EAST STAR RESOURCES PLC - CONDENSED INTERIM FINANCIAL STATEMENTS

NOTES TO THE INTERIM FINANCIAL INFORMATION

1              General information

The Company was incorporated on 17 November 2020 in England and Wales with Registered Number 13025608 under the Companies Act 2006, under the name Cawmed Resources Limited. The Company subsequently changed its name to East Star Resources Limited on 27 January 2021 and on 3^rd March 2021 re-registered as a plc.

The address of its registered office is Eccleston Yards, 25 Eccleston Place, London SW1W 9NF, United Kingdom.

The principal activity of the Company is to seek suitable investment opportunities primarily in the natural resources sector.

The Company listed on the London Stock Exchange ("LSE") on 19^th April 2021.

2              Accounting Policies

IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.

3              Basis of preparation

The Condensed Interim Financial Statements have been prepared in accordance with the Prospectus Rules and International Accounting Standards in conformity with the requirements of the Companies Act 2006 and the Companies Act 2006 applicable to companies reporting under IFRS. The Condensed Interim Financial Statements have been prepared in accordance with  IAS 34 "Interim Financial Statements." The Condensed Interim Financial Statements do not include all disclosures that would otherwise be required in a complete set of financial statements but have been prepared in accordance with the existing accounting policies of the Company.

The Interim Financial Statements for the period ended 31 May 2021 are unaudited.

The Company Financial Information has been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense.

The Historic Financial Information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The Historic Financial Information is presented in £ unless otherwise stated, which is the Company's functional and presentational currency.

No comparative figures have been presented as the Interim Financial Information covers the full period from incorporation on 17 November 2020.

Going concern

The Directors have made an assessment of the Company's ability to continue as a going concern and are satisfied that the company has the adequate resources to continue in operational existence for the foreseeable future. The Company, therefore, continues to adopt the going concern basis in preparing its interim financial statements.

Accounting policies

The same accounting policies, presentation and methods of computation have been followed in these Condensed Interim Financial Statements as were applied in the preparation of the Company's  historic financial information for the year period ended 31 December 2020, as included in the Prospectus dated 27 April 2021, except for the impact of the adoption of the Standards and interpretations described below and new accounting policies adopted as a result of changes in the Company.

Standards and interpretations adopted in the period

There were no new standards or interpretations adopted by the Company in the period.

Standards and interpretations issued and not yet effective:

Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:

4              Critical accounting estimates and judgments

In preparing the Condensed Interim Financial Statements, the Directors have to make judgments on how to apply the Company's accounting policies and make estimates about the future. Estimates and judgements are continuously evaluated based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.

5              Income Tax

Income tax can be reconciled to the loss in the statement of comprehensive income as follows:

6              Earnings per Ordinary Share

There were no potentially dilutive instruments in issue at the period end.

7              Trade and Other Receivables

9              Share Capital & Share Premium

¹ On incorporation on 17 November 2020, the Company issued 100,000 ordinary shares of £0.01 at their nominal value of £0.01.

² On 8 March 2021, the Company issued 5,900,000 ordinary shares at their nominal value of £0.01.

³ On 8 March 2021, the Company issued 23,850,217 ordinary shares at their nominal value of £0.01

⁴ On admission to the Standard List of the LSE on 4 May 2021, 39,689,947 shares were issued at a placing price of £0.05.

10           Share Based Payment Reserves

¹ On admission to LSE on 4 May 2021 1,200,000 brokers warrants were issued that entitle the warrant holder to subscribe for one Ordinary Share at £0.05 per ordinary share. The estimated fair values of options which fall under IFRS 2, and the inputs used in the Black-Scholes model to calculate those fair values are as follows:

 Warrants

The weighted average exercise price of the warrants exercisable at 31 May 2021 is £0.05.

The weighted average time to expiry of the warrants as at 31 May 2021 is 2.05 years.

The 6,000,000 warrants issued on 16 March 2021 were issued alongside the placing of ordinary shares and as such are not fair valued separately.

11           Related Party Transactions

On incorporation, the Company issued 100,000 Ordinary Shares of £0.01 at £0.01 per Ordinary Share for cash consideration of £1,000 to Orana Corporate LLP, an entity of which Directors Charlie Wood and Anthony Eastman are Partners. Subsequently these shares were transferred to Director Charlie Wood.

On 24 December 2020, Directors Ainslie Capital Limited and Tournesol Consulting Limited (entities associated with Directors Charlie Wood and Anthony Eastman respectively) each subscribed for 400,000 Ordinary Shares of £0.01 at £0.01 per Ordinary share (total of 800,000) for cash consideration, of which Charlie Wood had already received the 100,000 shares as referred above.

All of these shares are paid up subsequent to period end.

12           Ultimate Controlling Party

As at 31 May 2021, there was no ultimate controlling party of the Company.

13           Post Balance Sheet Events

Subsequent to period end, the Company announced it has entered into a binding Heads of Terms to acquire 100% of the share capital by way of a reverse takeover of Discovery Ventures Kazakhstan ("DVK"), a private Kazakhstan registered company. DVK has negotiated the rights to certain prospective gold and base metals exploration licences in the Chu-ili and Rudny Altai mineral belts (the "Projects") through a joint venture agreement with Kazakhstan National Mining Company, Tau-Ken Samruk JSC ("TKS"). As a result of this the Company has suspended trading on share since 19 July 2021.

The Company has also subscribed for four, 12-month convertible loan notes of US$175,000 each issued by DVK, with the proceeds of which will be used to continue exploration on the Projects.  As of 29 September 2021 the first 3 payments of $US175,000 (totalling $525,000 USD) have been transferred.

Other than above, there has been no significant change in either the financial performance or the financial position of the Company since 31 May 2021.

14           Approval of the Condensed Interim Financial Statements

The Condensed Interim Financial Statements were approved by the Board of Directors on 29 September 2021.