Group Eleven Resources : 2023 Fourth Quarter Financial Statements

Group Eleven Resources Corp.

Consolidated Financial Statements

December 31, 2023

Expressed in Canadian Dollars

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of

Group Eleven Resources Corp.

Opinion

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

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which indicates that the Company incurred ongoing losses since inception and has no source of recurring revenue. During the year ended December 31, 2023, the Company incurred a loss of $2,536,562 and will need to raise additional funds to maintain its current level of operations. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current year. 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.

In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our auditor's report.

Assessment of Impairment Indicators of Exploration and Evaluation Assets ("E&E Assets")

As described in Note 5 to the consolidated financial statements, the carrying amount of the Company's E&E Assets was $8,897,821 as of December 31, 2023. As more fully described in Note 2 to the consolidated financial statements, management assesses E&E Assets for indicators of impairment at each reporting period.

The principal considerations for our determination that the assessment of impairment indicators of the E&E Assets is a key audit matter are that there was judgment made by management when assessing whether there were indicators of impairment for the E&E Assets, specifically relating to the assets' carrying amount which is impacted by the Company's intent and ability to continue to explore and evaluate these assets. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of impairment that could give rise to the requirement to prepare an estimate of the recoverable amount of the E&E Assets.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures included, among others:

• Evaluating management's assessment of impairment indicators.
• Evaluating the intent for the E&E Assets through discussion and communication with management.
• Reviewing the Company's recent expenditure activity and expenditure budgets for future periods.
• Obtaining, on a test basis through government websites, confirmation of title to ensure mineral rights underlying the E&E Assets are in good standing.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management's Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year 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 Carmen Newnham.

Vancouver, Canada

Chartered Professional Accountants

April 22, 2024

GROUP ELEVEN RESOURCES CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian Dollars, unless otherwise stated)

	Note	December 31, 2023	December 31, 2022
ASSETS		($)	($)
Current Assets
Cash		3,357,077	1,120,804
Prepaid expenses		25,524	27,523
Other receivables	3	41,772	59,994
Total Current Assets		3,424,373	1,208,321
Non-current assets
Equipment	4	20,356	3,318
Exploration and evaluation assets	5	8,897,821	8,897,821
Total Assets		12,342,550	10,109,460
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued liabilities	6,13	529,302	349,017
Exploration partner advances	7	366,803	362,589
Total Current Liabilities		896,105	711,606
Non-Current Liabilities
Government loan payable	8	-	40,000
Total liabilities		896,105	751,606
Equity
Share capital	9	24,623,688	20,490,423
Reserves	9	1,527,153	1,035,265
Deficit		(17,577,435)	(15,092,128)
Total Shareholders' Equity		8,573,406	6,433,560
Non-controlling interest	10	2,873,039	2,924,294
Total Equity		11,446,445	9,357,854
Total Liabilities and Equity		12,342,550	10,109,460

Nature and continuance of operations (Note 1)

Subsequent events (Note 16)

On behalf of the Board:

/s/ Dan MacInnis		/s/ Alessandro Bitelli
Chairman		Director

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

GROUP ELEVEN RESOURCES CORP.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in Canadian Dollars, unless otherwise stated)

For the years ended

	Note	December 31, 2023	December 31, 2022
		($)	($)
Operating expenses
Exploration expenditures	5,13	1,388,706	1,518,827
Salaries and benefits	13	549,057	521,069
Marketing and investor relations		142,625	73,312
General and administrative		169,469	153,520
Professional fees	13	234,339	171,659
Depreciation	4	3,808	5,651
Foreign exchange (gain) loss		(26,413)	8,642
Interest income		(11,210)	(2,289)
Share based payments	13	101,189	76,285
		2,551,570	2,526,676
Write-off of accounts payable		5,008	-
Gain on extinguishment of government loan	10	10,000	-
Loss and comprehensive loss for the year		(2,536,562)	(2,526,676)
Loss attributable to:
Shareholders		(2,485,307)	(2,401,726)
Non-controlling interest	10	(51,255)	(124,950)
		(2,536,562)	(2,526,676)
Basic and diluted loss per common shares
attributable to shareholders ($)		(0.02)	(0.02)
Weighted average number of shares
outstanding - basic and diluted (#)		169,032,095	155,561,995

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

GROUP ELEVEN RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended

(Expressed in Canadian Dollars, unless otherwise stated)

					Total	Non-
	Share Capital			Shareholders'	controlling	Total
	Shares	Amount	Reserves	Deficit	Equity	Interest	Equity
	(#)	($)	($)	($)	($)	($)	($)
Balance - December 31, 2021	137,469,836	18,088,060	869,763	(12,690,402)	6,267,421	3,049,244	9,316,665
Shares issued for private placement	20,831,666	2,499,800	-	-	2,499,800	-	2,499,800
Share issuance costs - cash	-	(68,220)	-	-	(68,220)	-	(68,220)
Share issuance costs - agents' warrants	-	(29,217)	29,217	-	-	-	-
DSUs issued for debt	-	-	60,000	-	60,000	-	60,000
Share-base payments	-	-	76,285	-	76,285	-	76,285
Loss for the year	-	-	-	(2,401,726)	(2,401,726)	(124,950)	(2,526,676)
Balance - December 31, 2022	158,301,502	20,490,423	1,035,265	(15,092,128)	6,433,560	2,924,294	9,357,854
Shares issued for private placement	41,666,666	4,250,000	-	-	4,250,000	-	4,250,000
Warrants issued for private placement	-	-	250,000	-	250,000	-	250,000
Share issuance costs - cash	-	(96,036)	-	-	(96,036)	-	(96,036)
Share issuance costs - agents' warrants	-	(20,699)	20,699	-	-	-	-
DSUs issued for debt	-	-	120,000	-	120,000	-	120,000
Share-base payments	-	-	101,189	-	101,189	-	101,189
Loss for the year	-	-	-	(2,485,307)	(2,485,307)	(51,255)	(2,536,562)
Balance - December 31, 2023	199,968,168	24,623,688	1,527,153	(17,577,435)	8,573,406	2,873,039	11,446,445

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

GROUP ELEVEN RESOURCES CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian Dollars, unless otherwise stated) For the years ended

		December 31, 2023	December 31, 2022
		($)	($)
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year	(2,536,562)	(2,526,676)
Items not affecting cash:
	Depreciation	3,808	5,651
	Foreign exchange	4,214	1,022
	Share-based payments	101,189	76,285
	Deferred share units issued for debt	120,000	60,000
	Gain on extinguishment of government loan	(10,000)	-
	Changes in non-cash working capital items:
	Prepaid expenses	1,999	28,916
	Other receivables	18,222	(36,112)
	Accounts payable and accrued liabilities	169,799	(32,581)
Net cash used in operating activities	(2,127,331)	(2,423,495)
CASH FLOWS FROM INVESTING ACTIVITIES
	Purchase of equipment	(20,846)	(2,966)
Net cash used in investing activities	(20,846)	(2,966)
CASH FLOWS FROM FINANCING ACTIVITIES
	Funds received from private placement	4,500,000	2,499,800
	Contributions from non nontrolling interest	-	141,999
	Share issuance costs	(85,550)	(38,220)
	Government loan payable	(30,000)	-
Net cash provided by financing activities	4,384,450	2,603,579
Change in cash	2,236,273	177,118
Cash, beginning of year	1,120,804	943,686
Cash, end of year	3,357,077	1,120,804
Cash and cash equivalents is represented by:
	Cash	3,347,077	1,110,804
	Cash equivalents	10,000	10,000
		3,357,077	1,120,804
Supplemental Cash Flow Information:
	Agents' warrants issued for payment of financing fees	20,699	29,217
	Interest paid in cash	-	-
	Income taxes paid in cash	-	-
	Share issuance costs included in accounts payable and
	accrued liabilities	40,486	30,000

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

GROUP ELEVEN RESOURCES CORP.

Notes to the Consolidated Financial Statements (Expressed in Canadian Dollars, unless otherwise stated) For the years ended December 31, 2023 and 2022

1. NATURE AND CONTINUANCE OF OPERATIONS

Group Eleven Resources Corp. (the "Company" or "GERC") was incorporated under the laws of the Province of British Columbia, Canada on November 25, 2016, and its principal business activity is the exploration and evaluation of mineral properties. The Company's corporate office is located at 2200

• 885 W Georgia Street, Vancouver, British Columbia. The Company's common shares are listed on the TSX Venture Exchange ("TSX-V") under the symbol ZNG.

These consolidated financial statements are prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred ongoing losses since inception and has no source of recurring revenue. The success of the Company is dependent upon the ability of the Company to obtain necessary financing to continue its exploration and development activities, the confirmation of economically recoverable reserves, and upon establishing future profitable production, or realization of proceeds on disposal. In the absence of raising additional funds, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.

At December 31, 2023, the Company had working capital of $2,528,268 (December 31, 2022: $496,715). During the year ended December 31, 2023 the Company incurred a loss of $2,536,562 (December 31, 2022: $2,526,676) and used cash in operating activities of $2,127,331 (December 31, 2022: $2,423,495).

Management recognizes that the Company will need to raise additional funds to maintain its current level of operations and while it has been successful in doing so in the past, there can be no assurance that it will be able to do so in the future. Factors that 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, and investor perceptions and expectations of the global markets and mining and zinc sector in particular. A failure to raise capital when required could cause a deferral or delay in the current exploration projects, loss of currently held mineral properties, have a material adverse effect on the Company's business, financial condition and results of operations.

Management plans to continue to secure the necessary financing through a combination of equity financing and entering into joint venture arrangements; however, there can be no assurance that the Company will be successful in these actions. These consolidated financial statements do not give effect to adjustments to the carrying values and classification of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

There are many external factors that can adversely affect general workforces, economies and financial markets globally. Examples include, but are not limited to, the COVID-19 global pandemic and political conflict in other regions. It is not possible for the Company to predict the duration or magnitude of adverse results of such external factors and their effect on the Company's business or ability to raise funds.

2. MATERIAL ACCOUNTING POLICY INFORMATION

1. Basis of Presentation

The consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB"). These consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified at fair value through profit or loss, which are stated at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

GROUP ELEVEN RESOURCES CORP.

Notes to the Consolidated Financial Statements (Expressed in Canadian Dollars, unless otherwise stated) For the years ended December 31, 2023 and 2022

On April 22, 2024, the Board of Directors of the Company approved the consolidated financial statements for the year ended December 31, 2023.

1. Basis of Consolidation

These consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, Group Eleven Resources Ltd. ("GERL") and Group Eleven Mining and Exploration Inc. ("GEME"), a 60% interest in Ballinalack Resources Limited ("BRL"), and a 76.56% interest in TILZ Minerals Ltd. ("TILZ"), all incorporated in Dublin, Ireland. All inter-company transactions and accounts have been eliminated upon consolidation. For partially owned subsidiaries, the interest attributable to non- controlling shareholders is reflected in non-controlling interest. Adjustments to non-controlling interest are accounted for as transactions with owners and adjustments that do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.

1. Foreign Currencies

These consolidated financial statements are presented in Canadian dollars. The functional currency of the Company and its subsidiaries is also the Canadian dollar.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period- end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the period in which they arise.

1. Cash

Cash is comprised of cash on hand and demand deposits.

1. Financial Instruments

The Company applies the requirements of IFRS 9 - Financial Instruments ("IFRS 9") which utilizes a model for recognition and measurement of financial instruments and a single, forward-looking "expected loss" impairment model. The following is the Company's accounting policy for financial instruments under IFRS 9:

Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"), at fair value through other comprehensive income (loss) ("FVTOCI"), or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of receivable instruments is driven by the Company's business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by- instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or the Company has opted to measure them at FVTPL.

Measurement

Financial assets and liabilities 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. Other receivables, accounts payable and accrued liabilities, exploration partner advances and government loan payable are measured at amortized cost.