Amur Minerals : 2023 Annual Report

AMUR MINERALS CORPORATION

ANNUAL REPORT AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

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AMUR MINERALS CORPORATION

CORPORATE DIRECTORY

Directors	Mr R Schafer (Non-Executive Chairman)
	Mr R Young (Chief Executive Officer)
	Mr P Gazzard (Non-Executive Director)
	Mr T Bowens (Non-Executive Director)
Registered Office	Kingston Chambers
	P.O. Box 173
	Road Town
	Tortola
	British Virgin Islands
Auditors	Kiteserve Limited
	6 Karaiskakis Street, City House,
	3rd floor, CY-3032 Limassol,
	Cyprus
Nominated Adviser and Broker	S.P. Angel Corporate Finance LLP
	Prince Fredrick House
	35 - 39 Maddox Street
	London
	W1S 2PP
	United Kingdom
Legal Advisers	Maples and Calder
	P.O. Box 173
	Road Town
	Tortola
	British Virgin Islands
Solicitors	Fieldfisher LLP
	Riverbank House
	2 Swan Lane
	London
	EC4R 3TT
	United Kingdom

	Page(s)
Chairman's statement	1 - 2
Corporate governance	3 - 9
Operating risks and uncertainities	10 - 13
Statement of Directors' responsibilities	14
Remuneration committee report	15 - 16
Audit committee report	17 -18
Consolidated Directors' report	19 - 20
Independent Auditor's report to the members of Amur Minerals Corporation	21 - 27
Consolidated statement of financial position	28
Consolidated income statement	29
Consolidated statement of comprehensive income	30
Consolidated statement of changes in equity	31
Consolidated statement of cash flows	32
Notes to the consolidated financial statements	33 - 50

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AMUR MINERALS CORPORATION

CHAIRMAN'S STATEMENT

Dear Shareholders,

I take this opportunity to update our shareholders on the activities of Amur Minerals Corporation (the "Company") and its subsidiaries (together the "Group") for the 12-month period ended 31 December 2023. The highlight of this period was the divestiture of our wholly owned Russian Federation (RF) subsidiary, AO Kun-Manie, marking a significant milestone for the Group. The Company is now classified as an AIM Rule 15 cash shell, and is making progress towards completing a Reverse Takeover ('RTO') pursuant to AIM Rule 14.

For our shares to have remained trading on AIM, the Group was required to complete an acquisition which constituted an RTO under AIM Rule 14 or be re-admitted on AIM as an investing company under the AIM Rules on or before the date falling six months from 6 March 2023. As neither an RTO nor readmission to trading on AIM as an investing company was fully completed within that timeframe, trading in the Company's shares on AIM was suspended on 7 September 2023.

Trading will remain suspended until the completion of an RTO, which requires the publication of an admission document and the approval of such a transaction at a General Meeting of the Company, or the Company is readmitted to trading on AIM as an investing company.

On 25 January 2024, the Company entered into a heads of terms agreement ("HOT") to acquire a UK-based entity operating in the healthcare sector (the "Target"). The Target, a UK-based pharmaceutical firm, has developed an innovative drug delivery technology aimed at enhancing the efficacy of cancer treatments for solid tumors through localized chemotherapy delivery. We believe that the acquisition of the Target and the completion of an RTO provides the highest long-term value to shareholders.

The proposed transaction constitutes an RTO and is subject to various conditions, including the completion of financial, legal, and technical due diligence on the Target, negotiation and execution of a suitable SPA, the publication of an AIM Admission Document, and approval by the Company's shareholders at a general meeting. The Company is actively progressing through the necessary steps to finalize the RTO process and anticipates publishing an AIM Admission Document in May 2024.

Sale of AO Kun-Manie

On 6 March 2023 we were pleased to announce that the Company had completed the sale of its wholly owned RF subsidiary AO Kun-Manie along with its fully controlled Detailed Exploration and Mine Planning Licence (DEMP). The transaction grossed the Group a total of US$35 million allowing us to have recaptured our RF sunk costs. As a result of the sale, Company no longer holds any assets in, or conducts any business in, the RF.

The terms of the transaction were:

• The total consideration for the Transaction was US$35 million, paid upon completion of the Transaction in US$.
• The divesture price represented a premium of 119% to the Group's market capitalisation of 3 August 2022 (GBP13.2 million) and 44% to the Kun-Manie book value of US$24.3 million as at 31 December 2021 in Amur's 2021 annual report. The closing share price on 3 August 2022 was 0.89 pence per share.
• The Group pledged to pay a one-time special dividend of 1.8 pence per ordinary share within 90 days of receipt of the completion payment.

Financial Overview

As at 31 December 2023 the Group's total assets amounted to US$4,786,000 reduced from US$28,741,000 as at 31 December 2022 due to the sale of AO Kun-Manie. The Group had cash reserves of US$4,384,000, up from US$3,483,000 at the start of 2023 and remains debt free.

The increase in cash reserves derives as a result of the completion of the sale of the Group's wholly owned subsidiary AO Kun-Manie in March 2023 for total cash consideration of US$35,000,000, followed by the payment of a special dividend of US$31,284,000. The Group has not found it necessary to undertake any equity placings or other fundraising activities during the year.

The loss for the year ended 31 December 2023, amounted to US$9,647,000 (year ended 31 December 2022: US$3,013,000) driven mainly by the one-off losses from discontinued operations of US$7,256,000 that were recognised during the year following the disposal of AO Kun-Manie.

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AMUR MINERALS CORPORATION

CHAIRMAN'S STATEMENT

Other Comprehensive Income was credited with the amount of US$17,235,000 (2022: US$377,000 loss) mainly due to the reclassification in profit or loss as part of the loss on disposal of subsidiary of the foreign currency translation reserve as a result of the sale of AO Kun-Manie.

Dividend payment

In 2023, the amount of £25,071,702 (equivalent of US$31,284,000) of ordinary dividends, 1.8 pence per ordinary share, were declared upon completion of the disposal of AO Kun-Manie and the subsequent receipt of the disposal consideration of US$35,000,000 (2022: US$nil).

As at the the year end date, and the time of this announcement, dividends totalling £0.1 million (equivalent of US$109,322) remain unclaimed by shareholders and we urge these shareholders to complete the necessary steps, as detailed in the Company's RNS announcement on 24 May 2023, in order to receive payment of their dividend.

Mr. Robert W. Schafer

Non Executive Chairman

9 May 2024

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AMUR MINERALS CORPORATION

CORPORATE GOVERNANCE

Dear Shareholders,

As Chairman of AmurMineralsCorporation(the "Company" or "Amur"), I firmly believe that strong corporate governance helps provide the building blocks that allow an organisation to be successful. The Board is committed to good governance across the business at its executive level and throughout its operations. In March 2018, the Company adopted The Quoted Companies Alliance Corporate Governance Code 2018 (the "QCA Code" or the "Code").

The Board not only sets expectations for the business but also works towards ensuring that strong values are set and carried out by the Directors and Executives across the business. The Board strives to ensure that the objectives of the business, the principles and risks are underpinned by values of good governance throughout the Company and its subsidiaries (together the "Group").

The importance of engaging with our shareholders is key to the success of the business, and the Board strives to ensure that there are numerous opportunities for investors to engage with both the Board and executive team.

Mr R Schafer

Non-Executive Chairman

9 May 2024

Set out below are the 10 key principles of the QCA code adopted by Amur. In addition to the details provided below, governance disclosures can be found on the Company's website at https://amurminerals.com/corporate- governance-code/.

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

The Board's strategy has concluded that the highest medium and long-term value can be delivered to shareholders through completing an RTO and the Board are actively pursuing this strategy at the time of reporting. The Company entered into a HOT to acquire a UK based candidate in the healthcare sector (the "Target") on 25 January 2024. The Target is a UK-based pharmaceutical company which has developed an innovative drug delivery technology to improve the clinical performance of cancer treatments for solid tumours through the local delivery of chemotherapy.

Following the disposal of AO Kun-Manie in March 2023, the Company is an AIM Rule 15 cash shell. The Company is required to make an acquisition or acquisitions which constitute(s) a reverse takeover under AIM Rule 14 on or before the date falling six months from the completion of the disposal, or be re-admitted to trading on AIM as an investing company under AIM Rule 8.

The Company's shares are currently suspended from trading while it advances necessary workstreams to complete the RTO process and expects to be in the position to publish an AIM Admission Document in May 2024. The Board strongly believes that the pursuit of an RTO will bring the Company's shareholder's the highest medium and long-term value.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Group remains committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood and communicated. Understanding what analysts and investors think about us, and in turn, helping these audiences understand our business, is a key part of driving our business forward and we actively seek dialogue with the market. We do so via investor roadshows, attending investor conferences, maintaining updates on the Company's FAQ page and our regular reporting.

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AMUR MINERALS CORPORATION

CORPORATE GOVERNANCE (CONTINUED)

Amur is committed to providing full and transparent disclosure of its activities via the Regulatory News Service (RNS) of the London Stock Exchange, to the extent that is allowable by AIM whilst it is actively completing its RTO process. Company announcements are also available on the Company's website. Amur has an active and effective investor relations programme that includes institutional road-shows and presentations, effective Annual General Meetings with presentations to shareholders and a high level of disclosure of the Company's activity to its shareholders.

In addition, all shareholders are encouraged to attend the Company's Annual General Meeting (AGM) and any other meetings where Q&A sessions are a part of the meetings. Investors have access to current information on the Company through its website (www.amurminerals.com) and via the [e-mail] email address.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Board recognises that the long term success of the Group is reliant upon the efforts of the employees of the Group and its contractors, suppliers, regulators and other stakeholders. The Board has put in place a range of processes and systems to ensure that there is close oversight and contact with its key resources and relationships. The Board also recognises that our employees are one of our most important stakeholder groups.

The Group has close ongoing relationships with a broad range of its stakeholders and provides them with the opportunity to raise issues and provide feedback to the Group, and the Board is regularly updated on wider stakeholder insights into issues that matter to them and the business to enable the Board to understand and consider these issues in decision making.

The Board has been in communication with AIM during the period and post year-end whilst it has been undertaking necessary due diligence procedures in readiness to present its shareholders with an RTO proposal for their approval. The Board are confident that undertaking the RTO will provide the Group with the best chance of long-term success.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

Financial controls

The Group has an established framework of internal financial controls, the effectiveness of which is regularly reviewed by the Executive Management, the Audit Committee and the Board in light of an ongoing assessment of significant risks facing the Group:

• The Board is responsible for reviewing and approving overall Group strategy, approving revenue and capital budgets and plans, and for determining the financial structure of the Group including treasury, tax and dividend policy. Monthly results and variances from plans and forecasts are reported to the Board.
• The Audit Committee assists the Board in discharging its duties regarding the financial statements, accounting policies and the maintenance of proper internal business, and operational and financial controls, including the review of results of work performed by the Group controls function.
• There are comprehensive procedures for budgeting and planning, for monitoring and reporting to the Board business performance against those budgets and plans, and for forecasting expected performance over the remainder of the financial period. These cover cash flows, capital expenditure and balance sheets. Monthly results are reported against budget and compared with the prior year, and forecasts for the current financial year are regularly revised in light of actual performance.
• The Group has a consistent system of prior appraisal for investments, overseen by the Chief Financial Officer (Westend Corporate acting), Chief Executive Officer and Board of Directors. Financial controls and procedures are in place with which each business area is required to comply in order to be granted investment funds for development.

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AMUR MINERALS CORPORATION

CORPORATE GOVERNANCE (CONTINUED)

Non-financial controls

The Board recognizes that maintaining sound controls and discipline is critical to managing the downside risks to our plan. The Board has ultimate responsibility for the Group's system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group.

The principal elements of the Group's internal control system include:

• Close management of the day-to-day activities of the Group by the Executive Directors.
• An organizational structure with defined levels of responsibility, which promotes entrepreneurial decision-making and rapid implementation while minimizing risks.
• A comprehensive annual budgeting process producing a detailed integrated profit and loss, balance sheet and cash flow, which is approved by the Board.
• Detailed monthly reporting of performance against budget.
• Central control over key areas such as capital expenditure authorization and banking facilities.

The details of the Group's principal risks and controls to mitigate them are outlined on pages 10-13.

Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chairman

The Board comprises the Non-Executive Chairman, one Executive Director and two Non-Executive Directors. The Board of Amur is supported by the senior management team and Westend Corporate LLP (external accountancy and financial service provider). The details and background of the members of the Board and senior management can be found on the Company's website at www.amurminerals.com/management-team/.

The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Group on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. The following Directors are considered to be independent Directors:

• Robert Schafer (Non-Executive Chairman).
• Paul Gazzard (Non-Executive Director).
• Tom Bowens (Non-Executive Director).

The Board has established an Audit Committee and a Remuneration Committee, particulars of which appear hereafter. The Board has agreed that appointments to the Board are made by the Board as a whole. The Non- Executive Directors are considered to be part time but are expected to provide as much time to the Group as is required. The Board considers that this is appropriate given the Groupʼs current stage of operations. It shall continue to monitor the need to match resources to its operational performance and costs and the matter will be kept under review going forward. The Board notes that the QCA Code recommends a balance between executive and non-executive Directors and recommends that there be two independent non-executives. The Board shall review further appointments as scale and complexity grows.

Attendance at Board and Committee Meetings

The Company shall report annually on the number of Board and committee meetings held during the year and the attendance record of individual Directors. In order to be efficient, the Directors meet formally and informally both in person and by telephone. During the year there were 9 board meetings and their attendance was as follows:

	Meetings attended	Meetings eligible to attend
Mr R Schafer	9	9
Mr R Young	9	9
Mr P Gazzard	9	9
Mr T Bowens	8	8

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AMUR MINERALS CORPORATION

CORPORATE GOVERNANCE (CONTINUED)

Key Board activities this year included:

• To assign Kiteserve Ltd as a replacement to BDO LLP as the Company's statutory auditor.
• Approve the completion of the sale of AO Kun-Manie by Irosta Trading Limited.
• Approval of payment of dividends to the Company's shareholders and the conversion of funds to facilitate the dividend payment.
• Opening of the Company's new bank account.

Directors' conflict of interest

The Group has long established and effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board.

Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience required for the Group. Biographies of the directors are available on the Company's website. All Directors receive regular and timely information on the Group's operational and financial performance. Relevant information is circulated to the Directors in advance of meetings.

The Board recognises that it currently has limited diversity, and this will form a part of any future recruitment consideration if the Board concludes that replacement or additional directors are required. The Board will also review annually the appropriateness and opportunity for continuing professional development whether formal or informal.

Appointment, removal and re-election of Directors

The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments. The Company's Articles of Association require that one-third of the Directors must stand for re-election by shareholders annually in rotation and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment.

Independent advice

All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Group's expense. In addition, the Directors have direct access to the advice and services of the Company Secretary and Westend Corporate LLP (external accountancy and financial service provider).

Principle 7: Evaluate the Board performance based on clear and relevant objectives, seeking continuous improvement

The Board has determined that it shall itself be responsible for assessing the effectiveness and contributions of the Board as a whole, its committees (which currently comprise the Audit Committee and the Remuneration Committee) and individual directors. The size of the Board allows for open discussion and the Chairman has regular dialogue with the Chief Executive Officer whereby the Board's role and effectiveness can be considered. The Chief Financial Officer (undertaken by Westend Corporate LLP) also has regular dialogue with the Head of the Audit Committee whereby that Committee's effectiveness can be considered.

Internal evaluation of the Board, the Committee and individual Directors is to be undertaken on an annual basis in the form of peer appraisal and discussions to determine the effectiveness and performance of the Directors and their continued independence. No formal assessments have been prepared however the Board will keep this matter under review especially if either the size of the Board or the number of committees increases which in turn may require a more formalised assessment and evaluation process to be established to ensure continued effectiveness.

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AMUR MINERALS CORPORATION

CORPORATE GOVERNANCE (CONTINUED)

Principle 8: Promote a culture that is based on ethical values and behaviours

The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Group as a whole and that this will impact the performance of the Group. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Group as a whole and the way that employees behave. The corporate governance arrangements that the Board has adopted are designed to ensure that Amur delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations for the Group in a manner that encourages open dialogue with the Board.

A large part of Amurʼs activities is centred upon what needs to be an open and respectful dialogue with employees, clients and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Group to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Group does. The directors consider that at present the Group has an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge.

Additionally, the Group has adopted a code for Directorsʼ and employees dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016 and onshored into UK law on 31 December 2020 by the European Union (Withdrawal) Act 2018, as subsequently amended.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

Maintenance of Governance Structures and Processes

Ultimate authority for all aspects of the Groupʼs activities rests with the Board, the respective responsibilities of the Chairman and Chief Executive Officer arising as a consequence of delegation by the Board. The Board has adopted appropriate delegations of authority which set out matters which are reserved to the Board. The Chairman is responsible for the effectiveness of the Board, while management of the Groupʼs business and primary contact with shareholders has been delegated by the Board to the Chief Executive Officer.

Audit Committee

The Audit Committee currently comprises Paul Gazzard (Chairman) and Robert Schafer. This committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported. It receives reports from the executive management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee shall meet not less than twice in each financial year and it has unrestricted access to the Groupʼs auditors, however during 2023 the Committee met once. Its second meeting was opened up to the full board and involved the appointment of KiteServe as auditor.

Remuneration Committee

The Remuneration Committee comprises Tom Bowens (Chairman) and Robert Schafer. The Remuneration Committee reviews the performance of the executive directors and employees and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also considers and approves the granting of share options pursuant to the share option plan and the award of shares in lieu of bonuses pursuant to the Groupʼs Remuneration Policy.

Nominations Committee

Given the size and complexity of Amur, the Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a Nominations Committee.

Non-Executive Directors

At each Annual General Meeting one third of the directors must retire by rotation, whereupon they can offer themselves for re-election if eligible. The Board evaluates its performance and composition on a regular basis and will make adjustments as and when indicated. When assessing the independence

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