Conroy Gold and Natural Resources plc Annual Report 2023

Plain-text annual report

Annual report and consolidated financial statements for the financial year ended 31 May 2023 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc 1 Contents Chairman’s Statement Company Information Board of Directors Directors’ Report Independent Auditor’s Report Consolidated statement of profit or loss Consolidated statement of comprehensive income Consolidated statement of financial position Company statement of financial position Consolidated statement of changes in equity Company statement of changes in equity Consolidated statement of cash flows Company statement of cash flows Notes to and forming part of the consolidated and company financial statements 2 6 7 9 19 28 29 30 32 34 35 36 37 38 2 Chairman’s Statement Professor Richard Conroy Chairman Dear Shareholder, I have great pleasure in presenting the Company’s Annual Report and Consolidated Financial Statements for the year ended 31st May 2023. Drilling on Clay Lake Gold Target The year was one of further highly successful progress for Conroy Gold and Natural Resources PLC (the “Company” or “Conroy Gold”), during which a second district scale gold trend was discovered and the Joint Venture (“JV”) with Demir Export A.Ş. (“Demir Export”) became fully operational. A major feature of the year was the discovery of a second district scale gold trend in the Longford-Down Massif in Ireland, where the Company previously discovered the Orlock Bridge gold trend, also a district scale gold trend. The new gold trend lies along a geological structure known as the Skullmartin Fault Zone, lying to the south of the Orlock Bridge Fault Zone. This new gold trend, the Skullmartin gold trend, extends for approximately 24km and, like the Orlock Bridge gold trend, has the potential to hold many gold targets. The Company has already identified a highly exciting discovery along the new trend at Creenkill in County Armagh with visible gold and gold assay results of up 123 g/t Au (4oz gold per tonne). As well as the discovery of the new gold trend, an extensive drilling programme across the JV licence area has yielded other highly important and exciting results, both during the period under review and post year end. The drilling programme included step-out and stockwork drilling on the Clontibret gold deposit. This has shown continuity between the Clontibret gold deposit and the Corcaskea gold target, where historic trenching demonstrated high gold grades and has extended the deposit 400 metres to the North East. Drilling at the Clay Lake gold target, which is a very extensive gold target nearly 3 km in length and in places 2 km wide, has yielded excellent results including a continuous intersection of 40 metres at 1.2 g/t Au. The Clay Lake gold target area could have the potential to contain a major gold deposit. The Company’s land position over both gold trends has been secured with licences (in both Ireland and Northern Ireland) extending over an area of more than 1,000 sq km. The JV with Demir Export has a primary focus on the development of a gold mine, or mines, along the two district scale gold trends which have been discovered. To administer the JV project, three 100% owned subsidiaries of Conroy Gold have been established. These are: (i) Conroy Gold (Clontibret) Limited which now holds the Clontibret licence; (ii) Conroy Gold (Armagh) Limited which now holds the Mines Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc3 Site Visit – Core Shed at Cremartin Royal Options and Prospecting Licences in Northern Ireland and; (iii) Conroy Gold (Longford Down) Limited which holds the remaining JV licences. These subsidiaries are now fully operational. The JV, which is an earn-in JV, is structured over three phases of work: ■ Phase 1 – €4.5 million plus (plus €1 million on signing agreement) to earn an initial 25% in the three subsidiaries; ■ Phase 2 – €4.5 million plus to earn a further 15%; and ■ Phase 3 – all expenditure required to bring a given mining project to shovel ready status (including all planning and land acquisition costs) to earn a further 17.5% giving a total 57.5%) in that given project with Conroy Gold retaining the right to a 42.5% interest or to avail of one or other of various options including a carry option through to production or a net smelter royalty. Demir Export have now invested in excess of €4.5 million since March 2022 en route an anticipated investment of over €6 million which will be required to complete Phase 1. Demir Export is a long-established mining company with interests in iron, coal, gold and base Conroy Gold and Demir Export Personnel view Drillcore Mining in Ireland has a long tradition and the Board and management of the Company has already been involved in the discovery and development of two major mines in Ireland (Galmoy and Lisheen). Excellent infrastructure is already in place in the JV’s licence area including, power, a road network and service facilities. There is an established mining tradition in the area which, indeed, was once known as the Armagh-Monaghan Mining district. metals, including zinc and copper. Demir Export is owned by the Koç family who also control and largely own the largest industrial conglomerate in Türkiye (Turkey), a Fortune Global 500 Company and the leading investment holding company in Türkiye’s (Turkey’s) fast expanding economy. Conroy Gold also holds other licences in both Ireland and Finland which are not part of the JV. The Company thus has an extensive exploration portfolio and an established joint venture whose primary objective is to develop one, or more, gold mines in the district scale gold trends which Conroy Gold has discovered in Ireland. Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc4 Trenching at Creenkill Gold Target Site Visit – Clontibret Gold Deposit Post Period Work has continued on the licence areas with the intention to extend and confirm the JV’s knowledge of the significant discoveries already made. In County Armagh, 100m north-east of the existing find, quartz breccia in bedrock was discovered with returns of up to 6.6 g/t gold; the first results from Creenkill were promising with 11.5 g/t and 5.8 g/t intercepts with a further 4 nearby anomalous gold areas being discovered; gold in bedrock was also discovered at Drumavaddy, Slieve Glah. In total, 6,000 metres of drilling has been completed and 500 samples taken. Equity Interest in Karelian Diamond Resources PLC During the year the Company acquired an equity interest in AIM quoted Karelian Diamond Resources PLC (“Karelian Diamonds”) through entering into a debt capitalisation arrangement including the issue of convertible loan notes. As set out in the Financial Statements, the Company shares accommodation and staff with Karelian Diamonds and the two companies have certain common directors and shareholders. Karelian Diamonds and Conroy Gold reached agreement that an amount equivalent to £125,000 owing to Conroy Gold be capitalised into 5,000,000 new ordinary shares in the capital of Karelian Diamonds at a New Core Shed at Clontibret price of 2.5 pence per Karelian Diamonds share. Remaining outstanding amounts equivalent to £112,500 were incorporated into a convertible loan with a term of 18 months attracting an interest rate of 5% per annum. The loan note can be converted at the option of Conroy Gold, at a price equivalent to 5 pence per Karelian Diamonds share. Karelian Diamonds holds exploration licences in Northern Ireland in which assay results indicate the possible presence of Nickel, Copper and Platinum Group Metals mineralisation. The Company has also been conducting a promising diamond exploration programme in the Kuhmo region of Finland and owns the Lahtojoki diamond deposit in Finland, over which it holds a mining concession. Following the investment and the completion of a recent fundraising by Karelian Diamonds, Conroy Gold holds 5.29% of the issued share capital of Karelian Diamonds. Environmental, Social and Governance Issues These issues are of crucial importance at all stages of mining and particularly as we move towards mining development. Great emphasis is placed by the JV on Environmental, Social and Governance issues. Conroy Gold is committed to high standards of corporate governance and integrity in all of its activities and operations including rigorous health and safety compliance, environmental consciousness and the promotion of a culture of good ethical values and behaviour. Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc5 Visible Gold in Creenkill Quartz Breccia Bedrock Exploration expenditures on the JV licences are covered by the joint venture agreement with Demir Export. The Company has other exploration interests, both in Ireland and Finland, which are not covered by the JV which in due course could lead to further discoveries by the Company. Ongoing general working capital expenditures must also be covered by the Company. Directors and Staff I would like to express my deepest appreciation for the support and dedication of the Directors, staff and consultants which has made possible the continued progress and success which the Company has achieved during the year. The Company conducts its business with integrity, honesty and fairness and requires its partners, contractors and suppliers to meet similar ethical standards. Individual staff members must ensure that they apply and maintain these standards in all their actions. As Chairman of the Board, I am required to regularly monitor and review the Company’s ethical standards and cultural environment and, where necessary, take appropriate action to ensure proper standards are maintained. Financials The loss after taxation from continuing operations for the financial year ended 31 May 2023 was €362,829 (year ended 31 May 2022: €256,484). As at the 31 May 2023, the Group had cash reserves of €557,934 (year ended 31 May 2022: €1,216,097) and net assets of €19,807,318 (year ended 31 May 2022: €19,730,738). A fundraising of £400,000 at 13.5 pence per Ordinary Share was successfully arranged during the year, as announced by the Company on 20 June 2023. Professor Richard Conroy Chairman 29 November 2023 Jewellery and Gold Exhibition in Armagh supported by the Company Creenkill Gold Discovery Drill Rig being set up on site at Clontibret Gold Deposit Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc6 Company Information Directors Professor Richard Conroy Executive Chairman* Maureen T.A. Jones Managing Director* Professor Garth Earls Non-executive Director+§ Brendan McMorrow Non-executive Director*+§ Howard Bird Non-executive Director*§ * Member of the Executive Committee + Member of the Remuneration Committee § Member of the Audit Committee Company registration number 232059 Company secretary Maureen T.A. Jones (resigned 22 Nov 2023) Cathal Jones (appointed 22 Nov 2023) Registered office 3300 Lake Drive Citywest Business Campus Dublin 24, D24 TD21, Ireland Nominated adviser (NOMAD) Allenby Capital Limited 5 St. Helen’s Place, London, EC3A 6AB, United Kingdom Broker Peterhouse Capital Limited 3rd Floor, 80 Cheapside, London, EC2V 6EE, United Kingdom Head office Conroy Gold and Natural Resources P.L.C. 3300 Lake Drive Citywest Business Campus Dublin 24, D24 TD21, Ireland www.conroygold.com Public relations Lothbury Financial Services 1st Floor, 17 St. Swithins Lane London, EC4N 8AL, United Kingdom Hall Communications 1 Northumberland Road Dublin 4, D04 F578, Ireland London Stock Exchange AIM Market Symbol: CGNR SEDOL: BZ4BW18 ISIN number: IE00BZ4BTZ13 Statutory audit firm Deloitte Ireland LLP Chartered Accountants and Statutory Audit Firm 6 Lapps Quay Cork, T12 VY7W, Ireland Banker AIB 1-4 Lower Baggot Street Dublin 2, D02 X342, Ireland Registrar Avenir Registrars Limited No. 1 Main Street Blessington Co. Wicklow, W91 V82T, Ireland www.avenir-registrars.ie Legal advisers William Fry Solicitors 2 Grand Canal Square. Dublin 2, D02 A342. Ireland Roschier, Attorneys Ltd. Kasarmikatu 21A FI-00130 Helsinki, Finland Professor Richard Conroy Chairman Maureen T.A. Jones Managing Director Professor Garth Earls Non-Executive Director Brendan McMorrow Non-Executive Director Howard M. Bird Non-Executive Director Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Board of Directors Board of Directors 7 Professor Richard Conroy - Chairman of the Board of Directors Professor Richard Conroy is responsible for leading the Board and ensuring it operates in an effective manner whilst promoting communication with shareholders. He has over 40 years’ experience of founding and growing companies in the natural resources industry with a track record in making discoveries of global significance. Experience Professor Richard Conroy has been involved in natural resources for many years. He established Trans-International Oil, which was primarily involved in Irish offshore oil exploration. Trans-International Oil initiated the Deminex Consortium which included Deminex, Mobil, Amoco and DSM. Trans-International Oil was merged with Aran Energy P.L.C. in 1979, which was later acquired by Statoil. Professor Richard Conroy founded Conroy Petroleum and Natural Resources P.L.C. (“Conroy Petroleum”). Conroy Petroleum was involved in both onshore and offshore oil production and exploration and also in mineral exploration. Conroy Petroleum, in 1986, made the significant discovery of the Galmoy zinc deposits in County Kilkenny which was later developed as a major zinc mine. The discovery at Galmoy led to the revival of the Irish base metal industry and to Ireland becoming an international zinc province. Conroy Petroleum was also a founding member of the Stoneboy consortium, which included Sumitomo Metal Mining Co. Ltd., an exploration Group which discovered the world class Pogo gold deposit in Alaska, now in production as a major gold mine. Conroy Petroleum acquired Atlantic Resources P.L.C. in 1992 and subsequently changed its name to ARCON International Resources P.L.C. (“ARCON”). The oil and gas interests in ARCON were transferred to form Providence Resources P.L.C. ARCON was later acquired by Lundin Mining Corporation. Professor Richard Conroy was Chairman and Chief Executive of Conroy Petroleum/ARCON from 1980 to 1994. He founded Conroy Gold and Natural Resources P.L.C. in 1995. Since then, Professor Richard Conroy has utilised his extensive experience in the exploration industry in his role as Chairman of the Board. Professor Richard Conroy served in the Irish Parliament as a Member of the Senate. He was at various times front bench spokesman for the Government party in the Upper House on Energy, Industry and Commerce, Foreign Affairs and Northern Ireland. Professor Richard Conroy is Emeritus Professor of Physiology in the Royal College of Surgeons in Ireland. Professor Richard Conroy’s research included pioneering work on jet lag, shift working and decision making in business after intercontinental flights. He co-authored the first textbook on human circadian rhythms. Maureen T.A. Jones - Managing Director Maureen T.A. Jones oversees all of the Company’s business and is responsible for formulating the Company’s objectives and strategy. Until recently, she was also the Company Secretary for the Company ensuring all filings and re- quirements of the Companies Acts were fulfilled. Experience Maureen T.A. Jones joined Conroy Petroleum and Natural Resources P.L.C. on its foundation in 1980 and was a director and member of the Board of Directors of Conroy Petroleum/ARCON from 1986 to 1994. Maureen T.A. Jones has a medical background and specialised in the radiographic aspects of nuclear medicine before becoming a manager of International Medical Corporation in 1977. Maureen T.A. Jones has over twenty years’ experience at senior level in the natural resource sector. She has been Managing Director of Conroy Gold and Natural Resources P.L.C. since 1998. Maureen T.A. Jones brings a vast amount of managerial experience to the Board along with extensive experience of the exploration industry. 6 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc8 Conroy Gold and Natural Resources P.L.C. Board of Directors (continued) Board of Directors (continued) Professor Garth Earls - Non-executive Director Professor Garth Earls provides technical advice and guidance to the Company in relation to the exploration and resource development matters. He was appointed to the Board on 15 November 2016. Experience Professor Garth Earls is a Consulting Economic Geologist and Professor in the Department of Geology, University College Cork. He has been a Member of the Board of Directors and Managing Director of both AIM and TSX listed companies and has worked globally on a wide range of gold and base metal projects. In the 1980s he was part of the team that discovered the Curraghinalt gold deposit in Co. Tyrone. Professor Garth Earls is a former Director of the Geological Survey of Northern Ireland and former Chairman of the Geosciences Committee of the Royal Irish Academy. This experience is invaluable to the Company to assist in his role of technical advisor. Brendan McMorrow - Non-executive Director Brendan McMorrow was appointed to the Board on 28 August 2017. He brings a broad range of knowledge gained through holding senior financial roles in a variety of listed public companies in the natural resources sector. Experience Brendan McMorrow has over 30 years’ experience in a number of public companies in the oil and gas and base metals mining sectors listed in London, Toronto and Dublin where he held senior executive finance roles. He is currently Chief Executive Officer of Ormonde Mining P.L.C., a natural resources exploration company. Prior to that he was Chief Financial Officer of Circle Oil P.L.C. from 2005 to 2015, an AIM listed oil and gas exploration, development and production company, with operations in North Africa and the Middle East. Brendan is a Fellow of the Chartered Association of Certified Accountants. Howard Bird - Non-executive Director Howard Bird brings a broad range of knowledge gained through holding senior positions in a variety of different roles in the natural resources sector. He was appointed to the Board on 28 July 2020. Experience Howard Bird is an internationally experienced Professional Geoscientist (diamonds, gold, platinum and base metals) and has over 30 years’ diverse junior and senior mining company exploration, development and mining experience, including over 15 years at senior executive management level. Howard has extensive worldwide experience and was involved in programmes that have led to the discovery of over 100 kimberlites, working in Canada, Australia, Brazil, South Africa, Angola, Zimbabwe, Democratic Republic of Congo, Botswana and Gabon. Together, the Directors form the Board of Directors with a gender mix of four and one. The mix of experience that the Directors bring to the Board include financial and managerial experience, mining, development and natural resources experience which are crucial to the business of the Company and crucial to the smooth running of a Board of Directors and company. 7 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Directors’ Report Directors’ report 9 The Board of Directors submit their annual report together with the audited consolidated financial statements of Conroy Gold and Natural Resources P.L.C. (the “Company”) and its subsidiaries (“Conroy Gold”, or the “Group”) and the separate financial statements of the Company for the financial year ended 31 May 2023. Principal activities, business review and future developments Information with respect to the Group’s principal activities and the review of the business and future developments as required by Section 327 of the Companies Act 2014 is contained in the Chairman’s statement on pages 2 to 5. The Company is a mineral exploration and development company whose objective is to discover and develop world class ore bodies in order to create value for its shareholders. The Company’s strategy is to explore in politically stable and geographically attractive countries such as Ireland and Finland. The challenges facing the Company in achieving this strategy are world commodity prices and general economic activity, ensuring compliance with governmental and environmental legislation and meeting work commitments under exploration permits and licences sufficient to maintain the Company’s interest therein. To accomplish its strategy and manage the challenges involved, the Company employs experienced individuals with a track record of success of discovering world class ore bodies together with suitably qualified technical personnel and consultants, experienced drilling and geophysical and other contractors and uses accredited international laboratories and technology to interpret and assay technical results. Additionally, the Company ensures as far as possible to obtain adequate working capital to carry out its work obligations and commitments. Please refer to the section on risks and uncertainties on pages 16 and 17 for further details. By co-ordinating all of the above, this should result in a satisfactory return and value for shareholders. Results for the year and state of affairs at 31 May 2023 The consolidated statement of profit or loss for the financial year ended 31 May 2023 and the consolidated statement of financial position at that date are set out on pages 28 and 30. The loss for the financial year amounted to €362,829 (31 May 2022: loss of €256,484) and net assets at 31 May 2023 were €19,807,318 (31 May 2022: €19,730,738). No interim or final dividends have been or are recommended by the Board of Directors. The Group is not yet in a production stage and accordingly has no operating income. Consequently, the Group is not expected to report profits until it is in a position to profitably develop or otherwise turn to account its exploration projects. The Directors monitor the activities and performance of the Group on a regular basis and use both financial and non-financial indicators to assess the Group’s performance. Important events since the year-end Post year end, the Company announced on 20th June 2023 that it had completed a fundraising of £400,000 through the issue of 2,962,962 ordinary shares in order to increase the company’s exploration capacity and strengthen its working capital position. Each share carries a warrant to subscribe for one new Ordinary Share at a price of 22.5 pence per Ordinary Share exercisable at any point up to 13 June 2026. In announcements on 5th June 2023, 13th July 2023, 4th September 2023, 13th September 2023 and 22nd Novem- ber 2023 the Company announced detail of results and progress from the exploration programme being carried out in conjunction with the Company’s joint venture partner Demir Export AS. There were no further important events to note post year end. 8 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc10 Conroy Gold and Natural Resources P.L.C. Directors’ Report (continued) Directors’ report (continued) Directors The directors, who served at any time during the financial year, except as noted, were as follows: Professor Richard Conroy Maureen T.A. Jones Professor Garth Earls Brendan McMorrow Howard Bird Except as disclosed in the tables below, neither the Directors nor their families had any beneficial interest in the share capital of the Company. Apart from Directors’ remuneration (detailed in Note 4), loans from Directors (detailed in Note 13) and professional services provided by Professor Garth Earls and Brendan McMorrow (detailed in Note 18 (i)), there have been no contracts or arrangements entered into during the financial year ended 31 May 2023 in which a Director of the Company had a material interest. Refer to Note 18 for further details. Company Secretary Maureen T.A. Jones served as Company Secretary throughout the year and resigned on 22 November 2023. Cathal Jones was appointed as Company Secretary on that date. Directors’ shareholdings and other interests The interests of the Directors and their connected persons in the share capital of the Company were as follows: Director Date of signing financial statements Professor Richard Conroy Maureen T.A. Jones Professor Garth Earls Brendan McMorrow Howard Bird Ordinary Shares of €0.001 each 3,194,036* 368,329 - 26,060 - Date of signing financial statements Warrants - - - - - 31 May 2023 31 May 2023 31 May 2022 31 May 2022 Ordinary Shares of €0.001 each 3,194,036 368,329 - 26,060 - Warrants - - - - - Ordinary Shares of €0.001 each 3,194,036* 368,329 - 26,060 - Warrants 519,713 125,761 - 26,060 - * Of the 3,194,036 (31 May 2022: 3,194,036) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (31 May 2022: 192,942) are held by Conroy P.L.C., a company in which Professor Richard Conroy has a controlling interest. Details of warrants held by directors (all of which lapsed last year) are set out in the table below: 31 May 2023 31 May 2023 31 May 2022 31 May 2022 Expiry Date Warrants Price € Warrants Price € - - - - - - - - - - 121,198 398,515 39,090 86,671 26,060 4.33 0.50 0.50 4.33 0.50 16 November 2022 16 March 2023 16 March 2023 16 November 2022 16 March 2023 Director Date of signing financial statements Warrants Date of signing financial statements Price € Professor Richard Conroy Professor Richard Conroy Maureen T.A. Jones Maureen T.A. Jones Brendan McMorrow - - - - - - - - - - 9 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Directors’ report (continued) 11 Directors’ shareholdings and other interests (continued) Substantial shareholdings So far as the Board of Directors are aware, no person or company, other than the shareholders listed below, held 3% or more of the issued ordinary share capital of the Company. Shareholder Mr. Philip Hannigan Professor Richard Conroy Mr. Patrick O’Sullivan Jonathan Swann Paul and Marial Johnson Date of signing financial statements Ordinary Shares of €0.001 each 8,958,445 3,194,036* 3,000,000 2,222,222 1,686,255 Date of signing financial statements % 18.72 6.68 6.27 4.64 3.52 31 May 2023 Ordinary Shares of €0.001 each 8,588,075 3,194,036* 3,000,000 - 1,686,255 31 May 2023 % 19.19 7.14 6.70 - 3.77 31 May 2022 31 May 2022 Ordinary Shares of €0.001 each 2,011,577 3,194,036* 3,000,000 - 1,686,255 % 5.12 8.13 7.64 - 4.29 *Of the 3,194,036 (31 May 2022: 3,194,036) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (31 May 2022: 192,942) are held by Conroy P.L.C., a company in which Professor Richard Conroy has a controlling interest. Compliance policy statement of Conroy Gold and Natural Resources P.L.C. The Directors, in accordance with Section 225(2) of the Companies Act 2014, acknowledge that they are responsible for securing the Company’s compliance with certain obligations specified in that section (‘relevant obligations’). The Directors confirm that:    a compliance policy statement has been drawn up setting out the Company’s policies that in their opinion are appropriate with regard to compliance with relevant obligations; appropriate arrangements and structures have been put in place that, in their opinion, are designed to provide reasonable assurance of compliance in all material respects with those relevant obligations; and a review has been conducted, during the financial year, of those arrangements and structures. It is the policy of the Group to review during the course of each financial year the arrangements and structures referred to above which have been implemented with a view to determining if they provide a reasonable assurance of compliance in all material respects with relevant obligations. Statement of Directors’ responsibilities in respect of the annual report and the consolidated financial statements The Directors are responsible for preparing the annual report, including the Directors’ Report and the financial statements in accordance with the Companies Act 2014 and the applicable regulations. Irish Company law requires the Directors to prepare financial statements for each financial year. Under that law, they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the EU and applicable law and the Company financial statements in accordance with Financial Reporting Standard 101: Reduced Disclosure Framework (“FRS101”), issued by the Financial Reporting Council. Under company law, the Directors must not approve the Consolidated and Company financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the Group’s profit or loss for that financial year and otherwise comply with the Companies Act 2014. In preparing these financial statements, the Directors are required to:  select suitable accounting policies for the Group and Company financial statements and then apply them consistently;  make judgements and estimates that are reasonable and prudent;  state whether the financial statements have been prepared in accordance with the applicable accounting standards, identify those standards, and note the effect and the reason for any material departure from these standards; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.  10 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc12 Conroy Gold and Natural Resources P.L.C. Directors’ Report (continued) Directors’ report (continued) Statement of Directors’ responsibilities in respect of the annual report and the consolidated financial statements (continued) The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position and profit or loss of the Company and which enable them to ensure that the financial statements of the Group and the Company are prepared in accordance with the relevant accounting framework and comply with the provisions of the Companies Act 2014. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and the Company and to prevent and detect fraud and other irregularities. The Directors are also responsible for preparing a Directors’ report that complies with the requirements of the Companies Act 2014. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Going concern The Group recorded a loss of €362,829 (31 May 2022: €256,484) and the Company recorded a loss of €357,617 (31 May 2022: €256,484) for the financial year ended 31 May 2023. The Group had net assets of €19,807,318 (31 May 2022: €19,730,738) and the Company had net assets of €19,812,530 (31 May 2022: €19,730,738) at that date. The Group had net current liabilities of €3,161,475 (31 May 2022: €2,113,516) and the Company had net current liabilities of €2,777,541 (31 May 2022: €1,476,293) at that date. The Group had cash and cash equivalents of €557,934 at 31 May 2023 (31 May 2022: €1,216,097). The Company had cash and cash equivalents of €53,136 at 31 May 2023 (31 May 2022: €964,997). The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls, Brendan McMorrow, Howard Bird and former Directors, namely James P. Jones, Séamus P. Fitzpatrick and Dr. Sorċa Conroy, have confirmed that they will not seek repayment of amounts owed to them by the Group and the Company of €3,046,692 (31 May 2022:€3,069,148) for a minimum period of 12 months from the date of approval of the financial statements, unless the Group has sufficient funds to repay. The Board of Directors have considered carefully the financial position of the Group and the Company and in that context, have prepared and reviewed cash flow forecasts for the period to 30 November 2024. As set out in the Chairman’s statement, the Group and the Company expects to incur capital expenditure in 2023 and 2024, consistent with its strategy as an exploration company. The Directors recognise that the Group’s net current liabilities of €3,161,475 is a material uncertainty that may cast significant doubt on the Group and the Company’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. In reviewing the proposed work programme for exploration and evaluation assets, the results obtained from the exploration programme, the funds raised post year end, the prospects for raising additional funds as required and the joint venture arrangement with Demir Export, the Board of Directors are satisfied that it is appropriate to prepare the Group and the Company financial statements on a going concern basis. Corporate governance The Board has adopted the QCA Corporate Governance Code (“QCA Code”), which is derived from the 2018 UK Corporate Governance Code and the Guidance on Board Effectiveness (the “Code”) but adapted to the needs of smaller quoted companies. The Company agrees that good governance contributes to sustainable success and recognises the renewed emphasis on business building trust by forging strong relationships with key stakeholders. The Company understands the importance of a corporate culture that is aligned with the Company’s purpose and business strategy, and which promotes integrity and includes diversity. The Company conducts its business with integrity, honesty and fairness and requires its partners, contractors and suppliers to meet similar ethical standards. The Board is satisfied that its corporate culture and culture of its employees aligns the Company’s objectives, strategy and business model. It is an objective of the Company that all individuals are aware of their responsibilities in applying and maintaining these standards in all their actions. The Board ensures that support is available in the form of staff training and updating its employee handbook such that staff members understand what is expected of them. The Company’s Statement of Compliance with the QCA code is available on the Company’s website: www.conroygold.com/corporate-governance. 11 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc13 Conroy Gold and Natural Resources P.L.C. Directors’ report (continued) Board of Directors The Board of Directors is made up of two executive and three non-executive Directors. Biographies of each of the Directors are set out on pages 7 and 8. The Board of Directors agrees a schedule of regular meetings to be held in each calendar year and also meets on other occasions as necessary. Meetings are usually held at the head office in 3300 Lake Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland. A number of these meetings were held by way of Zoom and teleconference calls. Board of Directors’ meetings were held on 13 occasions from 1 June 2022 to 31 May 2023 and attendance is set out in the table below. An agenda and supporting documentation were circulated in advance of each meeting. Meetings held during the year Professor Richard Conroy Maureen T.A. Jones Professor Garth Earls Brendan McMorrow Howard Bird Board 13 13 13 11 12 7 There is an agreed list of matters which the Board of Directors has formally reserved to itself for decision, such as approval of the Group’s commercial strategy, trading and capital budgets, financial statements, Board of Directors’ membership, major capital expenditure and risk management policies. Responsibility for certain matters is delegated to Board of Directors’ committees. Executive Directors spend as much time on Group matters as is necessary for the proper performance of their duties. Non-executive Directors are expected to spend a minimum of one day a month on Group activities in addition to preparation for and attendance at Board and sub-committee meetings. There is an agreed procedure for Directors to take independent legal advice. The Company Secretary is responsible for ensuring that Board of Director’s procedures are followed, and all Directors have direct access to the Company Secretary. All Directors receive regular reports and full Board of Directors’ papers are sent to each Director in sufficient time before Board of Director’s meetings, and any further supporting papers and information are readily available to all Directors on request. The Board of Director’s papers include the minutes of the Audit committee of the Board of Directors which have been held since the previous Board of Director’s meeting, and, the Chairman of each committee is available to give a report on the committee’s proceedings at Board of Director’s meetings if appropriate. The Board of Directors has a process whereby each year every Director may meet the Chairman to review the conduct of Board of Directors’ meetings and the general corporate governance of the Group. The Board, having fully considered the corporate needs of the Group, is satisfied that it has an appropriate balance of experience and skills to carry out its duties. The Chairman of the Company oversees this process and reviews the Board composition to ensure it has the necessary experience, skills and capabilities. The Chairman and the Board, consider and review the independence of the Directors on an annual basis. The current non-executive Directors have a wide range of financial and technical skills based on both qualifications and experience including significant fundraisings, financial management, technical expertise and the discovery and bringing into production of operating mines. Each board member keeps their skills up to date through a combination of courses, continuing professional development through professional bodies and reading. The Company Secretary provides Directors with updates on key developments relating to the Company, the sector in which the Company operates, legal and governance matters including advice from the Company’s brokers, lawyers and advisors. 12 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc14 Conroy Gold and Natural Resources P.L.C. Directors’ Report (continued) Directors’ report (continued) Board of Directors (continued) Board performance The Board, through its Chairman, will in the coming year evaluate its ongoing performance, based on the requirements of the business and corporate governance standards. It is envisaged that the review process will include the use of internal reviews and periodic external facilitation. The results of such reviews will be used to determine whether any alterations are needed at either a board or senior management level or whether any additional training would be beneficial. It is intended that with effect from the end of the next financial year, these evaluations will be undertaken annually, after the end of each financial year but prior to the publication of the respective annual report and accounts. Director’s performance will be measured by way of such matters as:       Commitment; Independence; Relevant experience; Impartiality; Specialist knowledge; and Effectiveness on the Board. As set out in the Constitution of the Company, each year, one third (or the number nearest to one third) of the Directors with the exception of the Chairman and the Managing Director, retire from the Board of Directors by rotation. Effectively, therefore, each such Director will retire by rotation within a two-year period. Ethical values and behaviours The Board of Directors is committed to high standards of corporate governance and integrity in all its activities and operations and promotes a culture of good ethical values and behaviour. The Group conducts its business with integrity, honesty and fairness and requires its partners, contractors and suppliers to meet similar ethical standards. Individual staff members must ensure that they apply and maintain these standards in all their actions. The Chairman of the Board of Directors regularly monitors and reviews the Group’s ethical standards and cultural environment and where necessary takes appropriate action to ensure proper standards are maintained. Due to the size and available resources of the Company, the Chairman of the Board of Directors carries out executive functions. The Group is fully committed to complying with all relevant health, safety and environment rules and regulations as these apply to its operations. It is an objective of the Group that all individuals are aware of their responsibilities in providing a safe and secure working environment. Board Committees The Board of Directors has implemented an effective committee structure to assist in the discharge of its responsibilities. Membership of the Audit Committee, is comprised exclusively of non-executive Directors. The Remuneration and Executive Committees were both re-constituted during the financial year and its membership is set out under Company Information on page 6 of this report. Remuneration Committee The Remuneration Committee monitors the performance of each of the Company’s executive Directors and senior executives to ensure they are rewarded fairly for their contribution to the Group. The executive Director is excused from the meetings to determine his remuneration. It also sets the remuneration and terms and conditions of appointment for the non-executive Directors. In determining remuneration levels, the Board takes into consideration the practices of other companies of similar scope and size to ensure that senior executives and Board members are properly rewarded and motivated to perform in the best interests of the shareholders. No meetings of the remuneration committee were held in the period under review. 13 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc15 Conroy Gold and Natural Resources P.L.C. Directors’ report (continued) Board of Directors (continued) Executive Committee The Executive Committee supports the Managing Director in carrying out the duties delegated to her by the Board of Directors. It also ensures that regular reports are presented to the Board of Directors, that effective internal controls are in place and functioning and that there is an effective risk management process in operation throughout the Company. Audit Committee The Audit Committee’s terms of reference have been approved by the Board of Directors. The Audit Committee, constituted in accordance with Section 1097 of the Companies Act 2014, comprises of the three non-executive Directors and is chaired by Brendan McMorrow. Attendance at the Audit Committee meetings is set out below: Meetings held during the year Brendan McMorrow Professor Garth Earls Howard Bird Audit Committee 2 2 2 2 The Audit Committee reviews the accounting principles, policies and practices adopted, and areas of management judgement and estimation during the preparation of the interim and annual financial statements and discusses with the Group’s Auditor the results and scope of the audit. The external auditor has the opportunity to meet with the members of the Audit Committee alone at least once a year. The Audit Committee advises the Board of Directors on the appointment of the external auditor and on their remuneration and discusses the nature and scope of the audit with the external auditor. An analysis of the fees payable to the external audit firm in respect of audit services during the financial year is set out in Note 3 to the consolidated financial statements. The Audit Committee also undertakes a review of any non-audit services provided to the Group; and a discussion with the auditor of all relationships with the Group and any other parties that could affect independence or the perception of independence. Services in relation to tax were provided during the year under review. The Audit Committee is responsible for monitoring the controls which are in force to ensure the information reported to the shareholders is accurate and complete. The Audit Committee also reviews the effectiveness of the Group’s internal controls and risk management systems. It also considers the need for an internal audit function, which it believes is not required at present because of the size of the Group’s operations. The members of the Audit Committee have agreed to make themselves available should any member of staff wish to make representations to them about the conduct of the affairs of the Group. Internal control The Directors have overall responsibility for the Group’s system of internal control to safeguard shareholders’ investments and the Group assets. They operate a system of financial controls which enables the Board of Directors to meet its responsibilities for the integrity and accuracy of the Group’s accounting records. Among the processes applied in reviewing the effectiveness of the system of internal controls are the following:    The Board of Directors establishes risk policies as appropriate, for implementation by executive management; All commitments for expenditure and payments are subject to approval by personnel designated by the Board of Directors; and Regular management meetings take place to review financial and operational activities. The Board of Directors has considered the requirement for an internal audit function. Based on the scale of the Group’s operations and close involvement of the Board of Directors, the Directors have concluded that an internal audit function is not currently required. 14 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc16 Conroy Gold and Natural Resources P.L.C. Directors’ Report (continued) Directors’ report (continued) Risks and uncertainties The Group is subject to a number of potential risks and uncertainties, which could have a material impact on the long- term performance of the Group and could cause actual results to differ materially from expectation. The management of risk is the collective responsibility of the Board of Directors and is considered as part of all Board meetings. An ongoing process for identifying, evaluating and managing or mitigating the principal risks faced by the Group has been in place throughout the financial year and has remained in place up to the approval date of the report and accounts. The Board intends to keep its risk control procedures under constant review, particularly with regard to the need to embed internal control and risk management procedures further into the operations of the business and to deal with areas of improvement which come to management’s and the Board’s attention. As might be expected in a group of this size, a key control procedure is the day-to-day supervision of the business by the Executive Directors, supported by the senior managers with responsibility for key operations. The Board has considered the impact of the values and culture of the Group and ensures that, through staff communication and training, the Board’s expectations and attitude to risk and internal control are embedded in the business. The Board of Directors consider the following risks to be the principal risks affecting the business. General Industry Risk The Group’s business may be affected by the general risks associated with all companies in the gold exploration industry. These risks (the list of which is not exhaustive) include: general economic activity, global gold prices, government and environmental regulations, permits and licenses, fluctuating metal prices, the requirement and ability to raise additional capital through future financings and price volatility of publicly traded securities. As such there is no guarantee that future market conditions will permit the raising of the necessary funds by way of issue of new equity, debt financing or farming out of interests. To mitigate this risk, the Board regularly reviews Group cash flow projections and considers different sources of funds. Environmental Risk and Climate Change Environmental and safety legislation may change in a manner that may require stricter or additional standards than those now in effect. These could result in heightened responsibilities for the Group and could cause additional expense, capital expenditures, restrictions and delays in the activities of the Group, the extent of which cannot be predicted. The primary area that is expected to impact the Group is in the area of climate change where related legislation and regulations are evolving in pursuit of national and international climate change objectives. These will cause any applicable standards to be more stringent and the impact of this risk will continue to be monitored by the Directors and management. Management will continue to closely monitor any regulatory updates in this area and its potential impact on the Group. The Group employs staff and consultants experienced in the requirements of the relevant environmental authorities and seeks, through their experience, to mitigate the risk of non-compliance with accepted best practice. Exploration Risk All drilling to establish productive gold resources is inherently speculative and, therefore, a considerable amount of professional judgement is involved in the selection of any prospect for drilling. In addition, in the event drilling successfully encounters gold, unforeseeable operating problems may arise which render it uneconomic to exploit such finds. Estimates of potential resources include substantial proportions which are undeveloped. These resources require further capital expenditure in order to bring them into production. No guarantee can be given as to the success of drilling programmes in which the Group has an interest. The Group employs highly competent experienced staff and uses a range of techniques to minimise risk prior to drilling and utilises independent experts to assess the results of exploration activity. Financial Risk Refer to Note 20 in relation to the use of financial instruments by the Group, the financial risk management objectives of the Group and the Group’s exposure to inflation, interest rate risk, foreign currency risk, liquidity risk and credit risk. Management is authorised to achieve best available rates in respect of each forecast currency requirement. 15 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc17 Conroy Gold and Natural Resources P.L.C. Directors’ report (continued) Risks and uncertainties (continued) Pandemic Risk The COVID-19 pandemic continued to have some impact on the Company’s activities during the financial year. Since the outbreak of the COVID-19 pandemic, the Company has taken necessary measures in accordance with Government’s guidelines to protect the health, safety and wellbeing of its employees, contractors and partners in Ireland and Finland including for a period, staff working remotely. The field and laboratory work was not impacted as much in this financial year and the Company’s exploration and development programme continued. Russia/Ukraine war Risk Since February 2022, the world has been watching closely the situation between Russia and the Ukraine and the impact on Europe and the rest of the world. The main impacts seen to date are on the energy prices and any supply issues that may occur in the energy sector as a result of restrictions imposed. Directors and management will continue to closely monitor the situation and in particular the impact which it may have on the operations of the business. Communication with shareholders The Group gives high priority to communication with both shareholders and all other stakeholder groups. This is achieved through publications such as the annual and interim report, and news releases on the Company’s website www.conroygold.com, which is regularly updated. The Company encourages shareholders to attend the Annual General Meeting (AGM) to meet, exchange views and discuss the progress of the Group. The Directors are available after the conclusion of the formal business of the AGM to meet, listen to shareholders and discuss any relevant matters arising. Political donations There were no political donations during the financial year (31 May 2022: €Nil). Accounting records The Board of Directors are responsible for ensuring adequate accounting records, as outlined in Sections 281 to 285 of the Companies Act 2014, are kept by the Company. The Board of Directors, through the use of appropriate procedures and systems and the employment of competent persons have ensured that measures are in place to secure compliance with these requirements. The accounting records are maintained at the Company’s business address, 3300 Lake Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland. Disclosure of information to auditor So far as each of the Directors in office at the date of approval of the financial statements is aware:   There is no relevant audit information of which the Company’s auditor is unaware; and The Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. This information is given and should be interpreted in accordance with the provisions of Section 330 of the Companies Act 2014. 16 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc18 Conroy Gold and Natural Resources P.L.C. Directors’ Report (continued) Directors’ report (continued) Auditor Deloitte Ireland LLP will continue in office in accordance with Section 383 (2) of the Companies Act 2014. Shareholders will be asked to authorise the Directors to fix their remuneration. On behalf of the Directors: _____________________________ Professor Richard Conroy (Chairman) __________________________________ Maureen T.A. Jones (Managing Director) 27 November 2023 17 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcIndependent Auditors’ Report 19 IInnddeeppeennddeenntt aauuddiittoorr’’ss rreeppoorrtt ttoo tthhee mmeemmbbeerrss ooff CCoonnrrooyy GGoolldd aanndd NNaattuurraall RReessoouurrcceess PPllcc RReeppoorrtt oonn tthhee aauuddiitt ooff tthhee ffiinnaanncciiaall ssttaatteemmeennttss OOppiinniioonn oonn tthhee ffiinnaanncciiaall ssttaatteemmeennttss ooff CCoonnrrooyy GGoolldd aanndd NNaattuurraall RReessoouurrcceess PPllcc ((tthhee ‘‘ccoommppaannyy’’)) In our opinion the group and parent company financial statements: • • give a true and fair view of the assets, liabilities and financial position of the group and parent company as at 31 May 2023 and of the loss of the group for the financial year then ended; and have been properly prepared in accordance with the relevant financial reporting frameworks and, in particular, with the requirements of the Companies Act 2014. The financial statements we have audited comprise: the group financial statements: the Consolidated statement of profit or loss; the Consolidated statement of comprehensive income; the Consolidated statement of financial position; the Consolidated statement of changes in equity; the Consolidated statement of cash flows; and the related notes 1 to 22 including a summary of significant accounting policies as set out in note 1. the parent company financial statements: the Company statement of financial position; the Company statement of changes in equity; the Company statement of cash flows; and the related notes 1 to 22, including a summary of significant accounting policies as set out in note 1. • • • • • • • • • • The relevant financial reporting framework that has been applied in the preparation of the group financial statements is the Companies Act 2014 and International Financial Reporting Standards (IFRS) as adopted by the European Union (“the relevant financial reporting framework”). The relevant financial reporting framework that has been applied in the preparation of the parent company financial statements is the Companies Act 2014 and FRS 101 “Reduced Disclosure Framework” issued by the Financial Reporting Council (“the relevant financial reporting framework”) BBaassiiss ffoorr ooppiinniioonn We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are described below in the “Auditor's responsibilities for the audit of the financial statements” section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority, as applied to listed entities, 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. Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc 20 Independent Auditors’ Report (continued) MMaatteerriiaall uunncceerrttaaiinnttyy rreellaatteedd ttoo ggooiinngg ccoonncceerrnn In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. We draw attention to Note 1 in the financial statements, which indicates that as at 31 May 2023 the group incurred a loss of €362,829 and the parent company incurred a loss of €357,617 and, as of that date, the group and parent company had net current liabilities of €3,161,475 and €2,777,541 respectively. As stated in Note 1, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the group’s and parent company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Our evaluation of the directors’ assessment of the group and parent company’s ability to continue to adopt the going concern basis of accounting included: • • • • • • • obtaining an understanding of the group and parent company’s relevant controls over the preparation of cash flow forecasts and approval of the projections and assumptions used in cash flow forecasts to support the going concern assumption; assessing the design and determining the implementation of these relevant controls; evaluating directors’ plans and their feasibility by agreeing the inputs used in the cash flow forecast to expenditure commitments and other supporting documentation; challenging the reasonableness of the assumptions applied by the directors in their going concern assessment; obtaining confirmations received by the group and parent company from the directors and former directors evidencing that they will not seek repayment of amounts owed to them by the group and parent company within 12 months of the date of approval of the financial statements, unless the group and/or parent has sufficient funds to repay; assessing the mechanical accuracy of the cash flow forecast model; and assessing the adequacy of the disclosures made in the financial statements. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. SSuummmmaarryy ooff oouurr aauuddiitt aapppprrooaacchh KKeeyy aauuddiitt mmaatttteerrss The key audit matters that we identified in the current year were: • Going concern (see material uncertainty related to going concern section) • Valuation of intangibles assets and investment in subsidiaries. Within this report, any new key audit matters are identified with and any key audit matters which are the same as the prior year identified with . MMaatteerriiaalliittyy The materiality used in the current year for the group was €577,000 which was determined on the basis of approximately 2.9% of Shareholder’s Equity of the group. The materiality used in the current year for the parent company was €540,000 which was determined on the basis of approximately 2.7% of Shareholder’s Equity of the parent company. SSccooppiinngg We identified four significant components, which are the parent company, Conroy Gold and Natural Resources Plc, and the following subsidiaries: Conroy Gold Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc 21 Clontibret Limited, Conroy Gold Armagh Limited and Conroy Gold Longford-Down Limited. We scoped our audit by obtaining an understanding of the group and its environment and assessing the risks of material misstatement at the group and component level. Our audit scoping provides full scope audit coverage of 99.9% of the net assets (2022: 99.9% of net assets). SSiiggnniiffiiccaanntt cchhaannggeess oouurr aapppprrooaacchh iinn There were no significant changes in our approach. KKeeyy AAuuddiitt MMaatttteerrss Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current financial year and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. 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. In addition to the matter described in the material uncertainty relating to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. VVaalluuaattiioonn ooff iinnttaannggiibbllee aasssseettss aanndd iinnvveessttmmeenntt iinn ssuubbssiiddiiaarriieess KKeeyy aauuddiitt mmaatttteerr ddeessccrriippttiioonn At 31 May 2023, the carrying value of exploration and evaluation assets included in intangible assets in the group and parent company statement of financial position amounted to €26,331,917 (2022: €23,888,833) and €3,651,597 (2022: €3,421,364) respectively. The parent company statement of financial position also includes amounts relating to investment in subsidiaries of €18,603,085 (2022: €18,423,437). We draw your attention to the disclosures made in Note 1, 7 and 8 to the financial statements concerning the valuation of intangible assets and investment in subsidiaries. The valuation of intangible assets for both the group and the parent company and the underlying valuation of the investment in subsidiaries for the parent company, are dependent on the further successful development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. The valuation of intangible assets in the group statement of financial position and the valuation of intangible assets and investment in subsidiaries in the parent company statement of financial position were assessed as significant risks and given the balances in total at the respective financial statement level also constitutes the majority of the total assets recorded, we considered the valuation of intangible assets and investment in subsidiaries a key audit matter. Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc 22 Independent Auditors’ Report (continued) HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee kkeeyy aauuddiitt mmaatttteerr We performed the following procedures: • We evaluated the design and determined the implementation of relevant controls in place over capitalisation and subsequent valuation of intangible assets. • We inspected documentation in respect of new and current licences held (as relevant); • We challenged the directors’ assessment of indicators of impairment in relation to exploration and evaluation assets in both Ireland and Finland; • We performed a review of proposed exploration programme in respect of the group’s assets in Ireland and Finland; including: - discussing and challenging the allocation of capitalised costs for their reasonableness, assessing the reasonableness of the assets capitalised in the current year, and reviewing and considering indicators of impairment. - - • We obtained a listing of intangible asset additions in the financial year and selected a sample of additions to ensure the capitalisation was in line with accounting policies; • We performed a review of Board of Directors meeting minutes and press releases issued by the group in relation to the status of exploration and evaluation assets; • We performed a review of budgeted expenditure for the next 12 months from the date of approval of the financial statements; • We challenged the directors’ assessment of indicators of impairment in relation to the carrying value of investment in subsidiaries; and • We also considered the adequacy of the disclosure in the financial statements. KKeeyy oobbsseerrvvaattiioonnss A significant uncertainty exists in relation to the ability of the group and parent company to realise the exploration and evaluation assets capitalised to intangible assets and consequently the investment made in subsidiaries. As noted above, we draw your attention to the disclosures made in Note 1, 7 and 8 to the financial statements concerning the valuation of intangible assets and investment in subsidiaries. The valuation of intangible assets for both the group and the parent company and the underlying valuation of the investment in subsidiaries for the parent company, are dependent on the further successful development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. The financial statements do not include any adjustments in relation to these uncertainties and the ultimate outcome cannot, at present, be determined. Our opinion is not modified in respect of this matter. Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the risks described above, and we do not express an opinion on these individual matters. OOuurr aapppplliiccaattiioonn ooff mmaatteerriiaalliittyy We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc 23 Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: MMaatteerriiaalliittyy BBaassiiss ffoorr ddeetteerrmmiinniinngg mmaatteerriiaalliittyy RRaattiioonnaallee ffoorr tthhee bbeenncchhmmaarrkk aapppplliieedd GGrroouupp ffiinnaanncciiaall ssttaatteemmeennttss PPaarreenntt ccoommppaannyy ffiinnaanncciiaall ssttaatteemmeennttss €577,000 (2022: €577,000) €540,000 (2022: €577,000) 2.9% of Shareholder’s Equity (2022: 3% of Shareholder’s Equity) 2.7% of Shareholder’s Equity (2022: 3% of Shareholder’s Equity) We have considered Shareholder’s Equity to be the critical component for determining materiality as we determined the Shareholder’s Equity to be of most importance to the principal external users of the financial statements. Raising equity funding is of key importance to the group in continuing it current operations and is reflective of the current business life cycle of the group. We have considered quantitative and qualitative factors such as understanding the group and its environment, history of misstatements, complexity of the group and reliability of control environment. We have considered Shareholder’s Equity to be the critical component for determining materiality as we determined the Shareholder’s Equity to be of most importance to the principal external users of the financial statements. Raising equity funding is of key importance parent company in continuing it current operations and is reflective of the current business life cycle of the parent company. We have considered quantitative and qualitative factors such as understanding the parent company and its environment, history of misstatements, complexity of the parent company and reliability of control environment. Shareholders Equity €19.8m Shareholders Equity Materiality Materiality €577,000 Audit Committee Reporting Threshild €28,850 We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. PPeerrffoorrmmaannccee mmaatteerriiaalliittyy BBaassiiss aanndd rraattiioonnaallee ffoorr ddeetteerrmmiinniinngg ppeerrffoorrmmaannccee mmaatteerriiaalliittyy GGrroouupp ffiinnaanncciiaall ssttaatteemmeennttss PPaarreenntt ccoommppaannyy ffiinnaanncciiaall ssttaatteemmeennttss 74% of group materiality 74% of parent company materiality In determining performance materiality, we considered the following factors: a. our understanding of the group and parent company; b. the quality of the internal control environment and whether we were able to rely on controls; the nature and extent of misstatements (corrected and/or uncorrected) identified in previous audits; and c. Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc 24 Independent Auditors’ Report (continued) d. our expectations in relation to misstatements in the current period. We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of €28,850 (2022: €28,850), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. AAnn oovveerrvviieeww ooff tthhee ssccooppee ooff oouurr aauuddiitt We scoped our audit by obtaining an understanding of the group and its environment and assessing the risks of material misstatement at the group and component level. Based on that assessment, we focused our group audit scope primarily on the audit of 4 significant components, as outlined above. These components were subject to a full scope audit. The remaining 2 non-trading components were subject to analytical procedures. These components were selected based on the level of coverage achieved and to provide an appropriate basis for undertaking audit work to address the risks of material misstatement identified above. Our audit work for all components was executed at levels of materiality applicable to each individual component which were lower than group materiality and ranged from €404k to €540k. Our audit scoping provides full scope audit coverage of 99.9% of the net assets (2022: 99.9% of net assets) with the remainder covered by analytical procedures of 0.01% (2022:0.01%). At the group level, we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to a full audit. OOtthheerr iinnffoorrmmaattiioonn The other information comprises the information included in the Annual Report and Consolidated Financial Statements other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report and Consolidated Financial Statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information 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. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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. RReessppoonnssiibbiilliittiieess ooff ddiirreeccttoorrss As explained more fully in the Statement of Directors’ responsibilities the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal control as the directors determine 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, the directors are responsible for assessing the group and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc 25 going concern basis of accounting unless the directors either intend to liquidate the group and parent company or to cease operations, or have no realistic alternative but to do so. AAuuddiittoorr’’ss rreessppoonnssiibbiilliittiieess ffoorr tthhee aauuddiitt ooff tthhee ffiinnaanncciiaall ssttaatteemmeennttss 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 ISAs (Ireland) 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. A further description of our responsibilities for the audit of the financial statements is located on IAASA’s website at: https://iaasa.ie/publications/description-of-the-auditors-responsibilities-for-the-audit-of-the- financial-statements/. This description forms part of our auditor’s report. EExxtteenntt ttoo wwhhiicchh tthhee aauuddiitt wwaass ccoonnssiiddeerreedd ccaappaabbllee ooff ddeetteeccttiinngg iirrrreegguullaarriittiieess,, iinncclluuddiinngg ffrraauudd Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. IIddeennttiiffyyiinngg aanndd aasssseessssiinngg ppootteennttiiaall rriisskkss rreellaatteedd ttoo iirrrreegguullaarriittiieess In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non- compliance with laws and regulations, we considered the following: • • • • the nature of the industry and sector, control environment and business performance including the design of the group and parent company’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets; results of our enquiries of management and the audit committee about their own identification and assessment of the risks of irregularities; any matters we identified having obtained and reviewed the group and parent company’s documentation of their policies and procedures relating to: o identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; o detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; o the matters discussed among the audit engagement team and relevant internal specialists, including valuation specialists, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. In common with all audits under ISAs (Ireland), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory framework that the group and parent company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2014, Alternative Investment Market Rules, Irish Tax legislation and Pension Regulations. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the group and parent company’s ability Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc 26 Independent Auditors’ Report (continued) to operate or to avoid a material penalty. These included regulations as applicable to the environment, health and safety, and exploration and mining activities. AAuuddiitt rreessppoonnssee ttoo rriisskkss iiddeennttiiffiieedd As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud or non-compliance with laws and regulations. Our procedures to respond to risks identified included the following: • • • • • reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; enquiring of management, the audit committee and external legal counsel concerning actual and potential litigation and claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; reading minutes of meetings of those charged with governance, and in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. RReeppoorrtt oonn ootthheerr lleeggaall aanndd rreegguullaattoorryy rreeqquuiirreemmeennttss OOppiinniioonn oonn ootthheerr mmaatttteerrss pprreessccrriibbeedd bbyy tthhee CCoommppaanniieess AAcctt 22001144 Based solely on the work undertaken in the course of the audit, we report that: • We have obtained all the information and explanations which we consider necessary for the purposes of our • • • audit. In our opinion the accounting records of the parent company were sufficient to permit the financial statements to be readily and properly audited. The parent company balance sheet is in agreement with the accounting records. In our opinion the information given in the directors’ report is consistent with the financial statements and the directors’ report has been prepared in accordance with the Companies Act 2014. MMaatttteerrss oonn wwhhiicchh wwee aarree rreeqquuiirreedd ttoo rreeppoorrtt bbyy eexxcceeppttiioonn Based on the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not made. UUssee ooff oouurr rreeppoorrtt This report is made solely to the company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc 27 by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. KKeevviinn BBuuttlleerr For and on behalf of Deloitte Ireland LLP Chartered Accountants and Statutory Audit Firm No.6 Lapp’s Quay Cork Date: 29 November 2023 Notes: An audit does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular on whether any changes may have occurred to the financial statements since first published. These matters are the responsibility of the directors but no control procedures can provide absolute assurance in this area. Legislation in Ireland governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions. Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc 28 Conroy Gold and Natural Resources P.L.C. Consolidated statement of profit or loss For the year ended 31 May 2023 Note 2023 € Continuing operations Operating expenses Movement in fair value of warrants Share-based payment expense Operating loss Finance income – interest Interest expense Net finance cost Loss before taxation Income tax expense Loss for the financial year Loss per share Basic loss per share Diluted loss per share 2 19 19 14 3 5 6 6 2022 € (832,340) 585,954 - (246,386) 41 (10,139) (10,098) (604,891) 257,050 - (347,841) 3 (14,991) (14,988) (362,829) (256,484) - - (362,829) (256,484) (0.0083) (0.0083) (0.0065) (0.0065) The total loss for the financial year is entirely attributable to equity holders of the Company. _____________________ Professor Richard Conroy Chairman ___________________ Maureen T.A. Jones Managing Director 27 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc29 Conroy Gold and Natural Resources P.L.C. Consolidated statement of comprehensive income as at 31 May 2023 2023 € 2022 € Loss for the financial year (362,829) (256,484) Income recognised in other comprehensive income - - Total comprehensive loss for the financial year (362,829) (256,484) Loss for the financial year attributable to: Equity holders of the Company (362,829) (256,484) Total comprehensive loss for the financial year attributable to: Equity holders of the Company (362,829) (256,484) 28 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc30 Conroy Gold and Natural Resources P.L.C. Consolidated statement of financial position as at 31 May 2023 Assets Non-current assets Intangible assets Property, plant and equipment Financial assets Total non-current assets Current assets Cash and cash equivalents Other receivables Total current assets Total assets Equity Capital and reserves Share capital presented as equity Share premium Capital conversion reserve fund Share-based payments reserve Other reserve Retained deficit Total equity Non-controlling interests Convertible shares in subsidiary companies Total non-controlling interests Liabilities Non-current liabilities Convertible loans Leases due > 1 year Warrant liabilities Total non-current liabilities Current liabilities Trade and other payables Related party loans Total current liabilities Total liabilities Note 8 9 11 12 10 16 16 16 19 15 14 14 13 13 31 May 2023 € 26,331,917 91,703 273,491 26,697,111 557,934 124,828 682,762 31 May 2022 € 23,888,833 7,589 - 23,896,422 1,216,097 429,329 1,645,426 27,379,873 25,541,848 10,549,187 15,698,805 30,617 42,664 71,596 (6,585,551) 19,807,318 3,707,218 3,707,218 - 21,100 - 21,100 3,707,238 136,999 3,844,237 3,865,337 10,543,694 15,256,556 30,617 42,664 79,929 (6,222,722) 19,730,738 1,406,899 1,406,899 388,219 - 257,050 645,269 3,621,943 136,999 3,758,942 4,404,211 Attributable to equity holders of the Company 27,379,873 25,541,848 Total equity, non-controlling interests and liabilities 27,379,873 25,541,848 29 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Consolidated statement of financial position (continued) as at 31 May 2023 31 The financial statements were approved by the Board of Directors on 27 November 2023 and authorised for issue on 29 November 2023. They are signed on its behalf by: ____________________ Professor Richard Conroy Chairman _________________ Maureen T.A. Jones Managing Director 30 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc32 Conroy Gold and Natural Resources P.L.C. Company statement of financial position as at 31 May 2023 Assets Non-current assets Investment in subsidiaries Intangible assets Property, plant and equipment Financial assets Total non-current assets Current assets Cash and cash equivalents Other receivables Total current assets Total assets Equity Capital and reserves Called up share capital presented as equity Share premium Capital conversion reserve fund Share-based payments reserve Other reserve Retained deficit Total equity Liabilities Non-current liabilities Convertible loans Lease due > 1 year Warrant liabilities Total non-current liabilities Current liabilities Trade and other payables Related party loans Total current liabilities Total liabilities Note 7 8 9 11 12 10 16 16 16 19 14 14 13 13 31 May 2023 € 18,603,085 3,651,597 82,998 273,491 22,611,171 53,136 664,606 717,742 31 May 2022 € 18,423,347 3,421,364 7,589 - 21,852,300 964,997 1,198,558 2,163,555 23,328,913 24,015,855 10,549,187 15,698,805 30,617 42,664 71,596 (6,580,339) 19,812,530 - 21,100 - 21,100 3,358,284 136,999 3,495,283 3,516,383 10,543,694 15,256,556 30,617 42,664 79,929 (6,222,722) 19,730,738 388,219 - 257,050 645,269 3,502,849 136,999 3,639,848 4,285,117 Total equity and liabilities 23,328,9136 24,015,855 31 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc33 Conroy Gold and Natural Resources P.L.C. Company statement of financial position (continued) as at 31 May 2023 The Group is availing of the exemption in Section 304 of the Companies Act 2014 from filing its Company Statement of Profit or Loss and Other Comprehensive Income. The loss for the financial year was €357,617 (31 May 2022: €256,484). The financial statements were approved by the Board of Directors on 27 November 2023 and authorised for issue on 29 November 2023. They are signed on its behalf by: _____________________ Professor Richard Conroy Chairman _________________ Maureen T.A. Jones Managing Director 32 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc34 Conroy Gold and Natural Resources P.L.C. Consolidated statement of changes in equity for the financial year ended 31 May 2023 Note 16 Balance at 1 June 2022 Share issue Loss for the financial year Balance at 31 May 2023 Share capital Share premium € € Capital conversion reserve fund € Share- based payment reserve € Other reserve Retained deficit Total equity € € € 10,543,694 15,256,556 30,617 42,664 79,929 (6,222,722) 19,730,738 5,493 442,249 - - - - - - (8,333) - 439,409 - (362,829) (362,829) 10,549,187 15,698,805 30,617 42,664 71,596 (6,585,551) 19,807,318 Share capital Share premium € € Capital conversion reserve fund € Share- based payment reserve € Other reserve Retained deficit Total equity € € € 10,543,694 15,256,556 30,617 42,664 79,929 (5,966,238) 19,987,222 - - - - - (256,484) (256,484) 10,543,694 15,256,556 30,617 42,664 79,929 (6,222,722) 19,730,738 Balance at 1 June 2021 Loss for the financial year Balance at 31 May 2022 Share capital The share capital comprises of the nominal value share capital issued for cash and non-cash consideration. The share capital also comprises deferred share capital. The deferred share capital arose through the restructuring of share capital which was approved at Extraordinary General Meetings held on 26 February 2015 and 14 December 2015. A detailed breakdown of the share capital figure is included in Note 16. During the year, the company issued a total of 5,493,221 ordinary shares through the conversion of loan notes as set out in Note 14 and the issue of 75,286 shares to former director David Wathen who elected to take payment of directors fees outstanding to him in the form of shares. Share premium The share premium reserve comprises of the excess consideration received in respect of share capital over the nominal value of share issued. Capital conversion reserve fund The ordinary shares of the Company were re-nominalised from €0.03174435 each to €0.03 each in 2001 and the amount by which the issued share capital of the Company was reduced, was transferred to the capital conversion reserve fund. Share-based payment reserve The share-based payment reserve comprises of the fair value of all share options and warrants which have been charged over the vesting period, net of amounts relating to share options and warrants forfeited or lapsed during the year, which are reclassified to retained deficit. Other reserve The other reserve comprises of the equity portion of convertible loans. Retained deficit This reserve represents the accumulated losses absorbed by the Group to the consolidated statement of financial position date. 33 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc35 Conroy Gold and Natural Resources P.L.C. Company statement of changes in equity for the financial year ended 31 May 2023 Note 16 Balance at 1 June 2022 Share issue Loss for the financial year Balance at 31 May 2023 Share capital Share premium Capital conversion reserve fund € € € Share- based payment reserve € Other reserve Retained deficit Total equity € € € 10,543,694 15,256,556 30,617 42,664 79,929 (6,222,722) 19,730,738 5,493 442,249 - - - - - - (8,333) - 439,409 - (357,617) (357,617) 10,549,187 15,698,805 30,617 42,664 71,596 (6,580,339) 19,812,530 Share capital Share premium Capital conversion reserve fund € € € Share- based payment reserve € Other reserve Retained deficit Total equity € € € Balance at 1 June 2021 Loss for the financial year Balance at 31 May 2022 10,543,694 15,256,556 30,617 42,664 79,929 (5,966,238) 19,987,222 - - - - - (256,484) (256,484) 10,543,694 15,256,556 30,617 42,664 79,929 (6,222,722) 19,730,738 34 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc36 Conroy Gold and Natural Resources P.L.C. Consolidated statement of cash flows for the financial year ended 31 May 2023 Cash flows from operating activities Loss for the financial year Adjustments for non-cash items: Movement in fair value of warrants Interest expense Depreciation Payments from Karelian Diamond Resources P.L.C. Decrease/(increase) in receivables Increase/ (decrease) in payables Net cash used in operating activities Cash flows from investing activities Expenditure on intangible assets Purchase of property, plant and equipment Net Cash used in investing activities Cash flows from financing activities Convertible shares in subsidiary companies Net cash provided by financing activities (Decrease)/ increase in cash and cash equivalents Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year Note 19 14 9 10 13 8 9 15 2023 € (362,829) (257,050) 14,991 18,095 (586,793) - 31,009 142,594 (413,190) (2,443,083) (102,209) (2,545,292) 2,300,319 2,300,319 (658,163) 1,216,097 557,934 2022 € (256,484) (585,954) 10,139 1,885 (830,414) 70,000 (40,560) (3,255) (804,229) (899,859) - (899,859) 1,406,899 1,406,899 (297,189) 1,513,286 1,216,097 35 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Company statement of cash flows for the financial year ended 31 May 2023 Cash flows from operating activities Loss for the financial year Adjustments for non-cash items: Movement in fair value of warrants Interest expense Depreciation Decrease/(increase) in receivables Decrease in payables Payments from Karelian Diamond Resources P.L.C. Net cash (used) in operating activities Cash flows from investing activities Investment in subsidiaries Expenditure on intangible assets Payments to acquire property, plant and equipment Net cash (used)/ provided in investing activities (Decrease) in cash and cash equivalents Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year Note 19 14 9 10 13 15 8 9 37 2023 € (357,617) (257,050) 14,991 17,129 (582,547) 260,460 (87,266) - (409,353) (179,738) (230,233) (92,538) (502,509) (911,862) 964,997 53,136 2022 € (256,484) (585,954) 10,139 1,885 (830,414) (290,656) (122,348) 70,000 (1,173,418) 1,000,000 (374,870) - 625,130 (548,288) 1,513,286 964,997 36 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc38 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 1 Accounting policies Reporting entity Conroy Gold and Natural Resources P.L.C. (the “Company”) is a company domiciled in Ireland. The consolidated financial statements of the Company for the financial year ended 31 May 2023 comprise the financial statements of the Company and its subsidiaries (together referred to as the “Group”). The Company is a public limited company incorporated in Ireland under registration number 232059. The registered office is located at 3300 Lake Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland. The Company is a mineral exploration and development company whose objective is to discover and develop world class ore bodies in order to create value for its shareholders Basis of preparation The consolidated financial statements are presented in euro (“€”). The € is the functional currency of the Company. The consolidated financial statements are prepared under the historical cost basis except for derivative financial instruments, where applicable, which are measured at fair value at each reporting date. The preparation of consolidated financial statements requires the Board of Directors and management to use judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Details of critical judgements are disclosed in the accounting policies. The consolidated financial statements were authorised for issue by the Board of Directors on 29 November 2023. Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and the requirements of the Companies Act 2014. The Company’s financial statements have been prepared in accordance with Financial Reporting Standard 101: Reduced Disclosure Framework (“FRS101”) and the requirements of the Companies Act 2014. Basis of consolidation The consolidated financial statements include the financial statements of Conroy Gold and Natural Resources P.L.C. and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Group is exposed to or has the right to variable returns from its involvement with the entity and has the ability to affect those returns through its control over the entity. In assessing control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intra-Group balances, and any unrealised income and expenses arising from intra-Group transactions are eliminated in preparing the consolidated financial statements. The Company recognises investment in subsidiaries at cost less impairment. Going Concern The Group recorded a loss of €362,829 (31 May 2022: €256,484) and the Company recorded a loss of €357,617 (31 May 2022: €256,484) for the financial year ended 31 May 2023. The Group had net assets of €19,807,318 (31 May 2022: €19,730,738) and the Company had net assets of €19,812,530 (31 May 2022: €19,730,738) at that date. The Group had net current liabilities of €3,161,475 (31 May 2022: €2,113,516) and the Company had net current liabilities of €2,777,541 (31 May 2022: €1,476,293) at that date. The Group had cash and cash equivalents of €557,934 at 31 May 2023 (31 May 2022: €1,216,097). The Company had cash and cash equivalents of €53,136 at 31 May 2023 (31 May 2022: €964,997). 37 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc39 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 1 Accounting policies (continued) Going Concern (continued) The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls, Brendan McMorrow, Howard Bird and former Directors, namely, James P. Jones, Séamus P. Fitzpatrick and Dr. Sorċa Conroy have confirmed that they will not seek repayment of amounts owed to them by the Group and the Company of €3,046,692 (31 May 2022: €3,069,148) which are included in net current liabilities, within 12 months of the date of approval of the financial statements, unless the Group has sufficient funds to repay. Since the Joint Venture Agreement with Demir Export was completed, an initial payment of €1 million was made to the Company and in excess of a further €3.5 million has been advanced by Demir Export to date funding the ongoing drilling programme under the Joint Venture Agreement. In excess of 7,000 metres have been drilled to date, with more work planned for 2024. The Board of Directors have considered carefully the financial position of the Group and the Company and in that context, have prepared and reviewed cash flow forecasts for the period until 30 November 2024. The Directors have fully considered both current and future capital expenditure commitments and the options to fund such commitments in the twelve month period to November 2024. The Directors recognise that the Group’s net current liabilities of €3,161,475 (31 May 2022: €2,113,516) is a material uncertainty that may cast significant doubt on the Group and the Company’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. In reviewing the proposed work programme for exploration and evaluation of assets, the results obtained from the exploration programme, the funds raised post year end, the prospects for raising additional funds as required and the completed Joint Venture Agreement, the Board of Directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis. The consolidated and the Company’s financial statements do not include any adjustments to the carrying value and classification of assets and liabilities that would arise if the Group and the Company were unable to continue as going concern. Recent accounting pronouncements (a) New and amended standards adopted by the Group and the Company The Group and the Company have adopted the following amendments to standards for the first time for its annual reporting year commencing 1 June 2022:          IFRS 4 amendments regarding the expiry date of the deferral approach – Effective date 1 January 2023; IAS 8 amendments regarding the definition of accounting estimates – Effective date 1 January 2023; IAS 1 amendments regarding the disclosure of accounting policies - Effective date 1 January 2023; IFRS 17 Insurance contracts – Effective date deferred to 1 January 2023; Amendment to IFRS 16 about providing lessees with an extension of one year to exemption from assessing whether a COVID-19-related rent concession is a lease modification – Effective date 1 April 2021; IFRS 3 amendments updating a reference to the Conceptual Framework – Effective date 1 January 2022; IAS 37 amendments regarding the costs to include when assessing whether a contract is onerous – Effective date 1 January 2022; IFRS 1 amendments resulting from Annual Improvements to IFRS Standards 2018–2020 (subsidiary as a first-time adopter) – Effective date 1 January 2022; and IFRS 9 amendments resulting from Annual Improvements to IFRS Standards 2018–2020 (fees in the ‘’10 per cent’’ test for derecognition of financial liabilities) – Effective date 1 January 2022; Amendments to IAS 12 Income taxes: Deferred tax related to assets and liabilities arising from a single transaction – Effective date 1 January 2023. 38 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc40 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) Accounting policies (continued) 1 Recent accounting pronouncements (continued) (b) New standards and interpretations not yet adopted by the Group and the Company The adoption of the above amendments to standards had no significant impact on the financial statements of the Group and the Company either due to being not applicable or immaterial. Certain new accounting standards and interpretations have been published that are not mandatory for 31 May 2023 reporting periods and have not been early adopted by the Group and the Company. The following new standards and amendments to standards have been issued by the International Accounting Standards Board but have not yet been endorsed by the EU, accordingly, none of these standards have been applied in the current year. The Board of Directors is currently assessing whether these standards once endorsed by the EU will have any impact on the financial statements of the Group and the Company.    Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its associate or joint venture – Postponed indefinitely; Amendments to IFRS 16 Leases: Lease liability in a sale and leaseback – Effective date 1 January 2024; and Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as current or non-current and classification of liabilities as current or non-current – Effective date 1 January 2024. Intangible assets (a) The Company accounts for mineral expenditure in accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources. (i) Capitalisation All costs related to acquiring the legal rights to explore will be capitalised. All other costs incurred prior to acquiring the rights to explore are charged directly to the consolidated profit and loss account. Exploration, appraisal and development expenditure incurred on exploring, and testing exploration prospects are accumulated and capitalised as intangible exploration and evaluation (“E&E”) assets. E&E capitalised costs include geological and geophysical costs, and other direct costs of exploration (drilling, trenching, sampling and technical feasibility and commercial viability activities). In addition, E&E capitalised costs include an allocation from operating expenses. All such costs are necessary for exploration and evaluation activities. E&E capitalised costs are not amortised prior to the conclusion of appraisal activities. 39 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc41 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 1 Accounting policies (continued) (a) Intangible assets (continued) (i) Capitalisation (continued) At completion of appraisal activities if technical feasibility is demonstrated and commercial resources are discovered, then the carrying amount of the relevant E&E asset will be reclassified as a development and production asset, once the carrying value of the asset has been assessed for impairment. If following completion of appraisal activities in an area, it is not possible to determine technical feasibility and commercial viability, or if the right to explore expires, then the costs of such unsuccessful exploration and evaluation is written off to the consolidated statement of profit or loss in the period in which the event occurred. (ii) Impairment If facts and circumstances indicate that the carrying value of an E&E asset may exceed its recoverable amount, an impairment review is performed. The following are considered to be key indicators of impairment in relation to E&E assets:  The period for which the entity has the right to explore in the specific area has expired or will expire in the near  future and is not expected to be renewed. Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned.  Exploration for and evaluation of mineral resources in the specific area has not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area. Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.  For E&E assets, where the above indicators exist on an annual basis, an impairment test is carried out. The E&E assets are categorised into Cash Generating Units (‘’CGU’’) on a country-by-country (where material) basis for the years ended 31 May 2023 and 31 May 2022. The carrying value of the CGU is compared to its recoverable amount and any resulting impairment loss is written off to the consolidated statement of profit or loss. The recoverable amount of the CGU is assessed as the higher of its fair value, less costs to sell, and its value in use. Subsequent measurement of financial assets Financial assets held within a different business model other than the ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair value through profit or loss (“FVTPL”). Further, irrespective of the business model used, financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at fair value though profit or loss. All derivative instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply. The category also contains an equity instrument. The Group account for the investment at fair value through profit or loss and did not make the irrevocable election to account for the investment in Karelian Diamond Resources PLC and listed equity securities at fair value through other comprehensive income. The fair value was determined in line with the requirements of IFRS 13 ‘Fair Value Measurement’. Assets in this category are measured at fair value with gains or losses recognised in profit or loss. (b) Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is provided on a straight-line basis to write off the cost less estimated residual value of the assets over their estimated useful lives as follows: Motor vehicles Plant and office equipment 5 years 10 years 40 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc42 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 1 Accounting policies (continued) (c) Income taxation expense Income tax expense comprises current and deferred tax. Income tax expense is recognised in the consolidated statement of profit or loss except to the extent that it relates to items recognised directly in other comprehensive income, in which case it is recognised in the consolidated statement of comprehensive income. Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities on a net basis or their tax assets and liabilities will be settled simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. (d) Share-based payments The Group classifies instruments issued as financial liabilities or equity instruments in accordance with the substance of the contractual terms of the instruments. When the warrants issued (see note 18 for details) have an exercise price in sterling, they are derivative in nature and are liability classified. They do not qualify for equity classification as any cash settlement on exercise of these warrants will be received in a foreign currency. Where warrants are issued in the functional currency of the Group and meet the other necessary conditions, they are recognised as equity instruments. The warrant liabilities are recognised at their fair value on initial recognition and subsequently are measured at fair value through profit or loss. Any change in direct costs associated with the issuance of warrants are taken as an immediate charge or credit through the statement of profit or loss. See note 13 for further details. For equity-settled share-based payment transactions (i.e. the granting of share options and share warrants), the Group measures the services and the corresponding increase in equity at fair value at the measurement date (which is the grant date). In both instances a recognised valuation methodology for the pricing of financial instruments is used (Binomial Lattice Model or Black Scholes Model). (e) Earnings per share The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all potentially dilutive ordinary shares. (f) Cash and cash equivalents Cash and cash equivalents consist of cash at bank held by the Group and short-term bank deposits with a maturity of three months or less. Cash and cash equivalents are held for the purpose of meeting short-term cash commitments. (g) Trade and other receivables and payables Trade and other receivables are measured at their transaction price and subsequently measured at amortised cost. Trade and other payables are measured at initial recognition at fair value, and subsequently measured at amortised cost. 41 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc 43 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 1 Accounting policies (continued) (h) Pension costs The Group provides for pensions for certain employees through a defined contribution pension scheme. The amounts are charged to the consolidated statement of profit or loss. Any difference between amounts charged and contributions paid to the pension scheme is included in receivables or payables in the consolidated statement of financial position. (i) Foreign currencies Transactions denominated in foreign currencies relating to costs and non-monetary assets are translated into € at the rates of exchange ruling on the dates on which the transactions occurred. Monetary assets and liabilities denominated in foreign currencies are translated into € at the rate of exchange ruling at the consolidated statement of financial position date. The resulting profits or losses are dealt with in the consolidated statement of profit or loss. (j) Loans The Directors’ loans are initially measured at fair value, net of transaction costs and subsequently measured at amortised cost using the effective interest method, with interest expense recognised on the effective interest rate method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability. As the convertible loans are made up of both equity and liability components, they are considered to be compound financial instruments. At initial recognition, the carrying amount of a compound financial instrument is allocated to its equity and liability components. When the initial carrying amount is allocated, the equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. The fair value of the conversion feature is taken directly to equity. The fair value of the liability, which is the difference between the transaction price and the fair value of the conversion feature, is recognised as a liability in the consolidated statement of financial position. The liability is subsequently measured at amortised cost. The Company accounts for the interest expense on the liability component of the convertible loan notes at the effective interest rate. The difference between the effective interest rate and interest rate attached to the convertible loan increases the carrying amount of the liability so that, on maturity, the carrying amount is equal to the capital cash repayment that the Company may be required to pay. (k) Ordinary shares Ordinary shares are classified as equity. Costs directly attributable to the issue of ordinary shares and share warrants are recognised as a deduction from retained earnings, net of any tax effects. Effective 6 July 2022, share issue costs can be deducted from share premium. Costs in relation to the issuance of warrants will continue to be deducted from retained earnings. (l) Impairment – financial assets measured at amortised cost Financial assets measured at amortised cost are reviewed for impairment loss at each reporting date. The Company applies the simplified approach in accordance with IFRS 9 as adopted by the European Union. The Company measures the loss allowance at an amount equal to the lifetime expected credit losses (“ECL”) as required under a simplified approach for trade receivables that do not contain a financing component. The Company’s approach to ECL reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions. Significant financial difficulties of the counterparty, probability that the counterparty will enter bankruptcy or financial re-organisation and default in payments are all considered indicators for increases in credit risks. If the credit risk increases to the point that it is considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the loss allowance. Any contractual payment which is more than 90 days past due is considered credit impaired. 42 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc44 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 1 Accounting policies (continued) (m) Significant accounting judgements and key sources of estimation uncertainty The preparation of the consolidated financial statements requires the Board of Directors to make judgements and estimates and form assumptions that affect the amounts of assets, liabilities, contingent liabilities, revenues and expenses reported in the consolidated financial statements. On an ongoing basis, the Board of Directors evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. The Board of Directors bases its judgements and estimates on historical experience and on other factors it believes to be reasonable under the circumstances, the results of which form the basis of the reported amounts that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. In the process of applying the Group’s accounting policies above, the Board of Directors have identified the judgemental areas that have the most significant impact on the amounts recognised in the consolidated financial statements (apart from those involving estimations), which are dealt with as follows: Exploration and evaluation assets The assessment of whether general administration costs and salary costs are capitalised exploration and evaluation costs or expensed involves judgement. The Board of Directors consider the nature of each cost incurred and whether it is deemed appropriate to capitalise it within exploration and evaluation assets. Given that the activity of management and the resultant administration and salary costs are primarily focused on the Group’s gold prospects, the Board of Directors consider it appropriate to capitalise a portion of such costs. These costs are reviewed on a line by line basis with the resultant calculation of the amount to be capitalised being specific to the activities of the Company in any given year. The carrying value of exploration and evaluation assets in the consolidated statement of financial position was €26,331,917 (31 May 2022: €23,888,833) at 31 May 2023 (Note 8). The Board of Directors carried out an assessment, in accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources relating to likelihood of licence renewal, likelihood of further expenditure, possible discontinuation of activities over specific claims and available data which may suggest that the recoverable value of an exploration and evaluation asset is less than its carrying amount. Based on this assessment the Board of Directors is satisfied as to the carrying value of these assets and is satisfied that these are recoverable, acknowledging however that their recoverability is dependent on future successful exploration efforts. Going concern The preparation of consolidated financial statements requires an assessment on the validity of the going concern assumption. The validity of the going concern assumption is dependent on the successful further development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. The Directors recognise that described above are material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the Board of Directors, having reviewed the proposed programme for exploration and evaluation assets, the results from the exploration programme and the prospects for raising additional funds as required, are satisfied that it is appropriate to prepare the financial statements on the going concern basis. Refer to pages 38 and 39 for further details. Deferred tax No deferred tax asset has been recognised in respect of tax losses as it is not considered probable that future taxable profit will be available against which the related temporary differences can be utilised. 43 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 45 1 Accounting policies (continued) (m) Significant accounting judgements and key sources of estimation uncertainty (continued) Cash Generating Units (‘’CGUs’’) As outlined in the Intangible assets accounting policy, the exploration and evaluation assets should be allocated to CGU. The determination of what constitutes a CGU requires judgement. The carrying value of each CGU is compared to its recoverable amount. The recoverable amount of the CGU is assessed as the higher of its fair value less costs to sell and its value in use. The determination of value in use requires the following judgements:    Estimation of future cash flows expected to be derived from the asset; Expectation about possible variations in the amount or timing of the future cash flows; and The determination of an appropriate discount rate. Key sources of estimation uncertainty The preparation of the consolidated financial statements requires the Board of Directors to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the consolidated statement of financial position date and the amounts reported for revenues and expenses during the financial year. The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. While uncertainty exists, primarily due to the nature of the mining and exploration business, this assessment includes a review of the possible outcomes that can be reasonably expected in the forthcoming financial period. Employee benefits - Share-based payment transactions The Company had equity-settled share-based payment arrangements with non-market performance conditions which fall within the scope of and are accounted for under the provisions of IFRS 2: Share-based Payment. Accordingly, the grant date fair value of the options under these schemes is recognised as an operating expense with a corresponding increase in the “Share-based payment reserve”, within equity, where the exercise price is granted in EUR or recognised as a liability where a different currency is quoted as the exercise price over the vesting period. The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Company has made estimates as to the volatility of its own shares, the probable life of options granted and the time of exercise of those options. The model used by the Company is the Black Scholes Model. The fair value of these options is measured using an appropriate option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest, except where forfeiture is only due to share prices not achieving the threshold for vesting. (n) Segmental reporting Operating segment information is presented in the consolidated financial statements in respect of the Group’s geographical segments which represent the financial basis by which the Group manages its business. The Group has one class of business, Gold Exploration. The Group has two principal reportable segments as follows:   Irish exploration assets: gold exploration assets in Ireland; and Finnish exploration assets: gold exploration assets in Finland. Group assets and liabilities include cash resources held by the Group. Corporate expenses include other operational expenditure incurred by the Group. These are not within the definition of an operating segment. Performance is measured based on segment result and total asset value as included in the internal management reports that are reviewed by the Group’s Board of Directors. There are no significant inter segment transactions. Costs that are directly attributable to Ireland and Finland have been capitalised to exploration and evaluation assets as appropriate (Note 8). The Group did not earn any revenue in the current or comparative financial year. 44 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc46 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 1 Accounting policies (continued) (o) Leased assets Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period. 2 Operating expenses (a) Analysis of operating expenses Operating expenses Transfer to intangible assets Operating expenses are analysed as follows: Wages, salaries and related costs Professional fees Other operating expenses Auditor’s remuneration Depreciation 2023 € 773,957 (169,066) 604,891 412,507 204,924 98,431 40,000 18,095 773,957 2022 € 1,150,229 (317,889) 832,340 508,895 425,395 184,554 29,500 1,885 1,150,229 Of the above costs, a total of €169,066 (31 May 2022: €317,889) is capitalised to intangible assets based on a review of the nature and quantum of the underlying costs. The costs capitalised to intangible assets mainly relate to salaries of geological and on-site staff together with an appropriate portion of executive management salaries. €246,501 (31 May 2022: €179,396) is charged to the Statement of profit or loss in relation to Directors’ salaries. (b) Wages, salaries and related costs as disclosed above is analysed as follows: The following amounts has been charged to Profit and Loss account: Wages and salaries Social insurance costs 2023 € 402,566 9,941 412,507 2022 € 486,176 22,719 508,895 The amount of wages, salaries and related costs capitalised as intangible assets during the financial year was €138,276 (31 May 2022: €311,481). The average number of persons employed during the financial year (including executive Directors) by activity was as follows: Exploration and evaluation Corporate management and administration 2023 6 2 8 2022 6 2 8 45 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 47 The Group has an externally funded defined contribution scheme in order to satisfy the pension arrangements in respect of certain management personnel. No contributions were made during the year ended 31 May 2023 and 31 May 2022. An analysis of remuneration for each Director of the Company in the current financial year (prior to amounts transferred to intangible assets) is as follows: Professor Richard Conroy Maureen T.A. Jones Professor Garth Earls Brendan McMorrow Howard Bird Fees € 22,220 9,523 9,523 9,523 9,523 60,312 Salary € 179,250 114,851 - - - 294,101 Share-based payment charge € - - - - - - Pension contributions € - - - - - - Total € 201,470 124,374 9,523 9,523 9,523 354,413 An analysis of remuneration for each Director of the Company in the prior financial year (prior to amounts transferred to intangible assets) is as follows: Professor Richard Conroy Maureen T.A. Jones Professor Garth Earls Brendan McMorrow Howard Bird Fees € 22,220 9,523 9,523 9,523 9,523 60,312 Salary € 179,250 114,851 - - - 294,101 Share-based payment charge € - - - - - - Pension contributions € - - - - - - Total € 201,470 124,374 9,523 9,523 9,523 354,413 3 Loss before taxation The loss before taxation is arrived at after charging the following items, those items are stated at amounts prior to the transfer to intangible assets: Depreciation Auditor’s remuneration - Group The analysis of the auditor’s remuneration is as follows:  Auditor’s remuneration - Company The analysis of the auditor’s remuneration is as follows:  Audit of financial statements Audit of financial statements 2023 € 18,095 2022 € 1,885 40,000 35,000 35,000 30,000 Fees of €NIL (31 May 2022: €33,630 for tax advisory services) were paid to the group’s auditors for tax advisory and other non-audit services in respect of the current financial years. Included within the Group audit fee (above) is the amount incurred by the Company. 46 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc48 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 4 Directors’ remuneration Aggregate emoluments paid to or receivable by Directors in respect of qualifying services 2023 € 2022 € 354,413 354,413 During the year ended 31 May 2023 and 31 May 2022, one Director was a member of a defined contribution scheme but no amounts were paid and accordingly, no other disclosures are required by Section 305 of the Companies Act 2014. No compensation has been paid for the loss of office or other termination benefit in respect of the loss of office of Director or other offices (31 May 2022: €Nil). 5 Income tax expense No taxation charge arose in the current or prior financial year due to losses being carried forward in the current financial year and losses incurred in the prior financial year. Factors affecting the tax charge for the financial year: The total tax charge for the financial year is different to the standard rate of Irish corporation tax. This is due to the following: Loss on ordinary activities before tax Irish standard tax rate Tax credit at the Irish standard rate Effects of: Expenses not deductible for tax purposes Losses carried forward for future utilisation Losses utilised Tax charge for the financial year 2023 € (362,829) 12.5% (47,666) - 46,366 - - 2022 € (256,484) 12.5% (32,061) - 32,061 - - No deferred tax asset has been recognised on accumulated tax losses as it cannot be considered probable that future taxable profit will be available against which the deferred tax asset can be utilised. Unutilised losses may be carried forward from the date of the origination of the losses but may only be offset against taxable profits earned from the same trade. Unutilised losses carried forward amounted to €23,112,786 at 31 May 2023 and €22,749,957 at 31 May 2022. 47 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 49 6 Loss per share Loss for the financial year attributable to equity holders of the Company Basic loss per share Number of ordinary shares at start of financial year Number of ordinary shares issued during the financial year Number of ordinary shares at end of financial year Weighted average number of ordinary shares for the purposes of basic earnings per share Loss per ordinary share Diluted loss per share The effect of share options and warrants is anti-dilutive. 7 Subsidiaries 2023 € 2022 € (362,829) (256,484) No. of shares No. of shares 39,262,880 5,493,221 44,756,101 39,262,880 - 39,262,880 43,671,058 39,262,880 (0.0083) (0.0065) Conroy Gold Longford-Down Limited Conroy Gold Clontibret Limited Conroy Gold Armagh Limited Armagh Gold Limited Conroy Gold Limited % Owned Class 100% Ordinary 100% Ordinary 100% Ordinary 100% Ordinary 100% Ordinary 31 May 2023 € 9,116,823 5,766,901 3,719,357 3 1 18,603,085 31 May 2022 € 9,034,144 5,703,992 3,685,208 3 1 18,423,348 The Company holds 2 ordinary shares of €0.30 each in Conroy Gold Limited. The registered office of the above subsidiaries is 3300 Lake Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland. 48 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc50 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 8 Intangible assets Exploration and evaluation assets Group: Cost At 1 June Expenditure during the financial year License and appraisal costs Other operating expenses   At 31 May Company: Cost   At 1 June Expenditure during the financial year License and appraisal costs Other operating expenses Transfer of intangible assets to subsidiaries Sale of intangible assets to subsidiaries Transfer of current year costs to subsidiaries At 31 May 31 May 2023 € 23,888,833 1,795,401 647,683 26,331,917 31 May 2023 € 3,421,364 68,724 161,509 - - - 3,651,597 31 May 2022 € 22,988,974 30,986 868,873 23,888,833 31 May 2022 € 22,469,838 30,986 523,623 (18,423,344) (1,000,000) (179,739) 3,421,364 Exploration and evaluation assets relate to expenditure incurred in the development of mineral exploration opportunities. These assets are carried at historical cost and have been assessed for impairment in particular with regard to the requirements of IFRS 6: Exploration for and Evaluation of Mineral Resources relating to remaining licence or claim terms, likelihood of renewal, likelihood of further expenditure, possible discontinuation of activities over specific claims and available data which may suggest that the recoverable value of an exploration and evaluation asset is less than its carrying amount. The Irish licenses in relation to Clontibret, Longford Down and Armagh were transferred to the three new subsidiaries in the prior year. See Note 7. All prior costs capitalised in line with IFRS 6 as above, in relation to these three licenses, were transferred to the subsidiaries where the licenses are now held. Costs incurred in the current year in relation to the licenses held by the companies either were or will be recharged to the subsidiaries. The Board of Directors have considered the proposed work programmes for the underlying mineral resources. They are satisfied that there are no indications of impairment. The Board of Directors note that the realisation of the intangible assets is dependent on further successful development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. Please refer to Note 17 for details of further work commitments. 49 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 51 8 Intangible assets (continued) Mineral interests are categorised as follows: Group: Ireland Cost At 1 June Expenditure during the financial year License and appraisal costs Other operating expenses   At 31 May Group: Finland Cost At 1 June Expenditure during the financial year License and appraisal costs Other operating expenses   At 31 May Company: Ireland Cost At 1 June Expenditure during the financial year License and appraisal costs Other operating expenses   Transfer of intangible assets to subsidiaries Sale of intangible assets to subsidiaries Transfer of current year costs to subsidiaries At 31 May Company: Finland Cost At 1 June Expenditure during the financial year License and appraisal costs Other operating expenses   At 31 May 50 31 May 2023 € 21,086,461 1,794,850 622,324 23,503,635 31 May 2023 € 2,802,372 550 25,360 2,828,282 31 May 2023 € 618,992 68,174 136,149 31 May 2022 € 20,506,725 28,752 550,984 21,086,461 31 May 2022 € 2,482,249 2,234 317,889 2,802,372 31 May 2022 € 19,987,589 28,752 205,734 - - (18,423,344) (1,000,000) - 823,315 31 May 2023 € 2,802,372 550 25,360 2,828,282 (179,739) 618,992 31 May 2022 € 2,482,249 2,234 317,889 2,802,372 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc 52 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 9 Property, plant and equipment In respect of the current financial year: Group Cost At 1 June 2022 Additions At 31 May 2023 Accumulated depreciation At 1 June 2022 Charge for the financial year At 31 May 2023 Motor Vehicles € Plant & Office Equipment € 17,754 62,452 80,206 17,754 12,490 30,244 138,121 39,757 177,878 130,532 5,606 136,138 Total € 155,875 102,209 258,084 148,286 18,095 166,381 Carrying amount at 31 May 2023 49,962 41,740 91,703 Company Cost At 1 June 2022 Additions At 31 May 2023 Accumulated depreciation At 1 June 2022 Charge for the financial year At 31 May 2023 Motor Vehicles € Plant & Office Equipment € 17,754 62,452 80,206 17,754 12,490 30,244 138,121 30,086 168,207 130,532 4,639 135,171 Total € 155,875 92,538 248,413 148,286 17,129 165,415 Carrying amount at 31 May 2023 49,962 33,036 82,998 The net book value of assets held under finance leases or hire purchase contracts, included above are as follows: Group and Company Motor vehicles 2023 € 49,962 2022 € - 51 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc53 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 9 Property, plant and equipment (continued) In respect of the previous financial year: Group and Company Cost At 1 June 2021 Additions At 31 May 2022 Accumulated depreciation At 1 June 2021 Charge for the financial year At 31 May 2022 Motor Vehicles € Plant & Office Equipment € 17,754 - 17,754 17,754 - 17,754 138,121 - 138,121 128,647 1,885 130,532 Total € 155,875 - 155,875 146,401 1,885 148,286 Carrying amount at 31 May 2022 - 7,589 7,589 10 Other receivables Group Amount owed by Karelian Diamond Resources P.L.C. Other receivables VAT receivable Company Amounts owed from Conroy Gold Limited Amount due from Karelian Diamond Resources P.L.C. Vat receivable Amounts owed from Conroy Gold Clontibret Limited Amounts owed from Conroy Gold Longford-Down Limited Other receivables Amounts owed from Conroy Gold Armagh Limited 31 May 2023 € 4,993 79,800 40,027 124,828 31 May 2023 € 523,380 5,023 - 37,162 15,944 77,915 5,182 664,606 31 May 2022 € 199,806 90,670 138,853 429,329 31 May 2022 € 519,133 199,806 135,202 107,596 101,411 90,790 44,620 1,198,558 52 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc54 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 10 Other receivables (continued) The realisation of amounts owed by Group companies to the Company is dependent on the further successful development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. The Company has confirmed that it will not call on these balances within twelve months from the date of signing of these financial statements. However, as these amounts are receivable from the Group companies, the Directors are confident that the probability of default is negligible. Karelian Diamond Resources P.L.C. is not a group company but considered related due to common directors, registered office, the sharing of personnel and office facilities. Due to this relationship, expenses are shared and allocated to one another and payment of these is through an intercompany account. 11 Financial assets Equity investment Convertible loan 31 May 2023 € 143,943 129,548 273,491 31 May 2022 € - - - In May 2023, Karelian Diamond Resources plc reached agreement that it capitalises an amount equivalent to £125,000 of the amount owing to the Company be capitalised into 5,000,000 new ordinary shares of €0.00025 each in the capital of Karelian Diamond Resources P.L.C. at a price of 2.5p per share. A further amount outstanding equivalent to £112,500 was incorporated into a convertible loan note with a term of 18 months attracting an interest rate of 5% per annum, payable on the redemption or conversion of the Loan Note. The Loan Note can be converted at the option of the Company at a price equivalent to 5p per Share. 12 Cash and cash equivalents Group Cash held in bank accounts Company Cash held in bank accounts 31 May 2023 € 557,934 557,934 31 May 2023 € 53,136 53,136 31 May 2022 € 1,216,097 1,216,097 31 May 2022 € 964,997 964,997 53 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources PlcConroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 55 13 Current liabilities Trade and other payables Group Other creditors and accruals Amounts falling due within one year: Accrued Directors’ remuneration Fees and other emoluments Pension contributions Accrued former Directors’ remuneration Fees and other emoluments Pension contributions Company Other creditors and accruals Amounts falling due within one year: Accrued Directors’ remuneration Fees and other emoluments Pension contributions Accrued former Directors’ remuneration Fees and other emoluments Pension contributions 31 May 2023 € 614,121 2,464,317 164,675 464,125 - 3,707,238 31 May 2023 € 265,167 2,464,317 164,675 464,125 - 3,358,284 31 May 2022 € 552,795 2,368,045 164,675 507,345 29,083 3,621,943 31 May 2022 € 433,701 2,368,045 164,675 507,345 29,083 3,502,849 It is the Group’s practice to agree terms of transactions, including payment terms with suppliers. It is the Group’s policy that payment is made according to the agreed terms. The carrying value of the trade and other payables approximates to their fair value. The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls, Brendan McMorrow, Howard Bird and former Directors, namely James P. Jones, Séamus P. Fitzpatrick and Dr. Sorċa Conroy have confirmed that they will not seek repayment of amounts owed to them by the Group and the Company of €3,046,692 (31 May 2022: €3,069,148) for a minimum period of 12 months from the date of approval of the consolidated financial statements, unless the Group has sufficient funds to repay. 54 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc56 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 13 Current liabilities (continued) Related party loans – Group and Company Related party loans Opening balance 1 June Closing balance 31 May 31 May 2023 € 136,999 136,999 31 May 2022 € 136,999 136,999 The related party loans amounts relate to monies owed to Professor Richard Conroy amounting to €101,999 (31 May 2022: €101,999) and Séamus P. Fitzpatrick (former Director) amounting to €35,000 (31 May 2022: €35,000). The Directors and former Director have confirmed that they will not seek repayment of the remaining loan balances owed to them by the Group and Company at 31 May 2023 within 12 months of the date of approval of the consolidated financial statements, unless the Group has sufficient funds to repay. There is no interest payable in respect of these loans, no security has been attached to these loans and there is no repayment or maturity terms. Séamus P. Fitzpatrick is a former director in the Company having left the board in August 2017 (and is a shareholder of the Company owning less than 3% of the issued share capital of the Company). 14 Non-current liabilities Warrant liabilities No new warrants were issued in the current year or in the prior year. All warrants in issue at 31 May 2022 lapsed during the year. As a result €257,070 was reflected in the financial statements as a reduction in the fair value of warrants. Convertible loan On 15 July 2019, the Company entered into an unsecured convertible loan agreement for €250,000 with Hard Metal Machine Tools Limited (the “Lender”). This loan note attracted an interest rate of 5% and was convertible into ordinary equity at a price of 7 pence sterling per share. A further unsecured convertible loan note for €100,000 was issued on 30 October 2019 to the Lender and carried a similar interest rate and a conversion price of 6 pence sterling per share. Both loan notes together with all accrued interest were converted into a total of 5,417,935 new ordinary shares in the capital of the company during the year ended 31 May 2023. Opening Balance Interest payable Converted during the year 31 May 2023 € 388,219 14,991 (403,210) - 31 May 2022 € 378,080 10,139 - 388,219 55 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc57 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 15 Non-controlling interests Convertible shares Under the terms of the joint venture and related agreements entered into between the Company and Demir Export on 31 December 2021, in return for fulfilling funding and other obligations as set out in the agreements, Demir Export will earn an equity interest in the following wholly owned subsidiaries of the Company: Conroy Gold (Clontibret) Limited, Conroy Gold (Longford Down) Limited and Conroy Gold (Armagh) Limited. The investment by Demir Export is effected by the issuance of convertible shares in each subsidiary company which have no voting or participation rights. When all of the conditions (including, inter-alia a minimum of €5.5 million in cash investment) in relation to the first phase of the joint venture operation (Phase 1) have been fulfilled, the convertible shares will be converted into ordinary shares in each subsidiary company such that Demir Export will hold a 25% ordinary equity interest in each company. Demir Export can earn further equity in each subsidiary company by meeting the commitments set down in Phases 2 and 3 of the joint venture. At 31 May 2023, Demir Export had invested €3,707,218 in the subsidiary companies with convertible shares issued for the first €2,557,218 of this investment and the balance to be issued post year end in line with the agreement. This amount is recorded as a non-controlling interest at the year end. Post year end this investment has increased to in excess of €4,500,000. The joint venture agreements provide that in certain limited circumstances, Demir Export will be entitled to a net smelter royalty in the licences, capped at the level of investment made, in lieu of their convertible shares should it exit or terminate its involvement in the joint venture during the current Phase 1 stage. Conroy Gold Clontibret Limited Conroy Gold Longford Down Limited Conroy Gold Armagh Limited 16 Called up share capital and share premium – Group and Company Authorised: 11,995,569,057 ordinary shares of €0.001 each 306,779,844 deferred shares of €0.02 each 437,320,727 deferred shares of €0.00999 each 31 May 2023 € 2,577,000 495,100 635,118 3,707,218 31 May 2023 € 11,995,569 6,135,597 4,368,834 22,500,000 31 May 2022 € 1,206,899 100,000 100,000 1,406,899 31 May 2022 € 11,995,569 6,135,597 4,368,834 22,500,000 The deferred shares do not entitle the holder to receive a dividend or other distribution. Furthermore, the deferred shares do not entitle the shareholder to receive notice of or vote at any general meeting of the Company, and do not entitle the shareholder to any proceeds on a return of capital or winding up of the Company. 56 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc58 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 16 Called up share capital and share premium – Group and Company (continued) Issued and fully paid – Current financial year Number of ordinary shares Called up share capital € Start of financial year Share issue 39,262,880 5,493,221 End of financial year 44,756,101 39,263 5,493 44,756 Capital conversion reserve fund € Called up deferred share capital € 30,617 10,504,431 Share premium € 15,256,556 442,249 30,617 10,504,431 15,698,805 (a) On 7 July 2022 the Company converted a loan amounting to £258,534 into 3,693,346 ordinary shares of €0.001 in the capital of the company at a price of £0.07 per share. (b) On 17 August 2022 the Company raised €21,472 by the issue of 75,286 ordinary shares of €0.001 in the capital of the company to former director Mr C David Wathen at a price of £0.24 per share. (c) On 27 October 2022 the company converted a loan amounting to £103,475 into 1,724,589 ordinary shares of €0.001 in the capital of the company at a price of £0.06 per share. Issued and fully paid – Prior financial year Number of ordinary shares Called up share capital € Capital conversion reserve fund € Called up deferred share capital € Share premium € Start of financial year 39,262,880 End of financial year 39,262,880 39,263 39,263 30,617 10,504,431 15,256,556 30,617 10,504,431 15,256,556 Warrants: There were no warrants outstanding as all warrants over shares in the company lapsed during the year. At 31 May 2022, there were warrants in issue over 10,793,116 shares exercisable at prices from £0.035 to €4.33 per share with various exercise dates up to 15 February 2023. Share Price: The share price at 31 May 2023 was £0.1675 (31 May 2022: £0.3050). During the financial year, the price ranged from £0.1275 to £0.3150 (31 May 2022: from £0.1963 to £0.4350). 57 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc59 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 17 Commitments and contingencies Exploration and evaluation activities The Group has received prospecting licences under the Republic of Ireland Mineral Development Acts 1940 to 1995 for areas in Monaghan and Cavan. It has also received licences in Northern Ireland for areas in Armagh in accordance with the Mineral Development Act (Northern Ireland) 1969. At 31 May 2023, the Group had work commitments of €98,965 (31 May 2022: €328,055) for year to 31 May 2024, in respect of these prospecting licences held. These commitments will be funded by Demir Export A.S., the JV partner on Longford Down Massif as per the agreed terms of the JV agreement. The Group also hold prospecting license in Finland which are currently under application for extending, however there are no work or financial commitments in respect of these licenses as at 31 May 2023 (31 May 2022: €Nil) 18 Related party transactions (a) Details as to shareholders and Directors’ loans and share capital transactions with Professor Richard Conroy, Maureen T.A. Jones, Séamus P. Fitzpatrick (former Director) and Dr. Sorċa Conroy (former Director) are outlined in in Note 12 of the consolidated financial statements. The loans do not incur interest, are not secured and will not be called upon within twelve months from the date of signing of these consolidated financial statements. (b) For the financial year ended 31 May 2023, the Company incurred costs totalling €46,179 (31 May 2022: €100,313) on behalf of Karelian Diamond Resources P.L.C., which has certain common shareholders and Directors. These costs were recharged to Karelian Diamond Resources P.L.C. This intercompany account does not incur interest and no final settlement of the balance has been agreed. Both entities will continue to incur and share costs as with prior years. These costs are analysed as follows: Office salaries Rent and rates Other operating expenses 2023 € 25,558 10,146 10,475 46,179 2022 € 72,469 15,850 11,994 100,313 58 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc60 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 18 Related party transactions (continued) (c) At 31 May 2023 the company recorded a receivable of €5,023 from Karelian Diamond Resources P.L.C. (31 May 2022: €199,806). Amounts owed by Karelian Diamond Resources P.L.C. are included within trade and other receivables during the current year. During the financial year ended 31 May 2023, the Company paid €32,500 to (31 May 2022: €70,000 received from) Karelian Diamond Resources P.L.C. (d) During the financial year ended 31 May 2023, the Company charged €46,179 (31 May 2022: €100,313) to Karelian Diamond Resources P.L.C. in respect of the allocation of certain costs as detailed in Note 17(b) above. In May 2023, the Company converted amounts owing to it equivalent to €143,943 (£125,000) into ordinary equity as detailed in Note 11 and a further €129,549 (£112,500) into a convertible loan instrument as detailed in Note 11. (e) At 31 May 2023, Conroy Gold Limited owed €523,380 (31 May 2022: €519,133) to the Company. (f) At 31 May 2023, the Company was owed €13,933 (31 May 2022: €13,933) by Trans-International Oil Exploration Limited. Professor Richard Conroy and Maureen T.A. Jones are Directors of Trans-International Oil Exploration Limited. Professor Richard Conroy holds 50.7% of the share capital of this company. A further €37,535 (31 May 2022: €35,885) is owed by Conroy P.L.C., a company in which Professor Richard Conroy has a controlling interest. Amounts totalling €3,076 (31 May 2022: €3,076) were owed by companies in which Professor Richard Conroy and Maureen T.A. Jones hold a 50% interest each. The amounts owed by the various companies are included within “Other receivables” in the current and previous financial year’s consolidated statement of financial position and company’s statement of financial position. (g) At 31 May 2023, the Company was owed €37,162 (31 May 2022: €107,596) by Conroy Gold Clontibret Limited, €15,944 (31 May 2022:€ 101,412) by Conroy Gold Longford-Down Limited and €5,182 (31 May 2022:€Nil) by Conroy Gold Armagh Limited. These balances relate to administration expenses that are recharged to the subsidiaries from the Company as per the agreements with the companies. (h) Key management personnel are considered to be the Board of Directors and other key management. The compensation of all key management personnel during the year was €440,663 (31 May 2022: €400,413). Further analysis of remuneration for each Director of the Company is set out in note 2. (i) Professor Garth Earls invoiced the Group for €11,320 (31 May 2022: €9,785) during the financial year for professional services rendered to the Group. At 31 May 2023, Professor Garth Earls was owed €37,426 (31 May 2022: €33,331) in respect of these services and services to the company as director. Brendan McMorrow invoiced the Group for €23,750 (31 May 2022: €14,725) during the financial year for professional services rendered to the Group. At 31 May 2023, Brendan McMorrow was owed €29,961 (31 May 2022: €26,189) in respect of these services and services to the company as director. (j) During the year the Company converted two unsecured Convertible Loan Notes held by Hard Metal Machine Tools Limited (the "Lender") into ordinary shares in the company as detailed in Note 14. The Lender is a company 99% owned by Phillip Hannigan, a substantial shareholder in the Company 59 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc61 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 19 Share-based payments The Company has an equity-settled share-based payment arrangement with non-market performance conditions. At 31 May 2023, there were no share options outstanding (31 May 2022: €Nil). Warrants granted generally have a vesting period of two years. Details of the warrants outstanding during the financial year are below. 2023 No. of share warrants At 1 June Lapsed during the financial year (Note 15) At 31 May 10,793,116 (10,793,116) - 2023 Weighted average exercise price € 0.646 - - 2022 No. of share warrants 10,793,116 - 10,793,116 2022 Weighted average exercise price € 0.646 - 0.646 During the year ended 31 May 2023, 10,793,116 warrants lapsed (31 May 2022: no warrants lapsed). As a result of the warrants lapsing during the year, the fair value of sterling based warrants at the year end was NIL (31 May 2022: €257,050) and accordingly €257,050 was credited to the statement of profit or loss as a movement in the fair value of warrants. The Company estimated the fair value of warrants using the Black Scholes Model. The determination of the fair value of the warrants on the date of grant using the Black Scholes Model is affected by the Company’s share price as well as assumptions regarding a number of other variables. These variables include the expected term of the warrants, the share price volatility, the risk-free interest rate and the expected dividends. The following key input assumptions were used to calculate the fair value of the sterling based warrants: Dividend yield Share price volatility Risk free interest rate Expected life (in years) 2023 Warrants N/A N/A N/A N/A 2022 Warrants 0% 79% 1.24% 2 60 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc62 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 20 Financial instruments Financial risk management objectives, policies and processes The Group has exposure to the following risks from its use of financial instruments: (a) (b) (c) (d) (e) Credit risk. Inflation; Interest rate risk; Foreign currency risk; Liquidity risk; and The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and framework in relation to the risks faced. (a) Inflation The Group is exposed to the risk associated with inflation such as the impact of increased operating expenses including rent, light & heat and wages and salaries. The Chairman and Managing Director monitor costs on an ongoing basis. (b) Interest rate risk The Group currently finances its operations through shareholders’ funds. Short term cash funds are invested, if appropriate, in short-term interest-bearing bank deposits. There were no short-term interest-bearing bank deposits at 31 May 2023 or 31 May 2022 and no sensitivity analysis has been performed. The Group did not enter into any hedging transactions with respect to interest rate risk. (c) Foreign currency risk The Group is exposed to currency risk on purchases, loans and bank deposits that are denominated in a currency other than the functional currency of the entities of the Group. It is Group policy to ensure that foreign currency risk is managed wherever possible by matching foreign currency income and expenditure. During the financial years ended 31 May 2023 and 31 May 2022, the Group did not utilise foreign currency forward contracts or other derivatives to manage foreign currency risk. The Group’s foreign currency risk exposure in respect of the principal foreign currencies in which the Group operates was as follows at 31 May 2023: Cash and cash equivalents Trade and other payables Other receivables Amount due from related party Related party loans Total exposure Sterling exposure denominated in € 3,082 (50,930) - - - (47,848) Not at risk € 554,852 (3,656,308) 394,736 4,993 (136,999) (2,838,726) Total € 557,934 (3,707,238) 394,736 4,993 (136,999) (2,886,574) 61 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc63 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 20 Financial instruments (continued) Financial risk management objectives, policies and processes (continued) (c) Foreign currency risk (continued) The Group’s foreign currency risk exposure in respect of the principal foreign currencies in which the Group operates was as follows at 31 May 2022: Cash and cash equivalents Convertible loans Trade and other payables Other receivables Amount due from related party Related party loans Total exposure Sterling exposure denominated in € 63,602 (388,219) (49,222) - - - (373,839) Not at risk € 1,152,495 - (3,572,721) 229,523 199,806 (136,999) (2,127,896) Total € 1,216,097 (388,219) (3,621,943) 229,523 199,806 (136,999) (2,501,735) The following are the significant exchange rates that applied against €1 during the financial year: GBP Average rate 2023 0.869 Average rate 2022 0.844 Spot rate 31 May 2023 0.865 Spot rate 31 May 2022 0.852 Sensitivity analysis A 10% strengthening of Euro against Sterling, based on outstanding financial assets and liabilities at 31 May 2023 would have decreased the reported loss by €33,985 (31 May 2022: decreased the reported loss by €37,384) as a consequence of the retranslation of foreign currency denominated financial assets and liabilities at those dates. A weakening of 10% of the Euro against Sterling would have had an equal and opposite effect. It is assumed that all other variables, especially interest rates, remain constant in the analysis. (d) Liquidity risk Liquidity is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and adverse conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages liquidity risk by regularly monitoring cash flow projections. The nature of the Group’s exploration and appraisal activities can result in significant differences between expected and actual cash flows. Contractual maturities of financial liabilities as at 31 May 2023 were as follows: Item Trade and other payables (including related party loans) Carrying amount € Contractual cash flows € 6 months or less € 6 -12 months € 1-2 years € 2-5 years € 3,707,238 3,707,238 431,280* 3,275,958 3,707,238 3,707,237 431,280 3,275,958 - - - - 62 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc 64 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 20 Financial instruments (continued) Financial risk management objectives, policies and processes (continued) (d) Liquidity risk (continued) Contractual maturities of financial liabilities as at 31 May 2022 were as follows: Item Trade and other payables (including related party loans) Convertible loans Carrying amount € Contractual cash flows € 6 months or less € 6 -12 months € 1-2 years € 2-5 years € 3,621,943 3,621,943 552,795* 3,069,148** - - 388,219 402,500 - - - 388,219*** 4,010,162 4,024,443 552,795 3,069,148** - 388,219*** *The amount of €431,280 (31 May 2022: €552,795) relates to other creditors and accruals. **The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls, Brendan McMorrow, Howard Bird and former Directors, namely James P. Jones, Séamus P. Fitzpatrick and Dr. Sorċa Conroy have con- firmed that they will not seek repayment of amounts owed to them by the Group and the Company of €3,046,692 (31 May 2022: €3,069,148) within 12 months of the date of approval of the financial statements, unless the Group has sufficient funds to repay. **The related party loans amounts relate to monies owed to Professor Richard Conroy amounting to €101,999 (31 May 2022: €101,999) and Séamus P. Fitzpatrick (former Director) amounting to €35,000 (31 May 2022: €35,000) . ***More information regarding the convertible loans is detailed in Note 14. The Group had cash and cash equivalents of €557,934 at 31 May 2023 (31 May 2022: €1,216,097). (e) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge its obligation. Credit risk is the risk of financial loss to the Group if a cash deposit, amount owed by related party and other receivables is not recovered. Group deposits are placed only with banks with appropriate credit ratings. The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at 31 May 2023 and 31 May 2022 was: Cash and cash equivalents Amount owed by Karelian Diamond Resources Plc Other receivables 31 May 2023 € 557,934 5,023 209,358 772,285 31 May 2022 € 1,216,097 199,806 90,670 1,506,573 The Group’s cash and cash equivalents are held at AIB Bank which has a credit rating of “BBB+” (31 May 2022: BBB+) as determined by Fitch, and Bank of Ireland which a credit rating of “F2’’ (31 May 2022: BBB+) as determined by Fitch. 63 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc65 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 20 Financial instruments (continued) Financial risk management objectives, policies and processes (continued) (e) Credit risk (continued) Expected credit loss The Group measures credit risk and expected credit losses on financial assets measured at amortised cost using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward-looking information in determining any expected credit loss. At 31 May 2023 and 31 May 2022, all cash is accessible on demand and held with counterparties with a credit rating of BBB+ or higher. Having considered the credit rating of the counterparties and the outstanding balances, management have determined that for both financial years presented, the amount of ECL is immaterial. However, as these amounts are receivable from the Group companies, the Directors of the Company are confident that the probability of default is close to zero. (f) Fair values versus carrying amounts Due to the short-term nature of the Group’s current financial assets and liabilities held at amortised cost at 31 May 2023 and 31 May 2022, the fair value equals the carrying amount in each case. The carrying value of non-current financial assets and liabilities is a reasonable approximation of fair value. (g) Capital management The Group’s objective is to discover and develop world class ore bodies in order to create value for its shareholders. The Group’s strategy is to explore in politically stable and geographically attractive countries such as Ireland and Finland. The Group ensures as far as possible to obtain adequate working capital to carry out its work obligations and commitments. The Group’s overall strategy remains unchanged from the prior period. The Group has historically funded its activities through share issues and placings and loans. The Group’s capital structure is kept under review by the Board of Directors and it is committed to capital discipline and continues to maintain flexibility for future growth. The capital structure of the Group consists of equity of the Group (refer to the statement of changes in equity and Note 16). The Group is not subject to any externally imposed capital requirements. 64 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc66 Conroy Gold and Natural Resources P.L.C. Notes to and forming part of the consolidated and company financial statements for the financial year ended 31 May 2023 (continued) 21 Post balance sheet events Post year end, the Company announced on 20th June that it had completed a fundraising of £400,000 through the issue of 2,962,962 ordinary shares in order to increase the company’s exploration capacity and strengthen its working capital position. Each share carries a warrant to subscribe for one new Ordinary Share at a price of 22.5 pence per Ordinary Share exercisable at any point up to 13 June 2026. In announcements on 5th June 2023, 13th July 2023, 4th September 2023, 13th September 2023 and 22 November 2023 the Company announced detail of results and progress from the exploration programme being carried out in conjunction with the Company’s joint venture partner Demir Export AS. There were no further material events after the reporting year requiring adjustment to or disclosure in these audited consolidated and company’s financial statements. 22 Approval of the audited consolidated financial statements for the financial year ended 31 May 2023 These audited consolidated financial statements were approved by the Board of Directors on 27 November 2023 and authorised for issue on 29 November 2023. A copy of statements Company’s website www.conroygold.com and will be available from the will Company’s registered office at 3300 Lake Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland. the audited consolidated available financial the on be 65 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc67 Annual report and consolidated financial statements for the financial year ended 31 May 2023 Conroy Gold and Natural Resources Plc68 Annual report and consolidated financial statements for the financial year ended 31 May 2023Conroy Gold and Natural Resources Plc

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