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Citizens, Inc.NGEX MINERALS LTD. 2022 YEAR END REPORT Management’s Discussion and Analysis and Consolidated Financial Statements For the Twelve Months Ended December 31, 2022 (UNAUDITED) NGEX MINERALS LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2022 (Amounts in Canadian Dollars unless otherwise indicated) The following management’s discussion and analysis (“MD&A”) of NGEx Minerals Ltd. (“NGEx Minerals” or the “Company”) should be read in conjunction with the consolidated financial statements for the year ended December 31, 2022 and related notes therein. The financial information in this MD&A is reported in Canadian dollars unless otherwise indicated and is derived from the Company’s annual consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The effective date of this MD&A is March 31, 2023. Additional information about the Company and the Company’s website www.ngexminerals.com. is available on SEDAR at www.sedar.com and its business activities Some of the statements in this MD&A are forward-looking statements that are subject to risk factors set out in the cautionary note contained herein. CORE BUSINESS NGEx Minerals is a mineral exploration company with copper-gold and gold exploration projects in Argentina and Chile. The Company’s strategy is to create value for its shareholders through prudent management and deployment of its capital resources, by expanding and increasing the quality of its mineral resources through successful exploration and acquisitions and by advancing the engineering and other studies that are required to prepare its projects for eventual development by the Company and its partners or by third parties. The overall objective is to position the Company as a top tier mineral exploration-development investment opportunity. The Company has a strong management team and board with extensive experience in the resource sector, particularly in Chile and Argentina. The board and management team have an appropriate mix of geological, engineering, financial, and business skills to advance the Company’s projects and to generate value for its shareholders. The Company’s current flagship asset is its Los Helados copper-gold deposit, located in Region III of Chile (“Los Helados”, the “Los Helados Property” or the “Los Helados Project”). The Company is the majority partner and operator of the Los Helados Project, which is subject to a Joint Exploration Agreement (the “JEA”) with its partner, Nippon Caserones Resources Co. Ltd. (“NCR”). NCR became the Company’s partner on April 1, 2020, when Pan Pacific Copper (“PPC”) transferred its interest in the Los Helados Property to NCR. NCR is a subsidiary of JX Nippon Mining and Metals Corporation, a Tokyo-based mining and smelting company that also currently operates the Caserones Mine, located approximately 15km from Los Helados. NCR’s interest in the Caserones Mine is held through a subsidiary that is subject to a recently announced agreement whereby Lundin Mining Corporation will acquire a controlling stake. The JEA stipulates that when a party (the “first party”) thereto funds less than its pro rata share of expenditures related to Los Helados, resulting in the other party (the “second party”) funding in excess of its respective pro rata share, the first party’s interest shall be reduced with a corresponding increase to the second party’s interest. Accordingly, due to NCR having funded less than its pro rata share of expenditures related to Los Helados for the period from September 1, 2015 to August 31, 2022, the Company’s interest has increased to approximately 69%. For the period from September 1, 2022, to August 31, 2023, which encompasses the current exploration and drill program currently underway at the Los Helados Project, NCR elected to fund its pro rata share of qualifying expenditures and the Company’s interest in the Los Helados Property remains at 69% as at the date of this MD&A. The Company’s most recent Mineral Resource estimate for the Los Helados Project, with an effective date of April 26, 2019, is summarized in the following table: 1 Los Helados Mineral Resource (0.33% CuEq Cutoff) Tonnage Resource Grade Contained Metal Class (million tonnes) Indicated 2,099 Inferred 827 Cu (%) 0.38 0.32 Au (g/t) Ag (g/t) CuEq (%) 0.15 0.10 1.37 1.32 0.48 0.39 Cu (billion lbs) 17.6 5.8 Au (million oz) 10.1 2.7 Ag (million oz) 92.5 35.1 The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the 43-101 technical report for the Los Helados Project, entitled “Technical Report on the Los Helados Porphyry Copper-Gold Deposit, Chile”, dated August 6, 2019 and authored by F. Devine, P.Geo., G. Zandonai, RMCMC, and G. Di Prisco, P.Geo. This report is available on the Company’s website at www.ngexminerals.com or under the Company’s profile at www.sedar.com. The Company’s common shares are listed on the TSX Venture Exchange under the symbol “NGEX”. 2022 OPERATING HIGHLIGHTS AND OUTLOOK H1 2022 Los Helados Drill Program Successfully Confirms Multiple High-grade Centres; 2022-2023 Follow-up Campaign Continues to Extend High-grade Mineralization The Company undertook a drill program at Los Helados between January to June 2022 (the “H1 2022 Los Helados Program”), which completed 10,312 metres and successfully: Expanded, and demonstrated continuity of, mineralization associated with the high-grade breccia phase at the core of the current Mineral Resource at Los Helados, now called the Condor Zone. The Condor Zone was the main target of the H1 2022 Los Helados Program, and drilling sought to confirm continuity through infill drilling, and test the potential for extension as guided by a reinterpretation of the Los Helados geological model in 2021; Confirmed the existence of a second high-grade centre to the Los Helados deposit, the Fenix Zone, located at the western edge of the current Mineral Resource. The Fenix Zone remains open at depth, towards the surface, and laterally. Most importantly, the identification and confirmation of the Fenix Zone as a separate and distinct mineralized feature from the Condor Zone validates the Company’s recently revised geological interpretation, which hypothesizes that the Los Helados deposit hosts multiple centres of high-grade mineralization and that elevated grades do not necessarily dissipate away from the Condor Zone; and Discovered a third distinct, high-grade centre to the Los Helados deposit, the Alicanto Zone, located 550m north of the Condor Zone, which further affirms the Company’s reinterpreted geological model. The Alicanto Zone was discovered by drillhole LHDH078, which returned 474.8m at 0.61% copper equivalent (“CuEq”), including 100.0m at 1.20% CuEq. This newly discovered zone of high-grade mineralization remains open in all directions. Assay results received, analyzed and released by the Company in relation to the H1 2022 Los Helados Program are summarized as follows: 2 Hole-ID LHDH073 incl. incl. LHDH074 incl. and incl. and incl. and incl. LHDH075 incl. incl. incl. LHDH076 incl. incl. and incl. incl. incl. LHDH077 incl. incl. incl. Upper ext. Lower ext. LHDH078 incl. incl. From (m) 124.0 216.0 314.0 42.0 136.0 210.0 606.0 816.0 14.0 88.0 222.0 222.0 110.0 138.0 138.0 1,166.0 1,166.0 1,384.0 0.0 42.0 328.0 328.0 42.0 526.0 566.0 700.0 844.0 To (m) 1,000.0 912.0 524.0 1,058.3 890.0 504.0 746.0 890.0 922.0 652.0 602.0 378.0 1,400.0 922.0 542.0 1,400.0 1,308.0 1,400.0 989.0 778.0 548.0 452.0 150.0 778.0 1,040.8 1,040.8 944.0 Length (m) Cu (%) 876.0 696.0 210.0 1,016.3 754.0 294.0 140.0 74.0 908.0 564.0 380.0 156.0 1290.0 784.0 404.0 234.0 142.0 16.0 989.0 736.0 220.0 124.0 108.0 252.0 474.8 340.8 100.0 0.56 0.60 0.76 0.45 0.52 0.60 0.64 0.58 0.39 0.47 0.51 0.59 0.60 0.63 0.77 0.80 1.14 0.86 0.51 0.58 0.69 0.71 0.53 0.57 0.55 0.67 1.10 Au (g/t) 0.28 0.31 0.45 0.31 0.30 0.41 0.29 0.25 0.24 0.29 0.31 0.42 0.21 0.25 0.35 0.24 0.35 0.19 0.27 0.32 0.41 0.47 0.38 0.20 0.08 0.09 0.14 Ag (g/t) 2.1 2.2 2.8 1.9 2.0 2.1 2.5 2.5 1.3 1.4 1.6 1.7 2.3 1.9 2.2 4.5 3.8 23.4 1.7 1.9 2.4 2.6 1.6 2.0 1.7 2.0 2.1 CuEq1 (%) 0.74 0.80 1.06 0.65 0.71 0.87 0.83 0.74 0.55 0.65 0.70 0.86 0.74 0.80 1.00 0.97 1.38 1.11 0.69 0.79 0.95 1.02 0.77 0.71 0.61 0.73 1.20 Zones Intersected Condor Zone Condor Zone Condor Zone Condor Zone Fenix Zone Condor Zone Alicanto Zone 1 CuEq for drill intersections is calculated based on US$ 3.50/lb Cu, US$ 1,700/oz Au and US$ 20/oz Ag, with metallurgical recoveries of 88% for copper, 76% for gold and 60% for silver based on a comprehensive program of metallurgical testwork. The formula is: CuEq % = Cu % + (0.6117 * Au g/t) + (0.0057 * Ag g/t). 2 Los Helados hosts large-scale porphyry and associated breccia mineralization and drilled lengths are interpreted to be approximate true widths. The Company launched a follow-up extension drill campaign at Los Helados in November 2022, which will continue through April 2023 (the “2022/2023 Los Helados Program”). The 2022/2023 Los Helados Program has focused on testing for extensions of the high-grade mineralization intercepted in the Fenix and Alicanto Zones. The drill program has deployed directional drilling to optimize drilling efficiency and reduce the number of total metres required to effectively test the targets at depth. Directional drilling uses specialized down hole tools to direct the drill bit toward multiple target areas from a single pilot hole, allowing for different targets to be tested from a single drill collar. As of the date of this MD&A, results to date from the 2022/2023 Los Helados Program have further extended the Condor Zone, as well as the high-grade mineralization within the Fenix and Alicanto Zones, with all three zones remaining open to further expansion. Of particular interest are the results from the Alicanto Zone, where the current program has returned some of the highest-grade intercepts to date at Los Helados, and support the notion that this zone is a distinct high-grade centre at the northern edge of the current drill pattern. The Alicanto Zone is adjacent to the boundary shared with the Caserones properties, which are owned and operated by the Company’s partner at Los Helados. 3 Highlights to date from the 2022/2023 Los Helados Program include: LHDH083, which intersected 122.1m at 1.05% CuEq from 884.0m, within a broader intersection of 626.0m at 0.59% CuEq from 514.0m. LHDH083 was the first step out hole of the current program completed into the Alicanto Zone, and the intersection is 90m east of the zone’s discovery intersection in LHDH078; LHDH081, which was drilled across the Fenix Zone and returned 1,168.8m at 0.43% CuEq, including 220.0m at 0.72% CuEq. This hole successfully extends the mineralization of the zone 130m to the northwest; and Drilling at the Condor Zone continued to provide extension and confirmation of continuity, with holes LHDH079 returning 1,215.2m at 0.43% CuEq, including 256.9m at 0.65% CuEq and 100.2m at 0.64% CuEq, and LHDH082 intersecting 981.3m at 0.48% CuEq, including 826.0m at 0.73% CuEq within a broader intersection of 489.7m at 0.60% CuEq. Assay results received, analyzed and released by the Company in relation to the 2022/2023 Los Helados Program are summarized as follows: Hole-ID LHDH079 incl. and incl. LHDH081 incl. LHDH082 incl. incl. LHDH083 incl. and incl. From (m) 148.0 676.0 985.8 436.0 1,144.0 152.0 550.0 826.0 514.0 678.0 884.0 To (m) 1,363.2 932.9 1,086.0 1,604.8 1,364.0 1,133.3 1,039.7 968.0 1,140.0 724.0 1,006.1 Length (m) 1,215.2 256.9 100.2 1,168.8 220.0 981.3 489.7 142.0 626.0 46.0 122.1 Cu (%) 0.32 0.54 0.53 0.37 0.63 0.38 0.46 0.55 0.46 0.28 0.94 Au (g/t) 0.18 0.16 0.17 0.08 0.12 0.15 0.20 0.26 0.20 0.96 0.14 Ag (g/t) 1.5 2.6 1.4 1.8 2.6 1.7 1.9 2.3 1.9 1.2 2.7 CuEq1 (%) 0.43 0.65 0.64 0.43 0.72 0.48 0.60 0.73 0.59 0.87 1.05 Zones Intersected Condor Zone Fenix Zone Condor Zone Alicanto Zone 1 CuEq for drill intersections is calculated based on US$ 3.50/lb Cu, US$ 1,700/oz Au and US$ 20/oz Ag, with metallurgical recoveries of 88% for copper, 76% for gold and 60% for silver based on a comprehensive program of metallurgical testwork. The formula is: CuEq % = Cu % + (0.6117 * Au g/t) + (0.0057 * Ag g/t). 2 Los Helados hosts large-scale porphyry and associated breccia mineralization and drilled lengths are interpreted to be approximate true widths. The ongoing 2022/2023 Los Helados Program will continue to be focused on defining the geometry and size of the Alicanto and Fenix Zones, with the majority of the remaining holes of the program allocated to this objective. Several additional holes have now been completed, with assays underway. Results will be released as they are received, analyzed and confirmed by the Company. Maiden Exploration Program Launched at Potro Cliffs During the latter half of 2022, the Company applied for permits and began making preparations for the undertaking of a drill campaign at its Potro Cliffs copper-gold exploration target (“Potro Cliffs”), located in San Juan Province, Argentina. Potro Cliffs is the largest untested hydrothermal system in the emerging Vicuña District, which hosts several sizeable copper-gold deposits, such as Josemaria, Filo del Sol, and the Company’s Los Helados Project. The Potro Cliffs target lies along the same major north-northeast structural trend that controls the Filo del Sol deposit located approximately 8 km to the south and Los Helados located approximately 9 km to the north. 4 The Company received permits in late December 2022, and began drilling at Potro Cliffs in January 2023 with two rigs. To date, the Company has completed its first two holes at Potro Cliffs, one from the plateau at the top of the cliff and another collared in the valley approximately 700 metres below, and results will be released as they are received, analyzed and confirmed by the Company. Drilling at Potro Cliffs has continued through March 2023 with drill targeting guided by the geology of the first two holes. New Copper-Gold Porphyry System Discovered at Valle Ancho; Earn-in Completed In May 2022, the Company confirmed its discovery of a new copper-gold porphyry system at the La Quebrada target at the Valle Ancho and Interceptor properties (collectively, “Valle Ancho” or the “Valle Ancho Properties”), located in Catamarca Province, Argentina, with an intersection of 596.5m of 0.50% CuEq. The 2021/2022 drill campaign at Valle Ancho (the “2021/2022 Valle Ancho Program”), which was concluded in March 2022, consisted of 3,060 metres of diamond drilling to drill test priority exploration targets. At La Quebrada, five wide- spaced reconnaissance holes were completed, three of which intersected significant intervals of copper-gold mineralization consistent with a large porphyry system. The three discovery holes were drilled to depths of 601m, 271m and 431m, with each ending in mineralization. These are the first holes ever drilled by the Company at La Quebrada and the discovery will be an exciting target of future drill campaigns at Valle Ancho, as the Company looks to better understand extent, geometry and controls of this mineralization. Assay results from the five holes completed at La Quebrada are summarized as follows: La Quebrada – Copper-gold Porphyry Discovery From (m) To (m) Length (m) Cu (%) Hole-ID VADH003 incl. incl. 4.0 4.0 350.0 600.5 108.0 600.5 VADH004 No significant values VADH005 incl. incl. VADH006 incl. incl. 0.0 76.0 138.0 8.0 162.0 292.0 271.0 271.0 224.0 431.0 270.0 428.0 596.5 104.0 250.5 271.0 195.0 86.0 423.0 108.0 136.0 0.23 0.25 0.23 0.12 0.14 0.15 0.19 0.22 0.25 Au (g/t) 0.37 0.50 0.40 Ag (g/t) 1.4 1.5 1.6 CuEq1 (%) 0.50 0.62 0.53 0.26 0.29 0.33 0.27 0.38 0.32 1.1 1.2 1.5 2.2 1.9 4.2 0.32 0.36 0.40 0.40 0.50 0.50 VADH007 No significant values 1 CuEq for drill intersections is calculated based on US$ 3.50/lb Cu, US$ 1,700/oz Au and US$ 20/oz Ag, with metallurgical recoveries of 80% assumed for all metals. The formula is: CuEq % = Cu % + (0.7083 * Au g/t) + (0.0083 * Ag g/t). In addition, the 2021/2022 drill tested two additional exploration targets, Nordin and Anomalia 4. While the hole completed at Anomalia 4 did not return any significant mineralized intersections, hole VADH001 at the Nordin target returned 150m at 1.05 g/t Au from surface, and VADH002 intersected 198m at 0.63 g/t Au from surface, including 70m at 0.94 g/t Au. This mineralization occurs completely within oxidized rock and is characterized by even grade distribution throughout the depth of each hole. Initial assessment and interpretation suggest that the mineralization discovered in these two holes is consistent with the style of mineralization observed in the neighbouring Maricunga Gold Belt in Chile. 5 Assay results from the two holes completed at the Nordin target are summarized below: To (m) From (m) Nordin Target – Near Surface, Oxide Gold Discovery Au (g/t) 1.05 1.21 2.12 0.63 0.94 Hole-ID VADH001 incl. incl. VADH002 incl. 150.0 128.0 56.0 198.0 70.0 150.0 124.0 20.0 198.0 70.0 0.0 4.0 36.0 0.0 0.0 Length (m) Ag (g/t) 0.67 0.73 0.59 0.44 0.46 The Company’s interest in the Valle Ancho Properties was held through an option agreement with the Province of Catamarca, whereby it may earn a 100% interest in Valle Ancho by making US$8.0 million in total project expenditures by the end of 2022. In November 2022, after having completed the minimum expenditure requirement, the Company prepared requisite reports and made its formal submissions to the Province of Catamarca to complete the Valle Ancho earn-in. 2022 CORPORATE UPDATE Credit Facility On September 28, 2022, the Company obtained an unsecured US$3.0 million credit facility (the “2022 Facility”) from Zebra Holdings and Investments S.à.r.l (“Zebra”) and Lorito Holdings S.à.r.l. (“Lorito”) to provide financial flexibility to fund ongoing exploration and for general corporate purposes. Zebra and Lorito are companies controlled by a trust settled by the late Adolf H. Lundin. Zebra and Lorito report their respective security holdings in the Company as joint actors, as the term is defined by Canadian securities regulations, and are related parties by virtue of their combined shareholding in the Company in excess of 20%. As consideration for the 2022 Facility, Zebra and Lorito received 12,500 common shares upon execution thereof (the “Commitment Shares”) and shall receive an additional 200 common shares each month, for every US$50,000 in principal outstanding, prorated accordingly for the number of days outstanding. The 2022 Facility matures on September 28, 2023, and no interest is payable in cash during its term. All common shares issued in conjunction with the facilities are subject to a four-month hold period under applicable securities laws. As at December 31, 2022, no amount remained drawn or outstanding against the 2022 Facility. $30.0 Million Equity Financing On October 25, 2022, the Company closed a non-brokered private placement, pursuant to which the Company sold an aggregate of 15,000,000 common shares at a price of $2.00 per common share, generating aggregate gross proceeds of $30.0 million (the “Financing”). Share issuance costs related to the Financing totaled $0.6 million, and included professional fees, regulatory fees, and 5% finders’ fees payable in cash on approximately $11.6 million of the gross proceeds from the Financing. The common shares issued under the Financing were subject to a hold period, which expired on February 26, 2023. Approximately $1.8 million of the net proceeds was used shortly after closing of the Financing to fully repay the amounts drawn against the 2022 Facility, and the remaining net proceeds from the Financing have been, and will continue to be, used towards furthering work programs in Chile and Argentina, as well as for general corporate and working capital purposes. 6 RESULTS FROM OPERATIONS Year Ended Net loss ($000’s) Loss per share, basic and diluted ($) Total assets ($000’s) Dec-22 Dec-21 Dec-20 32,415 0.20 32,312 5,457 0.04 25,733 5,893 0.05 5,378 NGEx Minerals is a junior exploration company and, as such, its net losses are largely driven by its exploration and project investigation activities and there is no expectation of generating operating profits until it identifies and develops a commercially viable mineral deposit. Key financial results for the last eight quarters are provided in the table below. Three Months Ended Dec-22 Sep-22 Jun-22 Mar-22 Dec-21 Sep-21 Jun-21 Mar-21 Exploration costs ($000's) 6,038 4,539 9,765 8,582 3,518 1,390 Operating loss ($000’s) 8,384 6,243 10,497 9,296 4,213 1,863 Net loss ($000’s) 8,020 6,068 9,651 8,676 2,390 1,491 356 810 784 402 833 793 Net loss per share, basic and diluted ($) 0.04 0.04 0.06 0.06 0.01 0.01 0.01 0.01 Due to the geographic location of the Company’s mineral properties, the Company’s business activities generally fluctuate with the seasons, through increased exploration activities during the summer months in South America. As a result, a general recurring trend is the increase in exploration expenditures, and therefore net losses, for the fourth quarter and first quarter of a fiscal year, relative to the second and third quarters. In addition, other relevant factors, such as the financial position of the Company, other corporate initiatives, as well as the type and scope of planned exploration/project work, could affect the level of exploration activities and net loss in a particular period. NGEx Minerals incurred a net loss of $32.4 million for the year ended December 31, 2022 (2021: $5.5 million), including an operating loss of $34.4 million (2021: $7.7 million). Exploration and project investigation costs are the most significant expenditure category of the Company and for the year ended December 31, 2022 accounted for approximately 84% of the operating loss (2021: 73%). This is reflective of the Company’s accounting policy to expense its exploration costs through the consolidated statement of comprehensive loss, except for mineral property option payments and mineral property acquisition costs, which are capitalized. Exploration and project investigation costs for the year ended December 31, 2022 were $28.9 million (2021: $5.7 million). The increase for the year ended December 31, 2022 is primarily due to the Company having undertaken the H1 2022 Los Helados Program, initiated the 2022/2023 Los Helados Program, began preparations for a maiden drill campaign at the Potro Cliffs exploration target, as well as completed the 2021/2022 Valle Ancho during the year ended December 31, 2022, as discussed in the “2022 Operating Highlights and Outlook” section above. By comparison, for the year ended December 31, 2021, the Company’s exploration activities were much lower having only commenced the 2021/2022 Valle Ancho Program and undertaken preparations for the H1 2022 Los Helados Program. 7 Excluding share-based compensation, administration costs for the year ended December 31, 2022, totaled $3.1 million (2021: $1.6 million). Share-based compensation, a non-cash cost, reflects the amortization of the estimated fair value of options over their vesting period and is based to a large degree on the Company’s share price and its volatility. The actual future value to the option holders may differ materially from these estimates as it depends on the trading price of the Company’s shares if and when the options are exercised. In addition, as the granting of options and their vesting is at the discretion of the Board, the related expense is unlikely to be uniform across quarters or financial years. Administration costs, exclusive of share-based compensation costs, for the year ended December 31, 2022, were higher than 2021 due primarily to an increase in compensation costs resulting from increased personnel and the general easing of COVID-19 restrictions, which led to increased travel, promotional and general office support costs. For the year ended December 31, 2022, the Company recognized financing costs of $50,303 (2021: $136,436). The decrease is the result of the Company’s lower utilization of credit facilities to fund ongoing exploration and general corporate purposes during 2022, in comparison to 2021. Also, the Company recognized net monetary gain of $54,798 during the year ended December 31, 2022 (2021: net monetary loss of $54,923), in relation to the application of hyperinflationary accounting for the Company’s Argentine subsidiaries. The monetary gain recognized is the result of changes in the Argentine price indices and changes to the Company’s net monetary position during the year. Further discussion regarding the application of hyperinflationary accounting has been provided in the notes to the consolidated financial statements. From time to time, the Company acquires and transfers marketable securities as a mechanism to facilitate intragroup funding transfers between its Canadian parent and its Argentine operating subsidiaries. During the year ended December 31, 2022, the Company recognized a gain of $1,975,356 (2021: $2,477,478) on the use of marketable securities for this purpose, which represents the net benefit of having used this funding mechanism over traditional methods. The decrease in the gain is the result of less funding provided to its Argentine subsidiaries during the year ended December 31, 2022, compared to 2021. No tax recovery is recognized as a result of the nature of the Company’s activities and the lack of reasonably expected taxable profits in the near term. For the year ended December 31, 2022, the Company recognized other losses totaling $212,531 (2021: $33,431) in relation to the revaluation of a non-current obligation by the Company to fund US$3.4 million for NCR’s share of exploration expenditures at the La Rioja properties (the “Obligation”). As at December 31, 2022, the Company reviewed the nature and timing of future expenditures at the La Rioja properties and increased its expected annual funding of NCR’s share of future exploration expenditures based on its best estimate of exploration activities to be conducted on the project moving forward. This revision reduces the estimated timeframe for the settlement of the Obligation. The effect of this change in future estimated expenditures at the La Rioja properties is an increase in the present value of amounts due to NCR, which results in a loss recognized in the consolidated statement of comprehensive loss for the year ended December 31, 2022. In other comprehensive income, the Company reported foreign currency translation gains of $310,220 for the year ended December 31, 2022 (2021: loss of $686,032) on translation of subsidiary company accounts from their functional currency to the Canadian dollar presentation currency. For the year ended December 31, 2022, the foreign currency translation gain is primarily the result of fluctuations of the Canadian dollar relative to the Chilean peso over the year. In addition, for the year ended December 31, 2022, the impacts of hyperinflation amounted to a loss of $84,302 (2021: gain of $56,277) and consist of adjustments recognized on the continuing inflation of opening non-monetary balances during the year and the ongoing translation of the Company’s Argentine subsidiary into the Canadian dollar presentation currency. 8 LIQUIDITY AND CAPITAL RESOURCES As at December 31, 2022, the Company had cash of $23.2 million and net working capital of $20.2 million, compared to cash of $21.0 million and net working capital of $20.0 million as at December 31, 2021. The Company’s cash increased during the year ended December 31, 2022 due to the $29.4 million in net proceeds generated by the Financing, which have been partially offset by funds used in operations, including mineral property and surface access rights payments, and for general corporate purposes. In addition, during the year ended December 31, 2022, the Company received $495,847 (2021: $58,225) in gross proceeds on the exercise of stock options. The Company anticipates that it will deploy the majority of its treasury and capital resources towards furthering exploration programs in Chile and Argentina, and for general corporate and working capital purposes. Credit Facilities In February 2021, the Company obtained an unsecured US$3.0 million credit facility (the “2021 Facility”) from Zebra and Lorito, which matured on February 19, 2022 with no amounts drawn or owing. No interest was paid in cash during its term. On September 28, 2022, the Company obtained the 2022 Facility, which provided the Company with access to US$3.0 million from Zebra and Lorito (see “2022 Corporate Update” section above). The 2022 Facility matures on September 28, 2023, and any undrawn amounts will remain available to the Company until maturity. Liquidity Based on NGEx Minerals’ financial position at December 31, 2022, the Company anticipates the need for further funding to advance its South American exploration projects beyond the current exploration campaigns, as appropriate. Historically, capital requirements have been primarily funded through equity financing, joint ventures, disposition of mineral properties and investments, and the use of short-term credit facilities extended by its major shareholders, such as Zebra and Lorito. Management is confident that additional funding will be secured to fund planned expenditures for at least twelve months from December 31, 2022. Factors that could affect the availability of financing include the progress and results of ongoing exploration at the Company’s mineral properties, the state of international debt and equity markets, as may be impacted by inflation and investor perceptions and expectations with respect to the global copper, gold, and/or silver markets. There can be no assurance that such financing will be available in the amount required at any time or for any period or, if available, that it can be obtained on terms satisfactory to the Company. If necessary, depending on the amount of funding raised, the Company may explore opportunities to defer the timing of certain discretionary expenditures and the Company’s planned initiatives and other work programs may be postponed, or otherwise revised. RELATED PARTY TRANSACTIONS Under the normal course of operations, the Company may undertake transactions or hold balances with related parties. Other than those related party transactions identified elsewhere in this MD&A, during the year ended December 31, 2022, the Company has also engaged with Josemaria Resources Inc. (“Josemaria”) and Filo Mining Corp. (“Filo Mining”), related parties by way of directors, officers and shareholders in common, and MOAR Consulting Inc. (“MOAR”), an exploration consulting firm, of which a director of the Company is the president. Josemaria ceased to be a related party of the Company following the acquisition of all of its issued and outstanding common shares by Lundin Mining Corporation, which closed on April 28, 2022. 9 Related party services The Company has cost sharing arrangements with Josemaria and Filo Mining. Under the terms of these arrangements, the Company may, from time to time, provide management, technical, administrative and/or financial services (collectively, “Management Services”) to Josemaria and Filo Mining, and vice versa. In addition, the Company may, from time to time, engage MOAR to provide exploration consultation. These transactions were incurred in the normal course of operations, and are summarized as follows: Management Services to Josemaria Management Services to Filo Mining Management Services from Josemaria Management Services from Filo Mining Exploration Consultation from MOAR Related party balances Year ended December 31, 2021 83,524 591,415 (42,058) (549,787) (57,000) 2022 - 364,343 - (902,414) (12,750) The amounts due from (to) related parties, and the components of the consolidated statement of financial position in which they are included, are as follows: Receivables and other assets Receivables and other assets Accounts payable and accrued liabilities Accounts payable and accrued liabilities Key management compensation Related Party December 31, 2022 December 31, 2021 Josemaria Filo Mining Josemaria Filo Mining - 112,163 - 27,996 24,343 (1,667) (186,449) (15,113) The Company’s key management personnel have the authority and responsibility for overseeing, planning, directing and controlling its activities and consist of the Board of Directors and members of the executive management team. Total compensation expense for key management personnel, and the composition thereof, is as follows: Salaries and other payments Short-term employee benefits Directors fees Stock-based compensation Short-term incentive bonuses Severance Year ended December 31, 2021 474,000 14,000 82,000 458,478 - 75,000 1,103,478 2022 572,667 17,514 92,458 1,983,771 690,000 - 3,356,410 10 SIGNIFICANT ACCOUNTING POLICIES The Company’s significant account policies are described in Note 3 the consolidated financial statements for the year ended December 31, 2022, as filed on SEDAR at www.sedar.com. New Accounting Pronouncements The IASB and/or the IFRS Interpretations Committee have issued new standards and amendments, or interpretations to existing standards, which were not yet effective and not applied by the Company as at December 31, 2022. The Company continues to evaluate these changes to determine their impact, if any. IAS 1, Presentation of Financial Statements The IASB published Non-current Liabilities with Covenants (Amendments to IAS 1) to clarify how covenants with which an entity must comply within 12 months after the reporting period affect the classification of the related liability. Effectively, liabilities are to be classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if the entity has a substantive right to defer settlement for at least 12 months at the end of the reporting period. These amendments are effective January 1, 2024, with early adoption permitted. Retrospective application is required on adoption. The IASB has also issued amendments to IAS 1 and the IFRS Practice Statement 2, Making Materiality Judgements, to provide guidance on the application of materiality judgments with respect to an entity’s accounting policy disclosures. These amendments to IAS 1 replace previous requirements to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’ accounting policies. These amendments are effective January 1, 2023, with early adoption permitted. Prospective application is required on adoption. The Company does not expect adoption of these amendments to have a material impact on its consolidated financial statements. CRITICAL ACCOUNTING ESTIMATES The preparation of the consolidated financial statements in accordance with IFRS, such as the underlying consolidated financial statements for the year ended December 31, 2022, requires management to make estimates, assumptions and judgements that affect the reported amounts of assets, liabilities and expenditures. These estimates, assumptions and judgements are based on management’s best knowledge of the relevant facts and circumstances taking into account previous experience. Actual results could differ and such differences could be material. Estimates, assumptions and judgements are reviewed on an ongoing basis and are based on historical experience and other facts and circumstances. Revisions to estimates, assumptions and judgements, and the resulting effects on the carrying amounts of the Company’s assets and liabilities, are accounted for prospectively. Information about estimates, assumptions, judgements and other sources of estimation uncertainty as at December 31, 2022 that have a risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next year are provided below: 11 Valuation of mineral properties – The Company carries the acquisition costs of its mineral properties at cost less any provision for impairment. At each reporting date, the Company reviews its mineral properties for indicators of impairment, which requires the Company to exercise key judgements, including but not limited to, the Company’s right to explore the mineral property, whether the Company has further plans or budgets for substantive expenditures for the ongoing exploration and evaluation of the mineral property, the impact of exploration and evaluation results to date with respect to the mineral property, and the likelihood that the carrying value of the mineral property will be recovered in the future through development or sale of the asset. If indicators of impairment are identified, the Company would further review the carrying values of the applicable mineral properties to determine if their carrying values may exceed their fair value, which also requires the Company to make significant judgments and estimates. The judgments and estimates mentioned above are subject to various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the mineral properties. The Company has determined that no indicators of impairment exist for its mineral properties as of December 31, 2022. FINANCIAL INSTRUMENTS The Company’s financial instruments consist of cash, receivables and other assets, trade payables and accrued liabilities, amounts owing pursuant to the 2022 Facility, if any, non-current accrued liabilities and the amounts due to its exploration partner, NCR. Other than for the amounts due to its exploration partner, the carrying values of the Company’s financial instruments are considered to be reasonable approximations of fair value due to their short-term nature. For amounts due to its exploration partner, the Company revalues the liability from time to time based on revisions to the timing and amounts of expected future settlement, which the Company believes is a reasonable approximation of fair value. Between revaluations, the liability is accreted. As at December 31, 2022, the Company’s financial instruments are exposed to the following financial risks, including credit, liquidity and currency risks: (i) Credit risks associated with cash is mitigated by the Company’s practice of holding the majority of its cash with a large Canadian financial institution that has been accorded a strong investment grade rating by a primary rating agency. (ii) Liquidity risks associated with the inability to meet obligations as they become due are minimized through the management of its capital structure and by maintaining good relationships with significant shareholders and creditors, such as Zebra and Lorito. The Company also closely monitors and reviews its costs to date and actual cash flows on a monthly basis. Based on NGEx Minerals’ financial position at December 31 2022, the Company anticipates the need to obtain further funding to advance its South American exploration projects beyond the current exploration campaigns, as appropriate.. Please refer to the discussion provided in the “Liquidity and Capital Resources” section above for further details. 12 The maturities of the Company’s financial liabilities as at December 31, 2022 are as follows: Total Less than 1 year 1-5 years More than 5 years Accounts payable and accrued liabilities Non-current accrued liabilities Due to exploration partner 7,327,951 338,600 4,582,690 7,327,951 - - - 338,600 - - - 4,582,690 Total 12,249,241 7,327,951 338,600 4,582,690 In accordance with the terms of a Joint Exploration Agreement between the Company and the partner, NCR, the Company is required to fund NCR’s share of exploration expenditures related to the La Rioja properties (the “Obligation”). The undiscounted value of the Obligation remained US$3.4 million as at December 31, 2022, and has no defined timeline for settlement. The Obligation has been discounted at an annual effective rate of 8%, and recorded at its present value having the Canadian dollar equivalent of $630,460 at December 31, 2022 (2021: $393,719). The figure provided in the preceding table represents the Canadian dollar equivalent of the liability on an undiscounted basis. (iii) Foreign currency risk can arise when the Company or its subsidiaries transact or have net financial assets or liabilities which are denominated in currencies other than their respective functional currencies. At December 31, 2022, the Company’s largest foreign currency risk exposure existed at the level of its Chilean operating subsidiary, where the Company held a net financial asset position denominated in US dollars having a Canadian dollar equivalent of approximately $6.1 million. A 10% change in the foreign exchange rate between the US dollar, and the Chilean Peso, the subsidiary’s functional financial currency, would give rise to position/comprehensive loss. increases/decreases of approximately $611,000 in OUTSTANDING SHARE DATA As at March 31, 2023, the Company had 172,163,530 common shares outstanding and 12,674,000 share options outstanding under its share-based incentive plan. RISKS AND UNCERTAINTIES The operations of the Company are speculative due to the high-risk nature of its business, which includes the acquisition, financing, exploration, development and operation of mineral and mining properties. There are a number of factors that could negatively affect the Company’s business and the value of its common shares, and these risk factors could materially affect the Company’s future operations and financial position and could cause actual events to differ materially from those described in forward-looking statements relating to the Company. Significant risk factors have been identified by the Company and are listed below. The following information pertains to the outlook and conditions currently known to the Company that could have a material impact on the financial condition of the Company. Other factors may arise that are not currently foreseen by management of the Company that may present additional risks in the future. Current and prospective security holders of the Company should carefully consider these risk factors, as they could materially affect the Company’s future operations and 13 could cause actual events to differ materially from those described in forward-looking statements relating to the Company. Exploration and Development Risk Mining exploration, development and operations generally involve a high degree of risk that cannot be eliminated, and which can adversely impact the Company’s success and financial performance. Exploration for and development of mineral deposits involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. Discovery of mineral deposits is dependent upon a number of factors, not the least of which are the technical skills of the exploration personnel involved and the capital required for the programs. The cost of conducting programs may be substantial and the likelihood of success is difficult to assess. There is no assurance that the Company’s mineral exploration activities will result in any discoveries of new bodies of commercial ore. There is also no assurance that even if commercial quantities of ore are discovered that a new ore body would be developed and brought into commercial production. The commercial viability of a mineral deposit once discovered is dependent upon a number of factors, some of which are discussed separately in the subsequent sections, and include the particular attributes of the deposit (such as size, grade, metallurgy and proximity to infrastructure and labour), the interpretation of geological data obtained from drilling and sampling; feasibility studies; the cost of water and power; anticipated climatic conditions; cyclical metal prices; fluctuations in inflation and currency exchange rates; higher input commodity and labour costs; commodity price fluctuations; government regulations, including regulations relating to prices, taxes, royalties, land tenure and use, allowable production, importing and exporting of minerals, and environmental protection. Most of the above factors are beyond the control of the Company. Development projects will also be subject to the successful completion of final feasibility studies, issuance of necessary permits and other governmental approvals and receipt of adequate financing, as major expenses are typically required to locate and establish Mineral Reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site. The exact effect of these factors cannot be accurately predicted, but the combination of any of these factors may adversely affect the Company’s business. The Company’s operations are subject to all of the hazards and risks normally encountered in the exploration and development of copper, gold, and silver projects and properties, including unusual and unexpected geologic formations, seismic activity, rock slides, ground instabilities or failures, mechanical failures, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, facilities, damage to life or property, environmental damage and possible legal liability. As appropriate, the Company may seek to mitigate its exploration risk by diversifying its portfolio, or through the establishment of joint ventures and option agreements with third parties. Mineral Resource Estimates The Company’s reported Mineral Resources are estimations only. No assurance can be given that the estimated Mineral Resources will be recovered. By their nature, Mineral Resource estimations are imprecise and depend, to a certain extent, upon statistical inferences, which may ultimately prove unreliable because, among other factors, they are based on limited sampling, and, consequently, are uncertain because the samples may not be representative. Mineral Resource estimations may require revision (either up or down). There are numerous uncertainties inherent in estimating Mineral Resources, including many factors beyond the Company’s control. Such estimation is a subjective process, and the accuracy of any Mineral Resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. There can 14 be no assurance that recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions. In particular, factors that may affect Mineral Resource estimates include: changes in interpretations of mineralization geometry and continuity of mineralization zones; input parameters used to constrain the block cave underground mining shapes that constrain the Mineral Resources ; metallurgical and mining recoveries; operating and capital cost assumptions; metal price and exchange rate assumptions; confidence in modifying factors, including assumptions that surface rights to allow infrastructure to be constructed will be forthcoming; delays or other issues in reaching agreements with local or regulatory authorities and stakeholders; changes in land tenure requirements or permitting requirements from those discussed in the report; and changes in the environmental regulations or laws governing the property. Changes in key assumptions and parameters could result in a restatement of Mineral Resource estimates. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability and there is no assurance that they will ever be mined or processed profitably. Due to the uncertainty which may attach to Mineral Resources, there is no assurance that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. Any material reductions in estimates of Mineral Resources could have a material adverse effect on the Company’s results of operations and financial condition. Title Risk The Company has investigated its right to explore and exploit its properties and, to the best of its knowledge, those rights are in good standing. The results of the Company’s investigations should not be construed as a guarantee of title. Other parties may dispute the title to a property, or the property may be subject to prior unregistered agreements or liens and transfers or land claims by aboriginal, native, or Indigenous Peoples. The title may be affected by undetected encumbrances or defects or governmental actions. The Company has not conducted surveys of all of its properties, and the precise area and location of claims or the properties may be challenged and no assurances can be given that there are no title defects affecting such properties. The rules governing mining concessions in Chile and Argentina are complex and any failure by the Company to meet requirements would have a material adverse effect on the Company. Any defects in the title to the Company’s properties could have a material and adverse effect on the Company. No assurance can be given that applicable governments will not revoke or significantly alter the conditions of the applicable exploration and mining authorizations nor that such exploration and mining authorizations will not be challenged or impugned by third parties. Although the Company has not had any problem renewing its licenses in the past there is no guarantee that it will always be able to do so. Inability to renew a license could result in the loss of any project located within that license. According to the Company’s records and analysis, it has successfully completed the minimum exploration expenditure required to earn a 100% interest in the Valle Ancho properties, as stipulated by an option agreement between the Company and the Province of Catamarca, Argentina. While the Company is of the opinion that that material conditions and requirements of the earn-in at Valle Ancho have been completed prior to the deadline of December 31, 2022, as of the date of this MD&A, its submission to the Province of Catamarca is still under review and it has not yet received written confirmation with respect thereto. 15 Surface Access The Company has surface access rights but does not own any surface rights at the Los Helados Project. The owners of the surface rights are in agreement with the Company’s subsidiaries in conducting activities on their ground. From time to time, a land possessor may dispute the Company’s surface access rights and, as a result, the Company may be barred from its legal temporary occupation rights. Surface access issues have the potential to result in the delay of planned exploration programs, and these delays may be significant. Such delays may have a material adverse effect on the Company. The Company may require additional surface rights and property interests to further develop or exploit the resources on its properties, which will require negotiations with private landowners for the additional ownership and/or surface rights in order for the Company to fully operate. Surface rights may also be regulated and restricted by applicable law. There is no assurance that the Company will be able to obtain the required surface rights or negotiate successfully with private landowners to allow it to develop its properties and establish commercial mining operations on a timely basis. To the extent additional surface rights are available, they may only be acquired at significantly increased prices, potentially adversely impacting financial performance of the Company. Environmental and Socio-Political Risks The Company seeks to operate within environmental protection standards that meet or exceed existing requirements in the countries in which the Company conducts activities. The Company also aims to conduct its activities in accordance with high corporate social responsibility principles. Present or future laws and regulations, however, may affect the Company’s operations. Environmental legislation is evolving in a manner that requires stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. The Company is currently engaged in exploration with limited environmental impact. Future environmental costs may increase due to changing requirements or costs associated with exploration and the developing, operating and closing of mines. The Company is subject to environmental regulation in the various jurisdictions in which it operates. Failure to comply with these laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations or in the exploration or development of mineral properties may also be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations. Furthermore, environmental hazards may exist on the properties on which the Company holds interests which are unknown to the Company at present and which have been caused by previous or existing owners or operators of the properties. Programs may also be delayed or prohibited in some areas due to technical factors, new legislative constraints, social opposition or local government capacity or willingness to issue permits to explore in a timely manner. In parts of Argentina, there is environmental opposition to both mineral exploration and mining. Accordingly, there may be a certain degree of anti-mining sentiment that could potentially affect the risk of successfully exploring and developing the Company’s assets in those provinces. In Chile, the currently elected government is discussing changes to its constitution which may include changes to the current environmental and socio-political landscape in that country. Additionally, the 16 Chilean Congress is also considering legislation designed to protect the country’s glaciers. No changes have yet been made to the constitution and any proposed legislation has not yet been approved; however, depending on its final language, these changes could affect the Company’s ability to develop the Los Helados Project. See below for further discussion. Foreign Operations Risk The Company conducts exploration activities in foreign countries, including Argentina and Chile. Each of these countries expose the Company to risks that may not otherwise be experienced if all operations were located in Canada. The risks vary from country to country and can include, but are not limited to, civil unrest or war, terrorism, illegal mining, changing political conditions, fluctuations in currency exchange rates, expropriation or nationalization without adequate compensation, changes to royalty and tax regimes, high rates of inflation, labour unrest and difficulty in understanding and complying with the regulatory and legal framework respecting ownership and maintenance of mineral properties, as well as the revocation or suspension of previously issued mining permits. Changes in mining or investment policies or shifts in political attitudes may also adversely affect Company’s existing assets and operations. Real and perceived political risk may also affect Company’s ability to finance exploration programs and attract joint venture or option partners, and future mine development opportunities. Chile is typically viewed as a favourable mining jurisdiction; however, certain Canadian issuers have recently experienced regulatory action with regards to Chilean operations, specifically with respect to increased permitting timelines. Numerous countries have introduced changes to mining regimes that reflect increased government control or participation in the mining sector, including, but not limited to, changes of law affecting foreign ownership, mandatory government participation, taxation and royalties, exploration licensing, export duties, and repatriation of income or return of capital. There can be no assurance that industries, which are deemed of national or strategic importance in countries in which the Company has assets, including mineral exploration, will not be nationalized. There is a risk that further government limitations, restrictions or requirements, not presently foreseen, will be implemented. Changes in policy that alter laws regulating the mining industry could have a material adverse effect on the Company. There can be no assurance that the Company’s assets in these countries will not be subject to nationalization, requisition or confiscation, whether legitimate or not, by an authority or body. In addition, in the event of a dispute arising from foreign operations, the Company may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction of courts in Canada. The Company also may be hindered or prevented from enforcing its rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity. It is not possible for the Company to accurately predict such developments or changes in laws or policy or to what extent any such developments or changes may have a material adverse effect on the Company. Non-compliance with applicable laws, regulations and permitting requirements (including allegations of such) may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed or causing the withdrawal of permits or mining licenses, and the imposition of corrective measures requiring material capital expenditure or remedial action resulting in materially increased cost of compliance, reputational damage and potentially impaired ability to secure future approvals and permits. The Company may be required to compensate third parties for loss or damage and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations. Economic and Political Instability in Argentina Some of the Company’s mineral properties, such as Valle Ancho project and the Potro Cliffs exploration target, are located in Argentina. There are risks relating to an uncertain or unpredictable political and 17 economic environment in Argentina, especially as there is social opposition to mining operations in certain parts of the country. During an economic crisis in 2001 to 2003 and again in 2014 and 2020, Argentina defaulted on foreign debt repayments and on the repayment on a number of official loans to multinational organizations. In addition, the government has renegotiated or defaulted on contractual arrangements. The current government, which took office in December 2019, has reinstated currency controls previously lifted by the opposition government, which, among other impacts, restricts the ability of companies and its citizens to obtain United States dollars, in each case requiring Central Bank approval (resulting in, at times, a limitation on the ability of multinational companies to distribute dividends abroad in United States dollars). The current government has also reversed corporate tax rate reductions previously introduced by the previous opposition government. While the political environment in Argentina continues to develop, and the status of currency controls and restrictions remains fluid, past actions indicate that the Argentinean government may from time to time alter or impose additional requirements or policies that may adversely affect the Company’s activities in Argentina, or in its ability to attract joint venture partners or obtain financing for its projects in the future. In addition, economic instability in Argentina may negatively impact the timeliness or recoverability of amounts collectible from the government of Argentina. There may be material adverse consequences with respect to the Company and its operations as a result of political or economic instability in Argentina. Economic and Political Uncertainty in Chile Since October 2019, Chile has experienced increased frequency in wide scale public demonstrations demanding, among other things, constitutional and legal reforms, including demands for social program benefit increases and public funding for services that are currently private. In 2020, Chile voted in favor of drafting a new Constitution and in 2021 elected the constituent assembly tasked with preparing a new draft for consideration by the voters in the future. In December 2021, Gabriel Boric was elected President on a platform that committed to implement significant social, economic, and political changes. Simultaneously, the government has been considering tax and royalty reforms and has introduced or proposed a number of changes that affect or could affect businesses, including but not limited to a new royalty structure. Other changes could be considered or proposed in the future, including but not limited to increases to mining or income taxes or new royalties or changes to value added taxes. The constituent assembly may also propose a Constitution that could fundamentally alter key rights (such as water rights and mineral tenure) or introduce new ones (like environmental personage) that could affect the Company’s Los Helados Project and financial condition. Permitting The Company’s development and exploration activities are subject to permitting requirements in both Argentina and Chile. In particular, comprehensive environmental impact assessments will be necessary in Chile for any future development of Los Helados, and similarly in Argentina for Valle Ancho and Potro Cliffs. Following the receipt of environmental approvals, additional permits, licences, authorizations, and certificates will be required to proceed to project construction, including, for example, mining water and fuel delivery, sewage water treatment, hazardous waste plans, drilling and closure plans. Failure to obtain required permits and/or to maintain compliance with permits once obtained could result in injunctions, fines, suspension or revocation of permits and other penalties. There can be no assurance that the Company will obtain all such permits and/or achieve or maintain full compliance with such permits at all times. Activities required to obtain and/or achieve or maintain full compliance with such permits can be costly and involve extended timelines. 18 Previously issued permits may be suspended or revoked for a variety of reasons, including through government or court action. Failure to obtain and/or comply with required permits can have serious consequences, including: damage to the Company’s reputation, stopping the Company from proceeding with the development of a project, negatively impacting further development of a mine, and increasing the costs of development and litigation or regulatory action against the Company, and may materially adversely affect the Company’s business, results of operations or financial condition. Negative Operating Cash Flow The Company is an exploration stage company and has not generated cash flow from operations. The Company is devoting significant resources to the development and acquisition of its properties, however there can be no assurance that it will generate positive cash flow from operations in the future. The Company expects to continue to incur negative consolidated operating cash flow and losses until such time as it achieves commercial production at a particular project. The Company currently has negative cash flow from operating activities. Uncertainty of Funding and Dilution of Shareholders’ Interests in the Company The exploration and development of mineral properties requires a substantial amount of capital and may depend on the Company’s ability to obtain financing through joint ventures, debt financing, equity financing or other means. General market conditions, volatile metals prices, a claim against the Company, a significant disruption to the Company’s business, or other factors may make it difficult to secure the necessary financing. There is no assurance that the Company will be successful in obtaining required financing as and when needed on acceptable terms. Failure to obtain any necessary additional financing may result in delaying or indefinite postponement of exploration or development or even a loss of property interest. If the Company needs to raise additional funds, such financing may substantially dilute the economic and voting rights of the Company’s shareholders and reduce the value of their investment. Since the Company’s capital needs depend on market conditions and other factors beyond its control, it cannot predict or estimate the amount, timing or nature of any such future offering of securities. Thus, holders of common shares of the Company bear the risk of any future offerings reducing the market price of the common shares and diluting their shareholdings in the Company. Metal Price Risk The Company’s portfolio of properties and investments have exposure to predominantly copper, gold, and silver. Commodity prices fluctuate widely and are affected by numerous factors beyond the Company’s control, such as the sale or purchase of metals by various central banks and financial institutions, interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of major metals-producing and metals-consuming countries throughout the world. The prices of these metals greatly affect the value of the Company, the price of the common shares of the Company and the potential value of its properties and investments. This, in turn, greatly affects its ability to form joint ventures, option agreements and the structure of any joint ventures formed. This is due, at least in part, to the underlying value of the Company’s assets at different metals prices. Pandemic Outbreaks Since early 2020, the COVID-19 pandemic has at times negatively impacted and increased volatility of global financial markets and may continue to do so. The economic viability of the Company’s long-term business plan is impacted by its ability to obtain financing, and global economic conditions impact the general availability of financing through public and private debt and equity markets, as well as through other avenues. 19 The health and safety of the Stakeholders remain the Company’s priority, and the Company’s camp facilities and offices have implemented travel restrictions, surveillance, monitoring and response plans, as necessary, to reduce the risk of COVID-19 exposure and outbreak, including health screening of personnel when appropriate. As the Company continues to monitor developments with respect to COVID-19, both globally and within its operating jurisdictions, it will remain adaptive and will implement any such changes to its COVID-19 protocol, or its business in general, as may be deemed appropriate to mitigate any potential impacts to its business and its Stakeholders. Such changes, may include, but are not limited to, reduced operations, temporary closures of the Company’s project site or offices, and deviations from the timing and nature of previous operating plans. Moreover, sustained COVID-19 outbreaks have resulted in operational and supply chain delays and disruption as a result of governmental regulation and preventative measures being implemented worldwide, including in Argentina. The Company could also be required to close, curtail or otherwise limit its operating activities as a result of the implementation of any such governmental regulation or preventative measures in the jurisdictions in which the Company operates, or as a result of sustained COVID-19 outbreaks at its project site or facilities. Any such closures or curtailments could have an adverse impact on the business of the Company. In addition to the COVID-19 pandemic, other future outbreaks of infectious diseases, or the threat of such outbreak, could have a material adverse effect on the Company by causing operational and supply chain delays and disruptions, labour shortages and shutdowns, social unrest, breach of material contracts and customer agreements, government or regulatory actions or inactions, changes in tax laws, payment deferrals, increased insurance premiums, decreased demand for base and precious metals, declines in the price of base and precious metals, delays in permitting or approvals, governmental disruptions, capital markets volatility, or other unknown but potentially significant impacts. In addition, governments may impose strict emergency measures in response to the threat or existence of an infectious disease, which could have a material adverse effect on the Company’s business. Health and Safety Hazards Mining exploration and operations involve health and safety hazards that could adversely affect the Company’s reputation, business and future operations. By nature, exploration and mining activities present a variety of hazards and associated health and safety risks. Workers involved in the Company’s operations are subject to many inherent health and safety risks and hazards, including, but not limited to, rock falls, slides or bursts, equipment or structural fires, falls of ground, floods, chemical and biological hazards, mineral dusts, atmospheric hazards including low oxygen levels, gases and fumes, high altitude work, use of explosives, noise, electricity, fixed and moving equipment, civil disturbances and criminal activity, which could result in occupational illness or health issues, personal injury, and loss of life, and/or facility and workforce evacuation. Even though robust health and safety controls and risk mitigation measures are in place across the Company’s operations, health and safety incidents may occur. The overall management of health and safety is governed in accordance with the requirements of the Company’s Responsible Mining Development Policy. While significant effort is made to control and eliminate potential health and safety risks, these risks cannot be eliminated and may adversely affect the Company’s reputation, business, and future operations. Incidents resulting in serious injury or death, or those having a negative impact on surrounding communities (real or perceived) could result in litigation, civil or criminal sanctions, regulatory action 20 (including, but not limited to suspension of operations and/or fines and penalties), increased community tensions, or otherwise adversely affect the Company’s reputation and ability to meet its objectives. Indigenous Peoples The Company may operate in some areas that are presently or were previously inhabited or used by Indigenous Peoples. Various international and national laws, codes, resolutions, conventions, guidelines, and other material relate to the rights of Indigenous Peoples. Many of these materials impose obligations on government to respect the rights of Indigenous People. Some mandate that government consult with Indigenous People regarding government actions, which may affect Indigenous People, including actions to approve or grant mining rights or permits. ILO Convention 169, which has been ratified by Argentina and Chile, is an example of such an international convention. The obligations of government and private parties under the various international and national materials pertaining to Indigenous People continue to evolve and be defined. Examples of recent developments in this area include the United Nations Declaration of the Rights of Indigenous People and the International Finance Corporation’s revised Performance Standard 7, which requires governments to obtain the free, prior, and informed consent of Indigenous Peoples who may be affected by government action, such as the granting of mining concessions or approval of mine permits. The Company’s current and future operations are subject to a risk that one or more groups of Indigenous People may oppose continued operation, further development, or new development of the Copmany’s projects or operations. Such opposition may be directed through legal or administrative proceedings or expressed in manifestations such as protests, roadblocks or other forms of public expression against the Company’s activities. Opposition by Indigenous People to the Company’s operations may require modification of, or preclude operation or development of, the Company’s projects or may require the Company to enter into agreements with Indigenous People with respect to the Company’s projects. Non-Governmental Organization Intervention In recent years, certain communities of both Indigenous Peoples and others, as well as non- governmental organizations, have been vocal and negative with respect to mining activities. The Company’s relationship with the communities in which it operates is critical to ensure the future success of its existing operations and the construction and development of its projects. Community groups or non-governmental organizations may create or inflame public unrest and anti-mining sentiment among the inhabitants in areas of mineral development. These communities and organizations have taken such actions as protests, road closures, work stoppages and initiating lawsuits for damages. Such organizations can be involved, with financial assistance from various groups, in mobilizing sufficient local anti-mining sentiment to prevent the issuance of required permits for the development of mineral projects of other companies. While the Company is committed to operating in a socially responsible manner, there is no guarantee that the Company’s efforts in this respect will mitigate this potential risk. Any actions by communities and non-governmental organizations may have a material adverse effect on the Company’s activities, financial position, cash flow and results of operations. Ability to Import Key Services and Suppliers The Company operates in Argentina and Chile and requires the importation and use of specialist services and equipment to successfully execute on planned work programs. The ability to import key services and supplies into Argentina and Chile is regulated by various governmental authorities and the rules and 21 regulations governing the importation of key services and supplies are subject to change. The Company has no control over changes which may affect the ability to import required services and supplies. Dependence on Key Personnel The Company’s success will largely depend on the efforts and abilities of certain senior officers and key employees. Certain of these individuals have significant experience in the mining industry and, in particular, the mining industry in South America. While the Company does not foresee any reason why such officers and key employees will not remain with the Company, if for any reason they do not, the Company could be adversely affected. The Company has not purchased key man life insurance for any of these individuals. No Operating History Exploration projects have no operating history upon which to base estimates of future cash flows. Substantial expenditures are required to develop mineral projects. It is possible that actual costs and future economic returns may differ materially from the Company’s estimates. There can be no assurance that the underlying assumed levels of expenses for any project will prove to be accurate. Further, it is not unusual in the mining industry for new mining operations to experience unexpected problems during start-up, resulting in delays and requiring more capital than anticipated. There can be no assurance that the Company’s projects will move beyond the exploration stage and be put into production, achieve commercial production or that the Company will produce revenue, operate profitably or provide a return on investment in the future. Mineral exploration involves considerable financial and technical risk. There can be no assurance that the funds required for exploration and future development can be obtained on a timely basis. There can be no assurance that the Company will not suffer significant losses in the near future or that the Company will ever be profitable. Conflicts of Interest Some of the directors and employees/officers of the Company are also directors and employees/officers of other companies that are similarly engaged in the business of acquiring, exploring and developing natural resource properties. Such associations may give rise to conflicts of interest from time to time. In particular, one of the consequences will be that corporate opportunities presented to a director or employee/officer of the Company may be offered to another company or companies with which the director or employee/officer is associated and may not be presented or made available to the Company. The directors and employees/officers of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company, to disclose any interest that they may have in any project or opportunity of the Company, and to abstain from voting on such matter. Conflicts of interest that arise will be subject to and governed by the procedures prescribed by the Company’s Code of Business Conduct and Ethics and the Canada Business Corporations Act. Trading Price for the Common Shares is Volatile The securities of publicly traded companies, particularly mineral exploration and development companies, can experience a high level of price and volume volatility and the value of the Company’s securities can be expected to fluctuate depending on various factors, not all of which are directly related to the success of the Company and its operating performance, underlying asset values or prospects. These include the risks described elsewhere in this MD&A. The trading price of the Company’s common shares has been and may continue to be subject to large fluctuations, which may result in losses to investors. The trading price of the Company’s common shares may increase or decrease in response to a number of events and factors, including: issuances of common shares or debt securities by the Company; 22 the Company’s operating performance and the performance of competitors and other similar companies; the addition or departure of key management and other personnel; the expiration of lock-up or other transfer restrictions on outstanding common shares; significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or its competitors; the public’s reaction to the Company’s press releases, other public announcements and the Company’s filings with the various securities regulatory authorities; changes in recommendations by research analysts who track the Company’s common shares or the shares of other companies in the resource sector; the number of common shares to be publicly traded after an offering; and the factors listed under the heading “Cautionary Note Regarding Forward-Looking Statements”. In addition, the market price of the common shares is affected by many variables not directly related to the Company’s success and therefore not within the Company’s control. Factors which may influence the price of the Company’s securities, include, but are not limited to: worldwide economic conditions; changes in government policies; local community opposition to mining projects generally; investor perceptions; movements in global interest rates and global stock markets; variations in operating costs; the cost of capital that the Company may require in the future; the market price of metals, including copper, gold and silver; the price of commodities necessary for the Company’s operations; recommendations by securities research analysts; the share price performance of the Company’s competitors; news reports relating to trends, concerns, technological or competitive developments, regulatory changes and other related industry and market issues affecting the mining sector; publicity about the Company, the Company’s personnel or others operating in the industry; loss of a major funding source; and all market conditions that are specific to the mining industry, including other developments that affect the market for all resource sector shares, the breadth of the public market for the common shares, and the attractiveness of alternative investments. The effect of these and other factors on the market price of Shares on the exchanges on which the Company trades has historically made the Company’s share price volatile and suggests that the Company’s share price will continue to be volatile in the future. As a result of any of these factors, the market price of the common shares at any given point in time may not accurately reflect the long-term value of the Company. Securities class-action litigation often has been brought against companies following periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources. Control of NGEx Minerals As at the date of this MD&A, Zebra and Lorito, who report their security holdings as joint actors, are control persons of NGEx Minerals (as defined by the Canadian securities regulations). As long as Zebra and Lorito maintain significant interests in the Company, they will have the ability to exercise certain influence with respect to its affairs and significantly affect the outcome of the votes of shareholders. There is a risk that the interests of Zebra and Lorito differ from those of other shareholders. As a result of the significant holdings of Zebra and Lorito, there is a risk that the Company’s securities are less liquid and trade at a relative discount compared to circumstances where these persons did not have the ability to influence or determine matters affecting NGEx Minerals. Additionally, there is a risk that their significant interests in the Company discourages transactions involving a change of control thereof, including transactions in which an investor, as a holder of the Company’s securities, would otherwise receive a premium for its Company’s securities over the then-current market price. 23 Infrastructure Development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power and water supplies are important determinants that affect costs. The Company’s ability to obtain a secure supply of power and water at a reasonable cost depends on many factors, including: global and regional supply and demand; political and economic conditions; problems that can affect local supplies; delivery; and relevant regulatory regimes. Power and water are currently in short supply throughout Northern Chile and this may adversely affect the ability of the Company to explore and develop its Chilean project. Unusual or infrequent weather phenomena, sabotage or government, and other interference in the maintenance or provision of such infrastructure could adversely affect the activities and profitability of the Company. Establishing such infrastructure will require significant resources, identification of adequate sources of raw materials and supplies and necessary cooperation from national and regional governments, none of which can be assured. There is no guarantee that the Company will secure these power, water and access rights going forward or on reasonable terms. Global Financial Conditions and their Impact on Share Prices and Access to Financing The economic viability of the Company’s business plan is impacted by the Company’s ability to obtain financing. The economic conditions and outlook of the jurisdictions in which the Company’s projects reside, and more generally global economic conditions, may impact the general availability of financing through public and private debt and equity markets, as well as through other avenues. Significant political, market, economic, natural or manmade events may have wide-reaching effects and, to the extent they are not accurately anticipated or priced into markets, may result in sudden periods of market volatility and correction. Periods of market volatility and correction may have an adverse impact on economic growth and outlook, as well as lending and capital markets activity, all of which may impact the Company’s ability to secure adequate financing on favourable terms, or at all. Global financial markets experienced a period of correction and increased volatility during the COVID-19 pandemic and the conflict between the Russian Federation and Ukraine, which began in March 2020 and February 2022, respectively, and are ongoing as of the date of this MD&A. As these global events evolve, there is no guarantee that credit market conditions will not worsen. A general risk-adverse approach to investing, decreases in consumer spending and increases in the unemployment rate and consumer debt levels, which may become more predominant as a result of market turmoil, may limit the Company’s ability to obtain future equity financing. Inability to obtain financing at all, or on acceptable terms, may have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects. Other events may also result in volatility and disruption to global supply chains, operations, mobility of people, patterns of consumption and service, and financial markets, and therefore potentially have a negative impact on the Company’s ability to secure financing on favourable terms, or at all, its access to its projects, or its ability to execute its business initiatives, including its field programs. Such events may include catastrophic events, either on a global scale or in the specific jurisdictions where the Company has its projects, and include, but are not limited to, financial crises, such as that which occurred globally in 2008, earthquakes, tsunamis, floods, typhoons, fires, power disruptions, other natural or manmade disasters, terrorist attacks, wars, riots, civil unrest or other conflicts, outbreaks of a public health crises, including epidemics, pandemics or outbreaks of new infectious diseases or viruses, as well as related and attendant events. Furthermore, general market, political and economic conditions, including, for example, inflation, interest and currency exchange rates, structural changes in the global mining industry, global supply and demand 24 for commodities, political developments, legislative or regulatory changes, social or labour unrest and stock market trends will affect the Company’s operating environment and its operating costs, profit margins and share price. Uncertainty or adverse changes relating to government regulation, economic and foreign policy matters, and other world events have the potential to adversely affect the performance of and outlook for the Canadian and global economies, which in turn may affect the ability of the Company to access financing on favourable terms or at all. The occurrence of negative sentiment or events in the Canadian and broader global economy could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects. Currency Risk The Company will transact business in a number of currencies including but not limited to the US Dollar, the Argentine peso and the Chilean peso. The Argentine peso in particular has had significant fluctuations in value relative to the US and Canadian dollars. Ongoing economic uncertainty in Argentina as well as unpredictable changes to foreign exchange rules may result in fluctuations in the value of the Argentine peso that are greater than those experienced in the recent past. Fluctuations in exchange rates may have a significant effect on the cash flows of the Company. Future changes in exchange rates could materially affect the Company’s results in either a positive or a negative direction. The Company does not currently engage in foreign currency hedging activities. Information Systems and Cyber Security The Company's operations depend on information technology (“IT”) systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company's operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company's reputation and results of operations. Although to date the Company has not experienced any material losses relating to cyber attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company's risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities. Application of Anti-Corruption and Anti-Bribery Laws The Company is required to comply with anti-corruption and anti-bribery laws, including the Extractive Sector Transparency Measures Act, the Canadian Corruption of Foreign Public Officials Act and the U.S. Foreign Corrupt Practices Act, as well as similar laws in the countries in which the Company conducts its business. If the Company finds itself subject to an enforcement action or is found to be in violation of such laws, this may result in significant penalties, fines and/or sanctions imposed on the Company resulting in a material adverse effect on the Company. 25 Competition There is aggressive competition within the mining industry for the discovery and acquisition of properties considered to have commercial potential, as well as the necessary labour and supplies required to develop such properties. The Company competes with other exploration and mining companies, many of which have greater financial resources, operational experience and technical capabilities than the Company, for the acquisition of mineral claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees and other personnel. The Company may not be able to maintain or acquire attractive mining properties on terms it considers acceptable, or at all. Consequently, its financial condition could be materially adversely affected. Uninsurable Risks Exploration, development and production operations on mineral properties involve numerous risks, including unexpected or unusual geological operating conditions, rock bursts, cave-ins, fires, floods, earthquakes and other environmental occurrences, as well as political and social instability. It is not always possible to obtain insurance against all such risks and the Company may decide not to insure against certain risks because of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any further profitability and result in increasing costs and a decline in the value of the securities of the Company. The Company does not maintain insurance against political risks. Climate Change and Carbon Pricing Climate change is a top priority for many countries and jurisdictions around the world and governments and regulators continue to implement and develop new rules and regulations to control carbon gas or “green-house” gas emissions attributable to climate change. As part of their efforts to shift to lower- carbon economies, governments have implemented carbon pricing, a mechanism that harnesses market forces to address climate change by creating financial incentives to lower emissions. Some of these mechanisms include the implementation of taxes on fuel sales, emissions trading schemes, and fossil fuel extraction fees, all of which are expected to play an ongoing role in global efforts to address climate change. The cost of compliance with various climate change regulations will ultimately be determined by the regulations themselves and by the markets that evolve for carbon credits and offsets and, as a result, the financial impact, if any, on the Company’s operations cannot yet be fully understood. The potential physical impacts of climate change due to extreme weather events on the Company’s operations are also highly uncertain and may be particular to the unique geographic circumstances associated with the Company’s projects and operations. Due to changes in global climate conditions, many scientists predict an increase in the frequency of extreme weather events such as severe and unpredictable rain and snowfall precipitation, winds, floods, droughts, and other types of extreme weather conditions and events. Such events could disrupt the Company’s operations and development activities; impact the Company’s equipment and infrastructure; impede access to the Companys projects and properties; or threaten the health and safety of the Company’s employees and contractors. Internal Controls Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. 26 Conducting Business through Foreign Subsidiaries The Company conducts a portion of its business through one or more foreign subsidiaries, and a portion of its assets may be held by such entities. Accordingly, any limitation on the transfer of cash or other assets between the Company and its subsidiaries, or among its subsidiaries, could restrict the Company’s ability to fund operations efficiently. Any such limitations, or the perception that such limitations may exist now or in the future, could have an adverse impact on the Company’s valuation. Litigation Risk All industries, including the mining industry, are subject to legal claims, with and without merit. Defence and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation and dispute resolution process, the litigation process could take away from management time and efforts and the resolution of any particular legal proceeding to which the Company may become subject could have a material adverse effect on the Company’s financial position, results of operations or the Corporation’s property development. Outside Contractor Risks It is common for certain aspects of mining operations, such as drilling, to be conducted by outside contractors. As a result, the Company is subject to a number of risks, including: reduced control over the aspects of the tasks that are the responsibility of the contractors; failure of the contractors to perform under their agreements with the Company; inability to replace the contractors if their contracts are terminated; interruption of services in the event that the contractors cease operations due to insolvency or other unforeseen events; failure of the contractors to comply with applicable legal and regulatory requirements; and failure of the contractors to properly manage their workforce resulting in labour unrest or other employment issues. Taxes, Royalties and Other Charges The Company runs its business in different countries and strives to run its business in as tax efficient a manner as possible. The Company is potentially subject to taxes (including income taxes and mineral taxes), various fees and royalties imposed by various levels of government across the jurisdictions in which it operates. The laws imposing these taxes, fees and royalties and the manner in which they are administered may in the future be changed or interpreted in a manner that materially and adversely affects our business, financial position and results of operations. Repatriation of earnings to Canada from other countries may be subject to withholding taxes or restricted by currency controls. The Company has no control over withholding tax rates. QUALIFIED PERSON AND TECHNICAL INFORMATION The scientific and technical disclosure included in this MD&A have been reviewed and approved by Bob Carmichael, P. Eng. (BC). Mr. Carmichael is the Company's Vice-President of Exploration and a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects. (“NI 43-101”). Mineral Resource estimates for the Los Helados Project have an effective date of April 26, 2019. The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the 43-101 technical report for the project, entitled “Technical Report on the Los Helados Porphyry Copper-Gold Deposit, Chile”, dated August 6, 2019 and authored by F. Devine, P.Geo., G. Zandonai, RMCMC, and G. Di Prisco, P.Geo. This report is available on the Company’s website at www.ngexminerals.com or under the Company’s profile at www.sedar.com. 27 Mineral Resources are reported using a CuEq cutoff grade. Copper equivalent is calculated using US$3.00/lb copper, US$ 1,300/oz gold and US$23/oz silver, and includes a provision for selling costs and metallurgical recoveries corresponding to three zones defined by depth below surface. The formulas used are: CuEq% = Cu% + 0.6264*Au (g/t) + 0.0047*Ag (g/t) for the Upper Zone (surface to ~ 250 m); Cu% + 0.6366*Au (g/t) + 0.0077*Ag (g/t) for the Intermediate Zone (~250 m to ~600 m); Cu% + 0.6337*Au (g/t) + 0.0096*Ag (g/t) for the Deep Zone (> ~600 m). Copper equivalent values reported for the 2021/2022 Valle Ancho Program, the H1 2022 Los Helados Program, and the 2022/2023 Los Helados Program were based on US$ 3.50/lb Cu, US$ 1,700/oz Au and US$ 20/oz Ag. Respective assumed metal recoveries and CuEq formulae are as presented in the footnote to the associated tables of summarized drill results (see “2022 Operating Highlights and Outlook” section above). The Company’s Mineral Resource estimates as reported in this MD&A have been prepared in accordance with the CIM Definition Standards that are incorporated by reference in NI 43-101. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements made and information contained herein in the MD&A constitutes “forward-looking information” and forward-looking statements” within the meaning of applicable securities legislation (collectively, “forward-looking information” or “forward-looking statements”) concerning the business, operations, financial performance and condition of NGEx Minerals. The forward-looking information contained in this MD&A is based on information available to the Company as of the date of this MD&A. Except as required under applicable securities legislation, the Company does not intend, and does not assume, any obligation, to update this forward-looking information. Generally, any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance, (often, but not always, identified by words or phrases such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", “projects” , “estimates”, “budgets”, “scheduled”, “forecasts”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential”, “possible”, "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events, conditions or results “will”, "may", "could", "would", “should”, "might" or "will be taken", "will occur" or "will be achieved" or the negative connotations thereof and similar expressions) are not statements of historical fact and may be forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. Forward-looking information is necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks and uncertainties relating to, among other things, the inherent uncertainties regarding Mineral Resource estimates, cost estimates, changes in commodity prices, currency fluctuation, financings, changes in share price; unanticipated resource grades, infrastructure, results of exploration activities, cost overruns, availability of materials and equipment, timeliness of government approvals, taxation, political risk and related economic risk and unanticipated environmental impact on operations as well as other risks, and uncertainties and other factors, including, without limitation, those referred to in the “Risks and Uncertainties” section of the MD&A, and elsewhere, which may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. The Company believes that the expectations reflected in the forward-looking statements and information included in this MD&A are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements and information should not be unduly relied upon. This statement and information is as of the date of the MD&A. In particular, this MD&A contains forward-looking statements or information pertaining to: the assumptions used in the Mineral Resources estimates for the Los Helados Project, including, but not limited to, geological interpretation and grades; assumptions made in the interpretation of drill results, geology, grade and continuity of mineral deposits; expectations regarding access and demand for equipment, skilled labour and services needed for exploration and development of mineral properties; and that activities will not be adversely disrupted or 28 impeded by exploration, development, operating, regulatory, political, community, economic and/or environmental risks. In addition, this MD&A may contain forward-looking statements or information pertaining to: exploration and development plans and expenditures, including the size, scope, nature, timing and foci of the Company’s future exploration programs, particularly at Los Helados, Valle Ancho and Potro Cliffs; the anticipated improvements to efficiency that will be realized through directional drilling at Los Helados; the amount or timing of drilling that will be completed during the 2022/2023 Los Helados Program;whether current interpretation of the exploration and/or drill results to date will be confirmed by future work, including statements regarding prospectivity of exploration properties, the accuracy of a geological model, or the ability to extend and define of the Fenix, Alicanto and Condor Zones at Los Helados; the result of the Province of Catamarca’s review of the Company’s submission with respect to the completion of the earn-in expenditure at Valle Ancho to secure a 100% interest therein and the timing thereof; the expected results or success of exploration activities at Potro Cliffs, including but not limited to, drill results from the current program underway and the anticipated drill meters to be completed at Potro Cliffs, including whether the Company will drill holes in addition to the two initially planned and completed; the expected timing of assay results generated by the Company's drill program at Potro Cliffs; the future uses of the Company’s cash and working capital, including the net proceeds resulting from the Financing; the success of future exploration activities; potential for the discovery of new mineral deposits or expansion of existing mineral deposits; ability to build shareholder value; expectations with regard to adding to Mineral Resources through exploration; expectations with respect to the conversion of Inferred Resources to an Indicated Resource classification, or the conversion of Indicated Resources to a Measured Resource classification; ability to execute the planned work programs; estimation of commodity prices, Mineral Resources, estimations of costs, and permitting time lines; ability to obtain surface rights and property interests; currency exchange rate fluctuations; requirements for additional capital; government regulation of mining activities; environmental risks; unanticipated reclamation expenses; title disputes or claims; limitations on insurance coverage; and other risks and uncertainties. Forward-looking information is based on certain assumptions that the Company believes are reasonable, including that the current price of and demand for commodities will be sustained or will improve, the supply of commodities will remain stable, that the general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed on reasonable terms and that the Company will not experience any material labour dispute, accident, or failure of plant or equipment. These factors are not, and should not be construed as being, exhaustive. Although the Company has attempted to identify important factors that would cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. There can be no assurance that such statements will prove to be accurate, as the Company’s actual results and future events could differ materially from those anticipated in such statements, as a result of the factors discussed in the “Risk and Uncertainties” section of this MD&A, and elsewhere. All of the forward-looking information contained in this document is qualified by these cautionary statements. Readers are cautioned not to place undue reliance on forward-looking information due to the inherent uncertainty thereof. Statements relating to "Mineral Resources" are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the Mineral Resources described can be profitably produced in the future. 29 Independent auditor’s report To the Shareholders of NGEx Minerals Ltd. Our opinion In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of NGEx Minerals Ltd. and its subsidiaries (together, the Company) as at December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). What we have audited The Company’s consolidated financial statements comprise: the consolidated statements of financial position as at December 31, 2022 and 2021; the consolidated statements of comprehensive loss for the years then ended; the consolidated statements of cash flows for the years then ended; the consolidated statements of changes in equity for the years then ended; and the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information. Basis for opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements. PricewaterhouseCoopers LLP PricewaterhouseCoopers Place, 250 Howe Street, Suite 1400, Vancouver, British Columbia, Canada V6C 3S7 T: +1 604 806 7000, F: +1 604 806 7806 “PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Assessment of impairment indicators of mineral properties Our approach to addressing the matter included the following procedures, among others: Refer to note 3(b) – Summary of significant accounting policies – Critical accounting estimates, assumptions and judgments and note 6 – Mineral properties to the consolidated financial statements. The carrying value of mineral properties amounted to $3.9 million as at December 31, 2022 which all related to the Los Helados project. At each reporting date, management reviews the Company’s mineral properties for indicators of impairment, which requires management to exercise key judgments, including but not limited to (i) the Company’s right to explore the mineral properties, (ii) whether the Company has further plans or budgets for substantive expenditures for the ongoing exploration and evaluation of the mineral properties, (iii) the impact of exploration and evaluation results to date with respect to the mineral properties, and (iv) the likelihood that the carrying value of the mineral properties will be recovered in the future through development or sale of the assets. If indicators of impairment are identified, management would further review the carrying values of the applicable mineral properties to determine if their carrying values exceed their fair value. No impairment indicators were identified by management as at December 31, 2022. ● Assessed the judgments made by management in determining whether there were impairment indicators, which included the following: – Obtained, for a sample of mining claims, by reference to government registries and other regulatory bodies and vouching payments of required fees, evidence to support the right to explore the area. – Read board minutes and obtained budget approvals to evidence continued and planned substantive expenditures for the ongoing exploration and evaluation of the mineral properties, which included evaluating results of management’s current-year work programs and management’s longer-term plans. – Assessed whether the exploration for and evaluation of mineral resources have not led to the discovery of commercially viable quantities of mineral resources, or whether sufficient data exists to indicate that the carrying value of mineral properties is unlikely to be recovered in full from successful development or sale, based on evidence obtained in other areas of the audit. Key audit matter How our audit addressed the key audit matter We considered this a key audit matter due to (i) the significance of the carrying value of the mineral properties balance and (ii) the judgments made by management in its assessment of indicators of impairment related to mineral properties, which have resulted in a high degree of subjectivity in performing procedures related to these judgments applied by management. Other information Management is responsible for the other information. The other information comprises the Management’s Discussion and Analysis. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of management and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partner on the audit resulting in this independent auditor’s report is Ranbir Gill. /s/PricewaterhouseCoopers LLP Chartered Professional Accountants Vancouver, British Columbia March 31, 2023 NGEx Minerals Ltd. Consolidated Statements of Financial Position (Expressed in Canadian Dollars) ASSETS Current assets: Cash Receivables and other assets Non-current assets: Receivables and other assets Equipment Mineral properties TOTAL ASSETS LIABILITIES Current liabilities: Trade payables and accrued liabilities Non-current liabilities: Due to exploration partner Accrued liabilities TOTAL LIABILITIES SHAREHOLDERS’ EQUITY Share capital Contributed surplus Deficit Accumulated other comprehensive loss TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY Note December 31, 2022 December 31, 2021 5 5 6 8 5 9 $ 23,249,241 4,300,559 27,549,800 $ 21,000,042 929,612 21,929,654 840,337 18,723 3,902,697 4,761,757 242,199 23,968 3,537,087 3,803,254 32,311,557 25,732,908 7,327,951 1,955,816 630,460 338,600 969,060 393,719 - 393,719 8,297,011 2,349,535 97,613,481 4,347,722 (75,658,411) (2,288,246) 24,014,546 67,523,831 1,616,855 (43,243,149) (2,514,164) 23,383,373 $ 32,311,557 $ 25,732,908 The accompanying notes are an integral part of these consolidated financial statements. On behalf of the Board: /s/David F. Mullen Director /s/Wojtek A. Wodzicki Director NGEx Minerals Ltd. Consolidated Statements of Comprehensive Loss (Expressed in Canadian Dollars) Note 2022 Year ended December 31, 2021 Expenses Exploration and project investigation 11 $ 28,923,845 $ 5,664,896 General and administration: Salaries and benefits Share-based compensation Management fees Professional fees Travel Promotion and public relations Office and general Operating loss Other expenses (income) Interest income Financing costs Foreign exchange gain Net monetary loss (gain) Gain on use of marketable securities, net Other losses Other expenses Net loss Other comprehensive loss Items that may be reclassified subsequently to net loss: Foreign currency translation adjustment Impact of hyperinflation Comprehensive loss 10c 4 15 8 4 1,872,580 2,353,238 169,540 212,163 107,704 438,943 341,479 34,419,492 (249,330) 50,303 (60,965) (54,798) (1,975,356) 212,531 73,385 32,415,262 874,855 487,837 128,640 199,698 33,893 87,223 241,957 7,718,999 (25,680) 136,436 (28,059) 54,923 (2,477,478) 33,431 44,162 5,456,734 (310,220) 84,302 $ 32,189,344 686,032 (56,277) $ 6,086,489 Basic and diluted loss per common share $ 0.20 $ 0.04 Weighted average common shares outstanding 159,625,957 130,091,342 The accompanying notes are an integral part of these consolidated financial statements. 2 NGEx Minerals Ltd. Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) Cash flows used in operating activities Net loss for the year Adjustments to reconcile net loss to net operating cash flows: Depreciation Share-based compensation Finance costs Foreign exchange gain Net monetary loss Other losses Write-down of non-current taxes receivable Net changes in working capital and other items: Receivables and other Trade payables and accrued liabilities Cash flows from (for) financing activities Proceeds from equity financings Share issuance costs Drawdown of credit facility Repayment of credit facility Proceeds from option exercises Payments made on behalf of exploration partner 10c 8 9 9 7 Cash flows used in investing activities Mineral properties and related expenditures 6 Note 2022 Year ended December 31, 2021 $ (32,415,262) $ (5,456,734) 12,275 2,927,355 50,303 (35,756) 146,507 212,531 73,142 8,811 574,076 136,436 (28,473) 103,588 33,431 - (3,159,149) 5,031,376 (27,156,678) (892,418) 1,493,954 (4,027,329) 30,000,000 (635,780) 1,781,000 (1,769,950) 495,847 (36,254) 29,834,863 25,000,000 (715,891) 3,201,050 (3,174,495) 58,225 (11,915) 24,356,974 (126,220) (126,220) (125,756) (125,756) Effect of exchange rate change on cash (302,766) (102,665) Increase in cash during the year 2,249,199 20,101,224 Cash, beginning of the year $ 21,000,042 $ 898,818 Cash, end of the year Non-cash Financing Activities (Note 7) $ 23,249,241 $ 21,000,042 The accompanying notes are an integral part of these consolidated financial statements. 3 NGEx Minerals Ltd. Consolidated Statements of Changes in Equity (Expressed in Canadian Dollars) Balance, January 1, 2021 Share-based compensation Shares issued pursuant to the equity financings Share issuance costs Shares issued pursuant to credit facility Shares issued pursuant to stock option exercises Net loss and other comprehensive loss Balance, December 31, 2021 Balance, January 1, 2022 Share-based compensation Shares issued pursuant to the equity financings Share issuance costs Shares issued pursuant to credit facility Shares issued pursuant to stock option exercises Net loss and other comprehensive loss Balance, December 31, 2022 Note Number of Shares Share Capital Contributed Surplus Deficit Accumulated Other Comprehensive Loss Total Shareholders’ Equity 124,793,652 $ 43,053,810 - - $ 1,058,841 574,076 $ (37,786,415) - $ (1,884,409) - $ 4,441,827 574,076 31,250,000 - 146,026 25,000,000 (715,891) 111,625 - - - - - - - - - 25,000,000 (715,891) 111,625 74,287 101,666 - - 156,291,344 $ 67,523,831 (16,062) - $ 1,616,855 - (5,456,734) 58,225 (6,086,489) $ (43,243,149) $ (2,514,164) $ 23,383,373 - (629,755) 10c 156,291,344 $ 67,523,831 - - $ 1,616,855 2,927,355 $ (43,243,149) - $ (2,514,164) - $ 23,383,373 2,927,355 9 9 7 10b 15,000,000 - 15,352 30,000,000 (635,780) 33,095 - - - - - - - - - 30,000,000 (635,780) 33,095 816,834 - 692,335 - 172,123,530 $ 97,613,481 (196,488) - $ 4,347,722 - (32,415,262) 495,847 (32,189,344) $ (75,658,411) $ (2,288,246) $ 24,014,546 - 225,918 The accompanying notes are an integral part of these consolidated financial statements. 4 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) 1. NATURE OF OPERATIONS AND LIQUIDITY RISK NGEx Minerals Ltd. (the “Company” or “NGEx Minerals”) was incorporated on February 21, 2019, under the laws of the Canada Business Corporations Act in connection with a plan of arrangement, which was completed on July 17, 2019. The Company’s principal business activities are the acquisition, exploration and development of mineral properties located in South America. The Company’s registered office is located at Suite 2000, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8, Canada. The Company’s common shares trade on the TSX Venture Exchange (the "TSXV") under the symbol "NGEX". These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes that it will be able to meet its existing obligations and commitments and fund ongoing operations in the normal course of business for at least twelve months from December 31, 2022. The Company anticipates the need for further funding to advance its South American exploration projects beyond the current exploration campaigns, as appropriate. Historically, capital requirements have been primarily funded through equity financing, joint ventures, disposition of mineral properties and investments, and the use of short-term credit facilities extended by its major shareholders, such as Zebra Holdings and Investments S.à.r.l. (“Zebra”) and Lorito Holdings S.à.r.l. (“Lorito”). Zebra and Lorito are companies controlled by a trust settled by the late Adolf H. Lundin. Zebra and Lorito report their respective security holdings in the Company as joint actors, as the term is defined by Canadian securities regulations, and are related parties by virtue of their combined shareholding in the Company in excess of 20%. Management is confident that additional funding will be secured to fund planned expenditures for at least twelve months from December 31, 2022. Factors that could affect the availability of financing include the progress and results of ongoing exploration at the Company’s mineral properties, the state of international debt and equity markets, as may be impacted by inflation and investor perceptions and expectations with respect to the global copper, gold, and/or silver markets. There can be no assurance that such financing will be available in the amount required at any time or for any period or, if available, that it can be obtained on terms satisfactory to the Company. If necessary, depending on the amount of funding raised, the Company may explore opportunities to defer the timing of certain discretionary expenditures and the Company’s planned initiatives and other work programs may be postponed, or otherwise revised. 2. BASIS OF PRESENTATION These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. These consolidated financial statements are prepared on a historical cost basis except for certain financial assets, which are measured at fair value. Certain prior year comparatives have been reclassified to align with current year presentation. Specifically, interest income is now separately presented on the consolidated statements of comprehensive loss. These consolidated financial statements were authorized for issuance by the Board of Directors of the Company on March 31, 2023. 5 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Consolidation The consolidated financial statements of the Company include the following subsidiaries: Subsidiaries Suramina Resources Inc. NGEx Argentina Holdings Inc. NGEx RioEx Holdings Inc. Frontera Holdings (Bermuda) I Ltd. Frontera Holdings (Bermuda) II Ltd. Frontera Holdings (Bermuda) III Ltd. Urupampa S.A. RioEx Uruguay S.A. Minera Frontera del Oro SPA. Desarrollo de Prospectos Mineros Peruanos S.A.C. Pampa Exploracion S.A. RioEx S.A. Jurisdiction Canada Canada Canada Bermuda Bermuda Bermuda Uruguay Uruguay Chile Peru Argentina Argentina Nature of operations Holding company Holding company Holding company Holding company Holding company Holding company Holding company Holding company Exploration company Exploration Company Exploration company Exploration company The Company consolidates an entity when it has power over that entity, is exposed, or has rights, to variable returns from its involvement with that entity and has the ability to affect those returns through its power over that entity. All the Company’s subsidiaries are wholly-owned and all intercompany balances, transactions, including income and expenses arising from inter-company transactions, are eliminated in preparing the consolidated financial statements. b) Critical accounting estimates, assumptions and judgements The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates, assumptions and judgements that affect the reported amounts of assets, liabilities and expenditures on the financial statements. These estimates, assumptions and judgements are based on management’s best knowledge of the relevant facts and circumstances taking into account previous experience. Actual results could differ and such differences could be material. Estimates, assumptions and judgements are reviewed on an ongoing basis and are based on historical experience and other facts and circumstances. Revisions to estimates, assumptions and judgements, and the resulting effects on the carrying amounts of the Company’s assets and liabilities, are accounted for prospectively. Information about estimates, assumptions, judgments and other sources of estimation uncertainty as at December 31, 2022, that have a risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next year are provided below: 6 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) Valuation of mineral properties – The Company carries the acquisition costs of its mineral properties at cost less any provision for impairment. At each reporting date, the Company reviews its mineral properties for indicators of impairment, which requires the Company to exercise key judgements, including but not limited to, the Company’s right to explore the mineral property, whether the Company has further plans or budgets for substantive expenditures for the ongoing exploration and evaluation of the mineral property, the impact of exploration and evaluation results to date with respect to the mineral property, and the likelihood that the carrying value of the mineral property will be recovered in the future through development or sale of the asset. If indicators of impairment are identified, the Company would further review the carrying values of the applicable mineral properties to determine if their carrying values may exceed their fair value, which also requires the Company to make significant judgments and estimates. The judgments and estimates mentioned above are subject to various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the mineral properties. The Company has determined that no indicators of impairment exist for its mineral properties as of December 31, 2022. c) Foreign currency translation These consolidated financial statements are presented in Canadian dollars, which is the Company’s functional and presentation currency. The functional currencies of its material subsidiaries, which have operations in Chile and Argentina, are the Chilean peso and the Argentine peso, respectively. For the Company’s Argentine subsidiaries, which are affected by hyperinflationary accounting as described in Notes 3n and 4 below, and use the Argentine peso as their functional currency, the results and financial position of this subsidiary are translated into the presentation currency using the exchange rate prevailing at the date of the statement of financial position. The results and financial position of all other subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows: Assets and liabilities for each statement of financial position presented are translated using the exchange rate prevailing at the date of that statement of financial position. Income, expenses, and other comprehensive income for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions). All resulting exchange differences are recognized as a separate component of equity and in other comprehensive income. d) Mineral properties and exploration expenditure The Company capitalizes acquisition costs for property rights, including payments for exploration rights and estimated fair value of exploration properties acquired as part of an acquisition. 7 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) Mineral exploration costs and maintenance payments are expensed prior to the determination that a property has economically recoverable ore reserves. When it has been established that a mineral property is considered to be sufficiently advanced to the development stage, with economic viability and technical feasibility demonstrated, all further expenditures for the current period and subsequent periods are capitalized as incurred and subsequently amortized on a units of production based on proven and probable reserves of the assets to which they relate. e) Impairment of non-financial assets Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows (cash- generating units, or “CGU’s”). Value in use is determined as the present value of future cash inflows expected to be derived from a CGU using a pre-tax discount rate that reflects the current time value of money and the risks specific to that CGU. Non-financial assets that have been previously impaired are reviewed for possible reversal of the impairment at each reporting date. f) Financial instruments (i) Recognition The Company measures and classifies its financial assets based on its business model for managing its financial assets and the contractual cash flow characteristics of those financial assets. Financial assets are classified into three measurement categories on initial recognition: those measured at fair value through profit or loss, those measured at fair value through other comprehensive income (“OCI”) and those measured at amortized cost. Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment. Investments in marketable securities, such as equity instruments of publicly listed entities, are required to be measured at fair value through profit or loss, unless the Company makes an irrevocable election to present subsequent changes in the fair value of such instruments through OCI. The Company has not elected to measure any of its marketable securities through OCI. (ii) Derecognition The Company derecognizes financial assets when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all the associated risk and rewards of ownership to another entity. A financial liability is derecognized when the obligation under the liability is discharged, canceled or expired. Gains and losses on derecognition of financial assets and liabilities are generally recognized in the consolidated statement of comprehensive loss. 8 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) (iii) Impairment The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized costs based on a probability-weighted estimate of credit losses over the expected life of the financial asset. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the expected credit losses are reversed after the impairment was recognized. g) Cash Cash includes cash on hand, and deposits held with financial institutions with a fixed deposit term of three months or less, net of bank overdrafts. h) Equipment Equipment is carried at cost less accumulated depreciation and impairment losses. The cost of an asset consists of its purchase price, any directly attributable costs of bringing the asset to the working condition and location of its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Depreciation of each asset is calculated using the straight line method to allocate its cost less its residual value over its estimated useful life. The depreciation rates and methods for the Company’s equipment are as follows: Vehicles/Mobile Equipment Straight line over 5 years The assets’ residual values, depreciation methods, and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. When an asset is disposed of, the difference between the net sale proceeds and its carrying amount is recognized as a gain or loss within net loss on the consolidated statement of comprehensive loss. 9 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) i) Current and deferred income tax The Company follows the liability method of accounting for income taxes. Under the liability method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, unused tax losses and other income tax deductions. Deferred income tax assets are recognized for deductible temporary differences, unused tax losses and other income tax deductions to the extent that it is probable the Company will have taxable income against which those deductible temporary differences, unused tax losses and other income tax deductions can be utilized. Deferred income tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply when the related assets are realized or the liabilities are settled. The measurement of deferred income tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover and settle the carrying amounts of its assets and liabilities, respectively. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period in which the change is substantively enacted. j) Share capital Common shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds. k) Share-based compensation The Company has a share-based compensation plan, whereby it is authorized to grant share options to officers, employees, directors, and other eligible persons. The fair value of the options is measured at the date the options are granted, using the Black-Scholes option-pricing model with assumptions for risk-free interest rates, dividend yields, volatility of the expected market price of the common shares and an expected life of the options. The fair value less estimated forfeitures is charged over the vesting period of the related options as an expense on its financial statements. l) Provisions Provisions for restructuring costs and legal claims are recognized when: the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligations using the pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognized as interest expense. 10 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) m) Segment reporting As the Company primarily focuses its activity on the exploration and development of mineral properties, its operating and reportable segments are the Los Helados Project, the Company’s exploration projects in Argentina, other exploration projects, and the Company’s corporate administration function. Operating segments are components of an entity that engage in business activities from which they incur expenses and whose operating results are regularly reviewed by a chief operating decision maker to make resource allocation decisions and to assess performance. The Chief Executive Officer, the chief operating decision-maker for the Company, obtains and reviews operating results of each operating segment on a monthly basis. n) Hyperinflation The Company applies IAS 29, Financial Reporting in Hyperinflationary Economies, which outlines the use of the hyperinflationary accounting to consolidate and report its Argentine operating subsidiaries. Argentine subsidiaries’ non-monetary assets and liabilities, shareholders’ equity and comprehensive loss items from the transaction date when they were first recognized into the current purchasing power which reflects a price index current at the end of the reporting period before being included in the consolidated financial statements. To measure the impact of inflation on its financial position and results, the Company has elected to use the Wholesale Price Index (Indice de Precios Mayoristas or “IPIM”) for periods up to December 31, 2016, and the Retail Price Index (Indice de Precios al Consumidor or “IPC”) thereafter. These price indices have been recommended by the Government Board of the Argentine Federation of Professional Councils of Economic Sciences (“FACPCE”). As the consolidated financial statements of the Company have been previously presented in Canadian dollars, a stable currency, the comparative period amounts do not require restatement. o) Adoption of new accounting policy On January 1, 2022, the Company adopted IAS 16, Property, plant and equipment. IAS 16 has been amended to provide clarity with respect to the treatment of net proceeds generated from selling any items produced while bringing an item of property, plant and equipment to the location and condition necessary for it to be capable of operating in the manner intended by the entity. Specifically, the amendments prohibit entities from deducting amounts resulting from the selling of items produced during this phase from the cost of property, plant and equipment. Instead, an entity shall recognize such sales proceeds and related costs in profit or loss. The adoption of the amendments to IAS 16 have not had an impact on the Company’s financial results for the year ended December 31, 2022. p) New accounting pronouncements The IASB and/or the IFRS Interpretations Committee have issued new standards and amendments, or interpretations to existing standards, which were not yet effective and not applied by the Company as at December 31, 2022. The Company continues to evaluate these changes to determine their impact, if any. 11 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) IAS 1, Presentation of Financial Statements The IASB published Non-current Liabilities with Covenants (Amendments to IAS 1) to clarify how covenants with which an entity must comply within 12 months after the reporting period affect the classification of the related liability. Effectively, liabilities are to be classified as either current or non- current, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if the entity has a substantive right to defer settlement for at least 12 months at the end of the reporting period. These amendments are effective January 1, 2024, with early adoption permitted. Retrospective application is required on adoption. The IASB has also issued amendments to IAS 1 and the IFRS Practice Statement 2, Making Materiality Judgements, to provide guidance on the application of materiality judgments with respect to an entity’s accounting policy disclosures. These amendments to IAS 1 replace previous requirements to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’ accounting policies. These amendments are effective January 1, 2023, with early adoption permitted. Prospective application is required on adoption. The Company does not expect adoption of these amendments to have a material impact on its consolidated financial statements. 4. HYPERINFLATION Argentina was designated a hyperinflationary economy as of July 1, 2018, for accounting purposes. The Company recognized a loss of $84,302 for the year ended December 31, 2022 (2021: gain of $56,277) in relation to the impact of hyperinflation within other comprehensive income. The hyperinflationary gains and losses are generally the impact of two opposing factors: Gains are driven by the hyperinflationary impacts on capital injected into the Argentine subsidiaries during the period (“Gain on Capital Injected”). Losses are largely the result of depreciation of the Argentine peso relative to the Canadian dollar during the period, and its impact upon translation of the Argentine subsidiaries’ accounts into the Canadian dollar reporting currency (“Loss on Translation”). For the year ended December, 2022, although capital was injected into the Company’s Argentine subsidiaries, the Loss on Translation was the dominant factor due to continued depreciation of the Argentine peso relative to the Canadian dollar, which resulted in net hyperinflationary loss for the year. As a result of changes in the IPC and changes to the Company’s net monetary position, the Company recognized a net monetary gain of $54,798 for the year ended December 31, 2022 (2021: loss of $54,923), to adjust transactions recorded during the year into a measuring unit current as of December 31, 2022. The level of the IPC at December 31, 2022, was 1,134.59 (December 31, 2021: 582.5), which represents an increase of approximately 95% over the IPC at December 31, 2021, and an approximate 34% increase over the average level of the IPC during the year ended December 31, 2022. 12 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) 5. RECEIVABLES AND OTHER ASSETS Current Taxes receivable Other receivables and advances Other prepaid expenses and deposits Non-current Taxes receivable Deferred surface access rights Receivable from Exploration Partner December 31, 2022 December 31, 2021 108,932 2,857,214 1,334,413 4,300,559 - 840,337 840,337 49,076 193,059 687,477 929,612 86,489 155,710 242,199 As at December 31, 2022, current other receivables and advances includes $2,730,489 (2021: $nil) receivable from the Company’s exploration partner at the Los Helados properties (Note 6). Deferred Surface Access Rights Reduced Surface Access Rights Agreements Historically, the Company has had a contractual agreement with the owners of the surface rights covering the Los Helados properties, which gave the Company access over these surface rights for exploration, development, and mining through to closure of any mining operation, in exchange for certain payments which are linked to project activities and certain development milestones (the “Original Surface Access Agreement”). The Original Surface Access Agreement provided for minimum annual payments of US$0.5 million which covered basic access to the property and minimal surface disturbance such as road maintenance. On January 26, 2021, the Original Surface Access Agreement was mutually terminated by the Company and the holders of the surface rights and replaced with a reduced surface access agreement with an effective period of three years (the “Reduced Surface Access Agreement”). The Reduced Surface Access Agreement resulted in decreased payments receivable by the holders of the surface rights in return for a reduction in permitted activities by the Company at the Los Helados properties over its term. As a result, the payments by the Company to the holders of the surface rights were reduced to a total of US$400,000 over the term of the Reduced Surface Access Agreement, with US$200,000 paid upon execution in January 2021 and the remainder paid in January 2022. As the payments related to the Reduced Surface Access Agreement provide the Company the benefit of access for the period ending January 26, 2024, the contractual amount was initially deferred and has been amortized over the life of the agreement. 13 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) On November 22, 2022, the Company and the owners of the Los Helados surface rights negotiated an amendment to the Reduced Surface Access Agreement, whereby the term of the agreement was extended to January 26, 2026, in exchange for a US$250,000 payment upon execution, and additional payments of US$250,000 in each November 22, 2023, and 2024 (the “Extension Agreement”). Accordingly, as at December 31, 2022, the payment of US$250,000 due in November 2023 has been recognized within current trade payables and accrued liabilities, and the payment of US$250,000 due in November 2024 has been recognized within non-current accrued liabilities. As at December 31, 2022, each of the current and non-current portions of the contractual liability had a Canadian dollar equivalent of approximately $338,600. Similar to above, all contractual amounts with respect to the Extension Agreement were initially deferred and will be amortized over the term of the agreement ending January 26, 2026. In addition, the term over which the remaining undeferred amounts with respect to the Reduced Surface Access Agreement will be amortized was prospectively extended to January 26, 2026. The pro rata portion of deferred amounts relating to the 12 months ending December 31, 2023, have been classified as a current asset, whereas all other deferred amounts have been classified as non-current. Temporarily Restored Surface Access Rights On November 30, 2021, the Company and the owners of the surface rights at Los Helados executed a temporary restoration of the Company’s surface access rights as outlined in the Original Surface Access Agreement (the “2021-2022 Restored Rights Agreement”). Pursuant to the 2021-2022 Restored Rights Agreement, the Company paid US$300,000 to the holders of the Los Helados surface rights in exchange for reinstated surface access from date of execution until December 31, 2022. The amounts paid with respect to the 2021-2022 Restored Rights Agreement were initially deferred and have been amortized through the Consolidated Statements of Comprehensive Loss. On November 22, 2022, the Company and the owners of the Los Helados surface access rights further restored the Company’s surface access rights on a temporary basis with an additional agreement (the “2023 Restored Rights Agreement”). The 2023 Restored Rights Agreement allows the Company to carry on drilling and exploration activities at Los Helados during the year ending December 31, 2023, in exchange for a payment of US$450,000. As the incremental payment related to the temporary reinstatement of surface access rights provides the Company the benefit of access up to December 31, 2023, the amount paid has been deferred as a current asset as at December 31 2022. Non-current Taxes Receivable Pursuant to local regulations, the Company is entitled to a refund of certain value added taxes (“VAT”) paid in Argentina. While the Company continues to expect full payment of the amounts claimed, the timing of receipt of the refunds has become increasingly uncertain due to ongoing delays which have now exceeded the Company’s prior expectations and experiences. Accordingly, during the year ended December 31, 2022, the Company has written off the balance of its non-current taxes receivable to $nil, with the resulting in an impairment charge recognized within exploration and project investigation costs for the year. 14 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) 6. MINERAL PROPERTIES January 1, 2021 Additions Effect of foreign currency translation December 31, 2021 Additions Effect of foreign currency translation December 31, 2022 Los Helados Project Los Helados Project $ 4,105,871 125,756 Total $ 4,105,871 125,756 (694,540) (694,540) $ 3,537,087 $ 3,537,087 126,220 239,390 126,220 239,390 $ 3,902,697 $ 3,902,697 The Company’s primary mineral property assets are the Los Helados properties and the La Rioja properties (together, the “Los Helados Project”), which are comprised of adjacent mineral titles in Region III, Chile, and the San Juan Province in Argentina. The Company is the majority partner and operator of the Los Helados Project, which is subject to a Joint Exploration Agreement (“JEA”) with its exploration partner, Nippon Caserones Resources Co. Ltd. (“NCR”). NCR became the Company’s partner on April 1, 2020, when Pan Pacific Copper Co. Ltd. transferred its interest in the Los Helados Project to NCR, a subsidiary of JX Nippon Mining and Metals Corporation, a Tokyo-based mining and smelting company that also currently operates the Caserones Mine, located approximately 12 kilometres from the Los Helados properties. NCR’s interest in the Caserones Mine is held through a subsidiary that is subject to a recently announced agreement whereby Lundin Mining Corporation will acquire a controlling stake. As at December 31, 2022, the Company held an approximate 69% interest in the underlying Los Helados properties, which are located in Region III, Chile, and a 60% interest in the La Rioja properties, located in the adjacent San Juan Province in Argentina. The Company had sole funded 100% of the expenditures related to the Los Helados properties as the result of elections by the exploration partner pursuant to the JEA not to fund its share of expenditures for the period from September 1, 2015, to August 31, 2022. The sole funding of expenditures at the Los Helados properties during this period resulted in dilution of NCR’s interest, and corresponding increases to the Company’s interest, resulting in the amounts noted above. The foregoing notwithstanding, NCR elected to exercise its right to fund its pro rata share of qualifying expenditures related to the Los Helados properties for the period from September 1, 2022, to August 31, 2023. Amounts contributed or contributable by NCR with respect to its funding commitment for the Los Helados properties are recorded as reductions to exploration and project investigation costs and total $2,624,306 for the year ended December 31, 2022. 15 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) Valle Ancho Properties In November 2022, the Company secured a 100% interest in the Valle Ancho and Interceptor properties (collectively, the “Valle Ancho Properties”), located in Catamarca, Argentina, by making its formal submissions to the Province of Catamarca to evidence its completion of the US$8.0 million minimum expenditure requirement. Potro Cliffs The Company holds a 100% interest in Potro Cliffs, an exploration target located in San Juan Province, Argentina. Potro Cliffs lies along the same major north-northeast structural trend that controls the Filo del Sol deposit located approximately 7 km to the south and the Los Helados deposit located approximately 10 km to the north. 7. CREDIT FACILITIES On February 19, 2021, the Company obtained an unsecured US$3.0 million credit facility (the “2021 Facility”) from Zebra and Lorito to provide financial flexibility to fund ongoing exploration and for general corporate purposes. Zebra and Lorito are related parties of the Company by virtue of their combined shareholding in the Company in excess of 20%. As consideration for the 2021 Facility, Zebra and Lorito received 40,000 common shares upon execution thereof (the “2021 Commitment Shares”) and was entitled to receive an additional 600 common shares each month, for every US$50,000 in principal outstanding, prorated accordingly for the number of days outstanding. During the year ended December 31, 2022, the Company made no draws against the 2021 Facility (2021: US$2,550,000), which matured on February 19, 2022, with no amounts drawn or owing. No interest was payable in cash during its term. On September 28, 2022, the Company obtained a new unsecured US$3.0 million credit facility (the “2022 Facility”, and together with the 2021 Facility, the “Facilities”) from Zebra and Lorito to provide financial flexibility to fund ongoing exploration and for general corporate purposes. As consideration for the 2022 Facility, Zebra and Lorito received 12,500 common shares upon execution thereof (the “2022 Commitment Shares”) and was entitled to receive an additional 200 common shares each month, for every US$50,000 in principal outstanding, prorated accordingly for the number of days outstanding. During the year ended December 31, 2022, the Company drew a total of US$1,300,000 against the 2022 Facility, and the amount was fully repaid in October 2022 following the completion of an equity financing (Note 9). The repayment had a Canadian dollar equivalent of approximately $1.8 million. As at December 31, 2022, no amount remained drawn or outstanding against the 2022 Facility, which matures on September 28, 2023. No interest is payable in cash during its term. 16 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) As a result of the amounts previously drawn against the Facilities, during the year ended December 31, 2022, 15,352 common shares were issued to Zebra and Lorito (2021: 146,026 common shares), and the Company has recognized $16,741 (2021: $108,291) in financing costs through the consolidated statement of comprehensive loss. In addition, $19,688 has been deferred within prepaid expenses and other deposits as at December 31, 2022, which relates to a portion of the 2022 Commitment Shares. All common shares issued in conjunction with the facilities are subject to a four-month hold period under applicable securities laws. 8. DUE TO EXPLORATION PARTNER The Company has an obligation to fund a partner’s share of exploration expenditures related to the La Rioja properties (the “Obligation”). In accordance with the terms of the JEA between the Company and the partner, NCR, the Company has elected to settle the Obligation through funding NCR’s share of exploration expenditures, which remained US$3.4 million as at December 31, 2022, and has no defined timeline for settlement. The Company considered the estimated timeframe required to expend the remaining US$3.4 million on behalf of NCR at the La Rioja properties and has presented the remaining obligation as a non-current liability, discounted to its present value at an annual effective rate of 8% (2021: 8%). As at December 31, 2022, the Company reviewed the nature and timing of future expenditures at the La Rioja properties and increased its expected annual funding of NCR’s share of future exploration expenditures from US$25,600 to US$38,340 based on its best estimate of exploration activities to be conducted on the project. This revision reduces the estimated timeframe for the settlement of the Obligation. The effect of this change in future estimated expenditures at the La Rioja properties is an increase in the amount due to exploration partner by $212,531, with a corresponding amount recognized within other losses on the consolidated statement of comprehensive loss for the year ended December 31, 2022. 9. SHARE CAPITAL The Company has authorized an unlimited number of voting common shares without par value. On October 25, 2022, the Company closed a non-brokered private placement, pursuant to which the Company sold an aggregate of 15,000,000 common shares at a price of $2.00 per common share, generating aggregate gross proceeds of $30.0 million (the “Financing”). Share issuance costs related to the Financing totaled $0.6 million, and included professional fees, regulatory fees, and 5% finders’ fees payable in cash on approximately $11.6 million of the gross proceeds from the Financing. The common shares issued under the Financing were subject to a hold period, which expired on February 26, 2023. 17 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) 10. SHARE OPTIONS a) Share option plan The Company has a share option plan adopted by the Board of Directors on May 7, 2019, and amended May 19, 2022, which reserves an aggregate of 10% of the issued and outstanding shares of the Company for issuance upon the exercise of options granted. The granting, vesting and terms of the share options are at the discretion of the Board of Directors. b) Share options outstanding Movements in the number of share options outstanding and their related weighted average exercise prices are as follows: Balance at January 1, 2021 Options granted Exercised Expired or forfeited Balance at December 31, 2021 Options granted Exercised Expired or forfeited Balance at December 31, 2022 Number of shares issuable pursuant to share options 8,135,000 2,280,000 (101,666) (1,152,500) 9,160,834 4,640,000 (816,834) (270,000) 12,714,000 Weighted average exercise price per share $ 0.57 0.68 0.57 0.81 $ 0.56 1.98 0.61 1.59 $ 1.06 On January 11, 2022, the Company granted a total of 1,760,000 share options to officers, employees, directors and other eligible persons at an exercise price of $1.65 per share. In addition, on September 7, 2022, the Company granted a total of 2,595,000 share options to officers, employees, directors and other eligible persons at an exercise price of $2.08 per share, and on November 29, 2022, the Company granted an additional 285,000 share options to officers, employees, directors and other eligible persons at an exercise price of $3.16 per share. The Company uses the Black-Scholes option pricing model to estimate the fair value for all options granted and the resulting stock-based compensation. The weighted average assumptions used in this pricing model, and the resulting fair values per option, for the 4,640,000 share options granted during the year ended December 31, 2022, are as follows: (i) (ii) (iii) (iv) (v) Risk-free interest rate: Expected life: Expected volatility: Expected dividends: Fair value per option: 2.29% 5 years 61.08% nil $1.06 18 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) The following table details the share options outstanding and exercisable as at December 31, 2022: Outstanding options Weighted average remaining contractual life (Years) 1.66 2.84 2.91 3.96 4.61 4.84 3.11 Weighted average exercise price $0.475 $0.54 $0.68 $1.65 $2.08 $3.16 $1.058 Options outstanding 3,010,000 2,380,000 2,972,333 1,510,000 2,556,667 285,000 12,714,000 Exercise price $0.475 $0.54 $0.68 $1.65 $2.08 $3.16 Exercisable options Weighted average remaining contractual life (Years) 1.66 2.84 2.25 3.96 4.61 4.84 2.57 Weighted average exercise price $0.475 $0.54 $0.68 $1.65 $2.08 $3.16 $0.79 Options exercisable 3,010,000 2,380,000 1,522,335 503,334 829,998 95,000 8,340,667 c) Share-based compensation Exploration and project investigation General and administration Year ended December 31, 2021 86,239 487,837 574,076 2022 574,117 2,353,238 2,927,355 11. EXPLORATION AND PROJECT INVESTIGATION Due to the geographic location of the Company’s current mineral property interests, the Company’s business activities generally fluctuate with the seasons, with increased exploration activities during the summer months in South America. As a result, a general recurring trend is the increase in exploration expenditures, and therefore net losses, for the fourth quarter and first quarter of a fiscal year, relative to the second and third quarters. The Company expensed the following exploration and project investigation costs for the years ended December 31, 2022 and 2021: 19 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) Year ended December 31, 2022 Los Helados Project Potro Cliffs Valle Ancho Other Total Land holding and access costs Drilling, fuel, camp costs and field supplies Roadwork, travel and transport Engineering and conceptual studies Consultants, geochemistry and geophysics Environmental and community relations VAT and other taxes Office, field and administrative salaries, overhead and other administrative costs Share-based compensation COVID related health and safety Total 416,851 22 22,503 27,684 467,060 11,225,277 1,893 1,423,143 - 12,650,313 4,961,496 303,666 1,099,791 142,996 3,171,718 1,279,451 17,374 - - 25,202 52,909 778,753 - 228,012 88,971 859,429 37 - - - 18,751 5,757,660 303,666 1,327,803 257,169 4,102,807 347,285 1,708,337 28,725 3,363,798 460,431 975 23,062,652 8,794 - 103,381 118,477 453,479 5,331,006 1,511 - 574,117 119,452 76,708 28,923,845 2021 Land holding and access costs Drilling, fuel, camp costs and field supplies Roadwork, travel and transport Consultants, geochemistry and geophysics Environmental and community relations VAT and other taxes Office, field and administrative salaries, overhead and other administrative costs Share-based compensation COVID-19-related health and safety Total 400,219 261,069 142,014 112,765 39,442 104,478 260,259 20,409 - 1,340,655 - - - - - - - 8,010 30,174 438,403 1,194,990 21 1,456,080 673,076 515,605 16,728 540,916 122 65,575 - 7,913 815,212 693,945 56,170 653,307 1,039,153 31,423 1,330,835 60,542 - - 134,705 - 4,183,725 5,288 - 140,516 86,239 134,705 5,664,896 20 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) 12. RELATED PARTY TRANSACTIONS Under the normal course of operations, the Company may undertake transactions or hold balances with related parties. Other than those related party transactions identified elsewhere in these consolidated financial statements, during the year ended December 31, 2022, the Company has also engaged with Josemaria Resources Inc. (“Josemaria”) and Filo Mining Corp. (“Filo Mining”), related parties by way of directors, officers and shareholders in common, and MOAR Consulting Inc. (“MOAR”), an exploration consulting firm, of which a director of the Company is the president. Josemaria ceased to be a related party of the Company following the acquisition of all of its issued and outstanding common shares by Lundin Mining Corporation, which closed on April 28, 2022. a) Related party services The Company has cost sharing arrangements with Josemaria and Filo Mining. Under the terms of these arrangements, the Company may, from time to time, provide management, technical, administrative and/or financial services (collectively, “Management Services”) to Josemaria and Filo Mining, and vice versa. In addition, the Company may, from time to time, engage MOAR to provide exploration consultation. These transactions were incurred in the normal course of operations, and are summarized as follows: Management Services to Josemaria Management Services to Filo Mining Management Services from Josemaria Management Services from Filo Mining Exploration Consultation from MOAR b) Related party balances Year ended December 31, 2021 83,524 591,415 (42,058) (549,787) (57,000) 2022 - 364,343 - (902,414) (12,750) The amounts due from (to) related parties, and the components of the consolidated statements of financial position in which they are included, are as follows: Receivables and other assets Receivables and other assets Accounts payable and accrued liabilities Accounts payable and accrued liabilities Related Party December 31, 2022 December 31, 2021 Josemaria Filo Mining Josemaria Filo Mining - 112,163 - (186,449) 27,996 24,343 (1,667) (15,113) 21 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) c) Key management compensation The Company’s key management personnel have the authority and responsibility for overseeing, planning, directing and controlling its activities and consist of the Board of Directors and members of the executive management team. Total compensation expense for key management personnel, and the composition thereof, is as follows: Salaries and other payments Short-term employee benefits Directors fees Stock-based compensation Short-term incentive bonuses Severance 13. INCOME TAXES Year ended December 31, 2021 474,000 14,000 82,000 458,478 - 75,000 1,103,478 2022 572,667 17,514 92,458 1,983,771 690,000 - 3,356,410 Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to the loss for the year. These differences result from the following items: Loss before taxes Combined Canadian federal and provincial statutory income tax rates Income tax recovery based on the above rate Changes to income tax balances and other items that have not been recognized Impacts of changes and differences in foreign tax and currency rates Non-deductible expenses and permanent differences Total income tax recovery Year ended December 31, 2021 2022 32,415,262 5,456,734 27.00% 8,752,121 27.00% 1,473,318 (9,310,039) 671,598 642,557 (84,639) - (3,048,874) 903,958 - 22 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) The Company’s unrecognized deductible temporary differences and unused tax losses for which no deferred tax asset has been recognized consist of the following: Non-capital losses carried forward Mineral properties and related expenditures Other Year ended December 31, 2021 1,896,749 17,870,945 154,632 2022 2,978,119 25,671,833 253,303 28,903,255 19,922,326 As at December 31, 2022, the non-capital loss carry-forwards and their respective expiration dates are as follows: Year 2023 2024 2025 2026 2027 and onwards Canada - - - - 9,068,643 9,068,643 Argentina 183,421 10,733 11,279 252,168 955,064 1,412,665 Other 23,453 37,843 32,868 23,985 17,591 135,740 Total 206,874 48,576 44,147 276,153 10,041,298 10,617,048 14. SEGMENTED INFORMATION The Company is principally engaged in the acquisition, exploration and development of mineral properties in South America. The information regarding mineral properties and exploration and project investigation costs presented in Notes 6 and 11, respectively, represent the manner in which management reviews its business performance. Materially all of the Company’s mineral properties and exploration and project investigation costs relate to South America, particularly Chile and Argentina. The net gains on the use of marketable securities are allocated to the underlying projects for which the funding was provided. Materially all of the Company’s administrative costs are incurred by the Canadian parent, where materially all of the Company’s cash is held in the normal course of business until it is required to be deployed to the Company’s South American subsidiaries in support of ongoing and planned work programs. 23 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) The following are summaries of the Company’s current and non-current assets, current liabilities, and net losses by segment: Los Helados Project Valle Ancho & Potro Cliffs Current assets Non-current receivables and other assets Equipment As at December 31, Mineral properties 2022 Total assets Current liabilities Non-current accrued liabilities Due to exploration partner Total liabilities Current assets Non-current receivables and other assets Equipment As at December 31, Mineral properties 2021 Total assets 8,301,240 840,337 - 3,902,697 13,044,274 6,044,223 338,600 - 6,382,823 Los Helados Project 1,077,512 155,710 - 3,537,087 4,770,309 Corporate Total 18,712,293 - - - 18,712,293 27,549,800 840,337 18,723 3,902,697 32,311,557 850,809 - 7,327,951 338,600 630,460 1,481,269 630,460 8,297,011 536,267 - 18,723 - 554,990 432,919 - - 432,919 Valle Ancho Corporate Total 2,472,602 86,489 23,968 - 2,583,059 18,379,540 - - - 18,379,540 21,929,654 242,199 23,968 3,537,087 25,732,908 Current liabilities Due to exploration partner Total liabilities 537,961 1,158,217 259,638 1,955,816 - 537,961 - 1,158,217 393,719 653,357 393,719 2,349,535 24 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) Year ended December 31, 2022 2021 Exploration and project investigation Gain on use of marketable securities General and administration and other items Net loss Exploration and project investigation Gain on use of marketable securities General and administration and other items Net loss Los Helados Project Valle Ancho & Potro Cliffs Corporate Other Total 23,062,652 5,784,485 (57,155) (1,918,201) - - 76,708 28,923,845 - (1,975,356) 84,312 23,089,809 Los Helados Project 24,842 3,891,126 5,357,619 5,357,619 - 76,708 5,466,773 32,415,262 Valle Ancho Corporate Other Total 1,340,655 4,183,725 - (2,477,478) - - 140,516 5,664,896 - (2,477,478) 78,883 1,419,538 110,868 1,817,115 2,079,565 2,079,565 - 140,516 2,269,316 5,456,734 25 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) 15. USE OF MARKETABLE SECURITIES From time to time, the Company may acquire and transfer marketable securities to facilitate intragroup funding transfers between the Canadian parent and its Argentine operating subsidiaries. The Company does not acquire marketable securities or engage in these transactions for speculative purposes. In this regard, under this strategy, the Company generally uses marketable securities of large and well-established companies, with high trading volumes and low volatility. Nonetheless, as the process to acquire, transfer and ultimately sell the marketable securities occurs over several days, some fluctuations are unavoidable. As the marketable securities are acquired with the intention of a near term sale, they are considered financial instruments that are held for trading. Accordingly, all changes in the fair value of the instruments, between acquisition and disposition, are recognized through profit or loss. As a result of having utilized this mechanism for intragroup funding for the year ended December 31, 2022, the Company realized a net gain of $1,975,356 (2021: gain of $2,477,478). The net gain for the year ended December 31, 2022 was comprised of a favorable foreign currency impact of $2,269,711 (2021: $2,943,625 ) and a trading loss of $294,355 (2021: loss of $466,147 ), including the impact of fees and commissions. 16. CAPITAL MANAGEMENT The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to pursue the development of its mineral properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the definition and management of capital, the Company considers the items included in shareholders’ equity to be capital. The Company manages the capital structure and makes adjustments, as necessary, in light of changes in economic conditions and the risk characteristics of its assets. In order to maintain or adjust the capital structure, the Company may attempt to issue new shares or debt instruments, acquire or dispose of assets, or to bring in joint venture partners. To facilitate the management of its capital requirements, the Company may prepare expenditure plans and budgets that are updated as necessary depending on various factors, including, but not limited to, successful capital deployment and general industry conditions. 26 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) 17. FINANCIAL INSTRUMENTS AND MANAGEMENT OF FINANCIAL RISKS The Company has estimated the fair values of its financial instruments based on appropriate valuation methodologies. These values are not materially different from their carrying value. The Company classifies the fair value of its financial instruments according to the following hierarchy based on the amount of observable inputs used to value the instrument: Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 – inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Company’s financial instruments consist of cash, receivables and other assets, trade payables and accrued liabilities, amounts owing against the Facilities, if any, non-current accrued liabilities and the amounts due to its exploration partner. Other than for the amounts due to its exploration partner, the carrying values of the Company’s financial instruments are considered to be reasonable approximations of fair value due to their short-term nature. For amounts due to its exploration partner, the Company revalues the liability from time to time based on revisions to the timing and amounts of expected future settlement, which the Company believes is a reasonable approximation of fair value. Between revaluations, the liability is accreted. As at December 31, 2022, the Company’s financial instruments are exposed to the following financial risks, including credit, liquidity and currency risks: (i) (ii) Credit risks associated with cash is minimal as the Company deposits the majority of its cash with a large Canadian financial institution that has been accorded a strong investment grade rating by a primary rating agency. Liquidity risks associated with the inability to meet obligations as they become due is minimized through the management of its capital structure as explained on Note 16 and by maintaining good relationships with significant shareholders and creditors, such as Zebra and Lorito. The Company also closely monitors and reviews its costs to date and actual cash flows on a monthly basis. The maturities of the Company’s financial liabilities as at December 31, 2022, are as follows: Total Less than 1 year 1-5 years More than 5 years Accounts payable and accrued liabilities Non-current accrued liabilities Due to exploration partner 7,327,951 338,600 4,582,690 7,327,951 - - 338,600 - - - 4,582,690 Total 12,249,241 7,327,951 338,600 4,582,690 27 NGEx Minerals Ltd. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2022 and 2021 (Expressed in Canadian Dollars, unless otherwise stated) In accordance with the terms of a JEA between the Company and the partner, NCR, the Company has elected to settle the Obligation through funding NCR’s share of exploration expenditures, which remained US$3.4 million as at December 31, 2021, and has no defined timeline for settlement. The Obligation has been discounted and recorded at its present value at an annual effective rate of 8%. (iii) Foreign currency risk can arise when the Company or its subsidiaries transact or have net financial assets or liabilities which are denominated in currencies other than their respective functional currencies. At December 31, 2022, the Company’s largest foreign currency risk exposure existed at the level of its Chilean operating subsidiary, where the Company held a net financial asset position denominated in US dollars having a Canadian dollar equivalent of approximately $6.1 million. A 10% change in the foreign exchange rate between the US dollar, and the Chilean Peso, the subsidiary’s functional currency, would give rise to increases/decreases of approximately $611,000 in financial position/comprehensive loss. 28 NGEX Minerals Corporate Directory Company Head Office 2000 - 885 West Georgia Street Vancouver, BC V6C 3E8 Canada Phone: +1 604 689 7842 Fax: +1 604 689 4250 Auditors Pricewaterhouse Coopers LLP Vancouver, BC Canada Registered and Records Office 2200 – 885 West Georgia Street Vancouver, BC V6C 3E8 Canada Registrar and Transfer Agent Computershare Trust Company of Canada Vancouver, BC Canada Phone: +1 604 661 9400 Officers Wojtek Wodzicki, President and CEO Jeff Yip, Chief Financial Officer Bob Carmichael, Vice President Exploration Judy McCall, Corporate Secretary Company Information Amanda Strong Investor Relations Email: info@ngexminerals.com Phone: +1 604 689 7842 Solicitors Cassels Brock Vancouver, BC Canada Directors William Rand (Chair) Wojtek Wodzicki Adam I. Lundin David Mullen Cheri Pedersen Neil O’Brien Axel Lundin Share Listing TSXV: NGEX CUSIP: 65343P103
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