Q2 2023 Financial Results

("Amaroq" or the "Corporation" or the "Company")

Q2 2023 Financial Results

Launch of initial construction activities underway at cornerstone Nalunaq project

TORONTO, ONTARIO - 29 August 2023 - Amaroq Minerals Ltd. (AIM, TSXV, NASDAQ First North: AMRQ), an independent mine development company with a substantial land package of gold and strategic mineral assets in Southern Greenland, is pleased to present its Q2 2023 Financial Results.

Q2 2023 Corporate Highlights

• Gold business working capital of $41.0 million as of June 30, 2023 ($46.7 million as of March 31, 2023).
• Completion of GCAM Joint Venture (JV) transaction in April. Strategic minerals business has available liquidity of $29.3 million.
• The Company is progressing with preparations to upgrade its Icelandic listing from Nasdaq First North Growth Market to the Nasdaq Main Market.
• US$50.9 million senior secured debt funding package expected to close by the end of August 2023.

Q2 2023 Operational Highlights

• Permitting: The Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA) for Nalunaq are being translated, ahead of public consultation later this year.
• Contracting: Key contracting processes for the processing plant, infrastructure and construction, as well as underground mine rehabilitation and mining, were 60% complete at the end of Q2 2023.
• Engineering: Processing plant engineering, and preparations for its construction were 70% complete at the end of Q2 2023.
• Construction: Commenced pad building and Nalunaq camp expansion and upgrade activities in Q2. Components for the processing plant are being mobilized to ship to Greenland.
• Mining: Mine design and inspection took place in Q3, along with procurement of long lead items.
• Nalunaq exploration: Completed 1,735m resource drilling at Nalunaq from six drillholes targeting resource expansion areas directly up dip from the proposed mining area of the Mountain Block.
• Strategic Minerals: Amaroq progressed preparation for exploration projects at the Sava Copper Belt, Stendalen, Kobberminebugt and Paatasoq during the period.

Nalunaq Project KPIs

• • • 19,272 total hours worked during Q2 2023.
    • Daily average of 30 people working on site at Nalunaq over the period.
    • Zero Lost Time Injuries in H2 2023.
    • Committed to ensuring local representation among the workforce, with the ratio of Greenlandic personnel at Nalunaq standing at 50% in H2 2023.
    • The project is progressing on budget and to schedule. Amaroq intends to provide a fuller update on the Nalunaq project later this year.

Q3 2023 Outlook

• • • Contracting: Key contracting processes are expected to be 80% complete at the end of Q3 2023, with Halyard and Thyssen Schachtbau finalised.
    • Engineering: Overall engineering for the processing plant is expected to be 75% complete at the end of Q3 2023.
    • Construction: Targeting 20% completion by the end of Q3 2023, with pad construction for the processing plant, fuel storage and transport infrastructure and tailings storage facilities essentially complete and with construction of the processing plant's main building set to commence.
    • Mine Rehabilitation: Equipment and personnel to rehabilitate the Nalunaq Mine access portals and ramp to be mobilised to site in Q3 2023.
    • Support Infrastructure: Expansion and upgrade of the 50-person Nalunaq base camp to 88-person expected to be completed by the end of 2023.
    • Nalunaq Exploration: Nalunaq drilling results from 1,735m drilling campaign expected in Q3 2023.
    • Strategic Minerals: Completion of the Sava drilling programme during the period with results expected in Q4 2023.

Eldur Olafsson, CEO of Amaroq, commented:

"I am pleased to provide an update on our activities in Q2 2023. Most notably during this period, we have been focused on preparations for initial mining activities at Nalunaq. Our programme is progressing on plan and to budget, with rehabilitation works due to commence shortly, and first gold production anticipated next year.

"Exploration activities within our strategic minerals JV are ramping up, most notably across the Sava Copper Belt, where we have established a new 20-person camp and are commencing drilling at our first target, as we look to improve our understanding of this emerging high potential resource."

Update on H2 2023 Operational Workplan

Nalunaq Development Workplan

• Nalunaq

• Mine rehabilitation works are set to commence at Nalunaq in Q4 following the mobilisation of equipment and personnel, including the installation of all required mining services within the Mountain Block, ahead conducting the mine trial next year. Anticipated forward-looking development milestones include:
  • Mine rehabilitation works planned for commencement in Q4 2023.
  • Mining trial in Mountain Block delivering ore expected to commence in Q1 2024.
  • Success on the mining trial will enable possible First Gold production in H2 2024.

• Following finalisation of key contracts and procurement of all major long lead items for the process plant, the Company plans to commence construction of the Processing Plant main building in Q3 2023.

• Expansion and upgrade of the Nalunaq all-weather camp expected to be complete by the end of 2023.
• The Company intends to provide a further update on the Nalunaq Project Development programme later in 2023.

Gold Exploration Projects

• Nalunaq

• Results from the completed Mountain Block drilling are expected in Q3 and will be incorporated with additional data collection and in-mine exploration, targeting further potential resource expansion zones.

•  Nanoq

• ALS Goldspot is conducting a full review of the 2022 geophysical survey results to further define existing and new gold targets, ahead of further surface exploration and site preparation for initial drilling in 2024.

• Vagar Ridge

• Amaroq is progressing the construction of a robust geological and mineralisation model to inform future exploration at Vagar, including additional data collection and review and further geological mapping and sampling. Ground preparation and drill readiness preparations will also occur ahead of the 2024 season.

Strategic Minerals Projects (Amaroq 51%)

• Sava Copper Belt (Sava/North Sava)

• New 20 person exploration camp constructed and two drill rigs mobilised, to the first of two drill targets. Scout drilling is currently underway at Target West and Target North. Additional exploration has identified further high priority targets across the evolving copper belt, with the assistance of external porphyry and IOCG specialists.
• Scout drilling across the two key targets in Sava will continue through Q3 with results expected during Q4.
• Drilling at Target West is targeting porphyry style mineralisation with ore grade Cu and Mo encountered during 2022.
• Drilling at Target West is targeting a ~2km long strike of epithermal style mineralisation hosting Cu/Au results from 2022.
• In addition, the Company plans to conduct a Gravity geophysical survey over the Sava licence area to ensure full coverage of the prospective copper belt.

• Stendalen

• Following the completion of a high resolution Magnetotellurics (MT) geophysical survey over the host intrusion targeting areas of potential Ni/Cu sulphides similar in style to those seen at Voisey's Bay, detailed 3D inversion models will be reviewed ahead of targeting with a deep scout drillhole aiming to intersect three potential orebodies:

• Ti/V layering in the upper regions of the intrusion;
• Potential Platinum Group Metal (PGM) mineralisation within the layered sequence of the intrusion; and
• Potential Ni/Cu sulphide mineralisation at depth and in the contract areas similar in style to that seen at Voisey's Bay in Labrador.

• Kobberminebugt

• Completion of a high-resolution MT survey over the entire licence, with results expected in Q3 2023.

• Paatasoq

• Reconnaissance exploration conducted over licence area, with the assistance of the University of St Andrews, to assess REE and critical metal potential. Full results and interpretations are expected through Q3 and Q4 2023.

Amaroq Financial Results

The following selected financial data is extracted from the Financial Statements for the three months ended June 30, 2023.

Financial Results

Financial Position

Ends

Enquiries:  
Amaroq Minerals Ltd.  
Eldur Olafsson, Executive Director and CEO  
eo@amaroqminerals.com  

 Eddie Wyvill, Corporate Development
+44 (0)7713 126727  
ew@amaroqminerals.com  

Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)  
Callum Stewart  
Varun Talwar  
Simon Mensley  
Ashton Clanfield  

+44 (0) 20 7710 7600  

Panmure Gordon (UK) Limited (Joint Broker)  
John Prior  
Hugh Rich  
Dougie Mcleod  
+44 (0) 20 7886 2500  

Landsbankinn hf. (Listing Agent)  
Ellert Arnarson  
Ellert.Arnarson@landsbankinn.is 

Camarco (Financial PR)  
Billy Clegg  
Elfie Kent  
Charlie Dingwall  
+44 (0) 20 3757 4980  

For Company updates:  
Follow @Amaroq_minerals on Twitter  
Follow Amaroq Minerals Inc. on LinkedIn  

Further Information:  

About Amaroq Minerals  

Amaroq Minerals' principal business objectives are the identification, acquisition, exploration, and development of gold and strategic metal properties in Greenland. The Company's principal asset is a 100% interest in the Nalunaq Project, a development stage property with an exploitation license including the previously operating Nalunaq gold mine. The Corporation has a portfolio of gold and strategic metal assets in Southern Greenland covering the two known gold belts in the region. Amaroq Minerals is incorporated under the Canada Business Corporations Act and wholly owns Nalunaq A/S, incorporated under the Greenland Public Companies Act.

Certain statements in this release constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws. Such statements and information involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company, its projects, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", "scheduled", "forecast", "predict" and other similar terminology, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. These statements reflect the Company's current expectations regarding future events, performance and results and speak only as of the date of this release.

Forward-looking statements and information involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indicators of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements or information, including, but not limited to: material adverse changes, unexpected changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of parties to contracts with the company to perform as agreed; social or labour unrest; changes in commodity prices; and the failure of exploration, refurbishment, development or mining programs or studies to deliver anticipated results or results that would justify and support continued exploration, studies, development or operations.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Glossary

Inside Information

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 on Market Abuse ("UK MAR"), as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, and Regulation (EU) No. 596/2014 on Market Abuse ("EU MAR").

Qualified Person Statement

The technical information presented in this press release has been approved by James Gilbertson CGeol, VP Exploration for Amaroq Minerals and a Chartered Geologist with the Geological Society of London, and as such a Qualified Person as defined by NI 43-101.

Amaroq Minerals Ltd.

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended June 30, 2023

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

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

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

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

1.    NATURE OF OPERATIONS, BASIS OF PRESENTATION

Amaroq Minerals Ltd. (the "Corporation") was incorporated on February 22, 2017 under the Canada Business Corporations Act. The Corporation's head office is situated at 3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario, M5X 1A4, Canada. The Corporation operates in one industry segment, being the acquisition, exploration and development of mineral properties. It owns interests in properties located in Greenland. The Corporation's financial year ends on December 31. Since July 2017, the Corporation's shares are listed on the TSX Venture Exchange (the "TSX-V"), since July 2020, the Corporation's shares are also listed on the AIM market of the London Stock Exchange ("AIM") and from November 1, 2022, on Nasdaq First North Growth Market Iceland ("Nasdaq") under the AMRQ ticker.

These unaudited condensed interim consolidated financial statements for the six months ended June 30, 2023 ("Financial Statements") were approved by the Board of Directors on August 29, 2023.

1.1   Basis of presentation and consolidation

The Financial Statements include the accounts of the Corporation and those of its 100% subsidiary Nalunaq A/S, corporation incorporated under the Greenland Public Companies Act. The Financial Statements also include the Corporation's 51% equity pick-up of Gardaq A/S, a joint venture with GCAM LP. (Note 3).

The Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") including International Accounting Standard ("IAS") 34, Interim Financial Reporting. The Financial Statements have been prepared under the historical cost convention.

The Financial Statements should be read in conjunction with the annual financial statements for the year ended December 31, 2022 which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies, methods of computation and presentation applied in these Financial Statements are consistent with those of the previous financial year ended December 31, 2022, except for the policy described below.

a)   Investments in an associate or joint venture

The financial results of the Corporation's investments in its joint arrangement is included in the Corporation's results using the equity method. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the Corporation's share of comprehensive income or loss of the associates after the date of acquisition. The Corporation's share of profits or losses is recognized in the condensed interim statement of income (loss).

Unrealized gains on transactions between the Corporation and an associate or joint venture are eliminated to the extent of the Corporation's interest in the associate. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Dilution gains and losses arising from changes in interests in investments in associates are recognized in the condensed interim statement of income (loss).

The Corporation assesses at each period-end whether there is any objective evidence that its investments in associates or joint venture are impaired. If impaired, the carrying value of the Corporation's share of the underlying assets of associates or joint venture is written down to its estimated recoverable amount (being the higher of fair value less costs of disposal and value in use) and charged to the statement of income (loss).

There are two main instances when the Corporation recognizes an investment in associate or joint venture. In first case the entity recognizes an acquisition of new investment, has a significant influence over the investee but does not control it. In the second case, the Corporation loses control over the subsidiary because of a sale of a share in subsidiary that results in losing control over that subsidiary.  If the Corporation loses control over the subsidiary, then

- The Corporation derecognizes the assets and liabilities of the subsidiary from the consolidated statement of financial position,

- Recognizes the fair value of the consideration received from the transaction that has resulted in the loss of control,

- Recognizes any investment retained in the former subsidiary at its fair value once control is lost and subsequently accounts for it and any amounts owed by or to the former subsidiary in accordance with the relevant IFRS. The fair value shall be regarded as a fair value of the initial recognition of the investment in joint venture or associate.

- Subsequently recognizes associate's or joint venture's share of net profits or losses proportionately to the retained share of investment for the reporting periods.

1.2   Functional and presentation currency

The functional and presentation currency of the Corporation is Canadian dollars ("CAD"). The functional currency of Nalunaq A/S is CAD. The functional currency of Nalunaq A/S is determined using the currency of the primary economic environment in which the entity evolves and using the currency which is more representative of the economic effect of the underlying financings, transactions, events and conditions.

Foreign currency transactions are translated into the functional currency of the underlying entity using appropriate rates of exchange prevailing on the dates of such transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency rate of exchange in effect at the end of each reporting period. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the net profit or loss.

2.    CRITICAL ACCOUNTING JUDGMENTS AND ASSUMPTIONS

The preparation of the Financial Statements requires Management to make judgments and form assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and reported amounts of expenses during the reporting period. On an ongoing basis, Management evaluates its judgments in relation to assets, liabilities and expenses. Management uses past experience and various other factors it believes to be reasonable under the given circumstances as the basis for its judgments. Actual outcomes may differ from these estimates under different assumptions and conditions.

In preparing the Financial Statements, the significant judgements made by Management in applying the Corporation accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Corporation's audited annual financial statements for the year ended December 31, 2022.

Management has exercised a significant judgement in assessing whether the Corporation still has control over its subsidiary Gardaq A/S or whether it lost control over the subsidiary but still has significant influence or joint control over Gardaq A/S. The result of this assessment is described under Note 3 below. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

3.    INVESTMENT IN AN ASSOCIATE OR JOINT VENTURE CORPORATION

On June 10, 2022, the Corporation announced that it had signed a non-binding head of terms with ACAM to establish a special purpose vehicle (the "SPV") and created a joint venture (the "JV") for the exploration and development of its Strategic Mineral assets for a combined contribution of $62.0 million (GBP 36.7 million). Subject to the final terms of the JV, ACAM invested $30.1 million (GBP 18 million) in exchange for a 49% shareholding in the SPV, with Amaroq holding 51%. Amaroq contributed its strategic non- precious mineral (i.e., non-gold) licenses, and will be required to provide a contribution in kind over a three-year period, valued, in aggregate, at $31.4 million (GBP 18.7 million) in the form of site support, logistics and overhead costs associated with utilizing its existing infrastructure in Southern Greenland to support the JV's activities. The transfer of these licenses has been approved by the Greenland Government on April 13, 2023. An option for further future funding of $16.0 million (GBP 10.0 million) is also potentially available on the achievement of agreed milestones.

The carrying historical value of the transferred strategic non-precious mineral licenses to Gardaq A/S is $36,758 (Note 4). Gardaq A/S is the Corporation's only joint venture. Gardaq's share capital consists solely of ordinary shares, which are held directly by the Corporation. Gardaq is incorporated in Greenland where its exploration and evaluation activities on bearing properties are carried out. The proportion of ownership interest is the same as the proportion of voting rights held. The investment in Gardaq is accounted for under the equity method. The Corporation's interest in Gardaq is 51% as of June 30, 2023.

Upon execution of the Subscription and Shareholders' Agreement ("SSHA") on April 13, 2023, the Corporation has ceased the control of Gardaq on that date. Given that the relevant activities of Gardaq require unanimous consent of its shareholders in accordance with the SSHA, management has determined that it has joint control and as such the Corporation performed deconsolidation of Gardaq A/S as at April 13, 2023, the date when control was lost. The fair value of the investment retained in Gardaq A/S was determined to be $31,385,198 (GBP 18.7million) for 51% retained equity share of Gardaq A/S. The fair value of Gardaq A/S was measured based on the cash consideration received in exchange for 49% of the outstanding shares.

The Corporation has determined that it has a joint control in Gardaq A/S as decisions around relevant activities require unanimous shareholder approval. Effective April 13, 2023, the Corporation's investment was accounted for as an investment in joint venture using the equity method. The equity method involves recording the initial investment at cost and subsequently adjusting the carrying value of the investment for the Corporation's proportionate share of the profit or loss, other comprehensive income or loss and any other changes in the joint venture's net assets, such as further investments or dividends. For the period ended June 30, 2023 the Corporation recorded the 51% proportion of net loss from Gardaq of $1,639,482.

The following tables summarize the unaudited financial information of Gardaq A/S as of June 30, 2023.

4.    MINERAL PROPERTIES

5.    CAPITAL ASSETS

Depreciation of capital assets related to exploration and evaluation properties is being recorded in exploration and evaluation expenses in the consolidated statement of comprehensive loss, under depreciation. Depreciation of $321,265 ($363,461 for the six months ended June 30, 2022) was expensed as exploration and evaluation expenses during the six months ended June 30, 2023.

As of June 30, 2023, the amount of $7,522,085 ($7,522,085 as of December 31, 2022) of construction in progress is related to equipment and infrastructure received or in storage and which will be installed at the appropriate time. Equipment and infrastructure include process plant components that are not yet available for use.

6.    LEASE LIABILITIES

The Corporation has one lease for its office. In October 2020, the Corporation started the lease for five years and five months including five free rent months during this period. The monthly rent is $8,825 until March 2024 and $9,070 for the balance of the lease. The Corporation has the option to renew the lease for an additional five-year period at $9,070 monthly rent indexed annually to the increase of the consumer price index of the previous year for the Montreal area.

7.    STOCK-BASED COMPENSATION

7.1   Stock options

An incentive stock option plan (the "Plan") was approved initially in 2017 and renewed by shareholders on June 15, 2023. The Plan is a "rolling" plan whereby a maximum of 10% of the issued shares at the time of the grant are reserved for issue under the Plan to executive officers, directors, employees and consultants. The Board of directors grants the stock options, and the exercise price of the options shall not be less than the closing price on the last trading day, preceding the grant date. The options have a maximum term of ten years. Options granted pursuant to the Plan shall vest and become exercisable at such time or times as may be determined by the Board, except options granted to consultants providing investor relations activities shall vest in stages over a 12-month period with a maximum of one-quarter of the options vesting in any three-month period. The Corporation has no legal or constructive obligation to repurchase or settle the options in cash.

The fair value of each option granted was estimated at the time of grant using the Black-Scholes option pricing model. Black-Scholes is a pricing model used to determine the fair price or theoretical value for a call or a put option based on the following weighted assumptions at the measurement date:

The total share-based payment expenses related to the options and the amount credited to contributed surplus for the six months ended June 30, 2023, were $4,028 (June 30, 2022-$ 1,480,560). The following table outlines the activity for stock options for the six months ended June 30,2023, and 2022:

Changes in stock options are as follows:

From the options exercised during the period ended June 30, 2023, 391,725 shares were withheld to cover the stock option grant price and related taxes.

Stock options outstanding and exercisable as at June 30, 2023 are as follows:

7.2   Restricted Share Unit

Conditional awards under the RSU

7.2.1    Description

Conditional awards were made in 2022 that give participants the opportunity to earn restricted share unit awards under the Corporation's Restricted Share Unit Plan ("RSU Plan") subject to the generation of shareholder value over a four-year performance period.

The awards are designed to align the interests of the Corporation's employees and shareholders, by incentivizing the delivery of exceptional shareholder returns over the long-term. Participants receive a 10% share of a pool which is defined by the total shareholder value created above a 10% per annum compound hurdle.

The awards comprise three tranches, based on performance measured from January 1, 2022, to the following three measurement dates:

·  First Measurement Date: December 31, 2023;

·  Second Measurement Date: December 31, 2024; and

·  Third Measurement Date: December 31, 2025.

Restricted share unit awards granted under the RSU Plan as a result of achievement of the total shareholder return performance conditions are subject to continued service, with vesting as follows:

·  Awards granted after the First Measurement Date - 50% vest after one year, 50% vest after three years.

·  Awards granted after the Second Measurement Date - 50% vest after one year, 50% vest after two years.

·  RSUs granted after the Third Measurement Date - 100% vest after one year.

The maximum term of the awards is therefore four years from grant.

The Corporation's starting market capitalization is based on a fixed share price of $0.552. Value created by share price growth and dividends paid at each measurement date will be calculated with reference to the average closing share price over the three months ending on that date.

·  After December 31, 2023, 100% of the pool value at the First Measurement Date is delivered as restricted share units under the RSU Plan, subject to the maximum number of shares that can be allotted not being exceeded.

·  After December 31, 2024, the pool value at the Second Measurement Date is reduced by the pool value from the First Measurement Date (increased in line with share price movements between the First and Second Measurement Dates). 100% of the remaining pool value, if any, is delivered as restricted share units under the RSU Plan.

·  After December 31, 2025, the pool value at the Third Measurement Date is reduced by the pool value from the Second Measurement Date (increased in line with share price movements between the Second and Third Measurement Dates), and then further reduced by the pool value from the First Measurement Date (increased in line with share price movements between the First Measurement Date and the Third Measurement Date). 100% of the remaining pool value, if any, is delivered as restricted share units under the RSU Plan.

7.2.1    Valuation

The fair value of the award granted in December 2022 is $5,408,800 based on 80% of the available pool being awarded. A charge of $898,000 was recorded during the six months ended June 30, 2023.

8.    EXPLORATION AND EVALUATION EXPENSES (RECOVERY)

Exploration and Evaluation expenses for the period of three and six months ended June 30, 2023 are net of $1,398,912 of Exploration and Evaluation expenses incurred by Nalunaq A/S during the period from June 9 to Dec 31 2022 for the six non-gold strategic mineral licenses that have been transferred from Nalunaq A/S to Gardaq A/S.

9.    SITE DEVELOPMENT COSTS

10.   GENERAL AND ADMINISTRATION