in non-cash working capital items
(Increase)/decrease in receivables			527				824
(Increase)/decrease in inventory			(79)			(164)
(Increase)/decrease in other financial assets			2			-
Increase/(decrease) in accounts payable and accrued liabilities			(1,472)			1,051
Increase/(decrease) in accounts payable and accrued liabilities with related parties			16				22
Increase/(decrease) in provision			-			(1)
Net cash from (used in) operating activities			(2,012)			202
Cash flows from investing activities
Purchase of property, plant and equipment	10		(152)			(80)
Purchase of mineral property	6		-				(7)
Net cash used in investing activities
		(152)			(87)
Cash flow from financing activities
Bank indebtedness			136				574
Proceeds from loans			2,330			-
Repayment of loans			(133)			(55)
Net cash provided by financing activities			2,333			519
Net increase in cash			169				634
Effect of foreign exchange on cash			187				(317)
Cash, beginning of period			231				291
Cash, end of the period		$	587		$	608
Taxes paid			-				-
Interest paid			(202)			(422)
Supplemental non-cash information
Shares issued to settle debt	17		50			-
Change in value of investments	9		(2)			(2)

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

5