EMX EMX Royalty Corporation

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Years Ended December 31, 2015, 2014 and 2013

GENERAL

This discussion and analysis of financial position and results of operations is prepared as at March 24, 2016 and should be read in conjunction with the audited annual consolidated financial statements of the Company for the years ended December 31, 2015, 2014 and 2013 and the related notes thereto.

Those consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

Eurasian and its subsidiaries are engaged in the acquisition, exploration and evaluation of mineral assets in Turkey, Haiti, Europe, USA and the Asia Pacific region, and the investment in a royalty income stream in Nevada, USA. The Company’s common shares are listed on the TSX-V under the symbol of “EMX” and on the NYSE MKT under the symbol of “EMXX”. The Company’s head office is located at 501 - 543 Granville Street, Vancouver, British Columbia, Canada V6C 1X8.

These consolidated financial statements have been prepared using IFRS applicable to a going concern, which assumes that the Company will be able to realize its assets, discharge its liabilities and continue in operation for the following twelve months.

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On August 17, 2012, the Company and its wholly-owned subsidiary, EMX (Utah) Corp. completed an Agreement and Plan of Acquisition with Bullion Monarch whereby the Company acquired 100% of the issued and outstanding shares of Bullion Monarch.

The Company’s working capital position at December 31, 2015 was $5,787,109. With its current plans for the year and the budgets associated with those plans, in order to continue funding its administrative and exploration expenditures from the date of this Form 20-F, the Company will need to obtain additional cash and anticipates either financing or selling one or more of its assets.

Some of the Company’s activities for exploration and evaluation assets are located in emerging nations and, consequently, may be subject to a higher level of risk compared to other developed countries. Operations, the status of mineral property rights and the recoverability of investments in emerging nations can be affected by changing economic, legal, regulatory and political situations.

At the date of these consolidated financial statements, the Company has not identified a known body of commercial grade mineral on any of its exploration and evaluation assets. The ability of the Company to realize the costs it has incurred to date on these exploration and evaluation assets is dependent upon the Company identifying a commercial mineral body, to finance its development costs and to resolve any environmental, regulatory or other constraints which may hinder the successful development of the exploration and evaluation assets.

These consolidated financial statements of the Company are presented in Canadian dollars unless otherwise noted, which is the functional currency of the parent company and its subsidiaries except as to Bullion Monarch, the holder of a royalty income stream whose functional currency is the United States dollar.

DESCRIPTION OF BUSINESS

Eurasian is a Tier 1 company that trades on the TSX Venture and the NYSE MKT exchanges. It is principally in the business of exploring for, and generating royalties from, metals and minerals properties. The Company’s royalty and exploration portfolio mainly consists of properties in North America, Turkey, Europe, Haiti, Australia, and New Zealand. The Company started receiving royalty income as of August 17, 2012 when it acquired Bullion Monarch Mining, Inc. (“Bullion” or “BULM”). This royalty cash flow helps to provide a foundation for supporting the Company’s growth over the long term.

Eurasian operates as a royalty and prospect generator. Under the royalty and prospect generation business model, EMX acquires and advances early-stage mineral exploration projects and then forms partnerships with other parties for a retained royalty interest, as well as annual advanced royalty and other cash or share payments. Through its various agreements, Eurasian also provides technical and commercial assistance to partner companies as the projects are advanced. By optioning interests in its projects to third parties for a royalty interest, Eurasian a) reduces its exposure to the costs and risks associated with mineral exploration and project development, while b) maintaining the opportunity to participate in early-stage exploration upside, and c) developing a pipeline for potential production royalty payments and associated "brownfields" discoveries in the future. This approach helps preserve the Company’s treasury, which can be utilized for project acquisitions and other business objectives.

Strategic investments are an important complement to the Company’s royalty and prospect generation initiatives. These investments are made in under-valued exploration companies identified by Eurasian. EMX helps to develop the value of these assets, with exit strategies that can include royalty positions or equity sales.

EXPLORATION REVIEW

PROPERTY OVERVIEW

LEEVILLE & OTHER CARLIN TREND ROYALTY PROPERTIES

A material EMX asset is the Leeville royalty property acquired in the 2012 Bullion Monarch merger that covers portions of Newmont Mining Corporation’s Leeville, Turf, and Four Corners underground gold mining operations in the Northern Carlin Trend. The Leeville 1% gross smelter return royalty paid approximately US$1.26 million during the 12 months ending December 31, 2015. The royalty totaled 1,096 troy ounces of gold principally sourced from the Leeville mine, with minor contributions from other Newmont operations. The average realized gold price was US$1,160 per troy ounce. Newmont’s Turf Vent Shaft Project was commissioned in November 2015. Newmont has stated that the project will provide the ventilation required to “increase production”, and “unlock” additional resources at “greater Leeville” (see Newmont Mining Corp’s 10-K and 10-Q filings for 2014 and 2015). As understood by the Company, "greater Leeville" includes portions of EMX’s royalty property, and the Turf Vent Shaft Project as described by Newmont may potentially have a positive impact on the Leeville royalty. However, the Company does not have access to the information from Newmont in order to confidently assess what, if any, that impact may be. In addition, Newmont has delineated a trend of sediment-hosted gold mineralization that extends southeast from the Leeville underground mining complex and across EMX's Leeville royalty property that covers portions of the Rita K and Full House exploration projects. These Newmont exploration successes underscore the prospectivity of the Leeville royalty property.

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Further Carlin Trend exploration upside is provided by EMX’s Maggie Creek South 3% NSR and Maggie Creek 2% NSR royalty properties. The Maggie Creek South royalty property, acquired in the 2012 merger with Bullion Monarch, occurs on the southeast projection of the Good Hope fault trend, which has an alignment of deposits along its length including Mike, Tusc, Mac, and Gold Quarry. The Maggie Creek royalty property, acquired from Golden Predator as a subsequent event in March 2016, occurs along the northeast projection of the Gold Quarry fault zone, which is an important mineralizing control at the Gold Quarry mine. These two properties collectively cover approximately 4.8 square miles of prospective ground within about a mile of Newmont’s Gold Quarry open pit mining operation.

NORTH AMERICA

Eurasian’s portfolio in North America is comprised of 32 properties and includes porphyry copper-molybdenum, porphyry copper-gold, Carlin-type gold, and gold-silver vein projects in Arizona, Nevada, Utah, Wyoming, and Oregon. The portfolio is advanced through Eurasian’s wholly-owned subsidiary Bronco Creek, with thirteen of the properties under partnership with third parties. Six of the partnered properties are EMX royalty properties, including the Northern Carlin Trend's Leeville royalty (see Leeville and Other Carlin Trend Royalties section), and seven of the partnered properties are exploration projects under option agreements that include an EMX retained royalty interest. The remaining 19 exploration projects are available for partnership.

The Company’s 2015 work focused on advancing partner funded projects, executing new agreements for available EMX projects, identifying key royalty assets for purchase, generative exploration, business development, and balancing the portfolio by acquiring new properties on open ground while dropping low priority projects as summarized below.

• As a subsequent event in March 2016, the Company executed a purchase agreement for NSR royalty interests on the Maggie Creek (2% NSR on precious metals and 1% NSR royalty on all other minerals) and Afgan (1% NSR royalty) gold properties from Golden Predator. Eurasian acquired the royalties by issuing 250,000 EMX shares to Golden Predator as consideration for the purchase. The Maggie Creek property is located north-northeast of Newmont's Gold Quarry open pit operations on the Carlin Trend, and the Afgan property occurs on the Battle Mountain -Eureka Trend. The addition of these two royalty assets strengthens EMX's growing Nevada gold portfolio.

• EMX executed an Exploration and Option to Purchase Agreement with Kennecott, for the Superior West copper- molybdenum project near Superior, Arizona. Kennecott may earn a 100% interest in the project by completing US$5 .5 million in exploration expenditures and making cash payments totaling US$1,149,187, after which EMX will retain a 2% NSR in addition to AMR and certain project milestone payments. During Q3 and Q4, EMX conducted partner funded geologic mapping, geochemical sampling, geophysical surveying, and drill permitting work programs on the project.

• A second Exploration and Option to Purchase Agreement with Kennecott was executed for the Aguila de Cobre copper project in Arizona. Kennecott may earn a 100% interest in the project by completing US$4 million in exploration expenditures and making cash payments totaling US$225,000 over a four year period, after which EMX will retain a 2% NSR in addition to AMR and certain project milestone payments.

• An Exploration and Option Agreement was executed for the Hardshell Skarn project with Arizona Minerals Inc.,. AZ Minerals can earn a 100% interest in the Hardshell Skarn project by making cash payments totaling US$85,000, and upon exercise of the option EMX will retain a 2% NSR royalty and receive annual advanced royalty payments. The EMX royalty is not capped and not subject to buy-down.

• The Yerington West joint venture property, located in the Yerington mining district of west-central Nevada, is partnered with Entrée Gold Inc. The project hosts porphyry copper-molybdenum and copper-iron skarn targets beneath cover rocks. Entrée continued their work on the adjacent Ann Mason property, including an updated PEA study. EMX has a 100% interest in the Yerington West project until Entrée completes its initial earn-in requirements.

• The Copper King and Red Top properties are Arizona porphyry copper-molybdenum projects covered by two separate Option Purchase Agreements with Desert Star whereby Desert Star can acquire a 100% interest in each of the projects for cash, shares, and work commitments, after which EMX will retain a 2.5% NSR royalty. EMX assisted Desert Star with permitting in preparation for reconnaissance drill programs anticipated in 2016. A third Arizona copper property optioned to Desert Star, Copper Springs, returned to 100% Eurasian control after Desert Star elected to terminate its option for the property in Q1 2015.

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• In Q3, Savant terminated the option agreement for the Buckhorn Creek copper-molybdenum project in southern Arizona. Savant advanced the project by funding geologic mapping and geophysical surveys, as well as completing access agreements and permitting for proposed drill sites. Buckhorn Creek is available for partnership.

• Generative work focused on gold opportunities in the Great Basin and porphyry copper targets in Arizona. EMX acquired the Golden Sunrise and other gold projects in Nevada by staking open ground. In addition, a new sediment- hosted copper exploration program led by consulting geologist Dr. Jon Thorson was initiated.

• Eurasian elected to drop the Frazier Creek and Rush Basin projects due to a lack of encouraging exploration results.

EMX is encouraged by the funding committed to advance the partnered projects, as well as third party interest in the available copper and gold properties and new opportunities identified by generative exploration initiatives.

Qualified Person

Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed, verified and approved the above technical disclosure on North America.

TURKEY

Eurasian holds mineral property interests in Turkey’s Western Anatolia and Eastern Pontides mineral belts. These properties include bulk tonnage gold, gold-silver vein, polymetallic carbonate replacement, and porphyry gold-copper targets. Five of the seven EMX projects in Turkey are being advanced by partner companies, with two royalty properties (Balya and Aktutan) and three properties optioned for a retained royalty interest (Alankoy, Golcuk and Trab-23). The remaining two properties, the Akarca epithermal gold-silver project and Sisorta epithermal gold project, are 100% controlled by Eurasian and currently available for sale or partnership.

Akarca Property

The Akarca Property is a 2006 Eurasian grassroots exploration discovery in Turkey’s Western Anatolia region. EMX regained 100% control of Akarca after Çolakoglu advised EMX that it would not exercise its option to acquire the project. The Akarca agreement with Çolakoğlu required an up-front payment of US$250,000 and drilling of at least 5,000 meters by the end of the first year (2014). Both of these conditions were met. In January, 2015 Eurasian granted Çolakoğlu a six month extension from February 2015 to exercise its option. As a condition of this extension, Çolakoğlu paid EMX US$100,000 (non-refundable) from the total US$500,000 payment required to exercise the option. Overall, Çolakoğlu paid a total of US$350,000 to EMX, and conducted substantial drilling, trenching, geological mapping, geochemical sampling, and technical studies. Akarca is now available for sale or partnership, and EMX is engaged in discussions with several interested parties.

The Akarca project area currently has six drill defined zones of epithermal gold-silver oxide mineralization. Further, there are several additional mineralized zones identified from reconnaissance level drilling and surface sampling. Since its discovery, 245 core and reverse circulation holes totaling about 26,400 meters have been drilled at the Akarca project. As exploration continues, it is clear that the continuity of the near-surface oxide zones of higher grade vein and disseminated styles of mineralization are being successfully defined at a 25 to 50 meter drill spacing. Furthermore, ongoing reconnaissance and step-out drilling is demonstrating potential for new discoveries within broad areas mineralized by the gold-silver epithermal system(s) at Akarca. Exploration successes at Akarca since 2006 have led to in-the-ground investments of over US$13 million, mostly by partner companies.

Sisorta Property

The Sisorta project, located in the Eastern Pontides mineral belt, is an epithermal gold deposit with an NI 43-101 mineral resource at a 0.4 g/t cutoff of 91,000 indicated gold ounces from 3.17 million tonnes averaging 0.89 g/t, and 212,000 inferred gold ounces from 11.38 million tonnes averaging 0.58 g/t. An overview of the methodology used to estimate the resources are described in EMX’s news release dated June 16, 2009 and in the July 31, 2009 SEDAR filed report titled "Technical Report on the Exploration Results and Resource Estimates for the Sisorta Property, Sivas Province, Turkey. The three year trailing average London fix gold price as of July, 2009 was $US 785/troy ounce. The principle technical developments subsequent to the Sisorta technical report included a 46 hole, 5,500 meter diamond drill program and other work totaling approximately US$2.5 million in partner funded expenditures.

The Sisorta property had been in a joint venture with project manager Chesser Resources Ltd. (“Chesser”) (51%) and EMX (49%) since 2007. In March 2015, EMX purchased Chesser's interest in the property, and assumed management of the project. As Sisorta is now a 100% controlled asset of EMX, the Company is evaluating the property's exploration upside, while pursuing partnership opportunities with third parties.

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Balya Royalty Property

The Balya royalty property is located in the historic Balya lead-zinc-silver mining district in northwestern Turkey. EMX holds an uncapped 4% NSR royalty that it retained from the sale of the property to private Turkish mining company Dedeman Madencilik San ve Tic. A.S. in 2006. EMX understands that since acquiring the property, Dedeman has completed over 36,000 meters of diamond drilling in addition to re-initiating underground development at the Hastanetepe deposit in Q1 2015. The first shipments of material were trucked to Dedeman's mill at Kayseri for test processing in Q4.

Other Property Interests

Eurasian has option agreements that include retained royalty interests for the Golcuk, Trab-23, and Alankoy exploration properties:

• The Golcuk copper-silver property is located in northeast Turkey. Pasinex Resources Ltd. signed an agreement in 2012 granting it an option to acquire a 100% interest in the Golcuk property for shares and work commitments over a four year period, with EMX retaining a 2.9% NSR royalty interest. Pasinex’s exploration programs have identified a number of additional mineralized targets on the property, and their work in 2015 included: a) structural and alteration studies of the copper-silver mineralized zones, b) 1,000 meters of core drilling in the main target area, and c) petrologic studies. Pasinex is planning to continue with follow-up exploration programs in 2016.

• The Trab-23 property hosts both porphyry gold (copper-molybdenum) mineralization and epithermal quartz-barite-gold veins. Tumad executed an option agreement (the “Agreement”) in 2013 granting it an option to acquire Trab-23 for in- ground spending requirements, annual earn-in and pre-production payments, and payments based upon production. Tumad's original drill requirements for 2015 were not met, and Eurasian has accepted a revision of the Agreement requirements to include 3,000 meters of exploration drilling on or before September 11, 2016.

• The Alankoy gold-copper property is located in the Biga Peninsula of northwestern Turkey. An option agreement with Ferrite was executed in December 2013. Ferrite terminated the option and returned the property to EMX in Q4 2015. Subsequently, EMX signed an Exploration and Option Agreement for Alankoy with Black Sea in November 2015. Black Sea has the option to earn a 100% interest in the project through work commitments, payments, and annual advance royalties. EMX will retain an uncapped production royalty of 3% for gold, silver, and other precious metals, and 2% for all other minerals produced from the property.

• EMX has a royalty interest in the Aktutan polymetallic project sold to Dedeman in 2007 for considerations that also include a 4% uncapped NSR. No work was reported by Dedeman for 2015.

• The Sofular royalty property, also held by Dedeman, was dropped in Q1 2015 due to a lack of encouraging exploration results.

Qualified Person

Michael P. Sheehan, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified and approved the above technical disclosure on Turkey.

AUSTRALIA AND NEW ZEALAND

The Company's programs in Australia and New Zealand operated at a reduced expenditure rate during 2015. The Koonenberry gold project in New South Wales, Australia is being advanced by partner companies under royalty agreements with EMX. The Sisters copper-cobalt property, also in New South Wales, was relinquished during 2015 due to a lack of encouraging results. In Western Australia, EMX's generative work resulted in the submission of applications for the East Kimberley sediment-hosted copper exploration project. In New Zealand, the Neavesville gold-silver project was advanced by a partner funded drill program.

Koonenberry Property

The Koonenberry gold project is positioned along the regional-scale Koonenberry fault in southeastern Australia. The distribution of gold occurrences and gold geochemical anomalies are coincident with prominent structural features related to the Koonenberry fault. The majority of the project is under an Exploration and Option Agreement with North Queensland Mining Pty Ltd., a privately-held Australian company, whereby NQM can earn a 100% interest in the subsidiary that holds the EMX licenses, with EMX retaining a 3% production royalty upon earn-in. During 2015, NQM conducted geologic studies to identify prospective targets on the property, and subsequently relinquished lower priority licenses. Also during the year, Arastra Exploration relinquished their holdings covering portions of the Koonenberry project not included in the NQM Agreement, with EMX and NQM electing not to acquire the ground. The Koonenberry project is now covered by 524 square kilometers of exploration tenements.

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Neavesville Property

The Neavesville project consists of a single exploration permit, totaling over 30 square kilometers, in the Hauraki goldfield of New Zealand's North Island. EMX acquired Neavesville, which covers a historic JORC gold-silver resource, on open ground with minimal cost. The property hosts epithermal gold-silver mineralization that has geologic features similar to other deposits of the Hauraki goldfield.

The project is under a definitive agreement with L&M giving L&M the right to acquire the wholly-owned EMX subsidiary that controls the Neavesville property. The agreement with L&M provides for work obligations, staged payments, milestone payments based upon JORC reserves, and commercial production payments, all to the benefit of Eurasian.

An L&M funded three hole (817.2 m) reconnaissance drill program was conducted in 2015 that intersected alteration and anomalous gold-silver mineralization projected beneath the historic Ajax underground workings and open pit. Also in 2015, the Neavesville exploration permits were amalgamated into a single permit (EP 51767). The permit was renewed for an additional five year period, and is now valid through April, 2020 pending timely completion of statutory work programs.

Qualified Person

Eric P. Jensen, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified and approved the above technical disclosure on Australia and New Zealand.

EUROPE

Scandinavia is a favorable jurisdiction for mineral exploration and development, and Eurasian has assembled a portfolio of 100% controlled projects in Sweden and Norway that are available for partnership. The Company continued to reduce expenditures in Scandinavia during 2015 while examining ways to add value and pursuing strategic partnerships. In addition to the exploration properties in Sweden and Norway, EMX also maintains a royalty interest in northern Sweden's Viscaria project, as well as a portfolio of royalty interests in Serbia that includes Reservoir's Cukaru Peki copper-gold discovery.

Sweden

Eurasian’s portfolio in Sweden includes the VMS projects at Gumsberg and Adak. In 2015, EMX made a strategic decision to focus its attention on its VMS projects in the Bergslagen and Skellefteå mining districts in southern and central Sweden. Key projects are summarized below:

• The Gumsberg polymetallic (lead-zinc-silver-copper-gold) VMS property occurs in the historic Bergslagen District of southern Sweden. In Q1 2015, a geophysical program was executed that appears to map extensions of known bodies of mineralization along strike, and has identified new exploration targets. Follow-up reconnaissance work was conducted during the summer field season, with additional field work scheduled for early 2016.

• The Adak project is located in the Skellefteå mining district, and has a record of historic production from four mining areas that exploited stratiform to stratabound chalcopyrite-rich VMS mineralization. Multiple additional exploration targets exist within the project area including projections of mineralization down dip and along strike from the historic workings, along with several undrilled geophysical anomalies.

The Iekelvare project, and portions of the Storåsen and Sakkek-Pikkujärvi projects were dropped in 2015 due to a lack of encouraging results. Eurasian closed its office in Kiruna in Q1 2015 to reduce expenditures.

EMX also holds an effective 0.5% NSR royalty interest in Avalon Minerals Ltd.'s Viscaria iron-copper property located in the Kiruna mining district of northern Sweden. Upon receipt of US$12 million in royalty revenues, the royalty rate increases to a 1.0% NSR. Avalon conducted ongoing drilling and commenced ESIA permitting during 2015. In Q4, Avalon completed an updated mineral resource estimate and "scoping study" based upon a combination open pit and underground scenario.

Norway

EMX initiated a program in 2014 to evaluate IOCG, VMS, and other opportunities in Norway, and has since acquired the Burfjord and Tynset properties by applying for exploration permits on open ground. Burfjord contains IOCG-type targets in northern Norway, and is marked by numerous historic mines and prospects, as well as outcropping copper and gold mineralization that surround the flanks of a 6 kilometer by 4 kilometer doubly-plunging anticlinal structure. The Tynset project represents a greater than 30 kilometer trend of VMS-style mineralization near the historic Røros mining district in southern Norway. The Tynset project encompasses multiple areas of historic mine workings and exploration prospects, some of which expose gold-rich styles of VMS mineralization. Little modern exploration has taken place along the trend, with the last programs being conducted in the mid-1980’s. In 2015, EMX evaluated multiple other projects in the region, dropped low priority projects, and continued to assess additional project areas in Norway for acquisition.

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Royalty Properties in Serbia

EMX's royalty portfolio in Serbia initially resulted from prospect generation and organic royalty growth via the 2006 sale of its properties, including Brestovac West and Deli Jovan, to Reservoir Capital Corp., for uncapped NSR royalties of 2% for gold and silver and 1% for all other metals. Reservoir Capital Corp. later transferred those interests to Reservoir Minerals Inc. (“Reservoir”). Subsequently, Eurasian acquired an uncapped 0.5% NSR royalty covering Reservoir's share of minerals and metals mined from the Brestovac and Jasikovo properties, which along with Brestovac West, are included in the Timok Project joint venture between Reservoir (45%) and Freeport (55%).

Brestovac hosts porphyry and epithermal copper-gold mineralization at the Cukaru Peki deposit. In January 2014, Reservoir announced an initial NI 43-101 resource estimate for the Cukaru Peki deposit’s Upper Zone High Sulphidation Epithermal (HSE) of copper and gold mineralization (see Reservoir news release dated January 27, 2014). According to Reservoir, the Upper Zone HSE inferred resource above a 1% copper equivalent ( CuEq% = Cu% + (Au g/t x 0.6)) cut-off was estimated to be 65.3 million tonnes at an average grade of 2.6% copper and 1.5 grams per tonne (g/t) gold, or 3.5% copper-equivalent, containing 1.7 million tonnes (3.8 billion pounds) copper and 3.1 million ounces gold or 2.3 million tonnes (5.1 billion pounds) copper-equivalent. Reservoir announced in a March 12, 2015 news release that a budget had been approved by the Timok Project joint venture "to move the project forward toward the completion of a scoping study". As well, Reservoir announced further "high-grade" copper-gold drill intercepts in Q3 and Q4, including 179 meters (556-735 m) averaging 10.75% copper and 10.86 g/t gold (estimated true thickness 84 m) and 186 meters (466-652 m) averaging 8.02% copper and 4.44 g/t gold (estimated true thickness 170.4 m) from ongoing exploration.

EMX's Timok Project royalty properties add strategic upside potential for Eurasian in one of the richest copper-gold mineral belts in Europe.

Qualified Person

Eric P. Jensen, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified and approved the above technical disclosure on Europe.

HAITI

EMX sold its Haiti Joint Venture interests in Q4 to partner Newmont Ventures Limited, a wholly owned subsidiary of Newmont. The now terminated Joint Ventures covered six designated exploration areas along a 130 kilometer trend of northern Haiti's Massif du Nord mineral belt. Pursuant to the transaction, Newmont acquired all of EMX's interest in the designated exploration areas on the following terms:

• Newmont paid US$4 million (CAD $5.3 million) in cash to EMX at closing;
• The Joint Ventures were terminated;
• EMX retains a 0.5% NSR royalty on the 49 Research Permit applications covering the designated exploration areas;
• EMX retains the right to acquire any properties proposed to be abandoned or surrendered by Newmont.

As a subsequent event in February 2016, EMX sold its 100% controlled Grand Bois gold-copper project, which was outside the Joint Ventures with Newmont, to a private Nevada corporation. EMX retained a 0.5% NSR royalty interest in the Grand Bois project and the right to acquire any properties proposed to be abandoned or surrendered from the Grand Bois project in the future.

As a result of these two transactions, all of EMX's interests in Haiti have now been converted into NSR royalties.

Qualified Person

Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed, verified and approved the above technical disclosure on Haiti.

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STRATEGIC INVESTMENTS

IG Copper LLC

EMX is a strategic investor in IGC, a privately held company that is in a joint venture with Freeport on the Malmyzh copper-gold porphyry project in Far East Russia. IGC has a 51% ownership interest in the Malmyzh joint venture, with Freeport retaining a 49% interest. IGC is operating and managing the project. The Salasinskaya and Shelekhovo projects, 150 kilometers northeast of Malmyzh, are 100% controlled by IGC and not subject to the joint venture with Freeport. Eurasian was an early investor in IGC, and is its largest shareholder, with approximately 42% of the issued and outstanding shares (36% equity position on a fully-diluted basis) from investments totaling US$7.8 million.

Malmyzh is a grassroots, district-scale discovery with fourteen porphyry copper-gold prospects identified within a 16 by 5 kilometer intrusive corridor. The project has excellent logistics and available infrastructure, and is located 220 kilometers northeast of the Russia-China border at Khabarovsk. There were a number of significant advancements at Malmyzh during 2015:

• WAI provided a statement of inferred resources for the Malmyzh project under NI 43-101 and CIM definition standards. The open pit constrained inferred resources at a 0.30% copper equivalent cut-off are 1,661 million tonnes at average grades of 0.34% copper and 0.17 g/t gold, or 0.42% copper-equivalent, containing 5.65 million tonnes (12.45 billion pounds) copper and 9.11 million ounces gold, or 7.06 million tonnes (15.56 billion pounds) copper -equivalent *. See EMX's May 26, 2015 news release and SEDAR filed technical report titled "NI 43-101 Technical Report on the Initial Mineral Resource Estimate for the Malmyzh Copper-Gold Project, Khabarovsk Krai, Russian Federation" with an effective date of May 1, 2015 and dated July 10, 2015 for more information on the CuEq calculation, exploration results, QA/QC procedures, and methodology used to estimate the Malmyzh inferred resources.

• IGC advised that Russian Federation GKZ “reserves” had been added to the "state balance", and as a result the “prospecting phase” for Malmyzh had been completed. The Malmyzh “official GKZ approved reserves” were estimated according to the rules and regulations of the Russian Federation, and are not the same as reserves under NI 43 -101.

• IGC advised it had signed a Financial Advisory Agreement with the Russian Federation's Far East Development Fund and that the Malmyzh Joint Venture was named "Explorer of the Year" at the 2015 MINEX Forum in Moscow.

• IGC advised that the "Malmyzh Flanks" exploration license was granted. This new license expanded the Malmyzh land position for a total of 226.9 square kilometers, and includes additional areas for potential project infrastructure as well as extensions to known exploration targets.

• The Joint Venture is proceeding with acquiring project approvals to continue with the “advanced exploration and mining phase” of development as required for “strategically significant” deposits in the Russian Federation. IGC has informed
  EMX that the process is moving forward at a steady pace.

Overall, the Russian government strongly supports mining investment and development in their Far East Krais (administrative regions). IGC is encouraged by, and appreciative of, the strong measures of support for advancing a project recognized as an exceptional asset with world-class potential.

* Copper equivalent calculated as CuEq = Cu% + (Au g/t * 0.5), based on assumed prices of $3.25/lb Cu and $1400/oz Au, with recoveries of 90% for Cu and 70% for Au.

Revelo Resources Corp.

EMX has a strategic investment in Revelo. Revelo controls approximately 350,000 hectares of 100% owned exploration tenements. The portfolio is comprised of exploration projects prospective for copper, gold and silver, including the Montezuma project under JV agreement with a subsidiary of Newmont Mining Corp. Revelo also retains a 2% royalty interest in the Victoria Project, an important copper-gold-silver exploration project in northern Chile.

Qualified Person

Dean D. Turner, CPG, a Qualified Person as defined by NI 43-101 and consultant to the Company, has reviewed, verified and approved the above technical disclosure on Strategic Investments.

GEOTHERMAL ROYALTIES

EMX initiated a geothermal energy program in 2010, and acquired assets in Slovakia and Peru. Eurasian subsequently sold its geothermal assets in 2013 to SGL for cash payments, an equity position in SGL, and gross royalties of 1.0% in Slovakia and 0.5% in Peru from future geothermal energy production. EMX’s geothermal royalty properties in Slovakia are located in the Ziar Basin of west-central Slovakia and in the eastern part of the country, including the Pannonian Basin. SGL advises that 2015's Slovakia work included identifying drilling sites and ongoing resource reviews. EMX also has royalties on SGL geothermal licenses that occur in prospective regions of Peru’s Western and Eastern Cordillera. SGL advises that the lack of available transmission capacity is currently delaying the growth of the Peruvian geothermal industry.

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Operating Results

Year Ended December 31, 2015, 2014 and 2013

The net loss for the year ended December 31, 2015 (“FY15”) was $6,875,857 compared to $17,448,041 for the prior year

(“FY14”) and $13,982,612 for the year ended December 31, 2013 (“FY13”). The loss for FY15 was made up of a net royalty loss of $187,773 (2014 – income $801,836; 2013 – income $1,280,997) after depletion and related tax, net exploration expenditures of $4,364,675 (2014 - $5,022,658; 2013 - $3,819,107), general and administrative expenditures of $3,535,534 (2014 - $4,460,797; 2013 - $5,142,738) and other losses totaling $2,219,105 (2014 – $12,122,893, 2013 – $8,694,709) offset by a deferred income tax recovery of $3,431,230 (2014 - $3,356,471; 2013 - $2,392,945). Included in other losses was $3,973,699 (2014 - $7,371,765; 2013 - $4,765,511) in impairment charges related to the Carlin Trend Royalty Claim Block and related assets, and a gain on the sale of exploration and evaluation assets of $5,393,305 compared to a loss of $154,533 in the prior year, and a gain of $205,940 in FY13. Some items to note are:

Revenues

In FY15, royalty income was earned for 1,096 (2014 – 1,578; 2013 - 1,912) ounces of gold totaling $1,609,553 (2014 - $2,247,334; 2013 - $3,102,888) offset by gold tax and depletion of $1,797,326 (2014 - $1,445,498; 2013 - $1,821,891) for net royalty loss of $187,773 (2014 – income $801,836, 2013 – income $1,280,997). The decrease in royalty income was mainly due to a decrease in ounces produced and a lower realized gold price per ounce in the current period. In FY15 the average realized gold price was US$1,160 per ounce compared to US$1,263 for 2014, and US$1,490 for 2013.

Exploration Expenditures

Exploration expenditures (gross) decreased by $1,952,202 in FY15 compared to FY14, and decreased by $1,715,398 in FY14 compared to FY13. Recoveries decreased by $1,294,219 in FY15 compared to FY14, and decreased by $2,918,949 in FY14 compared to FY13 for a net decrease in exploration expenditures of $657,983 in FY15 compared to FY14, and a net increase in exploration expenditures of $1,203,551 in FY14 compared to FY13. Some of the differences between 2015 and 2014 are as follows:

• In Scandinavia, net expenditures decreased by $470,550 compared to the prior period. In 2015, the Company continued to support its exploration programs in Scandinavia, encouraged by decreasing levels of competition in the minerals sector, and increasing availability of prospective ground that could be acquired at low cost. In continuing with 2014, the Company continues to filter and upgrade its portfolio of assets, adding key copper, gold and polymetallic exploration projects in both Sweden and Norway while relinquishing less prospective areas and project interests. At the same time, Eurasian has continued to actively market its project interests in Scandinavia and will continue to do so in 2016. Expenditures in 2015 were directed toward sustaining costs for its offices and personnel, as well as conducting reconnaissance exploration across the region and hosting potential partners for site visits to various projects. Eurasian’s staff in Scandinavia is retained on a consulting basis only, in order to keep costs low during times of inactivity.

• In the USA, gross expenditures decreased from $3,657,918 to $2,713,477 and recoveries decreased from $2,221,662 to $901,385. In the prior year the Company and partners Kennecott, Savant, and Vale undertook active programs at Lomitas Negras, Buckhorn Creek, Frazier Creek, Jasper Canyon, and Copper Basin while there were no active programs for 2015. Gross expenditures on these projects decreased from US$1,227,351 to US$133,489. The decrease in expenditures was offset by US$277,031 in expenditures related to Kennecott pursuant to the new exploration and option agreement on the Superior West property. The Americas continue to represent a potentially high value, low cost exploration venue coupled with a large list of prospective partners to conduct EMX’s business model. Despite tough market conditions, base-metal projects still appear to be sought after and BCE is in discussions with several groups regarding its properties. A major focus of BCE for the year will remain to partner available assets, reduce holding costs, and recover a portion of its burn.

• In Turkey, gross expenditures increased by $88,117, while net expenditures increased by $121,001. In 2015, the Turkish Business Unit continued to be a key value driver for Eurasian. Partner funded programs continued to advance projects in the Eurasian portfolio, with 5 of the 7 projects in Turkey operating under partnerships. In 2015 the Company regained 100% control of the Sisorta and Akarca properties, and closed its exploration office in Ankara. In 2015 Eurasian changed its focus from early stage, grass-roots style generative work, to working with partners on advancing its projects and monitoring its royalty interests throughout the country. This work will be managed by Dama Engineering (“Dama”), a well-respected consultant and engineering firm in the Turkish mining community. Eurasian views its partnership with Dama as a key step in the evolution of its business interests in Turkey.
  
  

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• In the Asia Pacific region, net expenditures for 2015 totaled $294,051 compared to $749,610 in 2014 as the Company operated under a reduced expenditure rate. The Koonenberry project was reduced in scope with Arastra relinquishing their holdings and North Queensland relinquishing a portion of their holdings in the project. The Company elected not to acquire this ground. North Queensland continues to advance the Koonenberry project under the active exploration and option agreement. The Neavesville project is under a definitive agreement with L&M giving L&M the right to acquire the wholly-owned EMX subsidiary that controls the Neavesville property. In 2014, prior to partnership, Eurasian had conducted drilling at Neavesville, and had negotiated a comprehensive access agreement with one of the local Maori communities, providing ongoing access, and exploration and development rights across much of the Neavesville license. No such expenditures were incurred on the Neavesville project in the current year..

General and Administrative

General and administrative expenses (“G&A”) of $3,535,534 were incurred compared to $4,460,797 in FY14 and $5,142,738 in FY13. G&A costs (before share-based payments) have decreased each year since 2012 and the Company continues to strive to find areas to further streamline and reduce the expenses of our business. Significant changes in the current year compared to the previous years include:

• Share-based payments decreased by $560,295 in FY15 compared to FY14, and increased by $502,916 in FY14 compared to FY13. The difference between FY15 and FY14 being the result of a significant decrease in the fair value of options granted during the year from $1.18/share to $0.66/share in the current period. Eurasian also granted fewer shares as incentive stock grants, and there were no such options granted in FY13.

• Investor relations and travel expenditures decreased from by $73,286 and $69,533 in FY15 compared to FY14, and by $18,186 and $41,469 in FY14 compared to FY13 respectively as the Company made changes to budgets, and implemented cost cutting measures.

• Administrative and office expenses of $900,453 in the current year were comparable to the prior year of $926,905, and $982,239 in FY13. The Company has a corporate office in Vancouver which manages the finance, regulatory and administrative functions. It also has a regional office in Littleton, Colorado which supports the exploration, technical, investor relations and deal flow aspects of the business.

• Salaries and consultants are the largest expense in G&A. This expense category encompasses a broad range of management, technical and project development and marketing support. It should be noted that many of our personnel expenditures companywide are denominated in United States dollars (“USD”) and the increase in the value of the USD compared to the Canadian dollar, which is our reporting currency, will increase expenditures. Salaries and consultants decreased by $295,978 in FY15 compared to FY14, and by $985,946 in FY14 compared to FY13. The Company made changes to staffing and other budgets. A significant change in staffing included the departure of the Company’s Chief Operating Officer.

Other

• The Company recognized a net gain on the sale of certain exploration and evaluation assets during the year of $5,393,305 compared to a loss of $154,533 in the prior year, and a gain of $205,940 in FY13. The significant gain in FY14 was the result of the sale of certain interests in Haiti to Newmont for a US$4,000,000 ($5,277,542) cash payment and a retained 0.5% NSR royalty interest.

• As a result of the decline in the production of gold from the Carlin Trend Royalty Claim Block, and decrease in the realized gold prices, the Company revised its estimated annual gold production over the expected mine life and decreased its long term gold price forecast from US$1300 to US$1200 per ounce. As a result, the Company recorded $3,973,699 (2014 - $7,371,765; 2013 - $4,765,511) in impairment charges related to the Carlin Trend Royalty Claim Block and related assets that make up the same cash-generating unit (“CGU”).

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• The Company applied a one-step approach and determined the Carlin Trend Royalty Claim Block and the related assets within the same CGU to be impaired. The loss was first applied to reduce the asset component and any excess to goodwill within the CGU. As result, the Company has written down the goodwill by $3,047,605 (2014 - $2,248,057; 2013 – $Nil).

• The Company recorded a deferred income tax recovery of $3,431,230 compared to $3,356,471 in 2014, and $2,392,945 in 2013, and a net decrease in deferred tax liabilities of $1,715,656 (2014 - $2,493,010; 2013 - $1,779,707). A significant component of the deferred tax recovery and decrease in the related liability is the result of the impairment of the royalty interest partially offset by a cumulative translation loss as a result of the strengthening $USD compared to $CAD.

• The Company’s share of the net loss related to its 42.22% (2014 - 42.34%, 2013 – 40.96%) equity investment in IGC for the year ended December 31, 2015 was $1,062,146 (2014 - $1,086,649, 2013 - $2,093,823).

SIGNIFICANT INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD

The Company has a 42.22% equity investment in IGC. At December 31, 2015, the Company has paid an aggregate of US$7,892,345 towards its investment (2014 - US$7,892,345; 2013 - $6,829,309). At December 31, 2015, the Company’s investment less its share of accumulated equity losses was $3,394,255 (2014 - $4,072,737; 2013 - $3,960,650). The Company’s share of the net loss for the year ended December 31, 2015 was $1,062,146 (2014 - $1,086,649; 2013 - $2,093,823).

The Company has a minority position on the Board of IGC, and does not control operational decisions. The Company’s judgment is that it has significant influence, but not control and accordingly equity accounting is appropriate.

At December 31, 2014, the Company had a 49% equity investment in a private Turkish company (“Turkish Co”) with Chesser Resources Ltd; an Australian Stock Exchange listed Exploration Company. During the year ended December 31, 2015, the Company purchased the remaining 51% interest in the Turkish company. As such, the books and records of the Turkish company are consolidated as a 100% owned subsidiary of the Company. The carrying value of the investment prior to the purchase and as at December 31, 2014 was $Nil and the Company’s share of the net loss of the joint venture for the year ended December 31, 2015 was $Nil (2014 - $Nil; 2013 - $Nil).

As at December 31, 2015, associated companies’ aggregate assets, aggregate liabilities and net loss for the year are as follows:

As at December 31, 2014, associated companies’ aggregate assets, aggregate liabilities and net loss for the year are as follows:

As at December 31, 2013, associated companies’ aggregate assets, aggregate liabilities and net loss for the period are as follows:

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The year ended December 31, 2015 saw an impairment charge of $3,973,699 (2014 - $7,371,765; 2013 - $4,765,511) on the royalty interests, a related write-down of goodwill of $3,047,605 (2014 - $2,248,057; 2013 - $Nil), and a recovery of $3,431,230 (2014 - $3,356,471; 2013 - $2,392,945) of deferred income taxes, offset by a gain of $5,393,305 (2014 – loss $154,533; 2013 – gain $205,940) on the acquisition and sale of exploration and evaluation assets which had a significantly impact on the net losses for the respective fiscal years.

OUTSTANDING SHARE DATA

At March 24, 2016, the Company had 73,784,710 common shares issued and outstanding. There were also 5,130,500 stock options outstanding with expiry dates ranging from July 19, 2016 to June 8, 2020.

Critical Accounting Policies and Estimates

STATEMENT OF COMPLIANCE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

These consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

These consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit or loss or available for sale, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

Summary of Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements comprise the accounts of Eurasian, the parent company, and its controlled subsidiaries, after the elimination of all significant intercompany balances and transactions.

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Subsidiaries

Subsidiaries are all entities over which the Company has exposure to variable returns from its involvement and has the ability to use power over the investee to affect its returns. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company until the date on which control ceases.

The accounts of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Inter-company transactions, balances and unrealized gains or losses on transactions are eliminated. The Company’s principal operating subsidiaries are as follows:

Functional and Reporting Currency

The functional currency is the currency of the primary economic environment in which the entity operates. The functional currency for the Company and its subsidiaries is the Canadian dollar except the functional currency of the operations of Bullion Monarch which is the US dollar. The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates.

Translation of transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Monetary assets and liabilities denominated in foreign currencies are re-measured at the rate of exchange at each financial position date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss.

On translation of the entities whose functional currency is other than the Canadian dollar, revenues and expenses are translated at the exchange rates approximating those in effect on the date of the transactions. Assets and liabilities are translated at the rate of exchange at the reporting date. Exchange gains and losses, including results of re-translation, are recorded in the foreign currency translation reserve.

Financial Instruments

All financial instruments are classified into one of the following four categories:

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The Company’s financial instruments consist of cash and cash equivalents, investments, receivables, restricted cash, reclamation bonds, convertible notes receivable, accounts payable and accrued liabilities, and advances from joint venture partners. Unless otherwise noted the fair value of these financial instruments approximates their carrying values.

Cash and cash equivalents are classified as financial assets as loans and receivables and are accounted for at fair value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

Warrants held through investments are classified as derivative financial assets at FVTPL and are accounted for at fair value. For warrants that are not traded on an exchange, no market value is readily available. When there are sufficient and reliable observable market inputs, a valuation technique is used; if no such market inputs are available, the warrants are valued at intrinsic value, which is equal to the higher of the market value of the underlying security less the exercise price of the warrant, or zero.

Investments (Marketable securities) are classified FVTPL and are measured at fair market value. Marketable securities transferred to the Company as part of an acquisition are classified as AFS and are carried at fair market value. Changes in fair value of FVTPL assets are reflected in profit or loss in the period in which they occur. Changes in fair value of AFS assets are reflected in accumulated other comprehensive income on the statement of financial position until sold or if there is an other than temporary impairment in value.

Reclamation bonds are classified as financial assets held-to-maturity.

Restricted cash is classified as financial assets at FVTPL.

The Company classifies its receivables as loans and receivables and its accounts payable and accrued liabilities and advances from joint venture partners as other financial liabilities.

Impairment of Financial Assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the financial assets have been impacted.

For all financial assets, objective evidence of impairment could include:

• Significant financial difficulty of the issuer or counterparty;
• Default or delinquency in interest or principal payments; or,
• It becoming probable that the borrower will enter bankruptcy or financial re-organization.

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For certain categories of financial assets, that are assessed not to be impaired individually, are subsequently assessed for impairment on a collective basis. The carrying amount of financial assets is reduced by the impairment loss directly for all financial assets with the exception of receivables, where the carrying amount is reduced through the use of an allowance account. When a receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss.

With the exception of FVTPL marketable securities, if in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of AFS marketable securities, impairment losses previously recognized through profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized directly in equity.

Convertible Notes Receivable

The notes receivable are hybrid financial assets that consist of a note receivable component and a separate equity conversion component. The notes receivable are measured at fair value on initial recognition by discounting the stream of future interest and principal payments at the rate of interest prevailing at the date of the issue for instruments of similar term and risk. Interest income based on the rate of the note and the accretion of the additional interest to the amount that will be receivable on maturity are recognized through profit and loss as interest income. The equity conversion option is an embedded derivative that has been separated from the notes receivable and is valued based on residual value. The embedded derivative is not revalued subsequent to initial measurement unless terms of the original loan are changed.

Investments in Associated Companies

The Company accounts for its long-term investments in affiliated companies over which it has significant influence on the equity basis of accounting, whereby the investment is initially recorded at cost, adjusted to recognize the Company’s share of earnings or losses and reduced by dividends received.

The Company assesses its equity investments for impairment if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the equity investment and that the event or events has an impact on the estimated future cash flow of the investment that can be reliably estimated. Objective evidence of impairment of equity investments includes:

• Significant financial difficulty of the associated companies;
• Becoming probable that the associated companies will enter bankruptcy or other financial reorganization; or,
• National or local economic conditions that correlate with defaults of the associated companies.

Exploration and evaluation assets and exploration expenditures

Acquisition costs for exploration and evaluation assets, net of recoveries, are capitalized on a property-by-property basis. Acquisition costs include cash consideration and the value of common shares, based on recent issue prices, issued for exploration and evaluation assets pursuant to the terms of the agreement. Exploration expenditures, net of recoveries, are charged to operations as incurred. After a property is determined by management to be commercially feasible, subsequent development expenditures on the property will be capitalized.

When there is little prospect of further work on a property being carried out by the Company or its partners, when a property is abandoned, or when the capitalized costs are no longer considered recoverable, the related property costs are written down to management’s estimate of their net recoverable amount. The costs related to a property from which there is production, together with the costs of production equipment, will be depleted and amortized using the unit-of-production method.

An exploration and evaluation asset acquired under an option agreement, where payments are made at the sole discretion of the Company, is capitalized at the time of payment. Option payments received are treated as a reduction of the carrying value of the related acquisition cost for the mineral property until the payments are in excess of acquisition costs, at which time they are then credited to profit or loss. Option payments are at the discretion of the optionee and, accordingly, are accounted for when receipt is reasonably assured.

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Revenue recognition

The Company recognizes revenue in accordance with IAS 18 Revenue and based upon amounts contractually due pursuant to the underlying royalty agreements. Specifically, royalty revenue is recognized in accordance with the terms of the underlying royalty agreements subject to (i) when persuasive evidence of an arrangement exists; (ii) the risks and rewards having been transferred; (iii) the royalty or stream being fixed or determinable; and (iv) the collectability of the royalty being reasonably assured. In some instances, the Company will not have access to sufficient information to make a reasonable estimate of revenue and, accordingly, revenue recognition is deferred until management can make a reasonable estimate. Royalty revenue may be subject to adjustment upon final settlement of estimated metal prices, weights, and assays. Adjustments to revenue from metal prices are recorded monthly and other adjustments are recorded on final settlement and are offset against revenue when incurred.

Royalty interests

Royalty interests in mineral properties include acquired royalty interests in production stage and exploration stage properties. In accordance with IAS 38 Intangible Assets , the cost of acquired royalty interests in mineral properties is capitalized as intangible assets.

Acquisition costs of production stage royalty interests are depleted using the units of production method over the life of the related mineral property, which is calculated using estimated reserves. Acquisition costs of royalty interests on exploration stage mineral properties, where there are no estimated reserves, are not amortized. At such time as the associated exploration stage mineral interests are converted to estimated reserves, the cost basis is amortized over the remaining life of the mineral property, using the estimated reserves. The carrying values of exploration stage mineral interests are evaluated for impairment at such time as information becomes available indicating that the production will not occur in the future.

Goodwill

Goodwill represents the excess of the price paid for the acquisition of a consolidated entity over the fair value of the net identifiable tangible and intangible assets and liabilities acquired in a business combination. Goodwill is allocated to the cash generating unit to which it relates.

Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may be impairment. Impairment is determined by assessing if the carrying value of a cash generating unit, including the allocated goodwill, exceeds its recoverable amount.

Property and equipment

Property and equipment is recorded at cost. Equipment is depreciated over its estimated useful life using the declining balance method at a rate of 20% per annum. Depreciation on equipment used directly on exploration projects is included in exploration expenditures for that mineral property.

Decommissioning liabilities

Decommissioning liabilities are recognized for the expected obligations related to the retirement of long-lived tangible assets that arise from the acquisition, construction, development or normal operation of such assets. A decommissioning liability is recognized in the period in which it is incurred and when a reasonable estimate of the fair value of the liability can be made with a corresponding decommissioning cost recognized by increasing the carrying amount of the related long-lived asset.

The decommissioning cost is subsequently allocated in a rational and systematic method over the underlying asset’s useful life. The initial fair value of the liability is accreted, by charges to profit or loss, to its estimated future value.

Environmental disturbance restoration

During the operating life of an asset, events such as infractions of environmental laws or regulations may occur. These events are not related to the normal operation of the asset and are referred to as environmental disturbance restoration provisions. The costs associated with these provisions are accrued and charged to profit or loss in the period in which the event giving rise to the liability occurs. Any subsequent adjustments to these provisions due to changes in estimates are also charged to profit or loss in the period of adjustment. These costs are not capitalized as part of the long-lived assets’ carrying value.

Impairment of assets

Events or changes in circumstances can give rise to significant impairment charges or reversals of impairment in a particular year. The Company assesses its cash generating units annually to determine whether any indication of impairment exists.

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Where an indicator of impairment exists, an estimate of the recoverable amount is made, which is the higher of the fair value less costs to sell and value in use. The determination of the recoverable amount for value in use requires the use of estimates and assumptions such as long-term commodity prices, discount rates, future capital requirements, exploration potential and future operating performance. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, bank deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash.

Share-based payments

Share-based payments include option and stock grants granted to directors, employees and non-employees. The Company accounts for share-based compensation using a fair value based method with respect to all share-based payments measured and recognized, to directors, employees and non-employees. For directors and employees, the fair value of the options and stock grants is measured at the date of grant. For non-employees, the fair value of the options and stock grants is measured on the earlier of the date at which the counterparty performance is complete, or the date the performance commitment is reached, or the date at which the equity instruments are granted if they are fully vested and non-forfeitable. For directors, employees and non-employees, the fair value of the options and stock grants is accrued and charged to operations, with the offsetting credit to share based payment reserve for options, and commitment to issue shares for stock grants over the vesting period. If and when the stock options are exercised, the applicable amounts are transferred from share-based payment reserve to share capital. When the stock grants are issued, the applicable fair value is transferred from commitment to issue shares to share capital. Option based compensation awards are calculated using the Black-Scholes option pricing model while stock grants are valued at the fair value on the date of grant.

Income taxes

Income tax expense consists of current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is calculated providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is not recognized on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable income nor loss. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable income will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Income (loss) per share

Basic income or loss per share is calculated by dividing the net income or loss for the year by the weighted average number of shares outstanding during the year. Diluted income or loss per share is calculated whereby the weighted average number of shares outstanding used in the calculation of diluted income or loss per share assumes that the deemed proceeds received from the exercise of stock options, share purchase warrants and their equivalents would be used to repurchase common shares of the Company at the average market price during the year, if they are determined to have a dilutive effect.

Existing stock options and share purchase warrants have not been included in the current year computation of diluted loss per share as to do so would be anti-dilutive. For the years presented the basic and diluted losses per share are the same.

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Valuation of equity units issued in private placements

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component.

The fair value of the common shares issued in the private placements was determined to be the more easily measurable component and were valued at their fair value, as determined by the closing quoted bid price on the day prior to the issuance date. The balance, if any, was allocated to the attached warrants. Any fair value attributed to the warrants is recorded in reserves.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the Chief Executive Officer.

Classification of investments as subsidiaries, joint ventures, associated company and portfolio investments

Classification of investments requires judgement as to whether the Company controls, has joint control of or significant influence over the strategic financial and operating decisions relating to the activity of the investee. In assessing the level of control or influence that the Company has over an investment, management considers ownership percentages, board representation as well as other relevant provisions in shareholder agreements. If an investor holds 20% or more of the voting power of the investee, it is presumed that the investor has significant influence, unless it can be clearly demonstrated that this is not the case. Conversely, if the investor holds less than 20% of the voting power of the investee, it is presumed that the investor does not have significant influence, unless such influence can be clearly demonstrated.

Accounting pronouncements not yet effective

IFRS 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities and introduces new rules for hedge accounting. In July 2014, the IASB made further changes to the classification and measurement rules and also introduced a new impairment model. These latest amendments now complete the new financial instruments standard.

IFRS 9 requires financial assets to be classified into three measurement categories on initial recognition: those measured at fair value through profit and loss, those measured at fair value through other comprehensive income and those measured at amortized cost. Measurement and classification of financial assets is dependent on the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. For financial liabilities, the standard retains most of the IAS 39 requirements.

The effective date for IFRS 9 is January 1, 2018. The Company is currently evaluating the impact that the final standard is expected to have on its consolidated financial statements.

In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers ("IFRS 15"), which supersedes IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers, and SIC 31 Revenue - Barter Transactions involving Advertising Services. IFRS 15 establishes a single five-step model framework for determining the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.

Critical Accounting Judgments and Significant Estimates and Uncertainties

The preparation of the consolidated financial statements requires management to make judgments and estimates and form assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported revenue and expenses during the periods presented therein. On an ongoing basis, management evaluates its judgments and estimates in relation to assets, liabilities, royalty revenues and expenses. Management bases its judgments and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.

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The Company has identified the following critical accounting policies in which significant judgments, estimates and assumptions are made and where actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods. Further details of the nature of these assumptions and conditions may be found in the relevant notes to the consolidated financial statements.

In accordance with the Company’s accounting policy, royalty interests are evaluated on a periodic basis to determine whether there are any indications of impairment. If any such indication exists, a formal estimate of recoverable amount is performed and an impairment loss recognized to the extent that carrying amount exceeds recoverable amount. The recoverable amount of a royalty asset is measured at the higher of fair value less costs to sell and value in use. The determination of fair value and value in use requires management to make estimates and assumptions about expected production and sales volumes, the proportion of areas subject to royalty rights, commodity prices (considering current and historical prices, price trends and related factors), and reserves. These estimates and assumptions are subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the assets may be further impaired or the impairment charge reduced with the impact recorded in profit or loss.

Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may be impairment. Impairment is determined by assessing if the carrying value of a cash generating unit, including the allocated goodwill, exceeds its recoverable amount. The assessment of the recoverable amount used in the goodwill impairment analysis is subject to similar judgments and estimates as described above for property and equipment and royalty interests.

Recorded costs of exploration and evaluation assets are not intended to reflect present or future values of exploration and evaluation assets. The recorded costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge, that a change in future conditions could require a material change in the recognized amount.

The Company’s accounting policy for taxation requires management’s judgment as to the types of arrangements considered to be a tax on income in contrast to an operating cost. Judgment is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognized on the statement of financial position.

Deferred tax assets, including those arising from unused tax losses, capital losses and temporary differences, are recognized only where it is considered probable that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary differences caused principally by the expected royalty revenues generated by the royalty property are recognized unless expected offsetting tax losses are sufficient to offset the taxable income and therefore, taxable income is not expected to occur in the foreseeable future. Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, and reserves. Judgments are also required about the application of income tax legislation in foreign jurisdictions. These judgments and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized on the statement of financial position and the amount of other tax losses and temporary differences not yet recognized. In such circumstances, some or the entire carrying amount of recognized deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to profit or loss.

5.B. Liquidity and Capital Resources

The Company’s working capital position at December 31, 2015 was $5,787,109 (December 31, 2014 - $7,096,916; December 31, 2013 - $14,217,999). With its current plans for the year and the budgets associated with those plans, in order to continue funding its administrative and exploration expenditures for beyond twelve months from the date of this Form 20-F, the Company will need to obtain additional cash and anticipates either financing or selling one or more of its assets. Historically, the Company obtains its cash requirements through the issuance of shares, funding from joint venture partners, royalty income, attracting additional joint venture partners and the sale of available investments and marketable securities all of which are used to finance further property acquisitions, explore and develop its mineral properties, and obtain strategic investments.

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Operating Activities

Cash used in operations was $5,082,224 for the year ended December 31, 2015 (2014 - $4,781,944; 2013 - $5,785,887) and represents expenditures primarily on mineral property exploration and general and administrative expense for both periods, offset by royalty income received in the year.

Financing Activities

The Company received $Nil in 2015 (2014 - $Nil; 2013 - $361,600) from the exercise of stock options and $Nil in 2015 (2014 - $Nil; 2013 - $Nil) from the exercise of warrants.

Investing Activities

Some of the significant investment activities during the year ended December 31, 2015 are:

• The Company sold certain interests in Haiti to Newmont for a US$4,000,000 ($5,277,542) cash payment and a retained 0.5% NSR royalty interest.
• The Company advanced $973,236 to an associated company pursuant to a convertible loan agreement.
• The Company purchased an additional 51% of the shares of the Company that owns Sisorta in Turkey for AU$162,092 so that it now owns 100% of the project.
• The Company received $136,263 in net proceeds from the purchase and sale of marketable securities.
• The Company purchased strategic investments in Revelo for $Nil (2014 - $500,000; 2013 - $480,000)
• The Company invested $Nil (2014 - $1,063,036; 2013 - $2,774,570) in IGC.

5.C. Research and Development, Patents and Licenses, etc.

See subtopic “Exploration Expenditures” under “Item 5.A., Operating Results”.

5.D. Trend Information

See “Property Overview” under “Item 5, Operating and Financial Review and Prospects”, and “Other” under “Item 5.A., Operating Results”.

5.E. Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

5.F Tabular Disclosure of Contractual Obligations

The Company has no Contractual Obligations.