Financial statements
Page 1
Cover page UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025
Page 2
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, the statements must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared by management and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these interim condensed consolidated financial statements. /s/ Dan Vujcic /s/ Chris Stackhouse Dan Vujcic Chris Stackhouse Chief Executive Officer Chief Financial Officer 15 May 2025
Page 3
CORPORATE INFORMATION DIRECTORS Paul Smith (Chairman) Slobodan (Dan) Vujcic (CEO and Director) Nicholas Mather (Non-Executive Director) Maria Amparo Alban (Non-Executive Director) Scott Caldwell (Non-Executive Director) Adrian (Steve) van Barneveld (Non-Executive Director) Jian (John) Liu (Non-Executive Director) Charles Joseland (Non-Executive Director) COMPANY SECRETARY Steven Wood REGISTERED OFFICE 1 Cornhill London EC3V 3ND United Kingdom Registered Number 05449516 AUSTRALIAN OFFICE (Head office) Level 5/191 St Georges Terrace Perth 6000 Western Australia Email: info@solgold.com.au Web Site: www.solgold.com.au INDEPENDENT AUDITORS PricewaterhouseCoopers LLP 1 Embankment Place London, WC2N 6RH United Kingdom UK SOLICITORS Fasken Martineau LLP 100 Liverpool Street London, EC2M 2AT United Kingdom AUSTRALIAN SOLICITORS Gilbert + Tobin Level 16, Brookfield Place Tower 2, 123 St Georges Terrace, Perth WA 6000 Australia REGISTRARS Computershare Investor Services plc The Pavilions, Bridgwater Road Bristol BS99 7NH United Kingdom CONTACT INFORMATION Website: solgold.com.au Email: info@solgold.com.au ‘X’: @solgold_plc LinkedIn: linkedin.com/company/solgold-plc UK COMPANY NUMBER 05449516 ARBN 117 169 856
Page 4
Table of Contents Consolidated Statements of Profit or Loss ………………………………………………………………………………………………………………………………… 5 Consolidated Statement of Financial Position ……………………………………………………………………………………………………………………………6 Consolidated Statement of Change in Equity …………………………………………………………………………………………………………………………….7 Consolidated Statement of Cash Flows ……………………………………………………………………………………………………………………………………..8 Notes to the Consolidated Financial Statements NOTE 1 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ..................................................................................................... 6 NOTE 2 | SEGMENT REPORTING .................................................................................................................................................... 9 NOTE 3 | ADMINISTRATIVE EXPENSES ......................................................................................................................................... 11 NOTE 4 | LOSS PER SHARE ........................................................................................................................................................... 12 NOTE 5 | INTANGIBLE ASSETS ...................................................................................................................................................... 12 NOTE 6 | PROPERTY, PLANT AND EQUIPMENT ........................................................................................................................... 13 NOTE 7 | FINANCIAL ASSETS AT AMORTISED COST ..................................................................................................................... 14 NOTE 8 | OTHER RECEIVABLES AND PREPAYMENTS ................................................................................................................... 14 NOTE 9 | LOANS RECEIVABLE ....................................................................................................................................................... 15 NOTE 10 | SHARE CAPITAL ............................................................................................................................................................. 15 NOTE 11 | SHARE OPTIONS ............................................................................................................................................................ 16 NOTE 12 | OTHER FINANCIAL LIABILITIES ...................................................................................................................................... 19 NOTE 13 | BORROWINGS ............................................................................................................................................................... 20 NOTE 14 | DEFERRED REVENUE LIABILITY ..................................................................................................................................... 23 NOTE 15 | RELATED PARTIES ......................................................................................................................................................... 25 NOTE 16 | COMMITMENTS AND CONTINGENT ASSET AND LIABILITIES ....................................................................................... 25 NOTE 17 | SUBSEQUENT EVENTS ................................................................................................................................................... 26
Page 5
CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE THREE AND NINE MONTHS ENDED 31 MARCH 2025 Page 5 of 30 Condensed Consolidated Interim Statement of Profit or Loss Three months ended 31 March Nine months ended 31 March 2025 (unaudited) 2024 (unaudited) 2025 (unaudited) 2024 (unaudited) Notes US$ US$ US$ US$ Expenses Administrative expenses 3 (3,909,076) (2,396,251) (10,966,770) (8,311,772) Exploration costs written-off - (17,621) (41,611) (8,264,192) Operating loss (3,909,076) (2,413,872) (11,008,381) (16,575,964) Other (expense) / income (3,082) 243,605 124,033 297,521 Finance income 41,931 153,372 203,370 219,897 Finance costs (5,515,460) (4,605,032) (16,308,934) (12,730,840) Movement in fair value of derivative liability 12 - (12,000) 1,000 222,000 Remeasurement of amortised cost of financial liability - (24,145,761) - (24,145,761) Loss before tax (9,385,687) (30,779,688) (26,988,913) (52,713,147) Tax income / (expense) - - 165,005 (13,537) Loss for the period (9,385,687) (30,779,688) (26,823,908) (52,726,684) Other comprehensive income/(expense) Items that may be reclassified to profit and loss Exchange (expense)/gain on translation of foreign operations 83,740 16,725 (52,707) (201,490) Items that will not be reclassified to profit and loss Remeasurement of post-employment benefits - - (70,854) Other comprehensive expense, net of tax 83,740 16,725 (52,707) (272,344) Total comprehensive expense for the period (9,301,947) (30,762,963) (28,876,615) (52,990,028) Basic earnings per share (cents) 4 (0.3) (1.0) (0.9) (1.8) Diluted earnings per share (cents) 4 (0.3) (1.0) (0.9) (1.8) The accompanying notes form an integral part of these condensed consolidated interim financial statements.
Page 6
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2025 Page 3 of 30 Condensed Consolidated Interim Statement of Financial Position 31 March 2025 (unaudited) 30 June 2024 Notes US$ US$ Assets Intangible assets 5 444,101,050 425,548,038 Property, plant and equipment 6 22,964,834 23,014,517 Financial assets at amortised cost 7 1,000,003 1,706,305 Other receivables and prepayments 8(b) 5,343,874 4,407,796 Total non-current assets 473,409,761 454,676,656 Other receivables and prepayments 8(a) 2,837,646 1,988,382 Loans receivable 9 883,944 1,152,493 Cash and cash equivalents 18,745,385 6,028,043 Total current assets 22,466,975 9,168,918 Total assets 495,876,736 463,845,574 Equity Share capital 10(a) 40,452,643 40,452,643 Share premium 10(a) 459,986,179 459,986,179 Own shares reserve 10(b) - (25,389,208) Merger relief reserve 78,692,861 78,692,861 Other reserves 13,766,675 12,755,050 Accumulated loss (340,054,340) (306,351,714) Foreign currency translation reserve (5,586,196) (5,533,489) Total equity 247,557,822 254,612,322 Liabilities Trade and other payables 6,852,283 6,503,000 Lease liabilities 47,647 70,510 Borrowings 13(c) - 10,002,796 Provisions 16(b) - 716,170 Total current liabilities 6,899,930 17,292,476 Lease liabilities 22,888 136,808 Other financial liabilities 12(a) 756,228 1,076,806 Deferred tax liabilities 1,926,949 1,780,898 Borrowings 13 205,039,793 188,946,264 Deferred revenue liability 14 33,973,126 - Total non-current liabilities 241,718,984 191,940,776 Total liabilities 246,618,914 209,233,252 Total equity and liabilities 495,876,736 463,845,574 The accompanying notes form an integral part of these condensed consolidated interim financial statements.
Page 7
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 4 of 30 Condensed Consolidated Interim Statement of Changes in Equity Nine months ended 31 March 2024 Share Capital Share Premium Own Shares Reserve Merger Relief Reserve Share Based Payment Reserve Employee Benefit Reserve Accumulated Loss Foreign Currency Translation Reserve Total US$ US$ US$ US$ US$ US$ US$ US$ US$ Balance at 1 July 2023 40,452,643 459,986,179 (25,389,208) 78,692,861 10,898,247 714,450 (247,097,272) (5,332,111) 312,925,789 Loss for the period - - - - - - (52,726,684) - (52,726,684) Other comprehensive loss - - - - - (70,854) - (201,490) (272,344) Total comprehensive loss for the period - - - - - (70,854) (52,726,684) (201,490) (52,999,028) Options expired - - - - (477,019) - 477,019 - Vesting of options issued to directors and employees - - - - 1,611,769 - - - 1,611,769 Employee benefit reserve adjustment - - - - - - 69,018 - 69,018 Balance at 31 March 2024 (unaudited) 40,452,643 459,986,179 (25,389,208) 78,692,861 12,032,997 643,596 (299,277,919) (5,533,601) 261,607,548 Nine months ended 31 March 2025 Share Capital Share Premium Own Shares Reserve Merger Relief Reserve Share Based Payment Reserve Employee Benefit Reserve Accumulated Loss Foreign Currency Translation Reserve Total US$ US$ US$ US$ US$ US$ US$ US$ US$ Balance at 1 July 2024 40,452,643 459,986,179 (25,389,208) 78,692,861 12,122,374 632,676 (306,351,714) (5,533,489) 254,612,322 Loss for the period - - - - - - (26,823,908) - (26,823,908) Other comprehensive loss - - - - - - - (52,707) (52,707) Total comprehensive loss for the period - - - - - - (26,823,908) (52,707) (26,876,615) Options expired - - - - (315,600) - 315,600 - - Vesting of options issued to directors and employees - - - - 1,380,439 - - - 1,380,439 Employee benefit reserve adjustment - - - - - (53,214) 195,960 - 142,746 Sale of Own Shares (Note 10(b)) - - 25,389,208 - - - (7,390,278) - 17,998,930 Balance at 31 March 2025 (unaudited) 40,452,643 459,986,179 - 78,692,861 13,187,213 579,462 (340,054,340) (5,586,196) 247,257,822 The accompanying notes form an integral part of these condensed consolidated interim financial statements.
Page 8
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE THREE AND NINE MONTHS ENDED 31 MARCH 2025 Page 5 of 30 Condensed Consolidated Interim Statement of Cash Flows Three months ended March 31, Nine months ended March 31, 2025 (unaudited) 2024 (unaudited) 2025 (unaudited) 2024 (unaudited) Notes $ $ $ $ Cash flows from operating activities Loss for the period (9,385,687) (30,779,688) (26,823,908) (52,726,684) Depreciation 27,843 93,784 82,244 289,702 Interest on NSRs 13(b) 5,513,589 4,598,294 16,093,529 12,707,239 Remeasurement of amortised cost of financial liability - 24,145,761 - 24,145,761 Share based payments expense 454,331 540,179 1,380,439 1,607,245 Employee benefit reserve adjustment - - 142,746 - Capitalised exploration costs written-off - 17,621 41,611 8,264,192 Effects of foreign exchange (60,055) (4,971) (46,453) (260,855) Expected credit loss – Company Funded Loan Plan 9 45,675 (144,545) 273,602 683,917 Movement in fair value of derivative liability 12 - 12,000 (1,000) (222,000) Accretion of interest – short term loan facility 13(c) - - 208,446 - Loss on disposal of depreciable assets - - - 13,703 Deferred tax expense - - 146,051 - Decrease/(increase) in other receivables and prepayments (348,910) 22,081 (1,079,040) 895,183 Increase/(decrease) in trade and other payables 419,141 682,235 (1,599,895) (2,991,372) Net cash outflow from operating activities (3,334,073) (817,249) (7,981,838) (7,593,969) Cash flows from investing activities Acquisition of property, plant and equipment (14,358) - (255,817) (121,717) Acquisition of exploration and evaluation assets 5 (9,122,083) (8,457,880) (18,594,623) (20,973,049) Net cash outflow from investing activities (9,136,441) (8,457,880) (18,850,440) (21,094,766) Cash flows from financing activities Proceeds from sale of Own Shares 10(b) 18,071,215 - 18,071,215 - Costs of sale of Own Shares 10(b) (72,285) - (72,285) - Proceeds from Gold Stream Agreement 14 - - 33,400,000 - Costs of Gold Stream Agreement 14 (105,086) - (1,522,850) - Repayments of short-term loan facility borrowing 13(c) - - (10,211,242) - Repayments of lease liabilities - (107,902) (62,511) (316,556) Net cash (outflows)/inflows from financing activities 17,893,844 (107,902) 39,602,327 (316,556) Net (decrease)/increase in cash and cash equivalents 5,423,330 (9,383,031) 12,770,049 (29,005,291) Cash and cash equivalents at beginning of period 13,238,315 12,835,344 6,028,043 32,481,606 Effects of exchange rate changes on cash and cash equivalents 83,740 650 (52,707) (23,352) Cash and cash equivalents at end of period 18,745,385 3,452,963 18,745,385 3,452,963 The accompanying notes form an integral part of these condensed consolidated interim financial statements.
Page 9
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 6 of 30 NOTE 1 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1(a) | Basis of preparation of financial statements These general purpose unaudited condensed consolidated interim financial statements for the nine months ended 31 March 2025 (the “Interim Financial Statements”) have been prepared in accordance with UK -adopted International Accounting Standard 34, Interim Financial Reporting, International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom’s Financial Conduct Authority. The Interim Financial Statements are presented in United States dollars (“US$”) and have been prepared on the historical cost basis, apart from financial assets held at fair value. The Interim Financial Statements do not include all notes of the type normally included within the annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financi ng activities of the consolidated group. The financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. Accordingly, they are to be read in conjunction with the Annual Report for the year ended 30 June 2024, which was prepared in accordance with UK-adopted international accounting standards as applied in accordance with the provisions of the Companies Act of 2006, international financial reporting standards ("IFRSs") as issued by the International Accounting Standards Board (“IASB”), and the Disclosure and Transparency Rules of the Financial Conduct Authority. Statutory accounts for the year ended 30 June 2024 were approved by the board of directors on 26 September 2024 and delivered to the Regis trar of Companies. The report of the auditors on those accounts was unqualified and did not contain any statement under section 498 of the Companies Act 2006. It is also recommended that the Interim Financial Statements be read considering any public announcements made by SolGold plc and its controlled entities during the nine months ended 31 March 2025 and to the date of issuance of the Interim Financial Statements. Note 1(b) | Going concern At the period end, SolGold plc (the “Company”) and its subsidiaries (together, the “Group”) had cash on hand of approximately US$18.7 million and net current assets of approximately US$15.6 million. The Directors have reviewed the cash position of the Group for the period to 3 0 June 2026 and consider it appropriate that the Group’s Interim Financial Statements are prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of business, for the reasons set out below. The Group has not generated revenues from operations in its history and, in common with many exploration companies, the Group raises finance for its exploration and appraisal activities in discrete tranches. As such, the ability of the Group to continue as a going concern depends on its ability to draw on the stream proceeds and/or secure additional external financing. Management’s cashflow forecasts show that the Group needs to meet the Conditions Precedent in the Gold Stream Agreement, negotiate earlier drawdowns, or secure additional funding during the fourth quart er of fiscal 2025 to continue its development of the Cascabel project. This financing is also required to allow the Group to continue to meet its obligations and liabilities as they fall due. The Group has a proven ability to execute equity and other financings as demonstrated by the successfully completed US$750 million Gold Stream Agreement (Note 14) announced on 15 July 2024 (borrowed amounts are limited to the de- risking and construction of Cascabel); the Osisko Gold Royalty Ltd royalty agreement in November 2022; the SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) acquisition in February 2023 and the share issuance in December 2022. In addition, gross proceeds of $18,071,215 were raised during the nine months ended 31 March 2025 by the sale of the Own Shares of the Company which were originally acquired through the acquisition of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.).
Page 10
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 7 of 30 Note 1(b) | Going concern (continued) During the nine months ended 31 March 2025, SolGold executed the US$750 million Gold Stream Agreement with Franco- Nevada (Barbados) and Osisko Bermuda Limited. This funding is envisioned to cover the ongoing operational requirements for the Cascabel Project and associated administration expenses f or at least fifteen months from the date of approval of the Interim Financial Statements. The first tranche of US$33.4 million of the Initial Deposit (which includes three tranches totaling US$100 million) was draw n at closing of the agreement. The remaining US$66.6 million of the US$100 million Initial Deposit is expected to be drawn as milestones are achieved, providing a clear pathway for funding through to the final investment decision. Although significant funding for Cascabel is provided for under the Gold Stream Agreement, drawing funds requires completion of certain Conditions Precedent. While management believes the risk of failure to satisfy the Conditions Precedent is low, it is no t eliminated and is subject to factors within and outside management’s control. Should management need to negotiate for Gold Stream Agreement drawdowns prior to the satisfaction of Conditions Precedent, a waiver would need to be obtained, which would be granted solely at the discretion of the lenders. In light of the fact that the Group is required to meet the Conditions Precedent to unlock the next tranche of the gold stream financing or needs to secure alternative funding to meet its future exploration and working capital commitments in respect of Cascabel, this gives rise to a material uncertainty, as there can be no certainty the Group will be able to meet the Conditions Precedent or raise the required financing in the future. This material uncertainty may cast significant doubt upon the Group’s ability to continue as a going concern. Notwithstanding this material uncertainty, the Directors consider it appropriate to adopt the going concern basis of accounting in the preparation of the financial statements given the Company’s proven ability to raise necessary funding. The financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern. Note 1(c) | Significant accounting policies and critical accounting estimates and judgments The Group has applied the same accounting policies, estimates and judgments, and methods of computation in its Interim Financial Statements as in its 2024 annual financial statements, as well as new standards and interpretations effective for the first tim e for periods beginning on (or after) 1 July 2024, except for the newly applied judgments applicable to the deferred revenue liability, arising from the Gold Stream Agreement (Note 14), which are described in the following paragraphs. Note 1(c)(1) | Judgments – Deferred Revenue Liability Management has determined that under the terms of the Gold Stream Agreement, the ‘own-use’ exemption under IFRS 9 Financial Instruments is met. The Group retains significant business risk relating to the operation of Cascabel, and as such has accounted for the proceeds received as deferred revenue. Management has determined, with reference to the agreed contractual terms in conjunction with the Cascabel reserves and mine plan, that funds received from the Syndicate constitute a prepayment of revenues deliverable from future Cascabel production. Consideration received under the Gold Stream Agreement is deemed to be variable, because it is calculated based upon production volumes and the spot price of gold, and can be subject to cumulative adjustments when the contractual volume to be delivered changes. Note 1(d) | New standards and amendments in the period The Group adopted no new revised and amended standards during the nine months ended 31 March 2025.
Page 11
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 8 of 30 Note 1(e) | New standards and interpretations not yet adopted Certain new accounting standards and interpretations have been published that are not mandatory for the Group’s annual reporting year which began 1 July 2024, and have not been early adopted by the company. Amendments to IAS 21 Lack of Exchangeability Betw een Currencies and IFRS 19 Subsidiaries without Public Accountability: Disclosures are not expected to have a material impact on the company in the current or future reporting periods and on foreseeable future transactions. The impact of IFRS 18 Presentation and Disclosure in Financial Statements has not yet been assessed. Standard Description of Standard Effective for annual reporting periods commencing on or after Amendments to IAS 21 Lack of Exchangeability Between Currencies 1 January 2025 IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027 IFRS 19 Subsidiaries without Public Accountability: Disclosures 1 January 2027 Note 1(f) | Subsidiaries The interim condensed consolidated financial statements present the results of the Group as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full. Non-controlling interests are allocated their share of net profit or loss after tax in the statement of profit or loss and presented within equity in the condensed consolidated statement of financial position, separately from the equity of the owners of the parent. Note 1(g) | Transactions eliminated on consolidation Intra-group balances and any unrealised gains and losses or income and expenses arising from intra -group transactions, are eliminated in preparing the consolidated financial statements.
Page 12
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 9 of 30 NOTE 2 | SEGMENT REPORTING The presentation of the elements reported by segment has been modified from the year ended 30 June 2024. The change was made to better align to best-practice segment reporting. The following table summarizes the changes in presentation and reason for the change. Presented at 30 June 2024 Presented at 31 March 2025 Reason for change Finance Income Other income and finance income Items are of similar nature and of low materiality – combined presentation is more complete Depreciation Administrative expenses (depreciation included) Depreciation is a small portion of administrative expense; presentation of Administrative expense is more complete Capitalised exploration costs written-off Capitalised exploration costs written- off No change Loss for the period Not presented Elements of loss are presented, which are more meaningful than total loss (including Administrative Expenses, Exploration costs written-off, Other income and finance income, Finance costs, Movement in fair value of derivative liability, and Income tax expense (income) Assets (total) Assets (total) No change Liabilities (total) Liabilities (total) Borrowings (Note 13) as of 30 June 2024 were previously disclosed within the Corporate segment, and in the Interim Financial Statements have been disclosed within the Cascabel segment. This change was made due to management’s assessment that because the proceeds of the Borrowings were designated for Cascabel investment, and repayment of the Borrowings will be made from Cascabel production, they are more accurately disclosed as a Cascabel segment liability rather than a Corporate segment liability. Share-based payments Administrative expenses (depreciation included) Share-based payments are a portion of administrative expense; presentation of Administrative expense is more complete Non-current asset additions Not presented The primary component of assets is capitalised exploration costs; presentation of changes in non-current assets did not provide significant information to the reader. Note 2(a) | Description of segments The Group determines and separately reports operating segments based on information that is internally provided to the Board of Directors, who are the Group’s chief operating decision makers. The Group’s operating segments are aligned to those business units that are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Operating segments with similar economic characteristics are aggregated into reportable segments. The Group has outlined below the separately reportable operating segments, having regard to the quantitative threshold tests provided in IFRS 8, namely that the relative asset or profit / (loss) position of the operating segment equates to 10% or more of t he Group’s respective total. The Group reports information to the Board of Directors along these project category lines. The financial information of the other projects that do not exceed the thresholds outlined above, and is therefore not reported separately, is aggregated as Other Projects.
Page 13
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 10 of 30 Note 2(b) | Segment profit and loss disclosures Finance income and general finance costs are not allocated to segments, because this type of activity is driven by the central treasury function, which manages the cash position of the group. For financings with terms that designate funds for use of a specific project, the finance costs of the financing are allocated to the relevant segment. Nine months ended 31 March 2025 Administrative expenses Exploration costs written-off Other income and finance income Finance costs Movement in fair value of derivative liability Income tax expense (income) US$ US$ US$ US$ US$ US$ Cascabel project 2,181,318 - - 16,308,934 - (439,562) Other Ecuadorian projects 716,826 - - - - 128,506 All other projects 60,251 41,611 - - - Corporate 8,008,375 - - - - 146,051 Unallocated - - 327,403 - 1,000 Total 10,966,770 41,611 327,402 16,308,934 1,000 (165,005) Nine months ended 31 March 2024 Administrative expenses Exploration costs written-off Other income and finance income Finance costs Movement in fair value of derivative liability Income tax Expense (Income) US$ US$ US$ US$ US$ US$ Cascabel project 1,468,914 - - 12,730,840 - (44,979) Other Ecuadorian projects 1,045,725 - - - - 58,441 All other projects 52,189 8,246,192 - - - 75 Corporate 5,744,944 - - - - - Unallocated - - 517,418 - 222,000 - Total 8,311,772 8,246,192 517,418 12,730,840 222,000 13,537 Note 2(c) | Segment assets Segment assets are measured in the same way as in the financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset. Investments in financial assets that are managed by the treasury department are not considered to be segment assets. These are investments in debt and equity instruments that are classified as fair value through other comprehensive income, fair value through profit or loss and at amortised cost. Segment assets As at 31 March 2025 As at 30 June 2024 US$ US$ Cascabel project 353,359,894 319,269,300 Other Ecuadorian projects 140,657,427 136,170,085 All Other Projects 151,818 149,057 Corporate 1,707,597 8,257,132 Total assets as per the statement of financial position 495,876,736 463,845,574
Page 14
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 11 of 30 Note 2(d) | Segment liabilities Segment liabilities are measured in the same way as in the financial statements. These liabilities are allocated based on the operations of the segment. Segment liabilities As at 31 March 2025 As at 30 June 2024 US$ US$ Cascabel project 241,189,209 202,408,576 Other Ecuadorian projects 1,476,598 1,443,512 All Other Projects 13,193 1,926 Corporate 4,012,965 3,598,340 Total segment liabilities 246,691,965 207,452,354 Unallocated: Deferred tax liability 1,926,949 1,780,898 Total liabilities as per the statement of financial position 248,618,914 209,233,252 NOTE 3 | ADMINISTRATIVE EXPENSES Three months ended March 31, Nine months ended March 31, 2025 (unaudited) 2024 (unaudited) 2025 (unaudited) 2024 (unaudited) US$ US$ US$ US$ The operating loss includes the following items in administrative expenses Administrative and consulting expenses 1,312,739 809,441 3,131,601 2,968,496 Legal and professional fees 347,247 234,600 1,194,819 1,257,830 Insurance 93,949 56,742 234,053 186,298 Impact of negotiated settlement of accounts payable 1 - - - (1,379,150) Employment expenses 1,513,897 782,420 4,469,600 2,642,163 Expected credit loss (Note 9) 45,675 (144,545) 273,602 683,917 Depreciation 27,843 93,784 82,244 289,702 Foreign exchange losses/(gains) 113,395 23,630 200,412 55,271 Share based payments 454,331 540,179 1,380,439 1,607,245 Administrative expenses, as reported 3,909,076 2,396,251 10,966,770 8,311,772 Note 1 During the year ended 30 June 2024, certain liabilities, which were accrued at 30 June 2023, were re-negotiated and settled at a gain on settlement. The liability was recognised in administrative expenses when originally recorded (in the prior year, and the gain on settlement during the year ended 30 June 2024 has accordingly been offset against administrative expenses).
Page 15
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 12 of 30 NOTE 4 | LOSS PER SHARE Three months ended 31 March Nine months ended 31 March 2025 2024 2025 2024 Cents per share Cents per share Cents per share Cents per share Basic loss per share (unaudited) (0.3) (1.0) (0.9) (1.8) Diluted loss per share (unaudited) (0.3) (1.0) (0.9) (1.8) US$ US$ US$ US$ Loss used to calculate basic and diluted loss per share (unaudited) (9,385,687) (30,779,688) (26,823,908) (52,726,684) Number of shares Number of shares Number of shares Number of shares Weighted average number of shares 3,001,106,975 3,001,106,975 3,001,106,975 3,001,106,975 Weighted average number of dilutive options - - - - Weighted average number of ordinary shares and potential ordinary shares used in calculating dilutive LPS 3,001,106,975 3,001,106,975 3,001,106,975 3,001,106,975 Options granted are not included in the determination of diluted earnings per share as they are considered to be anti - dilutive. NOTE 5 | INTANGIBLE ASSETS 31 March 2025 30 June 2024 (audited) US$ US$ COST BALANCE AT BEGINNING OF PERIOD 472,335,850 449,944,617 Effect of foreign exchange on opening balances - 169,183 Additions 18,594,623 22,222,050 COST BALANCE AT END OF PERIOD 490,930,473 472,335,850 IMPAIRMENT BALANCE AT BEGINNING OF PERIOD (46,787,812) (38,510,533) Exploration costs written-off (41,611) (8,277,279) IMPAIRMENT BALANCE AT END OF PERIOD (46,829,423) (46,787,812) CARRYING AMOUNT AT BEGINNING OF PERIOD 425,548,038 411,434,084 CARRYING AMOUNT AT END OF PERIOD 444,101,050 425,548,038 As capitalised exploration and evaluation expenditure are not definite lived intangible assets, they are not amortised. Recoverability of the carrying amount of exploration assets is dependent on the successful development and commercial exploitation of areas of interest, and the sale of minerals or the sale of the respective areas of interest. Management has conducted an assessment for impairment triggers and identified none.
Page 16
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 13 of 30 NOTE 6 | PROPERTY, PLANT AND EQUIPMENT Land Plant and equipment Other depreciable assets Total US$ US$ US$ US$ COST BALANCE AT 1 JULY 2023 (Audited) 22,254,788 3,814,555 2,553,529 28,622,872 Effect of foreign exchange on opening balance - 5,292 44 5,336 Additions 120,000 117,120 4,339 241,459 Disposals - (15,216) (431,302) (446,518) COST BALANCE AT 30 JUNE 2024 (Audited) 22,374,788 3,921,751 2,126,610 28,423,149 Effect of foreign exchange on opening balance - (2,199) - (2,199) Additions 244,936 4,246 6,635 255,817 Disposals - (1,388,279) (37,104) (1,425,383) COST BALANCE AT 31 MARCH 2025 (Unaudited) 22,619,724 2,535,519 2,096,141 27,251,384 DEPRECIATION AND IMPAIRMENT BALANCE AT 1 JULY 2023 (Audited) - (2,690,491) (2,263,001) (4,953,492) Effect of foreign exchange on opening balance - (24,179) (76,123) (100,302) Depreciation charge for the period - (379,405) (26,599) (406,004) Depreciation capitalized as exploration costs - (232,079) (74,361) (306,440) Disposals - 44,132 313,474 357,606 DEPRECIATION AND IMPAIRMENT BALANCE AT 30 JUNE 2024 (Audit) - (3,282,022) (2,126,610) (5,408,632) Effect of foreign exchange on opening balance - 3,872 - 3,872 Depreciation charge for the period - (75,609) (6,635) (82,244) Depreciation capitalized as exploration costs - (182,407) - (182,407) Disposals - 1,345,757 37,104 1,382,861 DEPRECIATION AND IMPAIRMENT BALANCE AT 31 MARCH 2025 - (2,190,409) (2,096,141) (4,286,550) CARRYING AMOUNT AT 30 JUNE 2023 (Audited) 22,254,788 1,124,064 290,528 23,669,380 CARRYING AMOUNT AT 30 JUNE 2024 (Audited) 22,374,788 639,729 - 23,014,517 CARRYING AMOUNT AT 31 MARCH 2025 (Unaudited) 22,619,724 345,110 - 22,964,834
Page 17
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 14 of 30 NOTE 7 | FINANCIAL ASSETS AT AMORTISED COST 31 March 2025 (unaudited) 30 June 2024 (audited) US$ US$ Security bonds – office leases 1 8,174 592,692 Security bonds – Ecuador 2 984,018 1,101,929 Security bonds – Australia 3 7,811 11,684 Balance at end of reporting period 1,000,003 1,706,305 Notes 1 Cash security held against SolGold Finance AG office premises (30 June 2024 – cash security held against SolGold Finance AG and SolGold plc office premises) 2 Cash backed bank guarantees held by the Ecuadorian Ministry of Environment against Ecuadorian exploration tenements held by the Group 3 Cash security held by the Queensland Department of Natural Resources and Mines against Queensland exploration tenements held by the Group NOTE 8 | OTHER RECEIVABLES AND PREPAYMENTS Note 8(a) | Other receivables and prepayments – current 31 March 2025 (unaudited) 30 June 2024 (audited) US$ US$ Other receivables 315,441 568,843 Taxes receivable 1,742,865 1,174,726 Prepayments 779,340 244,813 Total other receivables and prepayments - current 2,837,646 1,988,382 Note 8(b) | Other receivables and prepayments – non-current 31 March 2025 (unaudited) 30 June 2024 (audited) US$ US$ Value added tax receivable 5,343,874 4,407,796 Total other receivables and prepayments – Non-current 5,343,874 4,407,796 Value added tax receivable in Ecuador pertains to the Cascabel project. The amount becomes recoverable upon commencement of production, which is longer than twelve months from 31 March 2025, and is therefore classified as non-current.
Page 18
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 15 of 30 NOTE 9 | LOANS RECEIVABLE 31 March 2025 (unaudited) 30 June 2024 (audited) Company funded loan plan receivable US$ US$ Balance at beginning of reporting period 1,152,493 2,099,527 Effect of foreign exchange 5,053 (21,041) Expected credit loss (273,602) (925,993) Balance at end of reporting period 883,944 1,152,493 The Company Funded Loan Plan (the “CFLP”) is a legacy plan established by the Company to assist employees in exercising share options. On 29 October 2018, the Company assisted employees to exercise 19,950,000 options previously issued to employees of the Company in 2016 via the CFLP. Since inception and until 31 March 2025, repayments of US$3,478,278 have been received against the loans provided. As at 31 March 2025, three participants remained beneficiaries of the Plan. The key terms of this CFLP on the date the loans were granted were as follows: • The employee may only use a loan under the Plan to pay for the exercise of Employee Options granted by the Company. • The loan will be granted for a maximum period of 2 years (an extended deadline was reached on 21 December 2023). • No interest will be charged on the loan. • The loan is secured by the shares granted on the exercise of the Employee Options. • The loans provided are full recourse. The Board of Directors in June 2021 resolved to extend the CFLP until 31 March 2022. During the October 2021 board meeting, the Board of Directors resolved to extend the CFLP again, this time for a further six months, to 30 June 2022. This extension of the loan resulted in an overall increase of US$669,211 in employee benefits expense. On 24 August 2022, the CFLP was extended for three individuals whom due to their positions in the Company had additional restrictions from trading during the year ended 30 June 2022. This extension saw their loan repayments terms extended until 21 December 2023, and the Board of Directors did not resolve to extend the due date, and as such the loans are due. The Board of Directors does not intend to liquidate shares, unless the share price appreciates significantly. The Company has the ability to sell the shares, and accordingly the exposure to credit risk is limited to the value of the shares. Management has considered the recoverability of the loans based on the movement in the share price over the period and has calculated an expected credit loss for the nine months ended 31 March 2025 of US$273,602 (nine months ended 31 March 2024: US$683,917). NOTE 10 | SHARE CAPITAL AND OWN SHARES RESERVE Note 10(a) | Share capital 31 March 2025 (unaudited) 30 June 2024 (audited) Ordinary shares fully paid up (nominal value of £0.01 per share) US$ Number US$ Number Balance at beginning and end of period 500,438,822 3,001,106,975 500,438,822 3,001,106,975
Page 19
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 16 of 30 Note 10(b) | Own Shares Reserve On February 24, 2023, the Company acquired 151,141,000 of its own shares (the “Own Shares”), as part of its acquisition of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.). During the nine months ended 31 March 2025, all of the Own Shares were sold at US$0.115 per share, for gross proceeds of US$18,071,215. Transaction costs of US$72,285 were incurred and paid from gross proceeds. The Own Shares were purchased by Jiangxi Copper (Hong Kong) Investment Company Limited in a transaction which closed on 26 March 2025. The Own Shares were carried at their amortised cost of US$25,389,208. The realized loss from the sale of Own Shares was recognized directly in accumulated deficit. NOTE 11 | SHARE OPTIONS Note 11(a) | Share option plan and grant information Share options are granted to employees under the company’s Employee Share Option Plan 2023 (“ESOP”) and Directors under the Long-Term Incentive Plan (“LTIP”). The ESOP and LTIP are designed to align participants’ interests with those of shareholders. Unless otherwise documented with the Company, when a participant ceases employment prior to the vesting of their share options, the share options are forfeited after 90 days unless cessation of employment is due to termination for cause, whereupon they are forfeited immediately. The contractual life of each option granted is between two to ten years. There are no cash settlement alternatives. Each option can be exercised from vesting date to expiry date for one share with the exercise price payable in cash.
Page 20
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 17 of 30 Note 11(b) | Options issued and outstanding At 31 March 2025 the Company had 73,100,000 options outstanding for the issue of ordinary shares (30 June 2024: 98,725,000). There were no options granted during the nine months ended 31 March 2025 ( nine months ended 31 March 2024: 10,500,000). Date of grant Vesting Exercisable to Exercise price Options granted Outstanding at 31 March 2025 Outstanding at 30 June 2024 £ Number Number Number Granted prior to 1 July 2022 27-Nov-19 On grant 2-Dec-24 £0.37 19,250,0001 - 19,250,000 Total granted prior to 1 July 2022 19,250,000 - 19,250,000 Granted during 2023 1-Jul-23 On 1 Dec 2022 1-Dec-25 £0.292 4,000,000 - - 1-Jul-23 On 1 Dec 2023 1-Dec-26 £0.35 3,000,000 - - 1-Jul-23 On 1 Dec 2024 1-Dec-27 £0.50 3,000,000 - - 24-Feb-23 On grant 12-Sep-23 £0.174 10,303,125 - - 24-Feb-23 On grant 6-Aug-24 £0.162 6,375,000 - 6,375,000 24-Feb-23 On grant 10-Aug-26 £0.162 7,350,000 7,350,000 7,350,000 24-Feb-23 On grant 29-Mar-27 £0.182 4,125,000 4,125,000 4,125,000 24-Feb-23 On grant 13-Jul-27 £0.133 5,625,000 5,625,000 5,625,000 17-Mar-23 On 17 March 2026 17-Mar-33 £0.17 30,000,000 30,000,000 30,000,000 18-Apr-23 On 18 April 2024 18-Apr-33 £0.1982 2,000,000 2,000,000 2,000,000 18-Apr-23 On 18 April 2025 18-Apr-33 £0.21 2,000,000 2,000,000 2,000,000 18-Apr-23 On 18 April 2026 18-Apr-33 £0.25 2,000,000 2,000,000 2,000,000 Total granted during 2023 79,778,125 53,100,000 59,475,000 Granted during 2024 6-Jul-23 On 6 July 2024 5-Jul-33 £0.17 2,000,000 2,000,000 2,000,000 6-Jul-23 On 6 July 2025 5-Jul-33 £0.21 2,000,000 2,000,000 2,000,000 6-Jul-23 On 6 July 2026 5-Jul-33 £0.25 2,000,000 2,000,000 2,000,000 27-Jul-23 On 27 July 2024 26-Jul-33 £0.17 500,000 500,000 500,000 27-Jul-23 On 27 July 2025 26-Jul-33 £0.21 500,000 500,000 500,000 27-Jul-23 On 27 July 2026 26-Jul-33 £0.25 500,000 500,000 500,000 25-Aug-23 On 25 Aug 2024 24-Aug-33 £0.17 1,000,000 1,000,000 1,000,000 25-Aug-23 On 25 Aug 2025 24-Aug-33 £0.21 1,000,000 1,000,000 1,000,000 25-Aug-23 On 25 Aug 2026 24-Aug-33 £0.25 1,000,000 1,000,000 1,000,000 12-Apr-24 1/3 on 1 January 2025, 1/3 on 1 January 2026, and 1/3 on 1 January 2027 11-Apr-30 £0.10285 9,500,000 9,500,000 9,500,000 Total granted during 2024 20,000,000 20,000,000 20,000,000 Totals 119,028,125 73,100,000 98,725,000 Note: 1 Options issued to BHP as part of the share subscriptions on 2 December 2019 and exercisable at £0.37 within 5 years. The options expired on 2 December 2024. These options fell outside the scope of IFRS 2 and were classified as a derivative financial liability as they did not meet the fixed for fixed test.
Page 21
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 18 of 30 Note 11(b) | Options issued and outstanding (continued) Share options held by certain individuals and groups are as follows: Share options held At 31 March 2025 At 30 June 2024 Option Price Exercise Period Number Number £ Date Scott Caldwell, Director 30,000,000 30,000,000 0.17000 17/3/2026 – 17/3/2033 Chris Stackhouse, CFO 9,000,000 9,000,000 0.10285 - 0.25000 18/4/2024 – 24/8/2033 Other members of management 17,000,000 17,000,000 0.10285 - 0.25000 11/4/2030 – 24/8/2033 BHP - 19,250,000 0.37000 2/12/2024 Former Cornerstone1 option holders 17,100,000 23,475,000 0.13300 - 0.18285 24/2/2023 – 13/7/2027 Total / Range 73,100,000 98,725,000 0.10285 - 0.25000 18/4/2024 – 24/8/2033 Notes: 1 Cornerstone Capital Resources Inc., renamed to SolGold Canada Inc. after it was acquired by the Company. Note 11(c) | Movement in share options outstanding and exercisable The number and weighted average exercise price of share options are as follows (“WAEP” refers to weighted average exercise price): 31 March 31 March 30 June 2025 2024 2024 WAEP Options WAEP Options WAEP Options £ Number £ Number £ Number Outstanding at the beginning of the period 0.20 98,725,000 0.22 95,028,125 0.22 95,028,125 Expired/lapsed during the period 0.32 (25,625,000) 0.17 (10,303,125) 0.22 (16,303,125) Granted during the period - - 0.21 10,500,000 0.16 20,000,000 Outstanding at the end of the period 0.17 73,100,000 0.22 95,225,000 0.20 98,725,000 Exercisable at the end of the period 0.16 22,766,665 0.27 46,850,000 0.25 44,725,000 The options outstanding at 31 March 2025 have a weighted average remaining contractual life of 6.2 years (30 June 2024: 5.2 years). Note 11(d) | Fair valuation and expense of share options The fair value of services received in return for share options granted is measured by reference to the fair value of share options granted. This estimate is based on a Black -Scholes model considering the effects of the vesting conditions, expected exercise period and the dividend policy of the Company.
Page 22
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 19 of 30 NOTE 12 | OTHER FINANCIAL LIABILITIES Note 12(a) | Schedule of other financial liabilities Balance on Statement of Financial Position Comprised of: 31 March 2025 (unaudited) 30 June 2024 (audited) US$ US$ Derivative liability for options issued to BHP - 1,000 Non-current employee benefits 756,228 1,075,806 Balance at end of reporting period 756,228 1,076,806 Other financial liabilities consist of the derivative liability for options issued to BHP (expired during the nine months ended 31 March 2025) as part of the share subscriptions on 2 December 2019 and non -current employee benefits. Non-current employee benefits are liabilities accrued in compliance with Ecuadorian employment labour regulations. The fair values of these financial liabilities approximate their carrying amounts principally due to their short-term nature or the fact that they are measured and recognised at fair value. Note 12(b) | Financial liabilities measured and recognized at fair value The following table represents the Group’s financial liabilities measured and recognised at fair value. Level 1 Level 2 Level 3 Total US$ US$ US$ US$ 31 March 2025 (unaudited) Derivative liability at fair value through profit or loss - - - - 30 June 2024 (audited) Derivative liability at fair value through profit or loss - - 1,000 1,000 Note 12(b)(1) | Valuation of liability measured at fair value The derivative liability at fair value through profit or loss, representing share options, was valued using the Monte Carlo Simulation method until the expiry of the share options on 2 December 2024. Inputs for Fair value of £0.37 BHP share options and assumptions 31 March 2025 30 June 2024 Number of options Nil - expired 2 Dec 2024 19,250,000 Share price £0.0876 Exercise price £0.370 Expected volatility 72.46% Time to expiry 0.42 years Expected dividends Nil Risk-free interest rate (short-term) 4.58% Fair value £0.00004 Valuation methodology Monte Carlo Value
Page 23
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 20 of 30 Note 12(c) | Movement in derivative liability recognized in other comprehensive (Loss) / Profit Three months ended March 31 Nine months ended December 31 2025 2024 2025 2024 US$ US US$ US$ Movement in derivative liability recognised in other comprehensive (loss) / profit - (12,000) 1,000 222,000 NOTE 13 | BORROWINGS Note 13(a) | Balances of borrowings 31 March 2025 (unaudited) 30 June 2024 (audited) US$ US$ Non-current liability Net Smelter Royalties (Note 13(b)) 205,039,793 188,946,264 Current liability Short term loan facility (Note13(c)) - 10,002,796 Balance at the end of the year 205,039,793 198,949,060 Note 13(b) | Net Smelter Royalty Financing 31 March 2025 (unaudited) 30 June 2024 (audited) US$ US$ NSR Financing Balance at beginning of reporting period 188,946,264 147,018,712 Interest accretion 16,093,529 17,781,791 Remeasurement of amortised cost - 24,145,761 Balance at end of reporting period 205,039,793 188,946,264 Owed to: Franco-Nevada Corporation (Note 13(b)(1)) 143,958,330 131,783,326 Osisko Gold Royalties Ltd (Note 13(b)(2)) 61,081,463 57,162,938 Balance at end of reporting period 205,039,793 188,946,264 Note 13(b)(1) | Borrowing from Franco-Nevada Corporation (“Franco-Nevada”) On 11 September 2020, Franco-Nevada paid SolGold US$100 million, the Royalty Purchase Price under the NSR Financing Agreement, less US$15,619,578 of outstanding principal and interest under the US$15 million secured bridge loan pursuant to the Bridge Loan Agreement. In return for the royalty purchase price, Franco-Nevada was granted a perpetual 1% royalty interest to be calculated by reference to net smelter returns from the Cascabel concession area. This financing arrangement is classified as a financial liability at amortised cost and was recognised at the amount received adjusted for transaction costs paid.
Page 24
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 21 of 30 Note 13(b)(1) | Borrowing from Franco-Nevada Corporation (“Franco-Nevada”) (continued) Key terms to the financing include: • Funding amount: US$100 million with upscale option to US$150 million, which expired eight months after the agreement date • Royalty terms: 1.0% NSR for US$100 million • Buy-back option: A 50% buy -back option exercisable at SolGold’s election for six years from closing at a price delivering Franco-Nevada a 12% IRR • Gold conversion: option in favour of Franco-Nevada to convert the NSR interest into a gold -only NSR interest (six years from year two of operations). The amount of the gold net smelter return will be calculated on a net present value neutral basis • Proceeds to fund the costs to complete the feasibility study, with any surplus to be used for SolGold’s share of the development of Alpala Financial liabilities classified at amortised cost are calculated using the Effective Interest Method, which allocates expenses at a constant rate over the term of the investment. The Effective Interest Rate (“EIR”) is the internal rate of return of the liability at initial recognition through the expected life of the financial liability. The EIR was calculated using the available development plan at the time of recognising the NSR and results in a discount rate of 11.84% (real). Management has reviewed its assessment and considers that the buy -back option is not an embedded derivative which needs to be separately accounted for as it is closely related. As such, it is not required to be accounted for as a separate instrument in accordance with IFRS 9. As in previous periods, Management assessed that the fair value of this embedded derivative was nil or immaterial, as there is no expectation or likelihood that the buy-back option will be exercised by SolGold. This financial liability will be re -measured based upon Qualified Person -approved assumptions from future updated Technical Reports. The most recent re -measurement was performed based upon the Technical Report announced 12 March 2024. Note 13(b)(2) | Borrowing from Osisko Gold Royalties Ltd (“Osisko”) On 2 December 2022, Osisko paid SolGold US$50 million, the Royalty Purchase Price under a new Royalty Financing Agreement announced on 7 November 2022. This financing arrangement is classified as a financial liability at amortised cost and was recognised at the amount received adjusted for transaction costs paid. In return for the royalty purchase price, Osisko has been granted a perpetual 0.6% royalty interest to be calculated by reference to net smelter returns from the Cascabel concession area in accordance with the terms and conditions set out in the agreement. Financial liabilities classified at amortised cost are calculated using the Effective Interest Method, which allocates expenses at a constant rate over the term of the investment. The EIR is the internal rate of return of the liability at initial recognition through the expected life of the financial liability, which in this case is the time from the recognition until the end of the mine life of the Alpala mine.
Page 25
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 22 of 30 Note 13(b)(2) | Borrowing from Osisko Gold Royalties Ltd (“Osisko”) (Continued) Key terms to the financing include: • Funding amount: US$50 million • Royalty terms: 0.6% NSR for US$50 million • Buy-back option: A 33.3% buy-back option exercisable at SolGold’s election for four years from closing at a price delivering Osisko a 12% IRR. The buy-back option can be exercised annually, in November, subject to the Royalty Financing Agreement. The EIR was calculated using the available development plan at the time of recognising the NSR and results in a discount rate of 8.87% (real). Management has performed an assessment and considers that the buy -back option is an embedded derivative which needs to be separately accounted for as it is not closely related. However, management has assessed that the fair value of this embedded derivative is nil or immaterial, as there is no expectation or likelihood that the buy-back option will be exercised. This financial liability will be re -measured based upon Qualified Person -approved assumptions from future updated Technical Reports. The most recent re -measurement was performed based upon the Technical Report announced 12 March 2024. Note 13(c) | Short-term loan facility borrowed from Franco Nevada Corporation Short term loan facility 31 March 2025 30 June 2024 US$ US$ Balance at beginning of reporting period 10,002,796 - Additions - 10,000,000 Transaction costs - (494,735) Accreted interest 208,446 497,531 Loan repayment (10,211,242) - Balance at end of reporting period - 10,002,796 On 14 May 2024, the Group announced interim funding of US$10,000,000 under a “Short-term Loan Facility” provided by Franco-Nevada Corporation. The Short -term Loan Facility accrued interest at 12% per annum and matured on 19 July 2024. All amounts due under the loan were paid off when the loan matured with a payment of US$10,211,242. The funds were borrowed to provide working capital until the Gold Stream Agreement (Note 14) was completed. The Short -term Loan Facility was secured by substantially all Group assets invested directly or indirectly in the Cascabel project.
Page 26
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 23 of 30 NOTE 14 | DEFERRED REVENUE LIABILITY Note 14(a) | Gold Stream with Franco-Nevada (Barbados) Corporation and Osisko Bermuda Limited The following table summarizes the changes in the deferred revenue liability: Deferred revenue liability US$ Balance at 1 July 2024 - First tranche of Initial deposit 33,400,000 Costs discounted against liability (1,522,851) Finance costs 1 2,095,977 Balance at 31 March 2025 33,973,126 Note: 1 For the nine months ended 31 March 2025, the Group recognised non-cash finance costs under the Gold Stream Agreement at rate of 8.93%. The finance costs are borrowing costs reported within capitalised exploration and evaluation costs. The Group, through SolGold Finance AG, has a gold stream agreement (the “Gold Stream Agreement”) with Franco-Nevada (Barbados) Corporation and Osisko Bermuda Limited (together, the “Syndicate”) for the provision of US$750,000,000 in project advancement funding and a proportion of development funding (“Deposit”) in exchange for a percentage of the gold produced from the Cascabel project. Under the Gold Stream Agreement, the Syndicate will provide to the Group: 1) the Deposit and 2) ongoing payments to the Group equivalent to 20% of the spot gold price at the time per ounce of delivered gold. Subject to any adjustments in accordance with the terms of the Gold Stream Agreement, the Syndicate will receive an amount in reference to 20% of the recovered gold in concentrate from Cascabel until 750,000 ounces of gold have been provided, after which the percentage will reduce to 12% for the remaining life of the mine. The Deposit comprises two funding segments, of which Franco -Nevada (Barbados) and Osisko Bermuda Limited will contribute 70% and 30%, respectively: i) the initial deposit ("Initial Deposit"): US$100 million paid over three tranches and as required milestones (“Conditions Precedent”) are satisfied. In July 2024, US$33,400,000 was received, which was allocated towards de-risking, permitting, completion of the development funding package and completion of the feasibility study ("FS") on the Project to take it to a Final Development Investment Decision, and ii) the construction deposit ("Construction Deposit") of US$650 million to be contributed as a significant portion of the total funding required for the construction of Cascabel. The Gold Stream Agreement includes a buyback option for SolGold for five years following the closing of the transaction, exercisable upon a change of control transaction of SolGold. The option would allow SolGold to reduce the stream by 50% within three years of the closing date of the Gold Stream Agreement, or by 33.33% thereafter until the fifth anniversary of the closing date of the Agreement. If exercised, SolGold would repay the liability to the Syndicate at a commercial rate of return.
Page 27
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 24 of 30 Note 14(a) | Options issued and outstanding (continued) Key terms of the Gold Stream Agreement are summarized as follows: • Initial Deposit: US$100,000,000, paid in three tranches, subject to satisfaction of Conditions Precedent, aimed at further de-risking, defining and enhancing value-adding opportunities at Cascabel, and completing financing activities and the feasibility study. • Construction Deposit: US$650 million for Project development upon certain conditions precedent having been met, including, but not limited to, a board-approved Final Development Investment Decision and evidence of the availability of all equity and other s ources of funds for full funding to completion. The deposit is payable in instalments upon achieving specific milestones, permits, and approvals related to Project advancement and construction; • Gold Deliveries: The Syndicate will receive an amount in reference to 20% of the recovered gold in concentrate from Cascabel until 750,000 ounces of gold have been provided, after which the percentage will reduce to 12% for the life of the mine. The Agreem ent only applies to the gold produced from the Cascabel concession. Any production from other properties owned by SolGold that is not processed through the Project mill or infrastructure is not subject to the Gold Stream Agreement; and • Production Payments: The Syndicate will make ongoing production payments to the Group equivalent to 20% of the spot gold price at the time for each ounce of gold delivered to the Syndicate under the Gold Stream Agreement. The borrowing from Franco-Nevada Corporation described at Note 13(c), which was due to mature on 19 July 2024, was repaid from proceeds from the first tranche of the Initial Deposit. The Gold Stream Agreement is secured by substantially all Group assets directly or indirectly invested in the Cascabel project. Should the Group become in Default of the Gold Stream Agreement, then the ownership of the Cascabel project would transfer to the Syndicate. Finance advisory fees are contingently payable upon receipt of the second tranche of the Initial Deposit and upon receipt of the Construction deposit (US$375,000 and US$750,000, respectively).
Page 28
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 25 of 30 NOTE 15 | RELATED PARTIES Transactions between related parties are on normal commercial terms and conditions and are no more favourable than those available to other parties unless otherwise stated. At and for the nine months ended 31 March 2025 (unaudited) 2024 (unaudited) US$ US$ Samuel Capital Pty Ltd (“Samuel”) Amount incurred 75,795 47,763 Balance outstanding 7,159 11,928 Commercial agreement with Samuel for the engagement of Mr. Nicholas Mather as Non -Executive Director of the Company. Bennett Jones LLP Amount incurred 436,858 48,996 Balance outstanding 1,161,713 Nil Mr. James Clare (a former Director whose period in office ended on 20 December 2023), is a partner in the Canadian law firm Bennett Jones LLP which has provided legal services and is also a shareholder in the Company. Included in the amounts disclosed above is approximately US$1.2 million for services rendered and not billed as well as approximately US$339,000 for Mr. Clare’s Director fees, which will be billed through Bennett Jones. DGR Global Limited (“DGR”) Amount incurred 9,347 3,922 Balance outstanding Nil Provision of exploration license maintenance. Mr. Nicholas Mather, Non -Executive Director, is a director of DGR, and DGR is an owner of 204,151,800 shares of the Company. D.R. Loveys and Associates Inc. Amount incurred Nil 33,209 Balance outstanding Nil Nil A service company which provides accounting and management consulting services, is owned by Mr. David Loveys, a shareholder of the Company and a director of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) NOTE 16 | COMMITMENTS AND CONTINGENT ASSET AND LIABILITIES Note 16(a) | 2% Net Smelter Royalty payable to Santa Barbara Resources Limited A 2% net smelter royalty is payable to Santa Barbara Resources Limited, who were the previous owners of the Cascabel tenements. These royalties can be bought out by paying a total of approximately US$4,000,000. Fifty percent (50%) of the royalty can be purchased for approximately US$1,000,000 for 90 days following the completion of a definitive-feasibility study and the remaining 50% of the royalty can be purchased for approximately US$3,000,000 90 days following a production decision. The smelter royalty is considered to be a contingent liability as the Group has not yet completed a definitive-feasibility study at 31 March 2025 and as such there is significant uncertainty over the timing of any payments that may fall due.
Page 29
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 26 of 30 Note 16(b) | Term sheet between SolGold plc and Group subsidiaries The terms of the Term Sheet (“Term Sheet”) previously signed between SolGold plc (assigned and assumed to/by SolGold Finance AG), SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.), SolGold Canada Inc.'s (formerly Cornerstone Capital Resourc es Inc.) subsidiary Cornerstone Ecuador S.A. (“CESA”), and Exploraciones Novomining S.A. (“ENSA”) became an internal arrangement which was eliminated upon consolidation of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) due to the Company ’s acquisition of the remaining shares of SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) executed on 24 February 2023. The Term Sheet documented CESA’s obligation to repay SolGold Canada Inc. (formerly Cornerstone Capital Resources Inc.) for its proportionate 15% share of Cascabel expenditures. The amount receivable from CESA and associated provision for impairment were eliminated for consolidated reporting, although the arrangement still exists. Note 16(c) | Provision for legal and employee expenses During the nine months ended 31 March 2025, the matter underlying a provision previously reported at US$716,170 (30 June 2024: US$716,170) was settled for US$596,709, and the provision was reduced to a nil balance. Note 16(d) | Gold Stream buyback option contingent upon a change of control The Gold Stream Agreement includes an option for the Group to reduce the Gold Stream Agreement by 50% within three years of the closing date of the Gold Stream Agreement or by 33.33% thereafter until the fifth anniversary of the closing date of the Gold Stream Agreement. The option is exercisable contingent upon a change of control event. Note 16(e) | Finance Advisory fees payable upon receipt of funds under Gold Stream Agreement Finance advisory fees are contingently payable upon receipt of the second tranche of the Initial Deposit and upon receipt of the Construction deposit (US$375,000 and U$750,000, respectively). There are no other material contingent assets and liabilities. NOTE 17 | SUBSEQUENT EVENTS On 11 April 2025, grant s of share options to taling 30,000,000 were approved by the Board of Directors, summarized as follows. Grant to CEO Number Exercise price (£) Vesting Date Expiry date 5,000,000 0.07 11 April 2026 11 April 2036 5,000,000 0.07 11 April 2027 11 April 2036 5,000,000 0.07 11 April 2028 11 April 2036 15,000,000 Grant to CFO Number Exercise price (£) Vesting Date Expiry date 1,666,667 0.06578 11 April 2025 11 April 2031 1,666,667 0.06578 1 January 2026 11 April 2031 1,666,666 0.06578 1 January 2027 11 April 2031 5,000,000
Page 30
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2025 Page 27 of 30 NOTE 17 | SUBSEQUENT EVENTS (continued) Grants to Other Employees Number Exercise price (£) Vesting Date Expiry date 3,333,334 0.06578 11 April 25 11 April 31 3,333,334 0.06578 1 January 26 11 April 31 3,333,332 0.06578 1 January 27 11 April 31 10,000,000