Form 20-F - Annual and transition report of foreign private issuers [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report ______________________

Commission file number: 000-54728

Avrupa Minerals Ltd.

(Exact name of Registrant as specified in its charter)

British Columbia, Canada

(Jurisdiction of incorporation or organization)

Suite 410 – 325 Howe Street, Vancouver, British Columbia, Canada V6C 1Z7

(Address of principal executive offices)

Winnie Wong, Chief Financial Officer

410-325 Howe Street. Vancouver, BC V6C 1Z7, Canada

Phone: 604-687-3520 Ext 236 Email: wwong@pacificopportunity.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities to be registered pursuant to Section 12(b) of the Act:

None

Securities to be registered pursuant to Section 12(g) of the Act:

Common Shares, no par value

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the Company’s classes of capital or common stock as of the close of the period covered by the annual report. 54,674,754 Common Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

If this report is an annual or a transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days. Yes x No ¨

Check whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer x	Smaller Reporting Company x
Emerging Growth Company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨

International Financial Reporting Standards as issued

by the International Accounting Standards Board x

Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ¨ Item 18 ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

Index to Exhibits on Page 77

Avrupa Minerals Ltd.

Form 20-F Annual Report

Table of Contents

	PART I	Page

Item 1.	Identity of Directors, Senior Management and Advisors	5
Item 2.	Offer Statistics and Expected Timetable	5
Item 3.	Key Information	5
Item 4.	Information on the Company	11
Item 5.	Operating and Financial Review and Prospects	44
Item 6.	Directors, Senior Management and Employees	49
Item 7.	Major Shareholders and Related Party Transactions	57
Item 8.	Financial Information	58
Item 9.	The Offer and Listing	59
Item 10.	Additional Information	61
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	73
Item 12.	Description of Other Securities Other Than Equity Securities	73

	PART II

Item 13.	Defaults, Dividend Arrearages and Delinquencies	73
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	73
Item 15.	Controls and Procedures	73
Item 16.	Reserved	74
Item 16A.	Audit Committee Financial Expert	74
Item 16B.	Code of Ethics	75
Item 16C.	Principal Accountant Fees and Services	75
Item 16D.	Exemptions from Listing Standards for Audit Committees	75
Item 16E.	Purchase of Equity Securities by the Issuer and Affiliated Purchasers	75
Item 16F.	Change in Registrant’s Certifying Accountant	75
Item 16G.	Corporate Governance	75
Item 16H.	Mine Safety Disclosure	75
Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	76
Item 16J.	Insider Trading Policies	76
Item 16K.	Cybersecurity	76

	PART III

Item 17.	Financial Statements	76
Item 18.	Financial Statements	76
Item 19.	Exhibits	77

METRIC EQUIVALENTS

For ease of reference, the following factors for converting metric measurements into imperial equivalents are provided:

To Convert from Metric	To Imperial	Multiply by

Hectares	Acres	2.471
Meters	Feet (ft.)	3.281
Kilometers (km)	Miles	0.621
Tonnes	Tons (2000 pounds)	1.102
Grams/tonne	Ounces (troy/ton)	0.029

INTRODUCTION

Avrupa Minerals Ltd. (Avrupa or the “Company”) was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia under the name Everclear Capital Ltd. The Company became a Capital Pool Corporation ("CPC") on September 2, 2008. On July 7, 2010, the Company changed its name and on July 13, 2010, the Company completed its qualifying transaction.

The Company qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act. The Company will continue to qualify as an emerging growth company until such time as the Company produces more than US$1.235 billion in gross revenue, the Company issues more than US$1 billion in non-convertible debt within a three-year period, the Company’s market capitalization exceeds US $700 million, or more than five years elapse from the time of its initial public offering in the United States. As an emerging growth company, the Company is exempt from the requirements of section 404(b) of the Sarbanes-Oxley Act, meaning that the Company is exempt from the requirement to obtain an external audit of its internal controls over financial reporting.

BUSINESS OF AVRUPA MINERALS LTD.

Avrupa is a mineral company engaged in the acquisition and exploration of mineral properties.

There are no known proven reserves of minerals on Avrupa’s properties. All of the Company's properties are currently at the exploration stage. The Company does not have any commercially producing mines or sites, nor is the Company in the process of developing any commercial mines or sites. The Company has not reported any revenue from operations since incorporation. As such, Avrupa is defined as an “exploration-stage company”.

FINANCIAL AND OTHER INFORMATION

In this Registration Statement, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (“CDN$” or “$”). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).

FORWARD-LOOKING STATEMENTS

Certain statements in this document constitute “forward-looking statements”. Some, but not all, forward-looking statements can be identified by the use of words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend,” statements that an action or event “may,” “might,” “could,” “should,” or “will” be taken or occur, or other similar expressions. Although the Company has attempted to identify important factors that could cause actual results to differ materially from expected results, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Registrant, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: the risks associated with outstanding litigation, if any, risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; uncertainties and risks related to carrying on business in foreign countries; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officers, directors or promoters of the Registrant with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of the Registrant’s common share price and volume; and tax consequences to U.S. Shareholders. We are not obligated to keep our information current and revise any forward-looking statements because of new information, future events or otherwise.

Part I

Item 1. Identity of Directors, Senior Management and Advisors

Not Applicable

Item 2. Offer Statistics and Expected Timetable

Not Applicable

Item 3. Key Information

As used within this Annual Report, the terms “Avrupa”, “the Company”, “Issuer” and “Registrant” refer collectively to Avrupa Minerals Ltd., its predecessors, subsidiaries and affiliates.

Table No. 1 sets forth the rate of exchange for the Canadian Dollar at the end of the five most recent annual periods December 31st, the average rates for the period, and the range of high and low rates for the period.

For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York. The table sets forth the number of Canadian dollars required under that formula to buy one U.S. Dollar. The average rate means the average of the exchange rates on the last day of each month during the period.

Canadian Dollar/U.S. Dollar

Period	Average	High	Low	Close

Year Ended 12/31/23	$ 1.35	$ 1.39	$ 1.31	$ 1.32
Year Ended 12/31/22	1.30	1.39	1.25	1.35
Year Ended 12/31/21	1.26	1.29	1.20	1.28
Year Ended 12/31/20	1.34	1.45	1.27	1.28
Year Ended 12/31/19	1.32	1.36	1.30	1.30

Three Months Ended 12/31/23	$ 1.36	$ 1.39	$ 1.32	$ 1.32
Three Months Ended 9/30/23	1.34	1.37	1.33	1.35
Three Months Ended 6/30/23	1.35	1.36	1.31	1.32
Three Months Ended 3/31/23	1.35	1.38	1.33	1.35

Three Months Ended 12/31/22	$ 1.35	$ 1.39	$ 1.33	$ 1.35
Three Months Ended 9/30/22	1.32	1.38	1.27	1.38
Three Months Ended 6/30/22	1.28	1.31	1.25	1.29
Three Months Ended 3/31/22	1.26	1.29	1.25	1.25

Three Months Ended 12/31/21	$ 1.27	$ 1.29	$ 1.23	$ 1.28
Three Months Ended 9/30/21	1.26	1.29	1.23	1.27
Three Months Ended 6/30/21	1.23	1.26	1.20	1.24
Three Months Ended 3/31/21	1.27	1.28	1.24	1.26

December 2023		$ 1.36	$ 1.32	$ 1.32
November 2023		1.39	1.36	1.36
October 2023		1.39	1.36	1.39
September 2023		1.37	1.34	1.35
August 2023		1.36	1.33	1.35
July 2023		1.34	1.34	1.32

The exchange rate was $1.32 on December 31, 2023.

Statement of Capitalization and Indebtedness

Not applicable.

Reasons for the offer and use of proceeds

Not applicable.

Risk Factors

An investment in the Common Shares of the Company must be considered speculative due to the nature of the Company’s business and the present stage of exploration and development of its non-producing mineral properties. In particular, the following risk factors apply:

Risks Associated with Mineral Exploration

The Company is engaged in the mineral exploration business, which is highly speculative and has certain inherent risks which could have a negative effect on the Company

Mineral exploration is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environment protection, the combination of which factors may result in the Company not receiving an adequate return on investment capital.

All of the Company's mineral properties are at the exploration stage and all of the Company's exploration expenditures may be lost

The Company is at the exploration stage on all of its properties and substantial additional work and expenditures will be required in order to determine if any economic deposits occur on the Company’s properties. Mineral exploration is highly risky, and most exploration properties do not contain any economic deposits of minerals. If a property is determined to not contain any economic reserves of minerals, the entire amount spent on exploration will be lost.

The mineral industry is highly competitive

The Company will be required to compete in the future directly with other corporations that may have greater resources. Such corporations could outbid the Company for potential projects or produce minerals at lower costs which would have a negative effect on the Company’s operations.

Commodity prices may not support corporate profit

The resource industry in general is intensely competitive and there is no assurance that, even if commercial quantities of minerals are discovered and developed, a profitable market will exist for the sale of same. Factors beyond the control of the Company may affect the marketability of any minerals discovered. The price of natural resources are volatile over short periods of time, and is affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production. If the Company is unable to economically produce minerals from its projects, it would have a negative effect on the Company’s financial condition or require the Company to cease operations altogether.

The Company's mineral exploration activities are subject to substantial government regulatory requirements

The mineral projects in which the Company has an interest are located in Portugal, Finland, and Kosovo. The process for acquiring an interest in mineral concessions in these three countries is different from procedures for acquiring mining claims in Canada or the United States and involves certain risks not applicable in those jurisdictions.

These countries are politically stable European jurisdictions governed by democratically-elected leaders. In each of these countries, the legal, tax, and administrative institutions for business activities are in place, and processes and procedures are established and understood. In Kosovo, the legal and administrative framework for the mining industry has been established over the past ten years, first by the United Nations Mission in Kosovo and followed-up and further developed by the Kosovo government. Specifically, a new mining law, established in 2010, exists, and the independent regulator and oversight mechanism is functioning properly.

In Portugal, the rights and obligations associated with mining concession are governed by Direcção-Geral de Energia e Geologia (“DGEG”). A complete application, including detail work plans to be carried out, minimum planned amount of investment, the means of financing, financial standing and ability of the applicant, detailed measurements to be used for environmental protection and evidence of advertising such in a county newspaper and the official gazette, is submitted to the DGEG. Before a decision is made by the DGEG, the DGEG might request clarification of the proposal and further supporting documents and information about the application as well as having a hearing of the consultation office. Once the application is approved, the DGEG will sign the administrative contract (mining concession) with the applicant as well as publishing an abstract in the official gazette. In order to keep a mining concession valid and in effect, it is necessary to pay an annual license fee as well as putting up bonds for the claims.

In Kosovo, Independent Commission of Mines and Minerals (“ICMM”) oversees the exploration license application process. Under Official Gazette of the Republic of Kosova/Pristina, No. 80/27, Law No 08/L – 163, Article 21, an exploration license can be applied for a parcel of land no greater than 100 square kilometers, with a three-year term. Extension periods can be granted upon reducing the parcel of land by 50%; each extension is for an additional two years and can be done three times. To maintain the licenses, the company is required to report by the end of a calendar year all work performed and provide ICMM the financial report. Environmental safety regulations are followed in accordance to the European standards.

In Finland, the Ministry of Employment and the Economy is responsible for overseeing mining and exploration activities under the Mining Act, which was issued in June 2011. Currently, an exploration permit is required to conduct most exploration activities, while a mining permit is required to exploit any mineral deposit. Annual exploration permit fees range from €20 per hectare in the permit’s first 4 years to €50 per hectare in year 11 and beyond. However, the government has recently proposed changes to the existing act which would grant greater control over mining operations to local areas while increasing license fees.

Mineral exploration and mining activities in Portugal, Kosovo and Finland may be affected in varying degrees by political instability and government regulations relating to the mining industry. Any changes in regulations or shifts in political conditions are beyond the control of the Company and may adversely affect its business. Future operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriations of property, environmental legislation and mine safety.

Changes in these regulations or in their application are beyond the control of the Company and may adversely affect its operations, business and results of operations. The requirements to comply with these regulations may result in increased costs, as well as delays in obtaining the permits required to conduct operations. Failure to comply with the conditions set out in any permit or failure to comply with the applicable statutes and regulations may result in orders to cease or curtail operations or to install additional equipment. The Company may be required to compensate those suffering loss or damage by reason of its operating or exploration activities.

On the Federal, Provincial/Territorial and State level, the Company must comply with exploration permitting requirements which require sound operating and reclamation plans to be approved by the applicable government body prior to the start of exploration. Depending upon the type and extent of the exploration activities, the Company may be required to post reclamation bonds and/or assurances that the affected areas will be reclaimed. If the

reclamation requires funds in addition to those already allocated, the Company could be forced to pay for the extra work and it could have a significant negative effect upon the Company’s financial position and operations.

As the Company’s operations are primarily related to the exploration of our properties in these jurisdictions, many governmental regulations relating to mining activities are not yet application to the Company.

Our potential mining processing operations and exploration activities in these jurisdictions are subject to various laws governing land use, the protection of environment, prospecting, development, production, exports, taxes, labor standards, occupational health, mine safety and other matters. Such operations and exploration activities are also subject to substantial regulation under these laws by governmental agencies and may require that the Company obtain permits from various governmental agencies. The Company believes that it is in substantial compliance with all material laws and regulations which currently apply to the Company’s activities. There can be no assurance, however, that all permits which the Company may require for future operations will be obtainable on reasonable terms or that such laws and regulations would not have an adverse effect on any mining project which the Company might undertake.

Failure to comply with laws and regulations may result in orders being issued thereunder which may cause operations to cease or be curtailed or may require installation of additional equipment. Violators may be required to compensate those suffering loss or damage by reason of their mining activities and may be subject to fines or penal sanctions if convicted of an offense under such legislation.

Amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a material adverse impact on the Company or prevent development of the Company’s mining properties.

The jurisdictions that the Company has operations in have environmental legislation that requires that the mining concessionaire to obtain the authorization from the applicable environmental authorities to initiate any exploration or exploitation activity. Environmental legislation in these jurisdictions imposes potential liability on owners and/or operators of mining facilities which release hazardous substances into the environment and are required to carry out their operations using methods and techniques not liable to cause damage to the environment or the land-owner.

The Company’s title to its properties may be disputed by third parties which could result in the loss of title to its properties

The Company has only done a preliminary title survey of its exploration properties in accordance with industry standards. These procedures do not guarantee the Company’s title and therefore, in accordance with the laws of the jurisdictions in which these properties are situated, their existence and area could be in doubt. Unregistered agreements or transfers, or native land claims, may affect title. If title is disputed, the Company will have to defend its ownership through the courts, which would likely be an expensive and protracted process and have a negative effect on the Company’s operations and financial condition. In the event of an adverse judgment, the Company would lose its property rights.

Risks Relating to the Financing of the Company

The Company’s auditors have Expressed a “Going Concern” Opinion.

The Company’s auditor has included a “going concern” opinion in its auditors’ report to the Company's consolidated financial statements for the fiscal year ended December 31, 2023. The qualification was included as a result of the Company having no current source of revenue, incurring losses since inception, and the need to obtain additional financing. If the Company is unable to meet its obligations, it will not be able to fulfill its business plan and be forced to reduce certain operations or cease operations altogether.

The Company will require additional financing which could result in substantial dilution to existing shareholders

The Company, while engaged in the business of mineral exploration, is dependent on additional financing for planned exploration programs as outlined herein. Management anticipates being able to raise the necessary funds by means of equity financing. The ongoing exploration of the Company’s properties is dependent upon the Company’s ability to

obtain financing through the joint venturing of projects, debt financing, equity financing or other means. Such sources of financing may not be available on acceptable terms, if at all. Failure to obtain such financing may result in delay or indefinite postponement of exploration work on the Company’s exploration properties, as well as the possible loss of its interest in such properties. Any transaction involving the issuance of previously authorized but unissued shares of common stock, or securities convertible into common stock, could result in dilution, possibly substantial, to present and prospective holders of common stock. These financings may be on terms less favorable to the Company than those obtained previously.

The Company has a history of net losses and no operational cash flow to sustain operations and does not expect to begin receiving operating revenue in the foreseeable future

None of the Company’s properties have advanced to the commercial production stage and the Company has no history of earnings or cash flow from operations. The Company has paid no dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. Historically, the only source of funds available to the Company has been through the sale of its common shares. Any future additional equity financing would cause dilution to current stockholders. If the Company does not have sufficient capital for its operations, management would be forced to reduce or discontinue its activities which would likely have a negative effect on the stock price.

The effects of a global pandemic, including the COVID-19 outbreak, may have a negative effect on the Company’s operations and financial condition

The World Health Organization declared the novel coronavirus COVID-19 as a pandemic in March 2020. This declaration led to numerous emergency measures being instituted in many countries worldwide. These measures include government and business closures, stay-at-home orders, and limitations placed on work and travel. The continued outbreak of any pandemic, including COVID, could materially and adversely impact the Company’s operations including mineral exploration, its joint-ventures, receipt of necessary government approvals, and regulatory compliance. It may also have a negative effect on the equity and debt markets, which may make raising additional capital more difficult or not available. The full extent of such impacts is outside the Company’s control and may have a significant negative effect on the Company’s operations and financial condition.

Risks Relating to an Investment in the Securities of the Company

The market for the Company’s common stock has been subject to volume and price volatility which could negatively affect a shareholder’s ability to buy or sell the Company’s shares

The market for the common shares of the Company may be highly volatile for reasons both related to the performance of the Company or events pertaining to the industry (e.g. mineral price fluctuation/high production costs/accidents) as well as factors unrelated to the Company or its industry. Market demand for products incorporating resource commodities fluctuate from one business cycle to the next. The Company’s common shares can be expected to be subject to volatility in both price and volume arising from market expectations, announcements and press releases regarding the Company’s business, and changes in estimates and evaluations by securities analysts or other events or factors. In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly small-capitalization companies such as the Company, have experienced wide fluctuations that have not necessarily been related to the operations, performances, underlying asset values, or prospects of such companies. For these reasons, the price of the Company’s common shares can also be expected to be subject to volatility resulting from purely market forces over which the Company will have no control. Further, despite the existence of a market for trading the Company’s common shares in Canada, stockholders of the Company may be unable to sell significant quantities of common shares in the public trading markets without a significant reduction in the price of the stock.

The Company has a dependence upon key management employees, the loss or absence of which could have a negative effect on the Company’s operations

The Company strongly depends on the business and technical expertise of its management and key personnel, including Chief Executive Officer and President Paul Kuhn and Chief Financial Officer Winnie Wong. There is little possibility that this dependence will decrease in the near term. As the Company’s operations expand, additional

general management resources will be required. The Company may not be able to attract and retain additional qualified personnel and this would have a negative effect on the Company’s operations.

Certain officers and directors may have conflicts of interest

Certain of the directors and officers of the Company are also directors and/or officers and/or shareholders of other natural resource companies. While the Company is engaged in the business of acquiring and exploring mineral properties, such associations may give rise to conflicts of interest from time to time. The Directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest that they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the board of directors, any director in a conflict must disclose his interest and abstain from voting on such matter. In determining whether or not the Company will participate in any project or opportunity, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at the time.

The Company could be deemed a passive foreign investment company which could have negative consequences for U.S. investors

The Company could be classified as a Passive Foreign Investment Company (“PFIC”) under the United States tax code. If the Company is declared a PFIC, then owners of the Company’s Common Stock who are U.S. taxpayers generally will be required to treat any so-called "excess distribution" received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes a qualified electing fund ("QEF") election or a mark-to-market election with respect to the Company’s shares. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of the Company’s net capital gain and ordinary earnings for any year in which the Company is classified as a PFIC, whether or not the Company distributes any amounts to its shareholders.

U.S. investors may not be able to enforce their civil liabilities against the Company or its directors, controlling persons and officers

It may be difficult to bring and enforce suits against the Company. The Company is a corporation incorporated in Canada under the laws of British Columbia. Three of the Company’s directors and officers are residents outside of the United States and all of the Company’s assets and its subsidiaries are located outside of the United States. Consequently, it may be difficult for United States investors to effect service of process in the United States upon those directors or officers who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under United States securities laws. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or the Company predicated solely upon such civil liabilities under the U.S. Securities Act.

Broker-Dealers may be discouraged from effecting transactions in our common shares because they are considered "Penny Stocks" and are subject to the Penny Stock Rules

Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on FINRA broker-dealers who make a market in "a penny stock". A penny stock generally includes any equity security that has a market price of less than US$5.00 per share that is not registered on certain national securities exchanges or quoted on the NASDAQ system. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.

Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of US$1,000,000 or an annual income exceeding US$200,000 in each of the last two years, or US$300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.

In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the US Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to

disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.

As a “Foreign Private Issuer”, the Company is exempt from the Section 14 Proxy Rules and Section 16 of the 1934 Securities Act

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result is shareholders having less complete and timely data. The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data.

Item 4. Information on the Company

DESCRIPTION OF BUSINESS

Introduction

Avrupa’s executive office is located at:

325 Howe Street, Suite 410, Vancouver, British Columbia, Canada V6C 1Z7

Telephone: (604) 687-3520

Facsimile: 1-888-889-4874

E-Mail: info@avrupaminerals.com

Website: www.avrupaminerals.com

The contact person in Vancouver is Winnie Wong, CFO.

The Company's common shares trade on the TSX Venture Exchange under the symbol "AVU".

The authorized share capital of the Company consists of an unlimited number of common shares. As of December 31, 2023, there were 54,674,754 common shares outstanding after adjustment for the 1 for 4 share consolidation effective December 21, 2020.

The Company is a growth-oriented junior exploration and development company focused on aggressive exploration, using a prospect generator model, for valuable mineral deposits in politically stable and prospective regions of Europe, including Portugal, Finland, and Kosovo.

Corporate Background

The Company was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia under the name Everclear Capital Ltd. On July 7, 2010, the Company changed its name to Avrupa Minerals Ltd.

As of December 31, 2023, the Company has the following subsidiaries:

	% of ownership	Jurisdiction	Nature of operations
MAEPA Empreendimentos Mineiros e Participacoes Lda	100%	Portugal	Exploration
Innomatik Exploration Kosovo LLC	100%	Kosovo	Exploration
AVU Kosova LLC	100%	Kosovo	Exploration
Akkerman Finland OY (1)	49%	Finland	Exploration

(1)This company is accounted for using the equity method.

Currently, the Company conducts mineral exploration in Portugal, Finland and Kosovo.

History and Development of the Business

Avrupa was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia. The Company became a “Capital Pool Company” as defined in the Exchange’s Listing Policy 2.4 and its common shares began trading on the TSX Venture Exchange (the "Exchange") on September 2, 2008.

As a Capital Pool Company, the principal business of the Company was to identify and evaluate opportunities for the acquisition of an interest in an asset or business and, once identified and evaluated, to negotiate an acquisition or participation subject to receipt of shareholder approval and acceptance for filing by the Exchange. Until the completion of such a Qualifying Transaction (“QT”), as defined under Exchange Listing Policy 2.4, the Company did not carry on any business other than the identification and evaluation of assets or businesses in this connection.

The Company completed its QT on July 13, 2010 to acquire 90% of the issued and outstanding shares in MAEPA Empreendimentos Mineiros e Participacoes Lda., a private Portugese company (“MAEPA”) and (b) 92.5% of the issued and outstanding shares of Innomatik Exploration Kosovo LLC, a private Kosovo company (“Innomatik”). The Company received the final approval from the Exchange for its QT and its common shares resumed trading under its current name and trading symbol “AVU” on the Exchange as of July 14, 2010. In April 2012, the Company acquired the remaining 10% of MAEPA to own 100% by paying $150,000 cash and issuing 500,000 common shares. In August 2013, the Company acquired the remaining 7.5% of Innomatik to own 100% by issuing 450,000 common shares and paying €100,000.

The Company, through its holding in MAEPA, holds one exploration license in Portugal within the Portuguese portion of the Iberian Pyrite Belt in the southern portion in the country. The Alvalade license have been issued to MAEPA by the government of Portugal.

Licenses have varying work commitments, as approved by the government of Portugal, and all licenses carry a 3% net smelter royalty (“NSR”), payable to the government of Portugal.

In December 2021, the Company signed a binding letter agreement with Akkerman Exploration B.V., a Dutch holding company, to acquire a 100% interest in Akkerman Finland OY (“AFOy”). AFOy owns three mineral reservations in the past-producing and high prospective Vihanti-Pyhäsalmi VMS district in central Finland and a fourth reservation covering under-explored gold targets in a greenstone belt-hosted major shear zone.

In February 2022, the Company issued 3,800,000 common shares at a deemed price of $0.075 per share to settle outstanding debt of $285,000.

In March 2022, the Company closed the private placement of 16,666,667 common stock units at a price of $0.075 per unit for gross proceeds of $1,250,000. Each unit is comprised of one common share and one common share purchase warrant, with each warrant exercisable into one additional common share at a price of $0.125 until February 28, 2025. The funds will be used for the acquisition and exploration of the four new exploration projects in Finland and for working capital.

In May 2022, the Company’s Kosovo subsidiary was issued a new exploration license on the Slivovo property by the Mining Bureau of Kosovo. In August 2022, the Company entered into an Option Agreement with Western Tethyan Resources on the project which was renamed the Slivova Project. Under the agreement, Western Tethyan can earn up to an 85% interest in the Project by funding €1,800,000 in exploration and development expenses over 3 years and then by making certain milestone and success payments in addition to completing an Environmental Impact Statement, a Feasibility Study, and completing a Mining License application. A definitive agreement was completed in May 2023.

During 2023, the Company’s Finland JV received exploration permits for its Kangasjärvi and Hallaperä projects. Application for an exploration permits on the Yli-li project was made and is in process, while the permit for the Kolima project has been approved by the mining bureau but has not yet been issued due to appeals

filed with the district court. Subsequently, a fifth exploration permit was applied for and approved for the Rauhala massive sulfide project.

Business Overview

The Company currently has interests in mineral exploration projects located in Portugal, Finland, and Kosovo. The Company and all of its properties are at the exploration stage. There is no assurance that a commercially viable resource deposit is present on any of the Company’s properties, and additional exploration is required before it is determined if any property is economically and legally viable.

Operations in certain areas are seasonal as the Company cannot conduct certain exploration activities on its properties year-round. The Company is not currently dependent upon market prices for its operations, nor is it dependent upon any patents, licenses or manufacturing processes. The Company’s operations are dependent upon exploration rights and claims as well as the terms of option and/or joint venture agreements on those properties. Please see the individual property descriptions below for the details of each of the Company’s current exploration projects.

Mineral Properties

The Company currently has interests in 7 mineral exploration properties, including 1 property in Portugal, 1 property in Kosovo, and 5 mineral exploration projects in Finland. All of the Company's properties are currently at the exploration stage.

Portugal

The Company through its subsidiary MAEPA, is currently focused in the Portuguese portion of the Iberian Pyrite Belt, a district with over 2,000 years of mining history from at least Roman times.

Exploration licenses in Portugal typically have duration of 2+1+1+1 years. In addition, all licenses have a 3% NSR attached which may be negotiated downwards in certain instances.

The governing body for Portugal is the Direcao-Geral de Energia e Geologia (“DGEG”). Typically, from application to issuance of licenses, it takes anywhere from 6-12 months, depending on the government’s ability and efficiency to check the application area for competitive application bids, various liabilities (local or regional, political, and/or technical), and anything that might obstruct exploration progress. Often the wait for issuance depends on the prior activities and obligations of the responsible government officials, and the desire to make a public showing of the signing ceremony which advertises investment into Portugal.

Despite exploration properties located on sites with historical operations, the Company does not have any potential environmental liabilities associated with its Alvalade license.

Alvalade Project

The Alvalade joint-venture project is located in southern Portugal in the Portuguese Pyrite Belt. The project consists of one exploration license and covers approximately 115 square kilometers. The Company currently has a 100% interest in the project subject to its joint-venture agreement with MATSA who can earn an 85% interest in the project.

Location and Access

The project is located on the Northwest extension of the Portuguese Pyrite Belt in the southwest portion of the country. The Alvalade Joint Venture is easily accessed by both paved and unpaved roads. Regional two to four lane paved roads cross the license block east to west and north to south. Secondary and Tertiary roads form a network that allows access to much of the JV area. A railroad line, which is used to transport copper and zinc concentrates from the Neves Corvo Mine to the port of Setubal passes through the Alvalade license. Several large towns, including Grandola, Ferreira do Alentejo, Castro Verde, and Aljustrel lie within or just outside of the borders of the license block. Electric power lines are ubiquitous, and a number of year-round rivers cross the license area, the main one being the Sado River.

As the Alvalade JV license block is considered to be a pure exploration play, there are no development types of facilities or plants at this time. The Company uses two warehouses for core storage and detailed review of the core, as well as for a small field office.

Regional and Property Geology

Rocks in the area include Devonian sediments, volcanic sediments, felsic sub-volcanic domes, and mafic diabase-like rocks form the package of target rocks in the area that potentially host copper- and zinc-bearing massive sulfide deposits. These are often covered by younger Carboniferous clastic sediments and turbidites. About 75% of the license block is covered by Tertiary sediments and/or Quarternary gravels. The Devonian target rocks, form a unit that is traceable from south of Lisbon, Portugal to near Seville, Spain, which is the Iberian Pyrite Belt (IPB). The IPB is host to many massive sulfide and stockwork sulfide deposits, which have a history of mining that dates back to Roman times.

The Alvalade JV encompasses the Portuguese part of the IPB that lies just north of the regional Messajana Fault. The giant Aljustrel massive sulfide body lies just to the south of the fault. Two formerly producing mines, Lousal and Caveira, lie within the property boundaries. Previous explorers have drilled upwards of 300 holes within the JV area. However, many of the holes did not penetrate more than a few 10’s of meters into bedrock. The Company’s compilation and review of the geology and structure of the Alvalade JV licenses indicates the strong possibility of

new interpretations for the stratigraphy and the structural framework of the region, allowing for potential discoveries in previously drilled parts of the property block.

Acquisition Details

The Company originally acquired its interest in the property through its acquisition of 90% of MAEPA in July 2010 and increased its interest to 100% (subject to a 3% NSR to the government of Portugal) upon the acquisition of the remaining 10% of MAEPA in April 2012.

The Alvalade JV formerly covered 3 licenses (Ferreira do Alentejo, Lousal Alvalade and Canal Caveira). In October 2013, the government of Portugal approved the amalgamation of the three exploration licenses into a single exploration license. The license has a 3% NSR attached which may be negotiated downwards in certain instances.

In December 2017, the Company signed an exclusivity agreement with a subsidiary of an international mining company, allowing it a right to negotiate the acquisition of an interest in the Alavade property, the Marateca property and the Mertola property for non-refundable payments of €25,000 in respect of each property for a total of €75,000. Such amount was received in December 2017 and was used to offset the expenditures incurred in fiscal 2018.

Former Joint-Venture Agreements

On June 6, 2011, the Company announced that it signed a Memorandum of Understanding (“MOU”) with Antofagasta Minerals S.A. (“Antofagasta”) to undertake exploration for copper-zinc massive sulfide deposits on the Alvalade project.

The agreement covered the three original Avrupa licenses: Alvalade, Canal Caveira, and Ferriera do Alentejo. The formerly operating Lousal and Caveira copper mines are located within the project area. Antofagasta completed a US$300,000 Initial Study of the project, which included acquisition of much of the remaining historic data, re-logging of selected drill holes, systematic sampling, and integrated geological and geophysical interpretation of the targeted areas

Under the original agreement, Antofagasta had the option to acquire an undivided 51% interest in the project, which can be exercised by Antofagasta funding or incurring expenditures of an additional US$4 million over three years. After exercise of the first option, Antofagasta would be granted a further option to acquire an additional 24% interest in the project for an aggregate 75% undivided interest, by completing and delivering a Feasibility Study on the project to the Company within five years. The Company was the operator of the joint-venture through the first option period. In February 2014, Antofagasta completed the expenditure of the required US$4 million and earned a 51% interest in the joint-venture.

On February 25, 2014, the Company and Antofagasta signed an amended Joint Venture Agreement. On January 27, 2015, the Company and Antofagasta signed a second amended Joint Venture Agreement which allowed for more interim funding by Antofagasta, an expanded time frame in which to get a feasibility study decision, and a means for Avrupa to be carried to production, if there is a production decision to be made on the project. Antofagasta subsequently earned an additional 9% in the project (60% total) by funding an additional US$2,000,000 on exploration for a total of US$6,300,000.

On August 31, 2015, the Company signed an agreement with Colt Resources Inc. (“Colt”) and Antofagasta, whereby Colt will purchase Antofagasta’s 60% interest in the property for a total of US$7.1 million in incremental payments and a 1% NSR to Antofagasta. With the purchase, Colt became the optionee partner with the Company operating the project. Under the revised joint-venture agreement, Colt could earn up to 80% of the Joint-venture through a combination of exploration expenditures, completion of a feasibility study, and generation of a mine development decision by the end of the year 2023.

Colt subsequently defaulted on its joint-venture obligations. In order to regain a 100% interest in the property, Avrupa entered into an agreement with Colt and Antofagasta. Under the agreement, the Company agreed to forgive

approximately €160,000 in debts, assume a deposit on the project of €75,000, and make the following payments to the initial partner on the project in return for increasing its interest in the project from 40% back to 100%:

·Cash payment of US$250,000 on the filing of an initial NI 43-101 compliant resource estimate meeting certain minimum criteria;

·Staged cash payments totaling US$1,000,000 on the completion of a NI 43-101 compliant feasibility study meeting certain minimum criteria; and

·Staged cash payments totaling US$3,000,000 on the commencement of commercial production from the project.

MATSA Joint-Venture Agreement

In November 2019, the Company signed a definitive joint-venture agreement with Minas de Aguas Teñidas, S.A. (“MATSA”) to form an earn-in exploration and exploitation joint venture on the Alvalade property. MATSA is a private Spanish mining company which owns and operates three mines in the province of Huelva, Andalusia, Spain. MATSA also holds 1,000 km2 of exploration licenses in the Iberian Pyrite Belt. MATSA is a 50:50 joint venture company of Mubadala Investment Company, and Trafigura, an independent commodity trading and logistics house.

On November 19, 2019, the Company and MAEPA (collectively the “Company”) and Minas de Aguas Teñidas, S.A. (“MATSA”) and its wholly-owned subsidiary Emisurmin Unipessoal Ltda. (“EUL”) (collectively “MATSA”) entered into an Earn-In Joint Venture Agreement (the “Agreement”) with respect to the Alvalade project.

Pursuant to the Agreement, PorMining Lda. (“PorMining”) was incorporated on December 17, 2019 to hold assets and develop mineral rights. EUL can earn up to an 85% interest in PorMining Lda. Subsequent arrangements to explore and, if warranted, develop those assets may also be entered into.

On March 27, 2020, MAEPA and EUL entered into a Quota Transfer Agreement pursuant to which MAEPA split its 100% interest in the share capital of PorMining into two portions, representing 51% and 49% of the company’s share capital, and sold the 51% portion to EUL for the nominal value of €510.

On March 27, 2020, the Company, MAEPA, MATSA and EUL entered into the PorMining Lda. Shareholders’ Agreement (the “Agreement”). Pursuant to the Agreement:

·PorMining has five directors. From the effective date until the second option exercise date, three will be nominated by EUL and two by MAEPA. Thereafter, four will be nominated by EUL and one will be nominated by MAEPA. Upon the occurrence of the 51/49 Phase and thereafter, EUL is entitled to nominate three directors and MAEPA two directors. In the event of dilution of the interest of EUL or MAEPA, each will be entitled to proportional representation (as described) equal to its then interest;

·In the event that EUL and/or MAEPA wish to sell or transfer their shares in PorMining, PorMining has a right of first refusal to purchase all or a portion of the shares. To the extent that PorMining does not exercise its right of first refusal to all of the shares, each of EUL and/or MAEPA has a right of first refusal; and,

·The Agreement will terminate at such time as there is a final decision regarding the dissolution and liquidation of PorMining, the parties mutually agree on the termination of the Agreement or as provided for under the Earn-In Joint Venture Agreement.

The effective date of the Transaction is the date that PorMining receives (received on June 15, 2021) the mineral rights in its name from the General Directorate of Energy and Geology of Portugal (“DGEG”). The Transaction is comprised of the following phases:

·Phase I – First Option;

·Phase II – Second Option;

·51/49 Phase; and

·Phase III – Development and Operation

Phase I – First Option

Phase I commenced on the effective date and continues until either the first option exercise date and the termination of the first option, whichever comes first.

During Phase I, MAEPA will grant EUL the sole and exclusive right to hold an undivided 51% interest in PorMining (the first option) for at least three years from the effective date or the issue of the Experimental Exploitation License (the “EEL”) by DGEG to PorMining. EUL’s right to maintain its 51% interest is conditional upon MATSA:

·Paying €400,000 to the Company on or before the effective date (€200,000 was received in December 2019 and the remaining €200,000 was received in June 2020);

·Funding or providing the necessary financial instrument to cover the guarantee, which will be returned to MATSA following the release of the guarantee by DGEG (funded €100,000 in June 2020); and

·Funding expenditures (the first option expenditures) on the mineral rights in an aggregate amount of €2,400,000 (€1,200,000 within the first 12 months following the effective date [met] and €1,200,000 in the next 24 months) on or before three years from the effective date or the issue of the EEL.

Funding of the first option expenditures is solely at MATSA’s discretion and MATSA may elect to terminate the first option at any time by delivering notice (the first option termination notice) to the Company. MATSA may elect to accelerate the funding of the first option expenditures in order to exercise the first option at an earlier date. If there is a shortfall in the first option expenditures, MATSA may elect to pay such amount on or before the end of the three-year period and the first option expenditures will be deemed to have been satisfied.

Upon MATSA completing all of the requirements of the first option, EUL will have unconditionally earned the 51% interest in PorMining. If the first option is terminated, MAEPA will acquire the 51% interest from EUL for a nominal value, the shares will be cancelled and MAEPA will hold a 100% interest in PorMining.

During Phase I, MAEPA will act as the operator of the mineral rights. PorMining will pay MAEPA an operator’s fee equal to €100,000 per year, paid monthly starting June 16, 2020, funded by MATSA and which shall form part of the first option expenditures. During the year 2021, €100,000 ($148,280) was received and has been included in reimbursements from optionee. In all other phases, PorMining will be the operator unless it appoints another person to act as operator. The operator is responsible for developing and submitting work programs to the technical committee or the board of directors for consideration and approval and to implement work programs when approved according to the approved budget. The technical committee is comprised of two representatives from each of EUL and MAEPA and will be in effect until the first option exercise date. Thereafter, the board of directors will make all decisions with respect to the mineral rights.

During Phase I, EUL will fund 100% of all maintenance payments (as defined) and approved work programs.

Effective March 2022, MATSA completed the Phase I first Option by funding a total of €2,500,000 on the project, and unconditionally earned the 51% interest in PorMining

Phase II – Second Option

Phase II commences on the first option exercise date and continues until the first to occur of the second option exercise date and the termination of the second option. On the first option exercise date, the Company will grant EUL the sole and exclusive right and option to acquire an additional 34% (for an aggregate 85% interest) in PorMining (the second option). EUL’s right to exercise the second option is conditional on MATSA satisfying the second option conditions as follows:

·Preparing, funding and delivering to PorMining a feasibility study on the mineral rights within five years of the issuance of the EEL or, provided that DGEG grants an extension to all or part of the EEL, the time period for when the second option conditions must be met shall be extended to a maximum of two additional years, for a total of seven years after the issuance of the original EEL;

·Making proper application for a mining license before the end of the term of the EEL; and

·Making all progress payments to Antofagasta as set out in the Debt Cancellation Agreement dated June 12, 2017 as follows:

oUS$250,000 within 60 days after the date of a news release announcing a NI 43-101 compliant technical report having been completed and with results as defined;

oUS$500,000 within 60 days after the date of a news release announcing completion of a feasibility study with results as defined;

oUS$500,000 on the one-year anniversary of the date of the news release announcing the feasibility study noted above;

oUS$750,000 within 60 days of the commencement of commercial production;

oUS$750,000 on the one-year anniversary of commencement of commercial production;

oUS$750,000 on the second anniversary of commencement of commercial production; and

oUS$750,000 on the third anniversary of commencement of commercial production.

The satisfaction of the second option conditions is solely at MATSA’s discretion and MATSA may elect to terminate the second option at any time by delivering notice (the second option termination notice) to the Company. If the second option is terminated, EUL will be entitled to retain its 51% interest in PorMining, plus an additional 1% interest for every €735,294 of expenditures funded during Phase II and the 51/49 Phase will commence.

Upon MATSA satisfying the second option conditions, EUL automatically earns an additional 34% interest in PorMining for an aggregate interest of 85%.

During Phase II, EUL will fund 100% of all maintenance payments and approved work programs.

As of December 31, 2023, MATSA funded €2,924,000 on the project Phase II – Second Option. Subsequent to the end of the year, MATSA has funded an additional €175,000 on the project Phase II.

51/49 Phase

The 51/49 Phase commences on termination of the second option and continues until the deemed conversion of the interest of a party to a royalty. During the 51/49 Phase, PorMining will remain the operator subject to the terms of the Agreement and the shareholders’ agreement and the activities of the parties with respect to the mineral rights will continue to be governed by the shareholder’s agreement.

If at any time after the 51/49 Phase has commenced EUL’s interest is reduced to below 10% as a result of dilution calculations, its interest will be deemed to be converted to a 1.5% royalty, which royalty shall only be payable up to a maximum total payment of €13,000,000 after which it will no longer be applicable. Upon conversion to the royalty, EUL will have no further rights or interest in respect of the assets under the Agreement or the shareholders’ agreement except for the royalty and the termination provisions apply.

If at any time during the 51/49 Phase MAEPA’s interest is reduced to 15% as a result of dilution calculations, then its interest will be deemed to be converted to a 15% “carried interest” following which MAEPA will not be required to contribute to any further work programs and will not be subject to any further dilution until such time as a feasibility study has been prepared, at which point Phase III will have been deemed to have commenced and MAEPA will have to sell the option.

During the 51/49 Phase, the parties will fund the maintenance payments and contribute to the costs of any approved work and/or development programs in proportion to their proportionate share.

Phase III – Development and Operation

Phase III commences on the second option exercise date and continues until the deemed conversion of the interest of a party to a royalty. Within 90 days of the commencement of Phase III, the Company will transfer its 15% interest in PorMining to MATSA in consideration for €10,000,000 to be paid as follows:

·€3,000,000 upon a construction decision being made by PorMining and all permits

·having been received from DGEG;

·€3,000,000 upon commencement of commercial production; and

·€4,000,000 upon the first anniversary of commencement of commercial production.

During Phase III, the parties will contribute their respective pro rata share of all approved work programs and budgets.

If at any time after Phase III has commenced MAEPA’s interest is reduced to below 10% as a result of dilution calculations, its interest will be deemed to be converted to a 1.5% royalty as described above for EUL.

The aim of the first stage of the joint venture is to delineate a deposit at Sesmarias or at any other targets within the Alvalade License with a significant drill program. Some of those other targets include the past-producing Lousal Mine, the Monte da Bela Vista stockwork zone, and at the past-producing Caveira Mine.

Exploration History

First-pass review of re-processed regional gravity and magnetics covering the Alvalade license led to the identification of up to ten target areas on the potential Alvalade JV property. The Company upgraded three of these areas – Aldeia dos Elvas, Monte da Bela Vista, and Azinheira dos Barros – and defined drill targets in all three areas.

On October 19, 2011, the Company announced that work completed to date included re-logging of an additional 31 historic drill holes, collection of approximately 250 more samples from the drill core, re-processing of regional gravity and magnetics data, first-pass selection of specific target areas, including the Azinheira dos Barros and Aldeia dos Elvas locations, detailed re-processing of gravity data for the Aldeia area, and 1:10,000-scale geologic mapping and rock chip sampling at Aldeia and Azinheira. Integration of geophysical data, geochemical data, and the results of recent surface work in these two districts suggests the potential for multiple drilling targets in both places.

On February 2, 2012, the Company announced the commencement of exploration work in the Portuguese Pyrite Belt under the Alvalade Joint Venture. The budget for work in 2012 was increased to US$2.5 million and approved by Antofagasta. Company geologists re-logged and selectively sampled over 50,000 meters of historic drill core from 194 drill holes completed in the JV area by other companies prior to the Company's acquisition of the property. A Phase 1 exploratory core drilling program was completed by the Company in three separate target areas. The initial program consisted of 8 holes totaling 3,269.8 meters and was designed to test targets located within two windows of exposed Paleozoic volcano-sedimentary rocks that host massive sulfide deposits elsewhere in the Iberian Pyrite Belt. 7 of the 8 holes drilled encountered alteration characteristic of massive sulphide systems in the Iberian Pyrite Belt. These same 7 holes crossed numerous zones of pyritic material, and 1 of the holes, MBV01, contained significant intervals of low-grade copper that may have been transported from a nearby potentially larger zone of copper mineralization.

Results of the re-logging and sampling, combined with the Phase 1 drill results, were used to plan Phase 2 drilling, which commenced in October 2012. The program consisted of 8 drill holes totaling 3,491 meters. 7 of the holes tested new targets along four separate trends of potentially mineralized host rocks. The 8th hole was drilled in the Monte a Bela Vista target area as a follow-up to hole MBV01 drilled in Phase 1, approximately two kilometers north of the past-producing Lousal Mine. The best results were obtained from the follow-up hole, MBV02, which was drilled to 653.1 meters and intercepted long intervals of probable feeder zone-style mineralized stockwork quartz veining, which may be indicative of the presence of a nearby massive sulfide system. Copper results from MBV02 included 45.90 meters (from 7.30 to 53.20 m) grading 0.24% Cu, including 8.05 meters (from 11.80 to 19.85 m) grading 0.39% Cu and 15.80 meters (from 23.70 to 39.50 m) grading 0.44% Cu; and 24.15 meters (from 146.30 to 170.45

m) grading 0.24% Cu, including 1.50 meters (from 154.15 to 155.65 m) grading 1.64% Cu and 7.50 meters (from 159.60 to 167.10 m) grading 0.44% copper. Gold results included 23.70 meters (from 154.15 to 177.85 m) assaying 1.35 g/t Au, including 1.50 meters (154.15 to 155.65 m) of 5.11 g/t gold and 7.45 meters (161.75 to 169.20 m) of 2.16 g/t gold; and 97.50 meters (279.50 to 377.00 m) of 0.40 g/t Au, including 7.00 meters (293.00 to 300.00) of 1.08 g/t Au and 9.50 meters (310.80 to 320.30 m) of 2.30 g/t Au. The hole also included numerous intervals of greater than 0.1% lead and/or zinc.

In March 2013, the Company commenced the Phase 3 drill program. The program was planned for up to 10 drill holes totaling approximately 4,500 to 5,000 meters. Drilling was planned for several areas along the Neves Corvo and Aljustrel target trends, as the Company developed a total of 23 new, high quality targets. The first part of the program targeted the Monte da Bela Vista area where Phase 1 and Phase 2 drill holes MBV01 and MBV02 intersected copper and gold vein mineralization, and around the formerly producing mines at Canal Caveira and Lousal. Drill results continue to show positive potential at Monte da Bela Vista. Drill hole MBV03 intersected several zones of stockwork quartz-sulfide mineralization, including a 65-meter wide zone at a depth of 426 to 491 meters.

Phase 4 drilling commenced in January 2014. Massive sulfide mineralization was discovered in the second drill hole at the Sesmarias South target area, approximately 7 kilometers south of the past producing Lousal Mine. The area is covered by approximately 100 meters of cover sediment, which completely obscures the target rocks. The mineralized intercept in SES002 totals 16.85 meters. The intercept includes a zone of massive sulfide mineralization, then underlain by a zone of semi-massive sulfides and strong stockwork sulfide veining. There follows a narrow shear zone, which is, in turn, underlain by a further zone of strong alteration with anomalous disseminated and stockwork sulfide mineralization. The analytical results for the Massive and Semi-massive zones are included in the table below:

SULFIDE TYPE	FROM	TO	TOTAL	Cu %	Pb %	Zn %	Sn %	Co %
Massive	151.65	159.60	7.95	2.21	3.05	4.82	0.15	0.084
Semi-massive/stockwork	159.60	162.50	2.90	0.71	1.27	3.17	0.092	0.051
TOTAL			10.85	1.81	2.57	4.38	0.13	0.075

Six additional holes were drilled in this initial Sesmarias program in the immediate vicinity of the initial Sesmarias massive sulfide intersection (SES002). A total of 1,961 meters were drilled in the general target area. Highlights from the 6 additional holes include:

·SES008, a 650-meter step-out NW from discovery SES002, intersects 5.5 meters of massive sulfide mineralization with positive gold and silver results, and including 5.0 meters @ 0.64% Copper, 0.94% Lead, and 1.54% Zinc.

·SES006, a 50-meter step-out NW from SES002, intersects 1.5 meters of VMS mineralization @ 1.66% Copper, 2.3% Lead, and 3.66% Zinc.

A further five holes were then drilled to follow-up on the prior eight-hole program. The highlight of this follow-up program is a thick massive sulfide intercept in drill hole SES010, which started at a depth of 228.40 meters, and continued for 57.85 meters to 286.25 meters depth. Average grades for the entire massive sulfide intercept are: 0.32% copper, 0.61% lead, 1.95% zinc, 0.45 g/t gold, and 25.1 g/t silver. True thickness of the intercept is estimated to be approximately 35 to 40 meters. The joint-venture partners completed 13 holes, over a total strike length of 1,700 meters, at Sesmarias, for a total of 3,807 meters in the general target area. The Sesmarias target zone is heavily faulted, and the rocks are strongly contorted and displaced, which makes exploration extremely difficult. Despite these difficulties, the results from the drill programs continue to clearly indicate the potential for a large-scale mineralized system.

Drilling at the Alvalade project resumed on October 28, 2015 with funding by the new joint-venture partner Colt. In the new phase of drilling, the partners planned to drill 5,000 to 6,000 meters, mostly in the immediate area of the Sesmarias copper-zinc discovery.

On February 3, 2016, the Company announced results from the drilling. Analytical results from four diamond drill holes completed in late 2015 in the area of previously-drilled SES010 (58 meters @ 0.32% Cu, 0.61% Pb, 1.95% Zn, 0.45 g/t Au, 25 g/t Ag) confirm and extend the massive sulfide lens to a present length of 300 meters with a 35-40 meter thickness. The lens is open to the northwest and down dip to the northeast. Following are the results from this drilling.

Drill hole ID	From (m)	To (m)	Intercept (m)	Cu (%)	Pb (%)	Zn (%)	Au (g/t)	Ag (g/t)
SES019	263.50	315.20	51.70	0.44	0.75	2.71	0.40	17.35
including	264.15	299.05	34.90	0.40	0.99	3.46	0.38	20.67
and including	280.45	290.95	10.50	0.36	1.71	5.18	0.37	21.71
SES020	277.85	287.55	9.70	0.25	0.57	0.99	0.47	24.70
	297.70	319.95	22.25	0.55	0.59	0.66	0.53	20.54
	325.00	334.10	9.10	0.32	0.14	0.52	0.68	11.31
	337.85	356.65	18.80	0.33	0.14	0.64	0.26	6.40
SES021	262.85	277.65	14.80	0.36	0.29	0.40	0.43	9.82
SES022	323.90	376.00	52.10	0.43	0.49	0.98	0.62	17.31

Results from recently-completed downhole geophysics, utilizing the “mise-a-la-masse” (MALM) method, combined with historic ground magnetics data, suggest that the sulfide lens may continue another 300 meters or more to the northwest from SES022.

The drill core was transported by Company personnel from the drill sites to a nearby secure storage facility for logging and sampling. The sample intervals were one meter, unless visual inspection of the core indicated that a slightly different interval was necessary to preserve continuity of mineralization and rock type for analysis. One half of the core was collected and sent to the geochemical laboratory, while the remaining half of the core was retained in the core boxes for future reference. All samples were sent by courier or transported by Company personnel to the ALS Minerals sample preparation facility in Seville, Spain. ALS shipped the prepped material to their main European analytical laboratory located in Loughrea, Ireland. The samples were analyzed by ICP methods for copper, lead, zinc, and silver, and by fire assay with an AAS finish for gold. In addition to ALS Minerals quality assurance/quality control (QA/QC) of all work orders, the Joint Venture conducted its own standard, internal QA/QC from results generated by the systematic inclusion of certified reference materials, blank samples, and field duplicate samples. The analytical results from the quality control samples in the Sesmarias work orders have been evaluated, and conform to industry best-practice standards.

Recent geochemical sampling, using ultra-trace level detection methods to analyze for base metals and a suite of pathfinder elements, in the area of the original SES002 discovery hole, has demonstrated even further northwest extension potential for the SES010 massive sulphide lens. Technical understanding of the sub-surface geology also suggests a possible extension of the lens to the southeast of up to 100 meters. There is also potential for further extension of the SES002 discovery lens, which now appears to be a separate lens from the SES010 lens. It is common to have multiple massive sulphide lenses in Pyrite Belt deposits.

In addition to further downdip and strike length massive sulphide targets found along the 1.8-kilometer trend of Sesmarias mineralization, there are at least four other separate, drill-ready targets in the immediate Sesmarias area, a significant target in the Pombal area located about 10 km southeast of Sesmarias, and several targets at the Monte da Bela Vista stockwork discovery located about 10 km north of Sesmarias, all on the Neves Corvo mineral trend.

Ongoing geological review of Sesmarias area core, along with subsequent interpretation and three-dimensional (3D) modeling of the data, suggests a simplified deposition history of mineralization and surrounding rock units. Using the newly developed information, the Company’s geologists see continued potential in the SES002 (“2”) Lens and in the SES010 (“10”) Lens. The new work indicates the possibility that a third lens may be located between widely-spaced drill holes SES008 and SES009 (the “8” Lens).

The 2 Lens is characterized by higher grade mineralization, including 10.85 meters @ 1.81% Cu; 75.27 ppm Ag; 2.57% Pb; 4.38% Zn; 0.13% Sn, although at this point, the extents of the mineralized envelope are undefined. The new 3D modeling suggests that the Lens is oriented in a non-parallel direction to the 10 Lens, which may explain why previous follow-up drilling did not significantly extend the discovery area. The Company also sent massive sulfide mineralization for analysis from previously-drilled hole SES003, which intersected the 2 Lens, but was never analyzed.

The 10 Lens, as defined by previous drilling, currently measures approximately 400 meters long, 30 meters wide, and tested to a depth of nearly 200 meters. It is open to the south, north, and to depth. The new drilling targets its extension to the north and potential for increasing copper and zinc grades.

The 8 Lens has been tentatively defined by the area between, and including, two drillholes: SES008 and SES009. Located 500 meters apart, SES008 and SES009 contained narrow zones of sulfide mineralization apparently truncated (from the previous interpretation) by faulting. The SES008 intercept included 5.0 meters @ 0.64% Cu; 36.8 ppm Ag; 0.94% Pb; 1.54% Zn. The SES009 drill hole contained 4.0 meters of pyrite mineralization. The new interpretation suggests that the 8 lens is dipping to the northwest, and that SES008 and SES009 intercepted the outer edge of the mineralized lens.

On November 30, 2018, the Company announced startup of drilling at the Alvalade project to enlarge and upgrade at least two lenses of copper- and zinc-bearing massive sulfide mineralization discovered by Avrupa during previous exploration work in the target area. The Company completed six holes totaling 2,498 meters. The drilling program successfully tested a new exploration model and concepts, with the following important results:

·Provided a much higher degree of predictability in location of mineralization in the immediate Sesmarias Project area, as the new model was tested successfully in all six drill holes;

·Enlarged the “10” Lens from 300 meters strike length to at least 600 meters long, up to 400 meters wide, and 25 meters thick (SES026 and SES027);

·Discovered the footwall feeder zone stockwork for the “8” Lens (SES028);

·Intercepted the edge of the “2” Lens/Horizon (SES025 and SES030);

·Intercepted a stockwork-stringer sulfide zone above the “10” Lens, providing evidence for a new, fourth lens/horizon, noted for now, as the “26” Horizon (SES026);

·Showed that mineralization is open to the east up to the bounding fault;

·Showed that mineralization is open to the west up to the boundary of the Devonian-age Volcano-Sedimentary (VS) host rocks for mineralization and the overlying Tertiary-age gravels and semi-consolidated sediments.

In March 2019, the Company reported on drilling results at the Alvalade project. Highlights from the program include the following results:

·SES026 intercepted 28.95 meters of 0.48% copper, 0.77 g/t gold, 15.7 ppm silver, 0.52% lead and 1.31% zinc.

·SES026 extended the “10” Lens by 300 meters to the north from previous drilling.

·The “10” Lens is now at 600 meters x 300 meters x 25 meters.

·Mise-à-la-masse (MALM) geophysical anomalism extends another 150 meters past SES026 location.

·SES028 intercepted the edge of a significant feeder zone stockwork beneath the “8” Lens. Assays indicated anomalous gold, silver, copper, lead, and zinc throughout the entire length of the stockwork from 373.40 meters to 460.80 meters in depth, beneath the 8 Lens.

·Discovered a possible new mineralized horizon in SES026, located above the “10” Lens, and intersected it again in SES027 and SES029.

·Confirmed that the high grade “2” Lens is a fault-bounded fragment of massive sulfide mineralization with origin yet to be determined. Hole SES003, drilled previously on this target, is now also being assayed and will be reported shortly.

·Continued re-logging of historic drill holes has upgraded targets in the northern portions of the Sesmarias Prospect.

·Each hole drilled in this exploration phase of the Project has enhanced the revamping of the exploration model. Combined with strong assay results in SES026, in particular, the information will be used in the next drill targeting exercise for this large area.

SES026 intercepted 28.95 meters of massive sulfide mineralization grading 0.48% copper and 0.77 g/t gold, extending the “10” massive sulfide lens to at least 600 meters in strike length. The top seven meters of the intercept contained higher grade silver, copper, lead, and zinc, followed by a nine-meter interval of 1.09 g/t gold, as shown in the table below. The hole was collared on a geophysical anomaly which extends a further 150 meters beyond the SES026 location. At this time, the estimated average dimensions of the 10 Lens are 600 meters long x 300 meters wide x 25 meters thick. The mineralization is open to the east boundary fault and to the west intersection of the Devonian host rocks and the Tertiary gravels. The lens appears to be cut by post-mineral dikes to the north and remains open to the south, though faulting may truncate the lens about 100 meters south of SES021.

SES026	From (m)	To (m)	Intercept (m)	Au (g/t)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
Total lens	385.70	414.65	28.95	0.77	15.7	0.48	0.52	1.31
Base metal zone	385.70	392.70	7.00	0.52	19.0	0.66	0.57	1.44
Gold zone	392.70	401.70	9.00	1.09	13.7	0.40	.50	1.31

Mineralization in SES026 showed significantly higher gold values compared to previous drilling on the 10 Lens, as shown below, as well as slightly higher overall copper values.

Drill hole ID	From (m)	To (m)	Intercept (m)	Au (g/t)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
SES010	228.40	286.25	57.85	0.45	25.1	0.32	0.61	1.95
SES019	263.50	315.20	51.70	0.40	17.35	0.44	0.75	2.71
including	264.15	299.05	34.90	0.38	20.67	0.40	0.99	3.46
and including	280.45	290.95	10.50	0.37	21.71	0.36	1.71	5.18
SES020	277.85	287.55	9.70	0.47	24.70	0.25	0.57	0.99
	297.70	319.95	22.25	0.53	20.54	0.55	0.59	0.66
	325.00	334.10	9.10	0.68	11.31	0.32	0.14	0.52
	337.85	356.65	18.80	0.26	6.40	0.33	0.14	0.64
SES021	262.85	277.65	14.80	0.43	9.82	0.36	0.29	0.40
SES022	323.90	376.00	52.10	0.62	17.31	0.43	0.49	0.98

The Sesmarias Prospect area continues for a further 1000 meters to the north of the area of the present phase of drilling.

SES028 hit 87.40 meters of stockwork quartz-iron sulfide veining that marks the possible edge of a feeder zone for the previously discovered “8” Lens. Assays indicated anomalous gold, silver, copper, lead, and zinc throughout the entire length of the stockwork from 373.40 meters to 460.80 meters in depth, beneath the 8 Lens. Examples of variable intervals of anomalism include:

From (m)	To (m)	Total (m)	Au (ppm)	Ag (ppm)	Cu (ppm)	Pb (%)	Zn (%)

373.40	399.95	26.55				0.09
373.40	405.65	32.25					0.3
379.20	387.60	8.40	0.26
393.40	398.30	4.90	0.28
444.30	460.80	16.50		8.8		0.24	0.44
447.30	460.80	13.50			0.18

SES026, SES027, and SES029 intersected a horizon of stockwork quartz-sulfide veining located 20-40 meters above the “10” lens. While mostly iron sulfides, the location of the horizon suggests potential for another possible mineral layer in the Sesmarias massive sulfide system.

The Company also provided assay results for drill hole SES003 which was drilled on the Alvalade Project in 2014, but not analyzed until 2019 due to its general proximity and similar visible characteristics to drill hole SES002. The SES003 assays were completed now in order to be added into Avrupa’s 3D model of the “2” Lens. Hole SES002 is the Sesmarias “2” Lens discovery hole, and its assay results are also shown below. SES003 added approximately 18 meters of dip length to the “2” Lens, as calculated in 2014. Results from SES003 are comparable to those from SES002, as shown in the tables below.

Hole SES003
SULFIDE TYPE	FROM	TO	TOTAL	Cu %	Ag ppm	Pb %	Zn %	Sn %	Co %
Massive/semi-massive	132.05	145.70	13.65	1.92	38.8	1.03	1.91	0.03	0.103
	FROM	TO	TOTAL	Cu ppm	Ag ppm	Pb ppm	Zn ppm	---	Co ppm
Weak/moderate stockwork	145.70	152.50	6.80	4133	7.42	3908	11645	---	296

Hole SES002 (Previously Reported)
SULFIDE TYPE	FROM	TO	TOTAL	Cu %	Ag ppm	Pb %	Zn %	Sn %	Co %
Massive/semi-massive	151.65	162.50	10.85	1.81	75.3	2.57	4.38	0.13	0.075
	FROM	TO	TOTAL	Cu ppm	Ag ppm	Pb ppm	Zn ppm	---	Co ppm
Weak/moderate stockwork	162.50	168.50	6.00	4514	10.57	1886	4838	---	528

To date, Avrupa has drilled seven closely-spaced, shallow core holes in the area of SES002 and SES003 to determine possible extent of the “2” Lens. Avrupa also conducted several types of downhole and surface geophysical surveys. Intercepts of broken massive sulfide mineralization in SES005, SES006, and SES007, along with results from the geophysical work, and review of the actual core material in all of the holes suggested that mineralization comprising the “2” Lens occurred in a fault zone (now understood as the eastern boundary fault described in the news releases of February 11, 2019 and March 11, 2019). The interpretations from the 2014 drilling program suggested that the possible extents of the “2” Lens were on the order of 100-125 meters dip x 50-75 meters strike, and 5-10 meters thickness, as demonstrated in the following cross section and map view of the mineralization.

The program continues to be highly successful, accomplishing goals of better technical understanding of the Sesmarias mineralizing system and significantly enlarging it. This self-funded drilling program is the seventh phase of drilling to be completed by Avrupa Minerals on the Alvalade license. In addition to further targets in the immediate Sesmarias Project area, additional future drilling is anticipated for the Sesmarias-Lousal-Monte da Bela Vista District, as well as in other Avrupa generated target areas with related Pyrite Belt-style massive sulfide targets and mineralization.

The initiation of the first stage of exploration by MAEPA was delayed due to the COVID-19 situation in Portugal and Spain. Portugal was declared to be in a State of Emergency on March 18th, 2020 which included the suspension of most government operations and private enterprises. On May 2nd, the Emergency was cancelled and a multi-phased plan to ease restrictions and reopen the Country and its economy was initiated.

On June 25, 2020, the Company announced that the five-year Experimental Exploitation License (“EEL”) was issued to PorMining for the Alvalade project. Work commenced with the review and full compilation of all historic data from the license area. Initial physical work included re-logging selected Sesmarias core, first logging and sampling of available, prior-to-Avrupa, historic core, geochemical exploration in selected target areas and Sesmarias extensions, and property-wide geophysics.

In October 2020, the Company announced that the Company would start a 7,000 to 8,000 meter diamond drilling program at the Alvalade Project. The program would test the Sesmarias copper-zinc massive sulfide discovery along strike to both the north and south, as well as the Monte da Bela Vista stockwork zone, located approximately nine kilometers north of Sesmarias. The Company would also drill at a number of other attractive massive sulfide targets around the 115-square kilometer license during the early stages of the program.

The Alvalade Experimental Exploitation license covers at least five target basin areas, each with numerous potential drill target setup locations. Sesmarias has seen the most recent work due to Avrupa’s copperand zinc-bearing massive sulfide discovery in 2014. Other areas, including Monte da Bela Vista, Lousal, and Caveira. still need first-and second-pass, discovery-oriented drilling. An airborne electromagnetic survey to be conducted late in calendar 2020 will cover the license from the Caveira Mine in the north to the south end of the Sesmarias zone. Results of this survey will assist in delineating further massive sulfide targets in this area.

The Joint Venture exploration team would also commence with a thorough compilation and detailed study of the historic Lousal Mine data with the expectation of delineating new, previously untested targets close to and within the old mine workings’ area. The Lousal Mine is located 1.5 kilometers south of Monte da Bela Vista, and about seven kilometers north of Sesmarias, but separated by a major fault zone. Geologically, it is possible that the Sesmarias and Lousal massive sulfide lenses were originally part of the same deposit more than 360 million years ago when Pyrite Belt mineralization formed, but movement along the later fault system separated the zones.

The Company previously acquired a large amount of data for the Lousal Mine which was digitized, but not fully compiled. During 2018, the Company performed a basic review of the data, including a partial collection of annual mine production reports from 1900 to 1988. The reports suggested that miners extracted upwards of 15-20 million metric tonnes of copper-zinciron- bearing massive sulfide material from a number of lenses in the Lousal Mine.

A new drill program began on the project in December 2020. In previous work at Sesmarias, Avrupa outlined four immediate target zones around the massive sulfide discovery, beyond downdip targets along the actual mineral lenses, Lens 2, Lens 8, and Lens 10. To date, Lens 8 has seen the least amount of development. Re-logging of previous Avrupa drilling by company and partner geologists along the Sesmarias discovery zone is providing an enhanced look into the targeting for new, additional mineralization. The first holes in this drilling phase will be set to extend Lens 8 towards the area of the “Northern Deep” targets, which will be designated the Brejo area, for both strike-length and dip-length extensions of the copper-zinc-iron sulfide zone. In total, the Company expects to drill 7-8,000 meters in the current program.

In addition to the drilling, a helicopter-supported VTEM electromagnetic survey commenced in mid-December, covering the northern 3/4 of the Alvalade License. The survey will cover four of the five major basins on the property, including Lousal, Monte da Bela Vista, Cabeça Gorda, and Caveira. Results from this program will assist in delineating further massive sulfide targets, particularly in the license area between Sesmarias and the historic Canal Caveira massive sulfide deposit located at the north end of the license. Initial orientation flights over the Sesmarias and Lousal massive sulfide deposits will be of significant value for determining the important geophysical characteristics of these deposits.

On February 24, 2021, the Company presented the initial progress report on drilling to date. Two diamond drill holes, totaling 874 meters, have been completed, and a third hole has been started in the SES008 area, testing northern extensions of the Sesmarias copper-zinc-iron sulfide mineralization. Avrupa discovered massive sulfide mineralization at Sesmarias in 2014, and intermittent drilling since then increased the known strike length of the massive lenses to 1.6 kilometers. The present work is the initial attempt to expand the mineralization to the north from SES008 to the Brejo area (formerly designated as Sesmarias North or Northern Deep target). Wide-spaced, historic drilling suggests strong possibility of massive sulfide mineralization in the Brejo target area.

Hole SES20-031 targeted potential massive sulfide mineralization related to the SES008 intercept. The hole continued to 536 meters depth, in several places intersecting the specific black shale unit that hosts massive sulfide mineralization at Sesmarias and at the Lousal Mine, located six kilometers to the north. Detailed review of the core showed that for its entire length, the drill hole passed through intensely folded rock units of the Volcano-Sedimentary Formation, the general host of mineralization throughout the Iberian Pyrite Belt. Overall, however, the drillhole roughly paralleled the major trend of bedding, allowing only for narrow true widths of mineralized intercepts.

The drillhole skirted or skimmed the main target zone, for the length of the hole. Previous work by Avrupa suggested that individual massive sulfide lenses were oriented ± vertically, but often dipping steeply to the NE. However, detailed re-logging of Sesmarias area core and subsequent first-logging of SES20-031 lead to the conclusion that

intense folding of the limb of a much larger, overall westerly-dipping fold system is a realistic reason as to why drilling has not yet cut significant thicknesses of massive sulfide – i.e., the drilling roughly parallels the target host unit and never really crosses mineralization at a favorable angle.

The thickest intercept occurs at 277.70 to 288.45 meters, where drilling skimmed the top of a possible folded/faulted massive sulfide lens. Rocks in the intercept zone are dominantly silica, containing disseminated sulfides, zones of banded sulfide mineralization, sulfide breccias, and one interval of approximately 0.5 meters of massive sulfide material. The intercept includes a 3.8-meter thick, weakly mineralized fault zone. The following table shows the metals’ values of the intercept.

From	To	Total	Copper	Lead
277.70	288.45	10.75	0.19%	0.74%
including
279.20	281.45	2.25	0.35%	1.73%
281.45	285.25	3.80	Fault zone
285.25	288.45	3.20	0.33%	1.12%

Following the completion of SES20-031, a downhole electromagnetic (DEM) survey was performed which produced a strong conductive response in the rocks located above the path of the drill hole. Using this information, the second hole was targeted in the “8” Lens zone directly at the conductor. SES21-032 continued to a depth of 338 meters. At 201 to 211 meters, the drill hole passed through the Sesmarias mineral horizon, a zone of weakly pyritic, quartz vein-rich, broken, graphitic gray and black shales which is interpreted to be the DEM conductor, and likely to represent a distal zone of potential massive sulfide mineralization in the “8” Lens area.

Drill hole SES21-033 was designed to target potential downdip massive sulfide mineralization beneath holes SES008 and SES20-031. Following the completion of SES21-033, the Company moved to the northwest of SES008 to potentially increase the strike length of the 8 Lens. At the same time, the geological team continued to assess the historical core in the Brejo area, and started to map geological structures visible in the old Lousal Mine workings. Initial work there clearly shows similarity of ore control characteristics to what we now know about the Sesmarias massive sulfide mineralization.

In June 2021, the Company presented an interim progress report covering drilling at the Alvalade Project. Highlights include:

Section 000

The Company drilled five holes, in different phases of drilling, on Section 000. From west to east, the holes are SES21-032, SES008, SES21-033, SES21-036, and SES21-037.

SES21-032. This hole cut the mineral horizon black shales, but above and distal to massive sulfide mineralization, as shown in the cross section below. Results included low anomalous levels of important indicator metals, including arsenic, antimony, manganese, and molybdenum. Copper, lead, and zinc showed weakly elevated levels, as well, suggesting some measure of proximity to massive mineralization in the subsequent drill holes. This kind of geochemical pattern will assist in vectoring towards mineralization in future target areas.

SES008. The Company drilled the 8 Lens discovery hole in 2014, and reported 5.0 meters of 0.64% copper, 0.94% lead, and 1.54% zinc. Massive sulfide mineralization lies within a wider zone of 33.1 meters of sulfide-bearing black shales and volcanics. The entire sulfide zone is bounded, top and bottom, by faulting.

SES21-033. Discovery of downdip massive sulfide mineralization of the 8 Lens in SES21-033, collared five meters northeast of SES008. After passing through the upper bounding fault zone, the hole intercepted 31.4 meters of disseminated, laminated, and stockwork sulfide mineralization, beginning from a depth of 331.6 meters and continuing downwards to 363.0 meters. Total amount of sulfides generally increases with depth, as do anomalous levels of copper, lead, and zinc. Significant copper-lead-zinc mineralization in massive sulfide material begins at

363.0 meters and terminates at 385.25 meters at the lower fault. The complete mineral zone, bounded by faults, totals 53.65 meters.

Hole SES21-033 Intercept information

Meters	From	To	Cu (%)	Zn (%)	Pb (%)
22.25	363.00	385.25	0.42	2.07	1.05
Including:
6.00	375.60	381.60	0.38	4.14	2.04
And:
4.65	380.60	385.25	0.66

Section 050 N.

The Company drilled two holes on Section 050 N, located 50 meters north of Section 000. Prior to drilling we suspected possible east-west faulting between the two sections, with unknown transposition between the north side and south side of the fault.

SES21-034 and SES21-035. These two holes targeted the northerly continuation of the 8 Lens in roughly the same geological position of the massive sulfide zone intersected in SES21-033. However, geological complications caused by faulting and folding of the target units appear, for all practical appearances, to have transposed the massive sulfide targets somewhat to the east. As both drill holes now appear to have been collared too far to the west, the results indicate that the Company drilled over the potential massive sulfide zone, just as SES21-032 did in Section 000. SES21-034 crossed mineral horizon gray and black shales with elevated results in indicator metals arsenic and antimony, as well as lead. SES21-035 crossed 12.2 meters of stockwork sulfides in mineral horizon black shales from 333.90 meters to 346.10 meters. Geochemical results show anomalous gold, silver, copper, lead, and zinc levels, as well as elevated indicator metals antimony and arsenic, suggesting close proximity to a potential massive sulfide zone.

SES21-036. This hole was collared 30 meters to the northeast of SES21-033. In hole 036, the entire fault-bounded zone of sulfide-bearing black shales and volcanics increases to 80.2 meters, with 17.0 meters of massive sulfide mineralization visible in the core. The hole entered the sulfide mineralized zone at 342.90 meters, with increasing and more intense stockwork mineralization followed by semi-massive sulfides downwards to 406.10 meters. Metal values increase downhole with increased amounts of sulfides. The drillhole passed through semimassive sulfides at this point, and continued through massive mineralization to 423.10 meters, where it is truncated by a fault. The mass also shows internal higher-grade base metal zonation. Further review is necessary to assist in vectoring towards the potential high-grade portions of the deposit.

Meters	From	To	Cu (%)	Zn (%)	Pb (%)
17.00	406.10	423.10	0.39	2.11	1.10
Including:
4.00	411.10	415.10	0.33	4.41	2.26
And:
7.00	415.10	422.10	0.47
And:
2.00	413.10	415.10
Total copper zone (semi-massive to massive sulfides)
56.00	367.10	423.10	0.30

SES21-037. To attempt to further increase the downdip projection of the 8 Lens, this hole was collared 30 meters to the northeast of SES21-036 along Section 000. However, the massive sulfide body appears to be thinning with depth, and increased faulting surely complicates the sulfide mineralized zone in SES21-037. Geological review is ongoing. Sampling will commence upon completion of the review and compilation of the new information.

Geological and geochemical results from drilling along Section 000 suggest a downdip projection of about 150 meters of massive sulfides on this section, up to 20 meters thick, and lying within a wider package of lower grade

stockwork/replacement sulfide mineralization. Results from both a recent mise-a-la-masse geophysical study and a coincident grid geochemical survey covering the overall 8 Lens target area suggest further massive sulfide potential, both to the northwest and to the southeast.

Section 070 S.

Previous drilling at SES20-031 and at SES028 suggests that massive sulfide mineralization could continue to the south from Section 000. We collared SES21-038 on Section 070 S to target potential massive mineralization in a similar geological position to the intercepts in SES21-033 and 036. Drilling in SES028, in 2018-19, intercepted a long interval of stockwork mineralization interpreted to lie geologically below potential massive sulfide mineralization. Drilling in SES20-031, late last year, intersected weakly mineralized silica material interpreted to lie geologically above possible massive sulfide mineralization.

Section 350 S

Hole SES21-044 was drilled along section 350 S and returned a total of 60.4 meters of semi massive to massive mineralization grading 0.40% copper, 0.68 g/t gold, 37.08 g/t silver, 0.96% lead, and 2.33% zinc. This is within a wider zone of 113.8 meters of stockwork to massive sulfide mineralization including 103.0 meters of 0.51 g/t gold, 96.0 meters of 29.20 g/t silver, 113.8 meters of 0.35% copper, 96.0 meters of 0.86% lead, and 96.0 meters of 1.98% zinc.

Section 350 S demonstrates the position of massive sulfide mineralization in a district-scale fold system at Sesmarias North. The massive sulfide body is heavily folded, itself, making it difficult to accurately estimate original true thickness of the beds, though best thinking puts it at 30-40 meters.

The geological section shows that mineralization can be divided into massive sulfides on the east limb of the main syncline and stockwork to semi-massive sulfides on the west limb of the main syncline. From detailed review of all core at Sesmarias North, it is apparent that the east limb mineralization in SES21-044 is the continuation of mineralization previously intersected in SES21-039, while the west limb mineralization is the continuation of mineralization seen in SES21-040. It is suspected that “two-limb” mineralization continues to the north, and that further drilling will demonstrate the position of such base metal mineralization. The massive sulfide mineralization is believed to remain open to the south towards the previously-discovered mineralization in the Sesmarias Central and South sectors (the “10” Lens). Further work is planned in the Central sector to follow up “2” Lens mineralization, which appears to be separate from the “10” Lens.

Hole SES21-046 was drilled approximately 100 meters from SES 21-044 NW along strike to fill the drilling gap between Section 120S and 350S.

The 250 S geological section shows that SES21-046 crosses the east limb of the Sesmarias syncline with good results in massive sulfide mineralization, then crosses back through a secondary fold into sulfides, but apparently at the very top of the massive body with lower-level results. The drill hole continues through the trough of the syncline until it cuts the closed-off top of the west limb with a higher-grade copper value over a short width. These results and interpretations point to further potential below this hole, as seen in SES21-044. Further drilling is planned for both sections to test for significant depth potential for copper-zinc mineralization.

During 2021, the Company commissioned a helicopter-supported VTEM geophysical survey over a portion of the Alvalade license. Initial results highlighted a trend of potential targets from the Caveira Mine to the Lousal Mine. Widescale cultural interference in the survey area, caused by a village, railroad tracks, and power lines, made

visualization of electromagnetic anomalism particularly difficult in the area between Lousal and Sesmarias. However, the Company engaged a second geophysical consulting firm to re-process the original data in order to clarify and accentuate the VTEM anomalism by masking the cultural electromagnetic effects on the survey.

First-pass, ground follow-up suggests that the anomalism follows the main mineral trend on the Alvalade license, and that the anomalism is hosted by the same (or similar) volcanosedimentary sequence (VS) rocks that host mineralization at Sesmarias, Lousal, and Monte da Bela Vista. The follow-up work will include mapping, rock chip sampling and grid soil sampling over the initial target areas, followed by work in the enhanced target areas presently being developed through the data re-processing procedures. We anticipate this work to be followed by scout drilling with a second drill rig.

In the Monte da Bela Vista (MBV) target sector where drilling was conducted in 2013-14, the Company returned to the mineralized area in 2021 for more detailed mapping and rock chip sampling, and a re-log of the historic core holes, using knowledge gained during the ongoing Sesmarias campaign. The updated geo-structural model, successfully being utilized in the Sesmarias area, is providing new targets at MBV, particularly in the parts of the area where the target mineral horizon is not exposed at the surface (southwest sector). Previous drilling by the Company targeted exposed VS mineral horizon rocks (northeast sector) with moderate success, but it appears that the best of the exposed mineral horizon zone may have been eroded away or removed structurally.

Combination of results from the VTEM survey, recent mapping and sampling, and an enhanced understanding of the structure and geology, suggests a new, buried and relatively untouched target zone, immediately adjacent to the southwest of the exposed VS mineral horizon rocks, and directly on trend with massive sulfides at the Lousal Mine.

The Company finished much of the initial targeting work at MBV with the acquisition of the final tranche of ionic leach soil sampling results. The Company collected 380 soil samples covering the MBV target area, and all geochemical results have returned from the lab. As expected, strong anomalism of target metals and pathfinder elements is present in the exposed mineral horizon sector in the northeast. In the buried mineral horizon sector in the southwest, strong anomalism in lead, barium, and manganese, along with detectable gold and silver anomalism, suggests the potential for buried massive sulfides, particularly along strike continuation of the Lousal massive sulfide bodies. The presence of a strong VTEM anomaly directly over the geological/geochemical target enhances the interpretation for potentially positive results here.

At the Lousal Mine area, historic data is being compiled and digitized to reconstruct the mine digitally. Knowledge of the workings and mining results will help immensely in defining new targets and extensions of mineralization at the historic mine. Surface geological mapping earlier this year has shown that the complexity of the mineral horizon at Lousal is quite similar to what is seen in the Sesmarias district drilling and what is now being seen in the MBV area.

In September 15, 2022, Phase 9 of drilling began on the Alvalade Project. This new drilling initially targeted anomalies located between the historic Lousal and Caveira Mines, over a strike length of approximately 11 kilometers. The first drill hole targeted potential mineralization located 300-400 meters northwest of the last reported mineralization in the Lousal Mine. Previous, wide-spaced drilling by Avrupa demonstrated the presence of robust massive sulfide mineralization over a further strike length of +1,200 meters through the central and southern sectors at Sesmarias.

Location map for Phase 9 drilling locations

On March 3, 2023, the Company provided an update on progress at the Alvalade Project. The Company completed four exploration holes, totaling 2,693 meters, in this phase of drilling. The first two holes tested possible NW strike extension of the Lousal massive sulfide deposit (LNW22-001) and electromagnetic anomalism on a parallel trend to Lousal mineralization (LNW22-002). The third hole targeted a strong geophysical anomaly in mineral-host black shales, located about 4 kilometers further north of the Lousal NW holes (RAI22-001). The fourth hole tested another geophysical anomaly in the Casas Novas target sector, two kilometers south of the Caveira Mine area (INC22-001). All four holes cut through weakly mineralized, strongly folded and faulted, target black shales. Geochemical results from sampling of the first three holes suggested proximity to potential massive sulfide systems, particularly in the two Lousal NW drill holes.

Subsequent to completing the two LNW holes, the Company performed a stationary-loop SQUID TEM electromagnetic survey to further attempt to identify potential massive sulfide mineralization in this sector. The survey identified an electrical conductor located west of the drilling in favorable geological target area, supported by anomalous base metal results from previous soil sampling work. Further electromagnetic studies, using a moving electrical loop for more detail, supported the presence of a strong conductor. The schematic location of the conductor would be tested by a new drill hole, LNW23-003. Furthermore, geochemical results from sampling of the first two LNW holes suggested the possibility of nearby sulfide mineralization. The Joint Venture continued detailed geochemical studies and interpretation covering the use of low-level results from elements including gold, silver, arsenic, antimony, manganese, molybdenum, thallium, tin, copper, lead, and zinc, to determine potential proximity to massive sulfide mineralization. In this case, while drilling did not intercept massive sulfide mineralization, the results from sampling of the weakly mineralized black shales, typically the host rock material for mineral deposits in this portion of the Iberian Pyrite Belt (“IPB”), suggested the presence of the kind of hydrothermal system that forms massive sulfide deposits in the IPB. The company is trying to ascertain how to differentiate the black shales from zones of potential massive sulfide mineralization.

Six additional holes were drilled in the Sesmarias Central and South Zones as the JV geological team aimed deeper to 400 meters depth to attempt to locate further high-grade mineralization. Previous JV drilling demonstrated the potential for significant thicknesses of massive sulfide mineralization, and the Company recognized the potential for

higher grade mineralization as it moved south towards the Central Zone, perhaps the center of the mineral system. The Company now recognizes that the SES002 lens could be part of the new discovery lens, separated by faulting.

The following diagram shows the extent of drilling in the Sesmarias North and Central Zones from SES019 northwest to SES21-036 as shown in the general schematic section. The six recently-completed drill holes are highlighted in red.

The following tables summarize the most important results from these six drill holes.

Hole SES23-047 intercepted at least part of the eastern limb of the target mineralized syncline, and possibly part of the hinge of the syncline. Further drilling is clearly necessary to search for both extension and shape of the mineral body.

Drillhole		Interval	From	To	Cu (%)	Pb (%)	Zn (%)	Ag (g/t)	Au (g/t)
SES23-047		26.95	393.80	420.75	2.18	2.58	5.60	88.2	0.33
	w/i	43.40	392.80	436.20	1.51	2.15	4.78	64.1	0.26

SES23-048 intersected 9.2 meters of massive sulfide mineralization, followed by 8.3 meters of stockwork sulfide mineralization near the presumed top of the hinge zone, or possibly on the western, upright limb of the Sesmarias synform on Section 800 South.

Drillhole		Interval	From	To	Cu (%)	Pb (%)	Zn (%)	Ag (g/t)	Au (g/t)
SES23-048		9.20	419.10	428.30	1.20	1.46	3.05	30.1	0.43
	and	8.30	428.30	436.60	0.31	anom.	0.33	anom.	0.43
	total	17.50	419.10	436.60	0.78	---	---	---	0.43
	also	0.25	348.40	348.65	1.01	0.74	1.32	39.2	0.14

SES23-049 did not cut significant mineralization, as the hole crossed too high in the Sesmarias synform, much like SES23-041, drilled in 2021. Fragments of massive sulfide mineralization are present in the major thrust fault that bounds and cuts the eastern, overturned limb of the Sesmarias synform

Drillhole		Interval	From	To	Cu (%)	Pb (%)	Zn (%)	Ag (g/t)	Au (g/t)
SES23-049	no significant results
		0.70	332.55	333.25	0.29	0.19	0.32	anom.	anom.

SES23-050 did not intersect any significant visible mineralization, as the hole crossed beneath the Sesmarias synform. It did cross the eastern limb fault containing abundant disseminated and fragmented pyrite.

Drillhole		Interval	From	To	Cu (%)	Pb (%)	Zn (%)	Ag (g/t)	Au (g/t)
SES23-050		samples in lab -- no significant results expected, though crossed faulted east limb at 397.50 to 398.70 meters, below hinge zone

SES23-051 crossed 30.7 meters of zinc-rich stockwork sulfide mineralization beneath the hinge zone. This included an intercept of 9 meters of semi-massive to massive sulfide mineralization and a further zone of 8 meters of semi-massive sulfides, followed by another 11.7 meters of stockwork sulfide mineralization.

Drillhole		Interval	From	To	Cu (%)	Pb (%)	Zn (%)	Ag (g/t)	Au (g/t)
SES23-051		9.00	456.80	465.80	anom.	0.99	2.35	11.7	anom.
	and	8.00	467.80	475.80	anom.	3.04	3.47	50.7	wk anom.
	strong stkwk	19.00	456.80	475.80	---	1.77	2.61	27.3	---
	total stkwk	30.70	456.80	487.50	---	1.18	1.88	17.8	---
	remainder of samples in lab -- no significant results expected, below hinge zone

SES23-052 crossed the western, upright limb of the Sesmarias synform in the Sesmarias South area. This is the first deeper intersection of the western limb in the Central and South zones at Sesmarias. The intersect included 28.4 meters of variable sulfide mineralization from stockwork to massive mineralization.

Drillhole		Interval	From	To	Cu (%)	Pb (%)	Zn (%)	Ag (g/t)	Au (g/t)
SES23-052		5.60	358.60	364.20	0.45	---	---	---	0.33
	and	7.00	366.20	373.20	anom.	0.84	2.72	24.8	wk anom.
	incl.	4.00	368.20	372.20	anom.		3.40		wk anom.
		3.00	370.20	373.20	anom.	1.33			wk anom.
		2.00	370.20	372.20	anom.			45.1	wk anom.
	w/i	28.40	358.60	387.00	total zone of sulfides, including insipient stkwk to massive mineralization
		now cutting remainder of samples -- no significant intervals of high-grade results expected, though several zones of stkwk exist

Current and Anticipated Exploration

Drilling in 2023 totaled 6,530 meters in 14 holes. Two holes were drilled at Caveira South, one at Casas Novas, four in the Lousal Northwest area, one at Brejo, and six in the Sesmarias massive sulfide VMS deposit area.

The highlight of the 2023 drilling program was the re-discovery of the high-grade copper-zinc-lead-silver mineralization at Sesmarias in SES23-047. Follow-up drilling at Sesmarias confirmed potential for more high-grade massive sulfide and stockwork mineralization in the Central Zone at Sesmarias. The success of the Sesmarias drilling underlies potential for the next phase of drilling there, tentatively commencing in Q2 of 2024. This phase will be aimed at defining the high-grade mineralization located in/around the hinge of the Sesmarias Syncline, particularly along strike between the 250 South and 800 South section lines. Plans for the next phase are underway.

To enhance targeting at Sesmarias, The Company performed an IP-Resistivity survey at the end of 2023. The 6-line, 2100-meter-long IP-Resistivity survey covered the North and Central Zones and the Brejo target area just north of Sesmarias. The survey may assist in identification of stockwork sulfide mineralization in proximity to massive sulfides.

Drilling in the northern target areas of the Alvalade license was less successful than at Sesmarias. Drilling intersected narrow lenses of polymetallic sulfide mineralization in both Caveira South drill holes and wispy, distal facies, replacement sulfide mineralization in the Casas Novas drill hole. The Company hopes to do follow-up drilling in both areas at some point in the future, but there are no plans for this in the up-coming drilling phase. Drilling at Lousal Northwest intercepted the mineral horizon black shales, but no significant sulfide mineralization.

Planning for the next phase of drilling is underway, which is expected to commence in the second quarter of 2024. This drilling will test the potential for more significant massive sulfide mineralization in the central and northern sectors of the deposit. This program is expected to total about 5,000 meters of drilling. The success of this drill program will determine how best to move towards a mining license application which will be necessary in the first half of 2025.

Kosovo

The Company advanced its property interests in Kosovo though its 100% owned subsidiary Innomatik Exploration Kosovo (IEK). The Company initially purchased a 92.5% interest in IEK in July 2010. During the year ended December 31, 2013, the Company acquired the remaining 7.5% interest in IEK.

Slivova (formerly Slivovo) Project

The original Slivovo exploration license is located approximately 15 km southeast of the capital Prishtine. The Company’s geologists first discovered an outcropping gossan zone, 200 meters long x 100 meters wide x 75 meters in elevation, near the village of Pester in late 2011. The license covered 15.2 square kilometers and was issued to the Company on June 27, 2012.

During fiscal 2020, Byrnecut decided not to proceed with advancing Slivovo. Rather than dropping the license and potentially allowing a third party to stake the open land, Innomatik Exploration Kosovo LLC (“IEK”), Byrnecut and Peshter Mining entered into a binding term sheet (the “TS”) whereby the parties set out the terms on which Peshter Mining would surrender the existing tenements, thereby enabling IEK to apply, as sole beneficial owner, for one or more tenements over the entirety of the tenement area.

As consideration for Byrnecut ensuring that Peshter Mining complies with its obligations under the TS, IEK must pay to Byrnecut milestone cash payments totaling €375,000 and milestone gold payments totaling 850 troy ounces of gold as follows:

Cash

·€125,000 within 30 days of the first to occur of the completion of a positive bankable feasibility study or the board of directors of IEK making a decision to proceed with the development of a commercial mining operation in respect of all or any part of the tenement area;

·€125,000 within 30 days of issue of a mining license in respect of all or any party of the tenement area; and

·€125,000 within 30 days of commencement of construction of a mine within the tenement area.

Gold

·100 troy ounces within 30 days of commencement of commercial production (“CCP”);

·175 troy ounces within 30 days of the one-year anniversary of CCP;

·250 troy ounces within 30 days of the two-year anniversary of CCP; and

·325 troy ounces within 30 days of the three-year anniversary of CCP.

The license was officially released back to the government and IEK reapplied for the vacated license. The application was reviewed by the board of directors of the Mining Bureau, but no decision was made by the time of their final meeting of their term in office, leaving the decision to a new incoming board of directors. In May 2022, the Company received a new 7-year exploration permit covering the Slivova gold prospect and potential extensions.

In September 2022, the Company announced that it entered into an Option Agreement with Western Tethyan Resources (“WTR”) for WTR to earn-in up to 85% of the Slivova Gold Project by funding and performing certain work programs to potentially advance the Slivova Project to a mining solution. WTR is a private exploration company based in London and Prishtina, Republic of Kosovo, and is 75% owned by London AIM-listed Ariana Resources.

The terms of the agreement for WTR to earn up to an 85% in the project is the following:

The Due Diligence (“DD”) Phase runs from September 1, 2022 (“Effective Date”) to March 1, 2023:

·€35,000 cash payment to Avrupa upon signing (received);

·€100,000 investment during DD Phase; however if WTR decides to vacate the Project before completion of 6-month DD, minimum of €25,000 must be spent (WTR spent such amount);

·€35,000 cash payment to Avrupa at the end of 6-month DD period (received March 6, 2023);

·Definitive Agreement to be completed and signed (completed May 2023).

Earn-In Phases

·Stage 1:

o€30,000 cash payment to Avrupa on September 1, 2023;

oIf WTR elects to enter the Definitive Agreement, it will invest total €800,000 during first two years from the Effective Date (minimum of €150,000 must be spent by September 1, 2023, post DD Phase), for exploration, drilling, baseline environmental and social surveys, landowners, etc., for 51% of the project.

·Stage 2: After completion of Stage 1, during the third year from the Effective Date, WTR will invest €1,000,000 for NI 43-101 resource estimation, commencement of full Environmental Impact Statement (“EIS”), etc., for 75% of the project.

·Stage 3: During fourth and fifth year from the Effective Date, WTR must complete the EIS, Feasibility Study (“FS”), and Mining License application, for 85% of the project.

·Stage 4: WTR completes success payments to previous JV partner, Byrnecut International Ltd. (“BIL”):

Cash

o€125,000 within 30 days of the first to occur:

-Completion of a positive FS (minimum 15% IRR)

-Avrupa or related party making a decision to proceed with development of a mining operation within the license area

o€125,000 within 30 days of issuance of a mining license for the Slivova Project, and

o€125,000 within 30 days of commencement of mine construction within the license area.

Gold

o100 troy ounces within 30 days of commencement of commercial production (“CCP”);

o175 troy ounces within 30 days of the first-year anniversary of CCP;

o250 troy ounces within 30 days of the second-year anniversary of CCP;

o325 troy ounces within 30 days of the third-year anniversary of CCP.

·Stage 5: Avrupa participates in the mine build or dilutes to 1% NSR.

On March 2, 2023, the Company reported that WTR completed its detailed due diligence study of the Slivova Gold Deposit and elected to continue with Stage 1 of the earn-in joint venture program at Slivova. In May 2023, the Company and WTR completed the definitive option agreement on the project.

During the 6-month due diligence period, WTR developed a small mine concept for the Slivova Project, studying “feasible access, mining, processing, and tailings management options”. At this level of investigation, WTR found that the Project demonstrates “potential for low initial capex, moderate operating costs, and attractive NPV and IRR in the context of the low initial capex and the current estimated mine life”. As a result of these studies, WTR is initiating a Preliminary Economic Assessment and Scoping Study for the Slivova Project, and that they engaged UK-based consultants Bara Consulting UK and Knight Piesold to perform the study.

During 2023, WTR completed an updated Mineral Resource Estimate and a positive, independent Preliminary Economic Assessment on the small mine concept. The PEA contemplates a combined open-pit and underground mining operation with gold recovery by Carbon-in-Leach method. WTR also performed exploration rock and soil sampling around the license to help identify satellite deposits. The government has issued trenching and drilling permits for 2024, and WTR is planning and budgeting for the work program. This program is expected to include trenching over several untested targets and exploration drilling outside of the main deposit in efforts to increase the mineral resources. WTR may also conduct some infill drilling. The Company believes WTR will perform the necessary work to reach the 51% ownership level of the license during 2024, as required by the JV agreement.

As of December 31, 2023, WTR had spent €379,840 towards the 51% earn-in level.

Finland

In December 2021, the Company signed a binding letter agreement (the “Letter Agreement”) with Dutch holding company, Akkerman Exploration B.V. (“AEbv), to acquire 100% ownership of Akkerman Finland OY (“AFOy”). Finnish-registered AFOy owns three mineral reservations in the past-producing and highly prospective Vihanti-Pyhäsalmi VMS district in central Finland, and a gold exploration property located in the Oijärvi Greenstone Belt in north-central Finland.

Currently, the Company has completed the initial earn-in requirements and has a 49% interest in AFOy.

Acquisition Terms

The Company could earn an initial 49% of AFOy in Stage One by issuing 1,470,000 common shares, paying €150,000 (€10,000 paid), and depositing €200,000 into an account dedicated for first year exploration expenditures.

As a Stage Two earn-in, the Company can acquire the remaining 51% of AFOy by issuing a further 1,530,000 common shares and depositing an additional €200,000 into the dedicated account for further exploration expenditures. The Company will also pay out the remaining advances of approximately €15,000 to AFOy’s parent company at this stage.

In February 2022, the Company signed the Share Purchase Agreement with AEbv. In March 2022, the Company completed Stage One under the agreement and acquired the initial 49% in AFOy by issuing 1,470,000 common shares, paying the remaining cash for a total of €150,000, and depositing €200,000 into an account for the first year’s exploration expenditures.

The Company will review data and drill core from the historic operations which cover each of the project areas, and will engage a qualified professional geologist to complete a technical report on the projects as part of its due diligence process. During the period between Stage One and Stage Two, the Company and AEbv will form a Technical Committee comprised of one representative from each party will oversee the work programs. AFOy’s majority shareholder will have the deciding vote during the initial earn-in period. The Company will be the operator for all work conducted on the properties.

The projects will be upgraded from a “reservation” to “licenses” as the first step of the exploration program. Once license areas are defined and the application process is underway, Avrupa will oversee detailed systematic data compilation and review, historic drill core review, basic surface geochemical exploration, and new drill targeting in preparation for drilling when the license applications are approved.

Projects

Initially there were four projects in the program: Kangasjärvi, Kolima, Säviä copper-zinc reservations in the Pyhäsalmi Mining District, and the Yli-li gold reservation in an under-explored greenstone belt located to the north of the Pyhäsalmi area. Initial work and review led to the dropping of the Säviä reservation due to problematic land access and difficult access to known mineralization. AFOy moved the other three reservations to permit application level, and the Finnish mining bureau, Tukes, granted permits for Kangasjärvi and Kolima. However, several objections were tabled, as allowed by Finnish law, and the Kolima permit remains in the appeals court process for now. The Yli-li application is in process at Tukes. Subsequently, AFOy acquired an exploration permit called Hallaperä covering known massive sulfide mineralization. And recently, AFOy acquired a fifth exploration permit through the Finnish permit process covering the Rauhala massive sulfide prospect.

Kolima Property

The 187 km2 Kolima reservation covers a target zone comprised of a thick layer of mineralized distal-type volcanics containing thin beds and layers of zinc-rich massive sulfide mineralization in some areas. The Geological Survey of Finland (GTK) discovered and explored the area in the period from 1956 to 1983. The GTK found zinc mineralization in an area two kilometers long and 200 to 400 meters wide within strongly altered metasediments and fine-grained volcanic rocks. GTK drilled 70 holes and detected widespread, polymetallic sulfide mineralization occurring as fine disseminations and thin layers of semi-massive sulfides. Generally, it seems that the currently known mineralization represents distal-style metals’ deposition within a larger VMS system that has not yet been discovered. Numerous mineralized boulders containing anomalous gold and copper are present around the site.

AFOy completed a helicopter-supported SkyTEM geophysical survey over the mineralized area of the reservation. Preliminary analysis of the data by AFOy did not suggest any obvious targeting. However, recently-completed detailed review of the data by AFOy and the Company outlined subtle anomalism over southern extension of the known volcanics-hosted mineral trend and also outlined a deeper (175 meters), strong geophysical target in a trend of the volcanic rocks parallel to those that host the known zinc mineralization. There is no reported previous exploration along this second trend, located a few kilometers west of the known zinc showings.

In April 2022, the Company reported on first operations at its recently-acquired Kolima Project in the Pyhäsalmi VMS Belt in central Finland.

Based on known mineralization in historic drill holes, the Company selected a suite of drill holes to detail re-log and sample. Most important goals include: 1) attempt to determine a mineral/geochemical vector towards proximal-style massive sulfide mineralization; 2) establish a more detailed recognition of strength and breadth of the known distal-style massive sulfide mineralization; and 3) determine potential to extend the Kärna mineralization to the southeast, 3.5 kilometers along strike towards the Target 1 geophysical conductor.

On June 21, 2022, the Company provided a follow-up progress report covering work related to the Kolima Project.

·Sampling and re-logging of four historic drill holes completed;

·Geochemical results confirm the presence of distal, disseminated VMS-style zinc mineralization, though the source is still unknown;

·Multi-element, pathfinder geochemistry supports the possibility for proximal, massive VMS-style mineralization within a radius of 5km;

·Combination of geology, SkyTEM geophysics, and new geochemical results suggest several well-defined target areas for first pass drilling when exploration license is issued.

The Company contracted with the Finland Geological Survey (GTK) to re-log and sample four representative, historic drill holes from the Kolima exploration projects carried out from the mid-1950’s to the early-1980’s by GTK. Re-logging of the four drillholes, totaling 743.55 meters and situated along a 2-kilometer strike length, indicated that predominantly disseminated zinc mineralization was present, for the most part, through long intervals of mixed volcanic and sedimentary rocks that form the core of the district-scale Kärnä Anticline. Holes that were started further to the west in the west limb of the anticline tended to have thicker zones of zinc mineralization, while the southeasternmost hole, collared at the edge of the east limb of the anticline, contained the least amount of target volcano-sedimentary rocks, and thus little zinc mineralization.

In addition to intervals of disseminated sulfides, detailed logging also revealed the presence of several thin beds of semi-massive to massive sphalerite, zinc sulfide, up to one meter thick, in two of the holes, again suggesting that the representative drilling cut distal deposition portions of a VMS system. Typical VMS pathfinder elements, including iron, manganese, antimony, arsenic, molybdenum, and locally tin, showed anomalous results. VMS metals themselves, copper, lead, and silver, were also present locally anomalous levels in the sampled core. Following are the zinc results of interest in the holes, from north to south:

HOLE R339 – Drilled from west limb of Kärnä Anticline; total depth of 84.5 meters; 62 samples
From (m)	To (m)	Interval (m)	Zinc (%)	Notes
29.66	29.84	0.18	2.4	Two thin beds of semi-massive sulfide mineralization within a 20-meter interval of mafic tuffs that contain continuously anomalous Zn up to 0.38%@ over one meter
44.13	44.27	0.14	4

63	63.15	0.15	7.8	Two thin beds of semi-massive sulfide mineralization within an interval of mineralized mafic tuffs containing 5.95 meters @ 1.3% Zn
65	66	1	4.4

HOLE R46 – Drilled from west limb of Kärnä Anticline; total depth of 297.6 meters; 109 samples
From	To	Interval	Zinc	Notes
175	179	4	0.3	Strongly anomalous zones of disseminated to weakly bedded sulfide mineralization in mixed tuffs, sediments, and mafic porphyry rocks within a total intercept of disseminated zinc mineralization beginning at a depth of 175 meters and continuing to 281.9 meters. Values range from 100's of ppm zinc to more than 1% over 1 to 4 meters thickness.
205	243.3	38.3	0.2
254	268.7	14.7	0.6
254	258	4	1.4
272	281.9	9.9	0.2
HOLE R26 – Drilled from crest of Kärnä Anticline; total depth of 151.45 meters; 70 samples
From	To	Interval	Zinc	Notes
21	29	8	0.3	Visible disseminated sulfides throughout both zones of mixed tuffs and sediments at the bottom of the interval
39.4	69	29.6	0.2

Hole R25 – Drilled from east limb of Kärnä Anticline; total depth of 210 meters; 20 samples
From	To	Interval	Zinc	Notes

It is encouraging to observe the widespread, disseminated to thin-layered zinc mineralization in mixed volcanics and sedimentary rocks suggesting a distal VMS facies depositional environment. Indicator element anomalism, including

iron, manganese, antimony, arsenic, molybdenum, and locally tin, also suggest distal facies VMS mineralization. Locally anomalous values of silver (up to 41.2 g/t over one meter), copper, and lead (up to 0.39% over four meters) further support the possibility of nearby VMS mineralization.

Results of the work to date were positive, and detailed review of all information vectors to the possible presence of a base metal-rich massive sulfide system at Kolima.

·Best potential lied along the west limb of the Kärnä anticline, particularly to the south of historic drilling in the area of SkyTEM Anomaly #1 (located within red oval in Figure 5).

·Further potential lied in the northern sector around and southeast of SkyTEM Anomaly #3 from drill collars to be located to the west of historic drilling and aimed beneath the old holes (located within yellow oval in Figure 5).

·Combination of all results suggested the possibility of a strong VMS system within a general target zone of five kilometers along the Kärnä Anticline.

·At this point, regional geophysics may indicate further potential of favorable stratigraphy located to the northeast of SkyTEM Anomaly #1 between the east limb of the Kärnä Anticline and village of Kolima. There was no known historic drilling in this area.

The Company submitted an application for an Exploration Permit on January 24, 2022. In May 2023, the Kolima application was approved by Finland’s mineral exploration licensing authority, but three appeals were filed. Those appeals must be reviewed before an exploration license can be granted. Consequently, AFOy and the Company decided to temporarily suspend exploration work at Kolima until the outcome of the court proceedings is established.

The Kangasjärvi Property

The 203 km2 reservation covers the Kangasjärvi deposit, a satellite deposit of the Pyhäsalmi mine, located about 25 kilometers to the north of the site. The massive sulfide was exposed at the surface, and Outokumpu mined 1-9% zinc material from the Kangasjärvi open pit in 1984-85 down to <100 meters from the surface. Exploration drilling by Outokumpu intersected massive sulfides down to 250 meters depth beneath the pit, but did not attempt deeper drilling, leaving the deposit open at depth, as well as along strike.

In 1983, GTK estimated a small historic resource in two separate lenses. Records in 1987 indicate that Outokumpu mined about 86,000 tonnes of 5.12% zinc. There is also reported anomalous copper, silver, and gold in the deposits. In addition to the Kangasjärvi deposit, there are at least three other mineral occurrences within the reservation area. Little work of any sort has been completed anywhere on the reservation for at least 20 years, even though there are historic drill holes throughout the district.

AFOy has completed a 92 line-kilomter helicopter-supported SkyTEM geophysical work over known significant areas within Kangasjärvi. In March 2022, the Company announced that it would work to advance the Kangasjärvi reservation to an exploration license application. The application area would cover the past producing Kangasjärvi zinc mine and apparent extension targets, as well as other potential prospects identified during the SkyTEM geophysical survey. In order to advance the exploration license application process, field work on the Kangasjärvi Reservation began in April 2022.

First-pass review of drillhole logs and data suggested that the mineralization at Kangasjärvi was hosted by a unit comprising of fine-grained tuffs and sediments, and included thin limestone layers that may act as marker beds within the mineral-horizon package. The potential mineral hosting unit was strongly altered, originally chlorite/sericite, and subsequently highly metamorphosed to include a cordierite-garnet-sillimanite assemblage of minerals. Widespread disseminated sulfides were present with increasing base metal sulfide content towards the known massive sulfide layer. The mineral horizon, as outlined by historic drilling in the open pit area and immediate surroundings over a strike length of 300 meters, was also reflected by strong conductivity and magnetism. Similar high conductivity and magnetism extended in strong and pronounced anomalism beyond previously-drilled mine area to the southeast over at least four kilometers and also for one kilometer to the north of the Kangasjärvi Mine.

Basic exploration work, continued review of historic core and geophysical data, and modeling of SkyTEM data from the Kangasjärvi license suggest an outstanding un-drilled target close to the old Kangasjärvi Mine. The area is structurally complex, but the Company expected that selective re-logging and sampling of available core, along with compilation and re-interpretation of all acquired data, would generate new, potential mineral target areas beyond the mine.

In August 2022, the Company submitted an application for a new Exploration Permit. The application covered approximately 18.4 square kilometers of favorable terrane for copper- and zinc-bearing volcanogenic massive sulfide deposits. In May 2023, the Finish mineral exploration licensing authority approved the Kangasjärvi application, there were no appeals during the 37-day comment period. The exploration license is now fully in force. AFOy has started to fulfill obligations related to the issuance of the new license, including payment of the annual fees directly to the landowners within the permit area, as well as planning the next phase of exploration.

The joint venture is making plans for drilling of a promising deep EM anomaly adjacent to the historic Kangasjärvi zinc mine in 2024. There are further SkyTEM anomalies that may rate drilling after planned exploration work during the up-coming field season. AFOy and the Company will continue the review and compilation of substantial amounts of historic geological and drilling data from around the license area.

The Hallaperä Property

The exploration license application for Hallaperä was received in 2023. The Hallaperä exploration license application is located near the town of Kiuruvesi in the Pyhäsalmi Mining District. The license covers known copper and zinc sulfide mineralization discovered by Outokumpu Oy in 1967, and partially outlined by drilling of 42 holes during the period 1967 to 1990.

The main Hallaperä massive sulfide body was outlined in 1967 by 21 drill holes in the initial phase of drilling over a total strike length of 1,150 meters. It is a plate-like body with an average thickness of 3 meters, up a maximum width of 18 meters. The strike is in a NNW-SSE direction, with a dip of 60-70 degrees to the SW. A smaller extension continues across the highway to the SSE over an additional length of 650 meters. The sulfide body was further outlined by subsequent drilling of another 21 holes drilled between 1967 and 1990 and remains open at depth. Mineralization includes both semi-massive sulfide and breccia-type characteristics, surrounded by disseminated sulfides. There is no apparent visible zonation. The highest metal grades are associated with breccia-type mineralization, which contains rounded fragments of silica in a matrix of sulfides. Pyrrhotite and pyrite are the dominant ore minerals, with chalcopyrite a minor constituent. In places, sphalerite and magnetite are also abundant.

The Company has been compiling and evaluating historic drill hole information in order to build a mineralization model to support further exploration. Historic, shallow-penetrating ground EM geophysics outlined close-to-surface mineralization, and follow-up drilling defined mineralization to a depth of just 150 meters. Samples were systematically analyzed for only copper, zinc, iron, and sulfur. With new geochemical and geophysical exploration, followed by drilling, there is room for further expansion of the Hallaperä mineral lens, particularly at depth, but possibly along strike, as well.

The Rauha License

The Finnish mining bureau recently awarded an exploration permit to AFOy for another license covering a massive sulfide deposit near the historic Vihanti Mine. The Rauhala deposit was discovered in 1985 by the Finnish Geological Survey (GTK), and later worked by Outokumpu Oy. It measures nearly 600 meters long and 350 meters wide and averages about 2 meters thick, as presently known. Virtually no work on the deposit has been completed in the past 20-25 years.

The Yli-li Gold Property

The 332 km2 Yli-li gold reservation covers 30 kilometers strike length of the southern extension of the Oijärvi greenstone belt and major shear zone. Several nearby properties that contain known gold mineralization are being explored by other operators, but the Yli-li property is relatively under-explored.

GTK first explored the southern extension of the Oijärvi shear zone, covered by the reservation, from 2001 to 2014. Initial studies turned up gold-in-till anomalies over intensely sheared and altered rocks. Limited drilling resulted in one intercept of 3 g/t gold over two meters at the Kupsusselkä prospect. Given these promising early-stage results, there is clearly need for wider-scale systematic exploration program to determine the best targets within the area.

Item 5. Operating and Financial Review and Prospects

Overview

The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with IFRS. The value of the U.S. Dollar in relationship to the Canadian Dollar was $1.32 on December 31, 2023.

The Company has since inception financed its activities through the issuance of equity. The Company anticipates having to raise additional funds by equity issuance in the next several years, as all of the Company’s properties are at the exploration stage. The timing of such offerings is dependent upon the success of the Company’s exploration programs as well as the general economic climate.

Set out below is the operating and financial review for the financial years ended December 31, 2023, 2022 and 2021. All per share amounts have been adjusted for the 1 for 4 common stock consolidation effective December 21, 2020.

Operating Results

Year ended December 31, 2023 vs. year ended December 31, 2022

During fiscal 2023, drilling continued on the Alvalade property in Portugal. In Kosovo, WTR completed a new Mineral Resource Estimate and Preliminary Economic Assessment on the Silvova Property. In Finland, exploration permits were issued on several of the licenses, and a fifth exploration project was acquired.

The comprehensive loss for the year ended December 31, 2023 was ($55,637), or ($0.00) per share, compared to a comprehensive loss of ($341,109), or ($0.01) per share, for the year ended December 31, 2022. Mineral exploration expenses were $66,492 (Year ended December 31, 2022 - $72,329), and reimbursement from optionees was $482,452 (2022 - $402,343).

Excluding the non-cash bad debt expenses of $12,934 (2022 - $Nil), depreciation of $1,775 (2022 - $1,923), and share-based payments related to the issuance of stock options of $Nil (2022 - $98,123), the Company’s general and administrative expenses totaled $422,747 during the year ended December 31, 2023 (2022 - $517,021), which is a decrease of $93,274 from the prior year.

Significant declines occurred in investor relations, which decreased to $52,615 from $109,270, professional fees, which fell to $133,099 from $175,500, listing and filing fees, which fell to $8,925 from $14,881, and transfer agent fees, which declined to $4,786 from $13,971. These decreases are largely attributable to fewer issuances of common shares in the current year. Increases occurred in consulting fees, wages and benefits, which rose to $180,854 from $165,955, office and administrative fees, which increased to $21,092 from $15,676, and travel, which declined to $4,786 from $13,971.

Other items include foreign exchange loss of ($5,747 (2022 – gain of $17,630) as exchange rates were less favorable in the current year, interest income and other income of $491 (2022 - $2,607) and loss on investment in Akkerman Finland OY of $27,569 (2022 - $62,973) as its share of the operating loss of AFOy. The Company also wrote-off property deposit of ($1,460) in 2023. Exchange differences arising on the translation of foreign subsidiaries was a gain of $1,144 (2022 - loss of $11,320).

During the year ended December 31, 2023, the Company expensed exploration costs of $66,492 which consists of costs of $27,561 on Alvalade in Portugal and $38,931 on Slivova in Kosovo.

Year ended December 31, 2022 vs. year ended December 31, 2021

During fiscal 2022, drilling continued on the Alvalade property. In Kosovo, a new license was granted for the Silvova property the Company agreed to an option agreement on the property with WTR. In Finland, exploration commenced on the recently acquired licenses.

The comprehensive loss for the year ended December 31, 2022 was ($341,109), or ($0.01) per share, compared to a loss of ($14,108), or ($0.00) per share, for the year ended December 31, 2021. Mineral exploration expenses were $72,329 (Year ended December 31, 2021 - $24,952), and reimbursement from optionee was $402,343 (2021 -$483,950).

Excluding the non-cash depreciation of $1,923 (2021 - $3,143), the Company’s general and administrative expenses totaled $615,144 during the year ended December 31, 2022 (2021 - $461,465), an increase of $153,679 from the year ended December 31, 2021. Significant increases in expenses occurred in professional fees, which rose to $175,500 from $109,079 which is consistent with the higher level of property-related activity during the current year; Share-based payment, which was $98,123 compared to $Nil as the Company issued stock options during 2022 and none in 2021; Travel, which increased to $9,811 from $1,109, and listing and filing fees, which rose to $14,881 from $7,068. Significant declines occurred in bad debt expense, which was $Nil compared to $10,679 in 2021, and office and administrative fees, which fell to $15,676 from $32,703.

Other items include foreign exchange gain of $17,630 (2021 - $61), interest income and other income of $2,607 (2021 - $Nil) and loss on investment in Akkerman Finland OY of $62,973 (2021 - $Nil). Exchange differences arising on the translation of foreign subsidiaries was a loss of $11,320 (2021 - $8,111).

During the year ended December 31, 2022, the Company expensed exploration costs totaling $72,329 consisting of $25,651 on the Alvalade project in Portugal and $46,678 on the Slivova property in Kosovo.

Year ended December 31, 2021 vs. year ended December 31, 2020

During fiscal 2021, drilling and new geophysical surveys were conducted on the Alvalade property. The Company also signed a Letter Agreement to acquire four exploration properties in Finland.

The comprehensive loss for the year ended December 31, 2021 was ($14,108), or ($0.00) per share, compared to a loss of ($155,697), or ($0.00) per share, for the year ended December 31, 2020. Mineral exploration expenses were $24,952 (Year ended December 31, 2020 - $80,343), and reimbursement from optionee was $483,950 (2020 - $$434,982).

Excluding the non-cash depreciation of $3,143 (2020 - $13,303) and bad debt expenses of $10,679 (2020 - $Nil), the Company’s general and administrative expenses totaled $461,465 during the year ended December 31, 2021 (2020 - $481,056), a decrease of $19,591 from the year ended December 31, 2020. Significant changes in expenses occurred in consulting fees, wages and benefits, which fell by $25,407 to $167,170 (2020 - $192,577); Professional fees, which declined by $20,432 to $109,079 (2020 - $129,511); Transfer agent fees, which fell to $10,971 (2020 - $18,648); and travel, which fell to $1,109 (2020 - $8,329). Increases in expenses include office and administrative fees, which rose to $32,703 (2020 - $18,468); and investor relations, which increased by $26,555 to $120,869 (2020 - $94,314).

Other items include foreign exchange gain of $61 (2020 - $802) and write-off of payables of $10,231 (2020 - $Nil). Exchange differences arising on the translation of foreign subsidiaries was a loss of $8,111 (2020 - $16,786).

During the year ended December 31, 2021, the Company expensed exploration costs totaling $24,952, all of which was expended on the Alvalade project in Portugal.

Liquidity and Capital Resources

As at December 31, 2023, the Company had working capital of $132,571 (December 31, 2022 – $157,445). With respect to working capital, the Company had cash of $121,745 (December 31, 2022 - $307,531). The decrease in cash was due to expenditures on property exploration and administrative expenses while no common shares were issued for cash compared to fiscal 2022.

During the year ended December 31, 2023, the Company issued no common shares. During the year ended December 31, 2022, the Company issued 21,936,667 common shares. The Company completed a non-brokered private placement of 16,666,667 common stock units at a price of $0.075 for gross proceeds of $1,250,000 in February 2022. Each unit consists of one common share and one common share purchase warrant. Each warrant allows the holder to purchase one additional common share under February 28, 2025 at a price of $0.125. The Company paid finder’s fee of $30,938 and issued 412,500 finder’s warrants. Each finder’s warrant is exercisable into one common share at $0.075 until August 28, 2023. In February 2022, the Company also issued 3,800,000 shares at a price of $0.075 per share to settle outstanding debt for $285,000. In March 2022, the Company issued 1,470,000 common shares to AEbv pursuant to the share purchase agreement and acquired a 49% interest in AFOy.

As of December 31, 2023, the Company has no outstanding commitments. The Company has not pledged any of its assets as security for loans and is not subject to any debt covenants. The Company issues stock in private placements, option payments from joint venture partners, direct funding by joint venture for the exploration of the Company’s properties, and the exercise of warrants, finders’ warrants, and options. The Company believes that sufficient funding from warrants, options, JV partners and the possible sale of additional equity will allow its efforts to continue throughout 2024. If the market conditions worsen or improve, the Company will make adjustments to budgets accordingly.

The current property exploration budget for fiscal 2024, exclusive of the amounts to be spent by the Company’s’ joint-venture partners, is approximately $300,000, with the majority budgeted for exploration on the recently acquired Finland licenses. General and Administrative expenses for 2023 are budgeted at approximately $600,000.

The Company has financed its operations through the issuance of common shares. The following sales and issuances of common stock have been completed in the last 5 fiscal years. All share amounts have been adjusted for the 1 for 4 common share consolidation effective December 21, 2020.

Common Share Issuances

Year Ended	Type of Share Issuance	Number of Common Shares Issued	Price	Gross Proceeds

December 31, 2019	Private Placement	500,000	$ 0.20	$ 100,000
	Private Placement	910,000	0.20	182,000

December 31, 2020	Private Placement	4,219,641	$ 0.12	$ 506,357

December 31, 2021	None	-	-	-

December 31, 2022	Private Placement	16,666,667	$0.075	$ 1,250,000
	Debt Settlement	3,800,000	0.075	285,000
	Property Acquisition	1,470,000	0.065	95,550

December 31, 2023	None	-	-	-

Year Ended December 31, 2023

As at December 31, 2023, the Company had working capital of $132,571 (December 31, 2022 – $157,445).

During the year, Operating Activities used cash of (185,786), including the loss for the year of ($56,781). Items not involving cash include depreciation of $1,775, bad debt expense of $12,934, loss on investment in Akkerman Finland OY of $27,569, and write-down of property deposits of $1,460. Changes in non-cash working capital items include sales tax receivables of ($586); due from optionee of ($18,532); advances to related party used cash of ($49,761); decrease in prepaid expenses and advances provided cash of $6,677; other receivables used cash of ($2,846); decrease in accounts payable and accrued liabilities used cash of ($48,534); due from/to related parties used cash of ($60,264); and exchange difference arising on the translation of foreign subsidiaries was $1,103.

There were no Investing or Financing Activities during the year.

Cash was $121,745 as of December 31, 2023 compared to cash of $307,531 as of December 31, 2022, a decrease of ($185,786) during the year.

Year Ended December 31, 2022

As at December 31, 2022, the Company had working capital of $157,445 (December 31, 2021 - working capital deficit of $642,407).

During the year, Operating Activities used cash of ($521,950), including the loss for the year of ($329,789). Items not involving cash include depreciation of $1,923, loss on investment in Akkerman Finland OY of $62,973, and share-based payment related to the issuance of stock options of $98,123. Changes in non-cash working capital items include sales tax receivables of ($1,858); advances to related party used cash of ($22,323); increase in prepaid expenses and advances used cash of ($9,131); other receivables used cash of ($3,070); decrease in accounts payable and accrued liabilities used cash of ($29,089); due from/to related parties used cash of ($278,013); and exchange difference arising on the translation of foreign subsidiaries was ($11,696).

Investing Activities used cash of ($499,267). Investment in Akkerman Finland OY used cash of ($211,800), advance to Akkerman Finland OY used cash of ($282,400), and purchase of equipment used cash of ($5,067).

Financing Activities provided cash of $1,189,584. Proceeds from issuance of common shares from the private placement of shares provided cash of $1,250,000, and issue costs used cash of ($60,416).

Cash was $307,531 as of December 31, 2022 compared to cash of $139,164 as of December 31, 2021, an increase of $168,367 during the year.

Year Ended December 31, 2021

As at December 31, 2021, the Company had a working capital deficit of $642,407 (December 31, 2020 – working capital deficit of $614,342).

During the year, Operating Activities used cash of ($42,180), including the loss for the year of ($5,997). Items not involving cash include depreciation of $3,143, bad debt expense of $10,679, and write-off of payables of ($10,231). Changes in non-cash working capital items include a decrease in VAT receivables of $20,153; a decrease in due from optionees of $48,498; a decrease in prepaid expenses and advances of $54,521; a decrease in other receivables of $10,589; a decrease in accounts payable and accrued liabilities of ($20,511); a decrease in accounts payable owed by optionees of ($61,249); a decrease in due from/to related parties of ($83,277); and exchange difference arising on the translation of foreign subsidiaries was ($8,498).

Investing Activities used cash of ($21,697). Deposit for the acquisition of an interest in AFOy used cash of ($14,155), and purchase of equipment used cash of $7,542.

Financing Activities used cash of ($2,197), with the entire amount due to share issue costs.

Cash was $139,164 as of December 31, 2021 compared to cash of $205,238 as of December 31, 2020, a decrease of ($66,074) during the year.

Critical Accounting Policies and Estimates

The financial statements have been prepared in accordance with International Accounting Standard (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). The consolidated financial statements, including comparatives, have been prepared on the basis of IFRS standards that are effective as at December 31, 2023.

The Company's financial statements are stated in Canadian Dollars (CDN$). The value of the Canadian Dollar in relationship to the US Dollar was $1.32 on December 31, 2023.

The consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at their fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and further periods if the revision affects both current and future periods.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the consolidated statement of financial position date, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

Critical judgments

·The analysis of the functional currency for each entity of the Company. In concluding that the Canadian dollar is the functional currency of the parent, management considered both the funds from financing activities and the currency in which goods and services are paid for. The functional currency of its wholly-owned subsidiaries in Europe is the Euro as management considered the currencies which mainly influence the cost of providing goods and services in those subsidiaries. The Company chooses to report in Canadian dollar as the presentation currency;

·The assessment of indications of impairment of each mineral property and related determination of the net realized value and write-down of those properties where applicable;

·The determination that the Company will continue as a going concern for the next year; and

·The accounting for investments in other companies can vary depending on the degree of control and influence over those other companies. Management is required to assess at each reporting date the Company’s control and influence over these other companies. Management has used its judgment to determine which companies are controlled and require consolidation and those which are significantly influenced and require equity accounting.

oThe Company’s interest in PorMining is less than 50%, therefore it does not have the current ability to control the key operating activities of the company. Pursuant to the Shareholders’ Agreement entered into by the companies, MAEPA, a wholly-owned subsidiary of the Company, was appointed operator during the Phase I period and the board of directors of PorMining is comprised of three directors appointed by SMP and two by MAEPA. The operator prepares and submits annual budgets and programs to the board

for approval. Management has determined that the Company does not have significant influence over PorMining. Accordingly, the investment in PorMining is accounted for at cost and not as an investment in associate.

oThe Company’s interest in AFOy is less than 50%, therefore it does not have the current ability to control the key operating activities of the company. However, pursuant to the Share Purchase Agreement entered into by the companies, the board of directors of AFOy is comprised of one director appointed by the Company and one director by AEBv. Despite the operator being AEBv, the Company provides the necessary funding as part of the earn-in and therefore can influence AFOy’s annual budgets and exploration programs. Management has determined that the Company has significant influence over AFOy and accordingly, the investment in AFOy is accounted for as an investment in associate.

Significant estimates

The estimate that 50% of the tax deposits will be recovered within one to two years.

Variation in Operating Results

The Company derives interest income on its bank deposits, which depend on the Company's ability to raise funds.

Management periodically, through the exploration process, reviews results both internally and externally through mining related professionals. Decisions to abandon, reduce or expand exploration efforts is based upon many factors including general and specific assessments of mineral deposits, the likelihood of increasing or decreasing those deposits, land costs, estimates of future mineral prices, potential extraction methods and costs, the likelihood of positive or negative changes to the environment, permitting, taxation, labor and capital costs. There cannot be a pre-determined hold period for any property as geological or economic circumstances render each property unique.

Research and Development

The Company conducts no Research and Development activities, nor is it dependent upon any patents or licenses.

Trend Information

The Company knows of no trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Company’s operations or financial condition.

Off-Balance Sheet Arrangements

The Company has no Off-Balance Sheet Arrangements.

Item 6. Directors, Senior Management and Employees

The following table lists as of April 15, 2024 the names of the Directors of the Company. The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.

Directors

Name	Country of Residence	Age	Date First Elected/Appointed
Paul W. Kuhn	Portugal	68	July 8, 2010
Mark T. Brown (1)	Canada	56	January 23, 2008
Paul Dircksen (1)	United States	78	September 30, 2013
Frank Hogel (1)	Germany	51	August 3, 2016
Paul Nelles	Germany	77	April 7, 2016

(1)Member of Audit Committee.

Members of the audit committee meet periodically to approve and discuss the annual financial statements and each quarterly report before filing and mailing. The committee operates under a written charter as included in the Company's Management Information Circular dated May 12, 2023. Details of the charter are contained in Item 6, “Board Practices” below.

The following table lists, as of April 15, 2024, the names of the Executive Officers of the Company. The Executive Officers serve at the pleasure of the Board of Directors. Paul W. Kuhn is a citizen of the United States; Winnie Wong is a citizen of Canada.

Executive Officers

Name

Position

Age

Date of Appointment

Paul W. Kuhn

CEO and President

July 8, 2010

Winnie Wong

Chief Financial Officer and

Corporate Secretary

July 8, 2010

Paul W. Kuhn joined Avrupa in July 2010 after working with Metallica Mining in Oslo, Norway since August 2008. He has more than 30 years of experience in the minerals exploration business in North America, Central Asia and Europe. He earned an A.B. Degree from Dartmouth College, US, in 1978, and an M.S. Degree from the University of Montana, US, in 1983. Mr. Kuhn has worked in a variety of geological terrains, exploring for gold, silver, base metals, uranium, and phosphate deposits, and has spent time as a production geologist in the deep underground mines of the Coeur d`Alene Mining District, historically one of the world’s most important silver districts. Mr. Kuhn has managed successful exploration programs in the US and Turkey, and was involved in a number of base and precious metal discoveries in Turkey, including the Taç and Çorak polymetallic deposits (presently being developed by Mediterranean Resources), the Cerattepe Cu-Au volcanogenic massive sulfide deposit (held by Inmet Mining), the Altıntepe epithermal Au deposit (being developed by Stratex International), the Diyadın Carlin-style Au deposit (developed by Newmont Mining and currently held by Koza Altin), and the Karakartal porphyry Cu-Au deposit (being developed by Anatolia Minerals). Mr. Kuhn was also involved with the original mapping and description of the Çöpler porphyry Au deposit (presently under mine construction and development by Anatolia Minerals).

Winnie Wong received a Bachelor of Commerce Degree (Honours) from Queen’s University in 1996 and is a member of the Institute of Chartered Accountants of British Columbia. Since July 1, 2001, she has been Vice President of Pacific Opportunity Capital Ltd. Her role is to manage the financial administration team and to assist Pacific Opportunity Capital Ltd.’s management group on corporate finance projects. From July 1 to December 31, 2000, Ms. Wong was the controller of Pivotal Corporation, a company providing software, services and support to a variety of businesses. Between 1996 and 1999, Ms. Wong worked with Deloitte & Touche, Chartered Accountants. Ms. Wong acts as the CFO and/or Corporate Secretary for other publicly listed companies including Silver North Resources Ltd. (formerly Alianza Minerals Ltd.) (since April 2015), Au Gold Corp. (since December 2020), and MTB Metals Corp., (since December 2017). Ms. Wong spends approximately 25% of her time on the affairs of the Company.

Mark T. Brown has been a Chartered Accountant since 1993 and is President of Pacific Opportunity Capital Ltd., a private company which provides small and medium sized companies with financial, equity and management solutions. Mr. Brown received a Bachelor of Commerce Degree from the University of British Columbia in 1990 and is a member of the Institute of Chartered Accountants of British Columbia. He has been a Chartered Accountant since 1993 and serves as President of Pacific Opportunity Capital Ltd., a private company which provides small and medium sized companies with financial, equity and management solutions, from 1997 to the present. From 1990 to 1994, he worked with PricewaterhouseCoopers before becoming controller of Miramar Mining Corporation. In 1996, he became controller of Eldorado Gold Corporation where his duties included debt and equity financings, international acquisitions, corporate reporting and system implementation. He is one of the founders of Rare Element Resources Ltd., a resource exploration company traded on the NYSE MKT and TSX Exchanges. He also is a former

and current officer and director of other public companies. His current officer and directorships include: a Director of Silver North Resources Ltd. (formerly Alianza Minerals Ltd.), a mineral exploration company traded on the TSX Venture Exchange; a Director of Au Gold Corp., a mineral exploration company traded on the TSX Venture Exchange; a Director and Chief Financial Officer of Copper Fox Metals Inc., a mineral exploration company traded on the TSX Venture Exchange; a Director of East West Petroleum Corp., an oil and gas company traded on the TSX Venture Exchange; Chief Financial Officer of Fjordland Exploration Inc., a mineral exploration company traded on the TSX Venture Exchange; a Director of Mineral and Financial Investments Limited, an investment company traded on the London Stock Exchange; a Director of MTB Metals Corp., a mineral exploration company traded on the TSX Venture Exchange; and as CEO and a Director of Green Bridge Metals, a mineral exploration company traded on the Canadian Securities Exchange. Mr. Brown devotes approximately 15% of his time to Company affairs.

Dr. Paul Nelles was one of the founders of the Company’s wholly-owned subsidiary Innomatik Exploration Kosovo LLC (“IEK”) and is currently a non-executive director of IEK. Dr. Nelles is the CEO of Peshter Mining Company J.S.C. that holds the Slivovo license in which the Company has 10.29% interest. Dr. Nelles graduated from TU Berlin in 1972 with a degree in mining engineering and obtained a PhD in mineral processing in 1975. He worked internationally in base metal mining for Metallgesellschaft between 1975 and 1991, at which stage he held the position of General Manager Project Development. In 1991, he was employed as technical director and appointed to the executive board of DESTAG, a leading dimension stone producer and worldwide trader. He was subsequently appointed CEO of the company. Dr. Nelles joined Normandy LaSource in France, as executive director for gold production and industrial minerals in 1997. In 2002, he was appointed as the “Trepca Manager” by the United Nations Mission in Kosovo and was promoted to Deputy Managing Director of the Kosovo Trust Agency in 2004, in charge of all major publicly owned enterprises. Since 2006 he has worked as an independent mining industry advisor. Dr. Nelles devotes approximately 25% of his time to Company affairs.

Paul Dircksen holds an M.S. in Geology from the Mackay School of Mines at the University of Nevada He has a strong technical background, serving as a team member on ten gold discoveries, seven of which later became operating mines. Mr. Dircksen has over 35 years of experience in the mining and exploration industry, serving in executive, managerial, and technical roles at several companies. He has held senior management positions with a number of resource groups including Orvana Minerals, Lacana Gold, The Cordex Group, Brett Resources, and the Bravo Venture Group. Mr. Dircksen has served as Vice-President of business development and technical services of Timberline Resources Corporation, a public mineral exploration company which is listed on the TSX Venture Exchange. Mr. Dircksen devotes approximately 5% of his time to Company affairs.

Frank Högel has a MBA with a focus on financial management, banking, and international business and management from the University of Nürtingen, Germany. He currently serves as the CEO of Peter Beck Performance Funds GbR and sits on the advisory board of Concept Capital Management. Concept Capital is an asset management company focused on evaluating and investing in Canadian resource companies through equity investments, convertible bonds and gold, silver and copper off-take agreements. Mr. Högel also sits on the board of several other public companies listed on the TSX Venture Exchange, including Golden Goliath Resources Ltd., Lake Victoria Gold Ltd., Monarca Minerals Inc., and Nicola Mining Inc., and as a Director of Canamex Gold Corp., which is traded on the Canadian Securities Exchange. Mr. Hogel devotes approximately 5% of his time to Company affairs.

Mark Brown, a director of the Company, was formerly a director of Ascent Industries Corp. (“Ascent”), a company listed on the Canadian Securities Exchange. Mr. Brown resigned as a director of Ascent on February 13, 2019. On March 1, 2019, the Supreme Court of British Columbia issued an order granting Ascent’s application for creditor protection under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) to address near term liquidity issues. On April 5, 2019, Ascent sold its Canadian Assets for $41.5 million, repaid all liabilities, successfully reorganized as Luff Enterprises Ltd., and was discharged from the CCAA process.

Mark Brown, a director of the Company, was formerly a director of Sutter Gold Mining Inc. (“SGM”) until May 21, 2019. On May 6, 2019, SGM received a cease trade order issued by the British Columbia Securities Commission for failure to file audited financial statements and Management’s Discussion & Analysis for the year ended December 31, 2018. SGM’s listing on the TSX Venture Exchange remains suspended until SGM meets TSX Venture Exchange’s requirements and upon the revocation of the cease trade order. On May 17, 2019, pursuant to an order of

the Supreme Court of British Columbia, a receiver was appointed for SGM in order to sell all the assets of SGM and repay the lender.

Except for the two orders detailed above, no Director and/or Executive Officer has been the subject of any other order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he or she is a Director and/or Executive Officer, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he or she is an officer or director from engaging in or continuing any conduct, practice, or employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.

There are no arrangements or understandings between any two or more Directors or Executive Officers, pursuant to which he or she was selected as a Director or Executive Officer. No members of the Board of Directors are related.

COMPENSATION

The Company has no arrangements pursuant to which directors are compensated by the Company for their services in their capacity as directors, or for committee participation. There are no director’s service contracts providing for benefits upon termination of employment.

To assist the Company in compensating, attracting, retaining and motivating personnel, the Company grants incentive stock options under a formal Stock Option Plan which was initially adopted by the directors of the Company on July 29, 2008 and subsequently re-approved by shareholders at every Annual Meeting of shareholders thereafter, up to and including the most recent Annual Meeting held on June 22, 2023.

The following table sets forth the compensation paid to the Company’s executive officers and members of its administrative body during the last three years.

Summary Compensation Table

(All Figures in Canadian Dollars unless otherwise noted)

Name

Fiscal

Year

Salary

Stock-based

Compensation

Number of

Options Granted

Other

Compensation

Total

Compensation

Paul W. Kuhn

CEO, President and

Director (1)

2023

2022

2021

$ 150,000

150,000

$ Nil

Nil

200,000

Nil

$ Nil

3,424

Nil

$ 150,000

165,884

150,000

Winnie Wong,

CFO and

Corporate Secretary (2)

2023

2022

2021

N/A

$ Nil

Nil

200,000

Nil

$ 111,700

135,135

94,200

$ 111,700

147,595

94,200

Mark T. Brown,

Director (2)

2023

2022

2021

N/A

$ Nil

Nil

200,000

Nil

$ Nil

Nil

$ Nil

12,460

Nil

Paul Dircksen,

Director

2023

2022

2021

N/A

$ Nil

Nil

200,000

Nil

$ Nil

Nil

$ Nil

12,460

Nil

Paul Nelles,

Director

2023

2022

2021

N/A

$ Nil

Nil

200,000

Nil

$ Nil

Nil

$ Nil

12,460

Nil

Frank Hogel,

Director

2023

2022

2021

N/A

$ Nil

Nil

200,000

Nil

$ Nil

Nil

$ Nil

12,460

Nil

(1)“Other Compensation” for Paul W. Kuhn in 2022 is €2,500 received for consulting work in Kosovo as a result of prior services.

(2)Pacific Opportunity Capital Ltd., a company of which Mark Brown is the President and of which Winnie Wong is the Vice President, charged a total of $111,700, $135,135, and $94,200 for rent and accounting and management fees for a team of four people during financial years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.

No funds were set aside or accrued by the Company during fiscal 2023 to provide pension, retirement or similar benefits for Directors or Executive Officers.

Employment Contracts

In June 2019, the Company and Paul Kuhn agreed to adjust the terms for serving as the Company’s President and CEO. Mr. Kuhn is responsible for providing technical oversight and guidance, establishing corporate goals and objectives, and setting and implementing corporate strategies. Beginning June 1, 2019, Mr. Kuhn receives a fee of $12,500 per month and a rent allowance of €4,000 for the first four months. If the Company is substantially sold or has a change of control, Mr. Kuhn will receive a payment equal to two years of fees. Mr. Kuhn will serve in these roles until terminated in writing by either the Company or Mr. Kuhn. The Company may terminate him at any time without notice or payment in lieu thereof for cause, or at any time without cause by providing six months’ written notice or by paying him in lieu of notice. Mr. Kuhn may leave at any time by providing the Company with three months’ written notice.

Board Practices

The Board of Directors’ mandate is to manage or supervise the management of the business and affairs of the Company and to act with a view to the best interests of the Company. The Company’s corporate governance practices are the responsibility of the Board.

Management has been delegated the responsibility for meeting defined corporate objectives, implementing approved strategic and operating plans, carrying out the Company's business in the ordinary course, evaluating business opportunities, recruiting staff and complying with applicable regulatory requirements. The Board facilitates its independent supervision over management by reviewing and approving long-term strategic, business and capital plans, material contracts and business transactions, all debt and equity financing transactions. Through its Audit Committee, the Board examines the effectiveness of the Company's internal control processes. The Board reviews and sets executive compensation and recommends incentive stock options.

The Board facilitates its exercise of independent supervision over management by ensuring that a majority of its members are independent of the Company. Directors are considered to be independent if they have no direct or indirect material relationship with the Company. A "material relationship" is a relationship which could, in the view of the Company's Board, be reasonably expected to interfere with the exercise of a director's independent judgment. Currently, the Company has two non-independent directors. Paul W. Kuhn serves as CEO and President of the Company, and Paul Nelles is a non-executive director of IEK.

The Board considers its size each year when it considers the number of directors to recommend to the shareholders for elections at the annual meeting of shareholders, taking into account the number required to carry out the Board's duties effectively and to maintain a diversity of views and experience. At the Annual General Meeting of Shareholders held on June 22, 2023, shareholders approved the resolution to set the current Board at 5 members. The Board does not have a nominating committee, and these functions are currently performed by the Board as a whole. However, if there is a change in the number of directors required by the Company, this policy will be reviewed. When new directors are appointed, they receive orientation on the Company's business, current projects and the industry. Board meetings may also include presentations by the Company's management and employees to give the directors additional insight into the Company's business.

The Board has found that the fiduciary duties placed on individual directors by the Company's governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual directors' participation in decisions of the Board in which the director has an interest have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company.

The Board of Directors met in person once during fiscal 2023. All matters were discussed telephonically during the year and all other matters were approved by resolutions.

Audit Committee

The Audit Committee is a committee of the board of directors to which the Board has delegated its responsibility for oversight of the nature and scope of the annual audit, management’s reporting on internal accounting standards and practices, financial information and accounting systems and procedures, financial reporting and statements and recommending, for Board approval, the audited financial statements and other mandatory disclosure releases containing financial information. The objectives of the Committee are:

1.To assist directors in meeting their responsibilities (especially for accountability) in respect of the preparation and disclosure of the financial statements of the Company and related matters;

2.To provide effective communication between directors and external auditors appointed by the Company;

3.To enhance the external auditors’ independence; and

4.To increase the credibility and objectivity of financial reports.

Membership of Committee

The Committee shall be comprised of at least three directors of the Company, all of whom shall be “financially literate” as defined by National Instrument 52-110 - Audit Committees. The Board shall have the power to appoint the Committee Chairman.

Meetings

At all meetings of the Committee every question shall be decided by a majority of the votes cast. In case of an equality of votes, the Chairman of the meeting shall not be entitled to a second or casting vote. A quorum for meetings of the Committee shall be a majority of its members, and the rules for calling, holding, conducting and adjourning meetings of the Committee shall be the same as those governing the Board.

Meetings of the Committee should be scheduled to take place at least four times per year. Minutes of all meetings of the Committee shall be taken. The Committee shall report the results of meetings and reviews undertaken and any associated recommendations to the Board.

The Committee shall meet with the external auditors at least once per year (in connection with the preparation of the year-end financial statements) and at such other times as the external auditors and the Committee consider appropriate.

Mandate and Responsibilities of Committee

It is the responsibility of the Committee to oversee the work of the external auditors, including resolution of disagreements between management and the external auditors regarding financial reporting. It is the responsibility of the Committee to satisfy itself on behalf of the Board with respect to the Company’s internal control system:

·identifying, monitoring and mitigating business risks; and

·ensuring compliance with legal, ethical and regulatory requirements.

It is a responsibility of the Committee to review the annual financial statements of the Company prior to their submission to the Board for approval. The process should include but not be limited to:

·reviewing changes in accounting principles, or in their application, which may have a material impact on the current or future years’ financial statements;

·reviewing significant accruals or other estimates such as the ceiling test calculation;

·reviewing accounting treatment of unusual or non-recurring transactions;

·ascertaining compliance with covenants under loan agreements;

·reviewing disclosure requirements for commitments and contingencies;

·reviewing adjustments raised by the external auditors, whether or not included in the financial statements;

·reviewing unresolved differences between management and the external auditors; and

·obtaining explanations of significant variances within comparative reporting periods.

The Committee is to review the financial statements (and make a recommendation to the Board with respect to their approval), prospectuses, management discussion and analysis and all public disclosure containing audited or unaudited financial information before release and prior to Board approval. The Committee must be satisfied that adequate procedures are in place for the review of the Company’ disclosure of all other financial information and shall periodically access the accuracy of those procedures.

With respect to the appointment of external auditors by the Board, the Committee shall:

·recommend to the Board the appointment of the external auditors;

·recommend to the Board the terms of engagement of the external auditors, including the compensation of the external auditors and a confirmation that the external auditors shall report directly to the Committee; and

·when there is to be a change in auditors, review the issues related to the change and the information to be included in the required notice to securities regulators of such change.

The Committee shall review with external auditors (and the internal auditor if one is appointed by the Company) their assessment of the internal controls of the Company, their written reports containing recommendations for improvement, and management’s response and follow-up to any identified weaknesses. The Committee shall also review annually with the external auditors their plan for their audit and, upon completion of the audit, their reports upon the financial statements of the Company and its subsidiaries. The Committee must pre-approve all non-audit services to be provided to the Company or its subsidiaries by the external auditors. The Committee may delegate to one or more members the authority to pre-approve non-audit services, provided that the member(s) report to the Committee at the next scheduled meeting such pre-approval and the member(s) comply with such other procedures as may be established by the Committee from time to time.

The Committee shall review risk management policies and procedures of the Company (i.e. hedging, litigation and insurance).

The Committee shall establish a procedure for:

·the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and

·the confidential, anonymous submission by employees and agents of the Company of concerns regarding questionable accounting or auditing matters.

The Committee shall review and approve the Company’ hiring policies regarding employees and former employees of the present and former external auditors of the Company. It shall have the authority to investigate any financial activity of the Company. All employees of the Company are to cooperate as requested by the Committee.

The Committee may retain any person having special expertise and/or obtain independent professional advice to assist in filling their responsibilities at the expense of the Company without any further approval of the Board.

The current Audit Committee members are Mark T. Brown, Paul Dircksen and Frank Hogel.

Staffing

The Company currently has 2 part-time employees (2022 – 2; 2021 – 2) in geology and exploration, and 2 executive officers (2022 – 2; 2021 – 2). Of the employees, both are located in Kosovo.

Management, administrative and secretarial functions in Vancouver are provided by Pacific Opportunity Capital Ltd., a private company of which Mark T. Brown, a director of the Company, is the president and director.

Share Ownership

The following table lists, as of April 15, 2024, Directors and Executive Officers who beneficially own the Registrant's voting securities and the amount of the Registrant's voting securities owned by the Directors and Executive Officers as a group.

Share Ownership

Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class

Common	Paul W. Kuhn (1)	1,381,250	2.51%
Common	Winnie Wong (2)	225,000	0.41%
Common	Mark T. Brown (3)	10,225,668	18.57%
Common	Paul Dircksen (4)	200,000	0.36%
Common	Frank Hogel (5)	627,000	1.14%
Common	Paul Nelles (6)	326,448	0.59%
	Total Directors/Officers	12,985,366	23.16%

(1)1,181,250 of these shares are common shares and 200,000 represent currently exercisable stock options.

(2)25,000 of these shares are common shares and 200,000 represent currently exercisable stock options.

(3)136,250 of these shares are common shares held directly by Mr. Brown, 25,000 are held jointly, and 1,855,000 are common shares held in Mr. Brown’s RRSP. 7,654,501 are common shares held by Pacific Opportunity Capital Ltd. a private company controlled by Mark T. Brown. 156,250 are common shares are held in the name of Spartacus Management Inc., a private company over which Mr. Brown has control; 200,000 of these shares represent currently exercisable common share purchase options. 198,667 are currently exercisable share purchase warrants held by Pacific Opportunity Capital Ltd.

(4)200,000 of these shares represent currently exercisable stock options.

(5)200,000 of these shares are common shares. 200,000 are currently exercisable stock options and 200,000 are currently exercisable share purchase warrants.

(6)126,448 of these shares are common shares, and 200,000 represent currently exercisable stock options

Based upon 54,674,754 common shares outstanding as of April 15, 2024, share purchase warrants and Stock options held by each beneficial holder exercisable within sixty days as detailed in “Stock Options Outstanding” below.

Item 7. Major Shareholders and Related Party Transactions

The Registrant is a publicly owned Canadian corporation, the shares of which are owned by U.S. residents, Canadian residents and other foreign residents. The Registrant is not controlled by another corporation as described below. The Company's common shares are issued in registered form and the following information is taken from the records of TSX Trust Company, 650 West Georgia Street, Suite 2700, Vancouver, BC V6B 4N9.

As of April 15, 2024, the shareholders' list for the Company's common shares showed 45 registered shareholders, including depositories, and 54,674,754 common shares issued and outstanding. Of the total registered shareholders, 7 are resident in Canada holding 49,985,125 common shares, or 91% of the total issued and outstanding; 22 shareholders are resident in the United States holding 1,046,673 common shares, or 2% of the issued and outstanding, and 16 shareholders are resident of other nations holding 3,642,956 common shares, or 7% of the issued and outstanding.

The Company is aware of one person/company who beneficially owns 5% or more of the Registrant's voting securities. The following table lists as of April 15, 2024 persons and/or companies holding 5% or more beneficial interest in the Company’s outstanding common stock.

5% or Greater Shareholders

Title of Class	Name of Owner	Amount and Nature of Beneficial Ownership	Percent of Class

Common	Mark T. Brown (1)	10,225,668	18.57%

(1)136,250 of these shares are common shares held directly by Mr. Brown, 25,000 are held jointly, and 1,855,000 are common shares held in Mr. Brown’s RRSP. 7,654,501 are common shares held by Pacific Opportunity Capital Ltd. a private company controlled by Mark T. Brown. 156,250 are common shares are held in the name of Spartacus Management Inc., a private company over which Mr. Brown has control; 200,000 of these shares represent currently exercisable common share purchase options. 198,667 are currently exercisable share purchase warrants held by Pacific Opportunity Capital Ltd.

No shareholders of the Company have different voting rights from any other shareholder.

RELATED PARTY TRANSACTIONS

The Company had the following related party transactions for the years ended December 31, 2023, December 31, 2022, and December 31, 2021:

	Services	Expenses Incurred During the Year Ended December 31, 2023	Expenses Incurred During the Year Ended December 31, 2022	Expenses Incurred During the Year Ended December 31, 2021
Amounts due to:
Pacific Opportunity Capital Ltd. (a)	Rent, management, accounting, marketing, and financing services	$ 111,700	$ 135,135	$ 94,200
Paul W. Kuhn	Consulting and share-based payment	$ 150,000	$ 165,884	$ 150,000
Paul L. Nelles (b)	Salaries and share-based payment	$ Nil	$ 12,460	$ Nil
TOTAL:		$ 261,700	$ 313,479	$ 244,200

(a)Pacific Opportunity Capital Ltd., a company controlled by Mark Brown, a director of the Company

(b)Paul L. Nelles is a director of Innomatik.

Item 8. Financial Information

The financial statements as required under Item #18 are attached hereto and found immediately following the text of this Annual Report. The audit report of DeVisser Gray LLP, Chartered Accountants, is included herein immediately preceding the financial statements and schedules.

Current Legal Proceedings

The Company knows of no material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any other material proceeding or pending litigation. The Company knows of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.

Dividends

The Company has not declared any dividends on its common shares since inception and does not anticipate that it will do so in the foreseeable future. The present policy of the Company is to retain future earnings, if any, for use in its operations and the expansion of its business.

Item 9. Offer and Listing of Securities

As of December 31, 2023, the end of the Company's most recent fiscal year, the authorized capital of the Company consisted of an unlimited number of common shares without par value. There were 54,674,754 common shares issued and outstanding as of December 31, 2023 and April 15, 2024.

NATURE OF TRADING MARKET

The Company's common shares trade on the TSX Venture Exchange in Vancouver, British Columbia, Canada under the stock symbol is “AVU”. The CUSIP number is 05453A207. The Company's common shares are not registered to trade in the United States in the form of American Depository Receipts (ADR's) or similar certificates.

The following table lists the high, low and closing sale prices on the TSX Venture Exchange for the Company's common shares for:

·each of the last six months ending April 30, 2024;

·each of the last twelve fiscal quarters ending the three months ended March 31, 2024; and

·each of the last five fiscal years ended December 31, 2023.

Per share prices have been adjusted for the 1 for 4 common share consolidation effective December 21, 2020.

The Company was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia. The Company became a “Capital Pool Company” as defined in the Exchange’s Listing Policy 2.4 and its common shares began trading on the Exchange on September 2, 2008. The Company completed its Qualifying Transaction (“QT”) on July 13, 2010 to acquire 90% of the issued and outstanding shares in MAEPA Empreendimentos Mineiros e Participacoes Lda., a private Portugese company (“MAEPA”) and (b) 92.5% of the issued and outstanding shares of Innomatik Exploration Kosovo LLC, a private Kosovo company (“Innomatik”). The Company received the final approval from the Exchange for its QT and its common shares resumed trading under its current name and trading symbol “AVU.V” as of July 14, 2010.

TSX Venture Exchange

Common Shares Trading Activity

	- Sales-
	Canadian Dollars
Period	High	Low	Close

April 2024	$ 0.035	$ 0.02	$ 0.02
March 2024	$ 0.025	$ 0.025	$ 0.025
February 2024	$ 0.025	$ 0.02	$ 0.025
January 2024	$ 0.035	$ 0.02	$ 0.02
December 2023	$ 0.04	$ 0.025	$ 0.03
November 2023	$ 0.045	$ 0.035	$ 0.04

Three Months Ended 3/31/24	$ 0.035	$ 0.03	$ 0.03
Three Months Ended 12/31/23	$ 0.05	$ 0.025	$ 0.03
Three Months Ended 9/30/23	$ 0.03	$ 0.03	$ 0.03
Three Months Ended 6/30/23	$ 0.08	$ 0.025	$ 0.05
Three Months Ended 3/31/23	$ 0.035	$ 0.025	$ 0.03
Three Months Ended 12/31/22	$ 0.04	$ 0.02	$ 0.025
Three Months Ended 9/30/22	$ 0.05	$ 0.025	$ 0.025
Three Months Ended 6/30/22	$ 0.105	$ 0.025	$ 0.03
Three Months Ended 3/31/22	$ 0.085	$ 0.065	$ 0.075
Three Months Ended 12/31/21	$ 0.105	$ 0.065	$ 0.065
Three Months Ended 9/30/21	$ 0.09	$ 0.07	$ 0.07
Three Months Ended 6/30/21	$ 0.10	$ 0.07	$ 0.08

Year Ended 12/31/23	$ 0.08	$ 0.025	$ 0.03
Year Ended 12/31/22	$ 0.105	$ 0.02	$ 0.025
Year Ended 12/31/21	$ 0.15	$ 0.06	$ 0.065
Year Ended 12/31/20	$ 0.20	$ 0.04	$ 0.15
Year Ended 12/31/19	$ 0.28	$ 0.08	$ 0.16

On September 12, 2012, the Company’s common shares began trading on the Frankfurt Stock Exchange in Germany under the symbol “8AM”. The following table lists the high, low and closing sale prices on the Frankfurt Stock Exchange for the Company's common shares since inception of trading.

Frankfurt Stock Exchange

Common Shares Trading Activity

	- Sales-
	Euros
Period	High	Low	Close

September 2012 to April 2024	€1.00	€0.0005	€0.0005

The following table lists, as of April 15, 2024, share purchase warrants outstanding, the exercise price, and the expiration date of the share purchase warrants.

Share Purchase Warrants Outstanding

Number of Share Purchase Warrants Outstanding

Exercise Price/share

Expiration Date

16,666,667

$0.125

February 28, 2025

American Depository Receipts.

Not applicable.

Other Securities to be Registered

Not applicable

Current Canadian Trading Market

The Company's common stock is currently listed and trading on the TSX Venture Exchange (“TSX-V”).

The TSX-V was created through the acquisition of the Canadian Venture Exchange by the Toronto Stock Exchange. The Canadian Venture Exchange was a result of the merger between the Vancouver Stock Exchange and the Alberta Stock Exchange which took place on November 29, 1999. On August 1, 2001, the Toronto Stock Exchange completed its purchase of the Canadian Venture Exchange from its member firms and renamed the Exchange the TSX Venture Exchange. The TSX-V currently operates as a complementary but independent exchange from its parent.

The initial roster of the TSX-V was made up of venture companies previously listed on the Vancouver Stock Exchange or the Alberta Stock Exchange and later incorporated junior listings from the Toronto, Montreal and Winnipeg Stock Exchanges. The TSX-V is a venture market as compared to the TSX Exchange which is Canada’s senior market and the Montreal Exchange which is Canada’s market for derivatives products.

The TSX-V is a self-regulating organization owned and operated by the TSX Group. It is governed by representatives of its member firms and the public.

The TSX Group acts as a business link between TSX Venture Exchange members, listed companies and investors. TSX-V policies and procedures are designed to accommodate companies still in their formative stages and recognize those that are more established. Listings are predominately small and medium sized companies.

Regulation of the TSX Venture Exchange, its member firms and its listed companies is the responsibility of Investment Industry Regulatory Organization of Canada ("IIROC"). IIROC is a not-for-profit, independent Canadian self-regulatory organization that, among other things, oversees trading in exchanges and marketplaces.

IIROC administers, oversees and enforces the Universal Market Integrity Rules (“UMIR”). To ensure compliance with UMIR, IIROC monitors real-time trading operations and market-related activities of marketplaces and participants, and also enforces compliance with UMIR by investigating alleged rule violations and administering any settlements and hearings that may arise in respect of such violations.

Investors in Canada are protected by the Canadian Investor Protection Fund (“CIPF”). The CIPF is a private trust fund established to protect customers in the event of the insolvency of a member of any of the following Self-Regulatory Organizations: the TSX Venture Exchange, the Montreal Exchange, the TSX, the Toronto Futures Exchange and the IIROC.

Item 10. Additional Information

Share Capital

The Company has financed its operations through the issuance of common shares through private placements, and the exercise of stock options. The changes in the Company’s share capital during the last 3 fiscal years are as follows:

No common shares were issued in fiscal 2023 ended December 31, 2023.

During the year ended December 31, 2022, the Company issued 21,936,667 common shares. The Company completed a non-brokered private placement of 16,666,667 common stock units at a price of $0.075 for gross proceeds of $1,250,000 in February 2022. Each unit consists of one common share and one common share purchase warrant. Each warrant allows the holder to purchase one additional common share under February 28, 2025 at a price of $0.125. The Company paid finder’s fee of $30,938 and issued 412,500 finder’s warrants. Each finder’s warrant is exercisable into one common share at $0.075 until August 28, 2023. In February 2022, the Company also issued 3,800,000 shares at a price of $0.075 per share to settle outstanding debt for $285,000. In March 2022, the Company issued 1,470,000 common shares to AEbv pursuant to the share purchase agreement and acquired a 49% interest in AFOy.

No common shares were issued in fiscal 2021 ended December 31, 2021.

Shares Issued for Assets Other Than Cash

During the year ended December 31, 2022, the Company issued 3,800,000 shares at a deemed price of $0.075 per share to settle outstanding debt for $285,000. The Company also issued 1,470,000 common shares to Akkerman Exploration B.V. for the purchase of 49% of Akkerman Finland OY.

Shares Held By Company

No Disclosure Necessary-

Stock Options

Stock Options to purchase securities from Registrant can be granted to Directors, Officers, Employees and Consultants of the Company on terms and conditions acceptable to the regulatory authorities in Canada, notably the TSX Venture Exchange.

The Company has a Rolling Stock Option Plan (the "Plan") which is required to be approved by shareholders annually. The Plan was initially adopted by the directors of the Company on July 29, 2008 and subsequently re-approved by shareholders at every Annual Meeting of shareholders thereafter, up to and including the Annual Meeting held on June 21, 2021. Under the Plan, stock options may be issued to qualified Officers, Directors, Employees and Consultants. The number of common shares reserved for issuance under the Plan is 10% of the currently issued common shares of the Company.

Under the Plan, the exercise price of the option may not be less than the closing price of the common shares on the TSX Venture Exchange on the day immediately preceding the date of grant, less the applicable discount allowed by the policies on the TSX Venture Exchange. An option granted under the Plan must be exercised within a period of five years from granting. Within this five year period, the Company's Board of Directors may determine the limitation period during which an option may be exercised and whether a particular grant will have a minimum vesting period. Any agreement to decrease the option price of options previously granted to insiders will require the approval of "disinterested shareholders", which is defined as approval by a majority of the votes cast at the Meeting other than votes attaching to shares of the Company beneficially owned by insiders of the Company to whom options may be granted under the Plan, and associates of such persons.

A complete copy of the Company’s Stock Option Plan as approved by shareholders at the Annual General Meeting held on June 5, 2012 has been included as an exhibit to the Company’s Form 20-F Registration Statement.

The names and titles of the Directors/Executive Officers of the Registrant to whom outstanding stock options have been granted and the numbers of common shares subject to such options are set forth in the following table as of April 15, 2024, as well as the number of options granted to Directors and all employees as a group.

Stock Options Outstanding

Name	Number of Shares of Common Stock	Number of Options Currently Vested	CDN$ Exercise Price	Expiration Date

Paul W. Kuhn President, CEO and Director	200,000	200,000	$ 0.08	March 14, 2027

Winnie Wong, Chief Financial Officer & Corporate Secretary	200,000	200,000	$ 0.08	March 14, 2027

Mark T. Brown, Director	200,000	200,000	$ 0.08	March 14, 2027

Paul Dircksen, Director	200,000	200,000	$ 0.08	March 14, 2027

Frank Hogel, Director	200,000	200,000	$ 0.08	March 14, 2027

Paul Nelles, Director	200,000	200,000	$ 0.08	March 14, 2027

Employees/Consultants	375,000	375,000	$ 0.08	March 14, 2027

Total Officers and Directors	1,200,000	1,200,000

Total Employees/Consultants	375,000	375,000

Total Stock Options Issued and Outstanding	1,575,000	1,575,000

Resolutions/Authorization/Approvals

-No Disclosure Necessary-

Memorandum and Articles of Association

The Company was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia under the name “Everclear Capital Ltd.” On July 7, 2010, the Company changed its name to “Avrupa Minerals Ltd.” At the Annual and Special Meeting of shareholders held on December 14, 2020, shareholders approved the adoption of new Company Articles.

There are no restrictions on the business the Company may carry on in the Articles of Incorporation.

Under the Company’s articles and bylaws any director or senior officer that has a disclosable interest in a contract or transaction shall be liable to account to the Company for any profits that accrue to the director or senior officer under or as a result of the contract or transaction unless disclosure is made thereof and the contract or transaction is approved in accordance with the provisions of the Business Corporations Act of British Columbia. A director is not allowed to vote on any transaction or contract with the Company in which he has a disclosable interest unless all directors have a disclosable interest in that transaction or contract, in which case all of those directors may vote on such resolution.

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act of British Columbia.

Section 16 of the Company’s bylaws address the duties of the directors, while Part 8 discusses the Borrowing Powers. The Company may, if authorized by the directors, may:

a)borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate

b)issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

c)guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

d)mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

Any bonds, debentures or other debt obligations of the Company may be issued at a discount, premium or otherwise, and with any special privileges as to redemption, surrender, drawings, allotment of or conversion into or exchange for shares or other securities, attending and voting at general meetings of the Company, appointment of directors and otherwise, and may, by their terms, be assignable free from any equities between the Company and the person to whom they were issued or any subsequent holder thereof, all as the directors may determine.

There are no age limit requirements pertaining to the retirement or non-retirement of directors and a director need not be a shareholder of the Company. At each annual general meeting of the Company, all the directors shall retire and the shareholders shall elect a Board of Directors consisting of the number of directors for the time being set pursuant the Company's Articles. A retiring director shall be eligible for re-election.

The remuneration of the directors may from time to time be determined by the directors or, if the directors shall so decide, by the shareholders. Such remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such who is also a director. Directors shall be paid such reasonable travelling, hotel and other expenses as they incur in and about the business of the Company and if any director shall perform any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director or shall otherwise be specially occupied in or about the Company's business, he may be paid a remuneration to be fixed by the Board or, at the option of such director, by the Company in general meeting, and such remuneration my be either in addition to or in substitution for any other remuneration that he may be entitled to receive.

Subject to the Business Corporations Act of British Columbia, a director may hold any office or place of profit with the Company, other than the office of auditor with the Company, in conjunction with his office of director for such period and such terms as the directors may determine. No director or intended director shall be disqualified by his office from contracting with the Company. Subject to compliance with the Business Corporations Act of British Columbia, a director or his firm may act in a professional capacity for the Company, other than as auditor, and he or his firm shall be entitled to remuneration for professional services as if he were not a director.

Section 21 deals with indemnification and payment of expenses of directors and officers. Subject to the provisions of the Business Corporations Act of British Columbia, the directors shall cause the Company to indemnify and pay all eligible penalties and expenses of an eligible party and, where appropriate, the heirs and personal or other legal representatives of an eligible party in accordance with the provisions of the Business Corporations Act of British Columbia. Each director, alternate director and officer is deemed to have contracted with the Company on the terms

of the indemnity contained in Article 21.1. The failure of a director, alternate director, or officer of the Company to comply with the provisions of the Business Corporations Act of British Columbia or these Articles shall not invalidate any indemnity to which he is entitled under this Part. The directors may cause the Company to purchase and maintain insurance for the benefit of eligible parties.

Section 27 covers the Nomination of Directors and Advance Notice Provisions which covers the nomination of persons for election to the Board of Directors of the Company. Nominations may be made at any annual or special meeting of shareholders if one of the purposes of the meeting was for the election of directors. Nominations may be made:

(a)by or at the direction of the board, including pursuant to a notice of meeting;

(b)by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Act, or a requisition of the shareholders made in accordance with the provisions of the Act; or

(c)by any person (a “Nominating Shareholder”): (A) who, at the close of business on the date of the giving of the notice provided for in Section 27 and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth in Section 27.

For a nomination to be made by a Nominating Shareholder, the Nominating Shareholder mush have given timely notice in proper written form to the Secretary of the Company at the principal executive offices of the Company. No person shall be eligible for election as a director unless nominated in accordance with Section 27. The Chairman of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the required procedures and, if any such nomination is not in compliance, to declare that such defective nomination shall be disregarded. The Board may, in its sole discretion, waive any requirement of Section 27.

The majority required for the passage of a special resolution or a special separate resolution shall be 2/3 of the votes cast on the resolution.

The rights, preferences and restrictions attaching to each class of the Company’s shares are as follows:

The authorized share structure of the Company consists of an unlimited number of common shares without par value. Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders. Directors may from time to time declare and authorize payment of such dividends, if any, as they deem advisable and need not give notice of such declaration to any shareholder. Dividends are subject to the rights, if any, of shareholders holding shares with special rights as to dividends. No dividend shall be paid otherwise than out of funds and/or assets properly available for the payment of dividends and a declaration by the directors as the amount of such funds or assets available for dividends shall be conclusive.

The Company may by resolution of its directors make any changes to the authorized share structure as may be permitted under Section 54 of the Business Corporations Act of British Columbia, or in its name as may be permitted under Section 263 of the Business Corporations Act of British Columbia, and may by resolution of its directors make or authorize the making of any alterations to these Articles and the notice of articles as may be required by such changes. The Company may by ordinary resolution create or vary special rights and restrictions as provided in Section 58 of the Business Corporations Act of British Columbia. No alteration, as provided in Article 9, will be valid as to any part of the issued shares of any class unless the holders of all the issued shares of that class consent to the alteration in writing or consent by special separate resolution. The Company may alter its Articles by resolution of its directors and, if required by such alteration, may by resolution of its directors alter the Notice of Articles.

Subject to the provisions of the Business Corporations Act of British Columbia, the Company or the Directors on behalf of the Company, may pay a reasonable commission or allow a reasonable discount to any person in consideration of his purchasing or agreeing to purchase, whether absolutely or conditionally, any shares, debentures, share rights, warrants or

debenture stock in the Company, or procuring or agreeing to procure purchasers, whether absolutely or conditionally, for any such shares, debentures, share rights, warrants or debenture stock. The Company may also pay such brokerage as may be lawful.

An annual general meeting shall be held once every calendar year at such time (not being more than 15 months after the annual reference date for the preceding calendar year) and place as may be determined by the Directors. The Directors may, as they see fit, convene an extraordinary general meeting. An extraordinary general meeting, if requisitioned in accordance with the Business Corporations Act of British Columbia, shall be convened by the Directors or, if not convened by the Directors, may be convened by the requisitionists as provided in the Business Corporations Act of British Columbia.

There are no limitations upon the rights to own securities.

There are no provisions that would have the effect of delaying, deferring, or preventing a change in control of the Company.

There is no special ownership threshold above which an ownership position must be disclosed.

The Company may alter its Notice of Articles, Articles and share structure in the following manner:

1. by directors' resolution or ordinary resolution, as determined in each case by the directors,

a. create one or more classes or series of shares and, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares and alter the identifying name of any of its shares;

b. establish, increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares;

c. if the Company is authorized to issue shares of a class of shares with par value, decrease the par value of those shares or if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

d. change unissued shares with par value into shares without par value or vice versa or change all or any of its fully paid issued shares with par value into shares without par value;

e. create, attach, vary or delete special rights or restrictions for the shares of any class or series of shares, if none of those shares have been issued;

f. subdivide all or any of its unissued, or fully paid issued, shares, and g. authorize alterations to the Articles that are procedural or administrative in nature or are matters that pursuant to the Articles are solely within the directors' powers, control or authority.

A copy of the Company’s new Articles is filed as an exhibit to this 20-F Annual Report.

Material Contracts

Not applicable

Exchange controls

Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors. There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company's securities, except as discussed in ITEM 10, ”Taxation" below.

Restrictions on Share Ownership by Non-Canadians: There are no limitations under the laws of Canada or in the organizing documents of Avrupa on the right of foreigners to hold or vote securities of Avrupa, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company. "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

Taxation

The following summary of the material Canadian federal income tax consequences are stated in general terms and are not intended to be advice to any particular shareholder. Each prospective investor is urged to consult his or her own tax advisor regarding the tax consequences of his or her purchase, ownership and disposition of common stock. The tax consequences to any particular holder of common stock will vary according to the status of that holder as an individual, trust, corporation or member of a partnership, the jurisdiction in which that holder is subject to taxation, the place where that holder is resident and, generally, according to that holder’s particular circumstances.

This summary is applicable only to holders who are resident in the United States, have never been resident in Canada, deal at arm’s length with the Company, hold their common stock as capital property and who will not use or hold the common stock in carrying on business in Canada. Special rules, which are not discussed in this summary, may apply to a United States holder that is an issuer that carries on business in Canada and elsewhere.

This summary is based upon the provisions of the Income Tax Act of Canada and the regulations thereunder (collectively, the “Tax Act” or “ITA”) and the Canada-United States Tax Convention (the “Tax Convention”) as at the date of the Annual Report and the current administrative practices of Canada Customs and Revenue Agency. This summary does not take into account provincial income tax consequences.

Management urges each holder to consult his own tax advisor with respect to the income tax consequences applicable to him in his own particular circumstances.

Canadian Income Tax Consequences

Disposition of Common Stock

The summary below is restricted to the case of a holder (a “Holder”) of one or more common shares (“Common Shares”) who for the purposes of the Tax Act is a non-resident of Canada, holds his Common Shares as capital property and deals at arm’s length with the Company.

Dividends

A Holder will be subject to Canadian withholding tax (“Part XIII Tax”) equal to 25%, or such lower rates as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on his Common Shares. Under the Tax Convention, the rate of Part XIII Tax applicable to a dividend on Common Shares paid to a Holder who is a resident of the United States is, if the Holder is a company that beneficially owns at least 10% of the voting stock of the Company, 5% and, in any other case, 15% of the gross amount of the dividend. The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.

Disposition of Common Shares

A Holder who disposes of Common Shares, including by deemed disposition on death, will not be subject to Canadian tax on any capital gain thereby realized unless the common Share constituted “taxable Canadian property” as defined by the Tax Act. Generally, a common share of a public corporation will not constitute taxable Canadian property of a Holder

unless he held the common share as capital property used by him carrying on a business in Canada, or he or persons with whom he did not deal at arm’s length alone or together held or held options to acquire, at any time within the 60 months preceding the disposition, 25% or more of the issued shares of any class of the capital stock of the Company.

A Holder who is a resident of the United States and realizes a capital gain on disposition of Common Shares that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the Common Shares is derived from, or from an interest in, Canadian real estate, including Canadian mineral resources properties, (b) the Common Shares formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 months preceding disposition, or (c) the Holder (i) was a resident of Canada at any time within the ten years immediately preceding the disposition, and for a total of 120 months during any period of 20 consecutive years, preceding the disposition, and (ii) owned the Common Shares when he ceased to be resident in Canada.

A Holder who is subject to Canadian tax in respect of a capital gain realized on disposition of Common Shares must include one half of the capital gain (“taxable capital gain”) in computing his taxable income earned in Canada. The Holder may, subject to certain limitations, deduct one half of any capital loss (“allowable capital loss”) arising on disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect to taxable Canadian property and, to the extent not so deductible, from such taxable capital gains of any of the three preceding years or any subsequent year.

United States Federal Income Tax Consequences

The following is a discussion of material United States Federal income tax consequences, under the law, generally applicable to a U.S. Holder (as defined below) of common shares of the Company. This discussion does not cover any state, local or foreign tax consequences.

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (“the Code”), Treasury Regulations, published Internal Revenue Service (“IRS) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possible on a retroactive basis, at any time. In addition, the discussion does not consider the potential effects, both adverse and beneficial, or recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time. The discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Company. Each holder and prospective holder of common shares of the Company is advised to consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company applicable to their own particular circumstances.

U.S. Holders

As used herein, a (“U.S. Holder”) includes a holder of common shares of the Company who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof, an estate whose income is taxable in the United States irrespective of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described in Section 7701(a)(30) of the Code. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals, persons or entities that have a “functional currency” other than the U.S. dollar, shareholders who hold common shares as part of a straddle, hedging or conversion transaction, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services.

This summary is limited to U.S. Holders who own common shares as capital assets. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares.

Distribution on Common Shares of the Company

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder’s United States Federal Income tax liability or, alternatively, individuals may be deducted in computing the U.S. Holder’s United States Federal taxable income by those individuals who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below). To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder’s adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Dividend income will be taxed at marginal tax rates applicable to ordinary income while preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.

In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale of other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss.

Dividends paid on the common shares of the Company will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a “foreign personal holding company” or a “passive foreign investment company”, as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Company. The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.

Under current Treasury Regulations, dividends paid on the Company’s common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of the Company’s common shares paid in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 31% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

Foreign Tax Credit

For individuals whose entire income from sources outside the United States consists of qualified passive income, the total amount of creditable foreign taxes paid or accrued during the taxable year does not exceed $300 ($600 in the case of a joint return) and an election is made under section 904(j), the limitation on credit does not apply.

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and applies to all foreign income taxes (or taxes in lieu of income tax) paid by (or withheld from) the U.S. Holder during the year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign source income bears to his/her or its worldwide taxable income in the determination of the application of this limitation. The various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of income such as “passive income”, “high

withholding tax interest”, “financial services income”, “shipping income”, and certain other classifications of income. Dividends distributed by the Company will generally constitute “passive income” or, in the case of certain U.S. Holders, “financial services income” for these purposes. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific and management urges holders and prospective holders of common shares of the Company to consult their own tax advisors regarding their individual circumstances.

Disposition of Common Shares of the Company

A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between (I) the amount of cash plus the fair market value of any property received, and (ii) the shareholder’s tax basis in the common shares of the Company. Preferential tax rates apply to long-term capital gains of U.S. Holders, which are individuals, estates or trusts. This gain or loss will be capital gain or loss if the common shares are capital assets in the hands of the U.S. Holder, which will be a short-term or long-term capital gain or loss depending upon the holding period of the U.S. Holder. Gains and losses are netted and combined according to special rules in arriving at the overall capital gain or loss for a particular tax year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders, which are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted, but individuals may not carry back capital losses. For U.S. Holders, which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

Other Considerations

In the following circumstances, the above sections of the discussion may not describe the United States Federal income tax consequences resulting from the holding and disposition of common shares of the Company.

Foreign Personal Holding Company

If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Company’s outstanding shares is owned, actually or constructively, by five or fewer individuals who are citizens or residents of the United States and 60% (50% after the first tax year) or more of the Company’s gross income for such year was derived from certain passive sources (e.g. from interest income received from its subsidiaries), the Company would be treated as a “foreign personal holding company.” In that event, U.S. Holders that hold common shares of the Company would be required to include in gross income for such year their allocable portions of such passive income to the extent the Company does not actually distribute such income.

The Company does not believe that it currently has the status of a “foreign personal holding company”. However, there can be no assurance that the Company will not be considered a foreign personal holding company for the current or any future taxable year.

Foreign Investment Company

If 50% or more of the combined voting power or total value of the Company’s outstanding shares are held, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31), and the Company is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Company might be treated as a “foreign investment company” as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares of the Company to be treated as ordinary income rather than capital gains.

Passive Foreign Investment Company

As a foreign corporation with U.S. Holders, the Company could potentially be treated as a passive foreign investment company (“PFIC”), as defined in Section 1297 of the Code, depending upon the percentage of the Company’s income

which is passive, or the percentage of the Company’s assets which is held for the purpose of producing passive income.

The rule governing PFICs can have significant tax effects on U.S. shareholders of foreign corporations who are subject to U.S. Federal income taxation under alternative methods at the election of each such U.S. shareholder. As a PFIC, each U.S. shareholder’s income or gain, with respect to a disposition or deemed disposition of the PFIC’s shares or a distribution payable on such shares will generally be subject to tax at the highest marginal rates applicable to ordinary income and certain interest charges, unless the U.S. shareholder has timely made a “qualified electing fund” election or a “mark-to-market” election for those shares.

A U.S. shareholder who elects to treat the PFIC as a Qualified Electing Fund ("QEF"), as defined in the Code, (an "Electing U.S. Holder") will be required to currently include in his income, for any taxable year in which the corporation qualifies as a PFIC, his pro-rata share of the corporation's (i) "net capital gain" (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Holder, and (ii) "ordinary earnings" (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case, for the U.S. Holder's taxable year in which the corporation’s taxable year ends, regardless of whether such amounts are actually distributed. A QEF election also allows the Electing U.S. Holder to generally treat any gain realized on the disposition of his common shares (or deemed to be realized on the pledge of his common shares) as capital gain; treat his share of the corporation's net capital gain, if any, as long-term capital gain instead of ordinary income, and either avoid interest charges resulting from PFIC status altogether, or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of the corporation's annual realized net capital gain and ordinary earnings.

The procedure a U.S. Holder must comply with in making a timely QEF election will depend on whether the year of the election is the first year in the U.S. Holder's holding period in which the corporation is a PFIC. If the U.S. shareholder makes a QEF election in such first year, then the U.S. shareholder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files a tax return for such first year. If, however, the corporation qualified as a PFIC in a prior year during the U.S. shareholder’s holding period, then the U.S. shareholder may make a retroactive QEF election, provided he has preserved his right to do so under the protective statement regime or he obtains IRS permission.

If a U.S. shareholder has not made a QEF Election at any time (a "Non-electing U.S. Holder"), then special taxation rules under Section 1291 of the Code will apply to gains realized on the disposition (or deemed to be realized by reason of a pledge) of his common shares, and certain "excess distributions" by the corporation. An excess distribution is a current year distribution received by the U.S. shareholder on PFIC stock to the extent that the distribution exceeds its ratable portion of 125% of the average amount received by the U.S. shareholder during the preceding three years.

A Non-electing U.S. shareholder generally would be required to pro-rate all gains realized on the disposition of his common shares and all excess distributions over the entire holding period for the common shares. All gains or excess distributions allocated to prior years of the U.S. shareholder (other than years prior to the first taxable year of the corporation during such U.S. Holder's holding period and beginning after January 1, 1987 for which it was a PFIC) would be taxed at the highest marginal tax rate for each such prior year applicable to ordinary income. The Non-electing U.S. shareholder also would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-electing non-corporate U.S. shareholder must treat this interest charge as "personal interest" which is wholly non-deductible. The balance of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution, and no interest charge will be incurred with respect to such balance.

If a corporation is a PFIC for any taxable year during which a Non-electing U.S. shareholder holds common shares, then the corporation will continue to be treated as a PFIC with respect to such common shares, even if it is no longer by definition a PFIC. A Non-electing U.S. shareholder may terminate this deemed PFIC status by electing to recognize a gain, which will be taxed under the rules for Non-Electing U.S. Holders, as if such common shares had been sold on the last day of the last taxable year for which it was a PFIC. If the corporation no longer qualifies as a

PFIC in a subsequent year, then normal Code rules and not the PFIC rules will apply with respect to a U.S. shareholder who has made a QEF election.

In certain circumstances, a U.S. Holder of stock in a PFIC can make a “qualified electing fund election” to mitigate some of the adverse tax consequences of holding stock in a PFIC by including in income its share of the corporation’s income on a current basis. However, the Company does not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. Management urges US persons to consult with their own tax advisors with regards to the impact of these rules.

Controlled Foreign Corporation

A Controlled Foreign Corporation (CFC) is a foreign corporation more than 50% of whose stock by vote or value is, on any day in the corporation’s tax year, owned (directly or indirectly) by U.S. Shareholders. If more than 50% of the voting power of all classes of stock entitled to vote is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom own actually or constructively 10% or more of the total combined voting power of all classes of stock of the Company could be treated as a “controlled foreign corporation” under Subpart F of the Code. This classification would affect many complex results, one of which is the inclusion of certain income of a CFC, which is subject to current U.S. tax. The United States generally taxes United States Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States Shareholders are generally treated as having received a current distribution out of the CFC’s Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFC’s earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts.

In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Corporation which is or was a United States Shareholder at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Company (accumulated in corporate tax years beginning after 1962, but only while the shares were held and while the Company was “controlled”) attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to the United States Shareholders of the CFC. This rule generally will be effective for taxable years of United States Shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States Shareholders. The PFIC provisions continue to apply in the case of PFIC that is also a CFC with respect to the U.S. Holders that are less than 10% shareholders. Because of the complexity of Subpart F, a more detailed review of these rules is outside of the scope of this discussion.

The amount of any backup withholding will not constitute additional tax and will be allowed as a credit against the U.S. Holder’s federal income tax liability.

Filing of Information Returns

Under a number of circumstances, United States Investor acquiring shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns with a duplicate copy to the Internal Revenue Service Center, Philadelphia, PA 19255. In particular, any United States Investor who becomes the owner, directly or indirectly, of 10% or more of the shares of the Company will be required to file such a return. Other filing requirements may apply, and management urges United States Investors to consult their own tax advisors concerning these requirements.

Statement by Experts

The Company’s auditors for its financial statements as at December 31, 2023, 2022 and 2021 was DeVisser Gray LLP, Chartered Accountants. Their audit report is included with the related financial statements within this Annual Report.

Documents on Display

All documents incorporated in the Company’s 20-F Registration Statement and this Annual Report may be viewed at the Company’s Executive Office located at 410 – 325 Howe Street, Vancouver, British Columbia, Canada, V6C 1Z7.

Item 11. Disclosures About Market Risk

The Company competes with other resource companies for exploration properties and possible joint venture agreements. There is a risk that this competition could increase the difficulty of concluding a negotiation on terms that the Company considers acceptable.

The Company’s property interests in Portugal, Finland and Kosovo make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian Dollar and foreign functional currencies. The Company does not invest in foreign currency contracts to mitigate the risks. The Company has net monetary assets of $104,000 dominated in Euros. A 1% change in the absolute rate of exchange in US dollars and Euros would affect its net income by $1,600.

As the Company is currently in the exploration phase and has no producing mineral properties, it is not currently exposed to commodity price risk.

Item 12. Description of Securities Other than Equity Securities

Not Applicable

Part II

Item 13. Defaults, Dividend Arrearages and Delinquencies

Not Applicable

Item 14. Modifications of Rights of Securities Holders and Use of Proceeds

Not Applicable

Item 15. Controls and Procedures

Disclosure Controls and Procedures

The Company’s management is responsible for establishing and maintaining disclosure controls and procedures to provide reasonable assurance that material information related to the Company, including its consolidated subsidiaries, is made known to senior management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), by others within those entities on a timely basis so that appropriate decisions can be made regarding public disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and our Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities and Exchange Act of 1934, as amended) as December 31, 2023. The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures as of December 31, 2023, were effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the Chief Executive Office and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

The Company’s management is responsible for designing, establishing and maintaining a system of internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f)) to provide reasonable assurance that the financial information prepared by the Company for external purposes is reliable and has been recorded, processed and reported in an accurate and timely manner in accordance with IFRS. The Board of Directors is responsible for ensuring that management fulfills its responsibilities. The Audit Committee fulfills its role of ensuring the integrity of the reported information through its review of the interim and annual financial statements. Management reviewed the results of their assessment with the Company’s Audit Committee.

Because of its inherent limitations, the Company’s internal control over financial reporting may not prevent or detect all possible misstatements or frauds. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

To evaluate the effectiveness of the Company’s internal control over financial reporting, Management has used the Internal Control - Integrated Framework (2013), which is a suitable, recognized control framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management has assessed the effectiveness of the Company’s internal control over financial reporting and concluded that such internal control over financial reporting is effective as of December 31, 2023.

Limitations on the Effectiveness of Controls

The Company's management, including the CEO and CFO, does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Attestation Report of the Registered Accounting Firm.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Form 20-F Annual Report.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 16. Reserved

Item 16A. Audit Committee Financial Expert

The Company does not have an “audit committee financial expert” serving on its audit committee. The Company’s Audit Committee consists of three directors (two independent), all of whom are both financially literate and very

knowledgeable about the Company’s affairs. Because the Company’s structure and operations are straightforward, the Company does not find it necessary at the current time to augment its Board with a financial expert.

Item 16B. Code of Ethics

The Board has not adopted a written code of ethics. However, the Board views good corporate governance as an integral component to the Company’s success. It has found that the fiduciary duties placed on individual directors by the Company’s governing corporate legislation and the common law and the restrictions placed by the applicable corporate legislation on an individual director’s participation in decisions of the Board in which the director has an interest have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company.

Item 16C. Principal Accounting Fees and Services

The audit committee is directly responsible for the appointment, compensation and oversight of auditors; the audit committee has in place procedures for receiving complaints and concerns about accounting and auditing matters; and has the authority and the funding to engage independent counsel and other outside advisors.

The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals required by this policy / procedure. The decisions of any Audit Committee member to whom authority is delegated to pre-approve a service shall be presented to the full Audit Committee at its next scheduled meeting.

In accordance with the requirements of the US Sarbanes-Oxley Act of 2002 and rules issued by the Securities and Exchange Commission, we introduced a procedure for the review and pre-approval of any services performed by DeVisser Gray LLP, including audit services, audit related services, tax services and other services. The procedure requires that all proposed engagements of DeVisser Gray LLP for audit and permitted non-audit services are submitted to the finance and audit committee for approval prior to the beginning of any such services.

Fees, including reimbursements for expenses, for professional services rendered by DeVisser Gray LLP to the Company are detailed below.

Principal Accountant Fees and Services	Fiscal 2023 Ended 12/31/2023	Fiscal 2022 Ended 12/31/2022
Audit Fees	$ 22,000	$ 20,500
Audit-Related Fees		-
Tax Fees	-	-
All Other Fees	-	-
TOTAL	$ 22,000	$ 20,500

Item 16D. Exemptions from the Listing Standards for Audit Committees

--- No Disclosure Necessary ---

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

--- No Disclosure Necessary ---

Item 16F. Change in Registrant’s Certifying Accountant

--- No Disclosure Necessary ---

Item 16G. Corporate Governance

--- No Disclosure Necessary ---

Item 16H. Mine Safety Disclosure

--- No Disclosure Necessary ---

Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

--- No Disclosure Necessary ---

Item 16J. Insider Trading Policies

The Company has not adopted insider trading policies and procedures governing the purchase or sale of the Company’s stock by directors, management or employees. The Board of Directors believes that providing insiders and employees with guidance and education of the governing securities regulations, particularly those of the British Columbia Securities Commission and the TSX Venture Exchange, is sufficient to promote compliance with applicable insider trading laws.

Item 16K. Cybersecurity

Risk Management and Strategy

The Company currently manages our cybersecurity risk through our IT consultants in a variety of practices that are applicable to all users of our information technology and information assets, including our employees, vendors and contractors. The Company uses a combination of technology and monitoring to promote security awareness and prevent security incidents, including network and passwords protocols, rotation of security measures and third party firewalls and antivirus protections.

We have not experienced any material cybersecurity incidents or identified any material cybersecurity threats that have affected or are reasonably likely to materially affect us, our business strategy, results of operations or financial condition.

Governance

The Board of Directors is responsible for overseeing risks related to cybersecurity. The Company's senior management of the President and Chief Financial Officer are responsible for assessing and managing risks and incidents relating to cybersecurity threats. They report any material findings and recommendations, if any, to the Board of Directors.

Part III

Item 17. Financial Statements

The Company has provided financial statements pursuant to ITEM #18.

Item 18. Financial Statements

The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with IFRS.

The financial statements as required under ITEM #18 are attached hereto and found immediately following the text of this Annual Report. The audit report of DeVisser Gray LLP, Chartered Accountants, is included herein immediately preceding the financial statements.

Item 19. Exhibits

(A) The financial statements thereto as required under ITEM #18 are attached hereto and found immediately following the text of this Annual Report. The audit report of DeVissser Gray LLP, Chartered Accountants, for the audited financial statements is included herein immediately preceding the audited financial statements.

·Audited Financial Statements

·Independent Auditors Report of DeVisser Gray LLP, Chartered Accountants, dated April 29, 2024.

·Consolidated Statements of Financial Position at December 31, 2023, and December 31, 2022.

·Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023, December 31, 2022 and December 31, 2021.

·Consolidated Statements of Cash Flows for the years ended December 31, 2023, December 31, 2022 and December 31, 2021.

·Consolidated Statements of Changes in Equity for the years ended December 31, 2023 and December 31, 2022.

·Notes to Financial Statements

(B) Index to Exhibits:

1.Certificate of Incorporation, Certificates of Name Change, Articles of Incorporation, Articles of Amalgamation and By-Laws:

1.1Certificate of Incorporation and Notice of Articles dated January 23, 2008**

1.2Articles and Bylaws (British Columbia) dated January 23, 2008*

1.3Certificate of Name Change dated July 7, 2010**

1.4New Articles and Bylaws as approved by shareholders on December 14, 2020

2.Instruments defining the rights of holders of the securities being registered – See Exhibit Number 1

3.Voting Trust Agreements – not applicable

4.Material Contracts – not applicable

5.List of Foreign Patents – not applicable

6.Calculation of earnings per share – not applicable

7.Explanation of calculation of ratios – not applicable

8.List of Subsidiaries*

9.Statement pursuant to the instructions to Item 8.A.4, regarding the financial statements filed in registration statements for initial public offerings of securities – not applicable

10.Notice Required by Rule 104 of Regulation BTR – not applicable

11 Code of Ethics – not applicable

12Certifications required by Rule 13a-14(a) or Rule 15d-14(a)

12.1 CEO

12.2 CFO

13Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code

13.1 CEO

13.2 CFO

14.Legal Opinion required by Instruction 3 of ITEM 7B – not applicable

15.Additional Exhibits:

15.1Consent of DeVisser Gray LLP, Chartered Accountants, dated June 20, 2012***

15.2Copy of Stock Option Plan*

_________

*Incorporated by reference to the registrant’s Form 20FR filed with the Securities Exchange Commission on June 4, 2012.

**Incorporated by reference to the registrant’s Form 20FR filed with the Securities Exchange Commission on October 5, 2012.

***Incorporated by reference to the registrant’s Form 20FR filed with the Securities Exchange Commission on October 24, 2012.

AVRUPA MINERALS LTD.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

DECEMBER 31, 2023, 2022 AND 2021

AVRUPA MINERALS LTD.

Contents

Page

Auditor’s Report	81

Consolidated Statements of Financial Position	82

Consolidated Statements of Comprehensive Loss	84

Consolidated Statements of Changes in (Deficiency) / Equity	87

Consolidated Statements of Cash Flows	86

Notes to the Consolidated Financial Statements	87

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Avrupa Minerals Ltd.,

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Avrupa Minerals Ltd. (‘the Company’), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022 and the consolidated statements of comprehensive loss, changes in (deficiency)/equity and cash flows for the years ended December 31, 2023, 2022 and 2021, and the related notes and schedules (collectively referred to as the ‘consolidated financial statements’). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022 and its financial performance and its cash flows for the years ended December 31, 2023, 2022 and 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 in the consolidated financial statements, it will be necessary for the Company to obtain additional financing and while it has been successful in the past, there can be no assurance that it will be able to do so in the future. These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company's ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

This issue also constitutes, from our perspective, a critical audit matter that was communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the consolidated financial statements; and (ii) involved, on our part, especially challenging, subjective, or complex judgements. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating this critical audit matter, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The principal considerations for our determination that the going concern uncertainty was a critical audit matter were: (i) that the formal reporting of such uncertainty involves a significant disclosure, the absence of which could constitute a material misstatement to a financial statement reader and, (ii) that, at the same time, it involves on our part the use of a high level of subjective judgement as we are required to consider the possible impact of future events that cannot currently be known and which in all likelihood will not be directly linked to any particular current or future financial results and reporting, or the lack thereof.

Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures also included, among others, (i) obtaining and evaluating management’s assessment of the Company’s ability to remain a going concern; (ii) determining based on all other evidence available to us whether management’s assessment appeared to be fair and reasonable in the circumstances and, (iii) considering whether the resultant disclosure of these matters herein was consistent with the foregoing, in the context of the Company’s overall business activities, objectives and financial history.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (‘PCAOB’) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

-------------------------------------------------------------------------------------------------------------------------------------------------------------

410 – 325 Howe Street, Vancouver, BC V6C 1Z7 T: (604) 687-3520 F: 1 (888) 889-4874

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement, whether due to fraud or error. The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

A critical audit matter was communicated above under ‘Going Concern’.

De Visser Gray LLP (1054)

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, Canada

April 29, 2024

We have served as the Company’s auditor since 2008.

-------------------------------------------------------------------------------------------------------------------------------------------------------------

410 – 325 Howe Street, Vancouver, BC V6C 1Z7 T: (604) 687-3520 F: 1 (888) 889-4874

AVRUPA MINERALS LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS AT DECEMBER 31

(Presented in Canadian Dollars)

	Note	2023		2022

Assets
Current assets
Cash		$	121,745	$	307,531
Prepaid expenses and advances			2,699		9,376
Due from optionee	5		18,409		12,811
Advance to related party	9		72,084		22,323
Sales tax receivables			4,213		3,627
Other receivables			13,559		10,713
			232,709		366,381
Non-current assets
Property deposits	6		-		1,446
Tax deposits	6		41,201		41,201
Exploration and evaluation assets	5		167,920		167,920
Equipment	4		854		2,602
Investment in PorMining	5		765		765
Advance to Akkerman Finland OY	7		282,400		282,400
Investment in Akkerman Finland OY	7		230,963		258,532
			724,103		754,866

Total assets		$	956,812	$	1,121,247

Liabilities
Current liabilities
Accounts payable and accrued liabilities		$	52,396	$	100,930
Due to related parties	9		47,742		108,006
			100,138		208,936

Shareholders' equity
Share capital	8		10,990,255		10,990,255
Reserves	8		7,642,877		7,641,733
Deficit			(17,776,458)		(17,719,677)
			856,674		912,311

Total shareholders' equity and liabilities		$	956,812	$	1,121,247

These consolidated financial statements are authorized for issue by the Board of Directors on April 29, 2024. They are signed on the Company's behalf by:

/s/Paul W. Kuhn

/s/Mark T. Brown

Director

See notes to the consolidated financial statements

AVRUPA MINERALS LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31

(Presented in Canadian Dollars)


	Note	2023		2022		2021

Mineral exploration expenses
Mineral exploration expenses	5	$	66,492	$	72,329	$	24,952
Reimbursements from optionees	5		(482,452)		(402,343)		(483,950)
			415,960		330,014		458,998
General administrative expenses
Bank charges			699		649		630
Bad debt expenses			12,934		-		10,679
Consulting fees, wages and benefits	9		180,854		165,955		167,170
Depreciation	4		1,775		1,923		3,143
Investor relations			52,615		109,270		120,869
Listing and filing fees			8,925		14,881		7,068
Office and administrative fees			21,092		15,676		32,703
Professional fees	9		133,099		175.500		109.079
Rent	9		10,200		11,308		11,866
Share-based payment	9		-		98,123		-
Transfer agent fees			4,786		13,971		10,971
Travel			11,477		9,811		1,109
			(438,456)		(617,067)		(475,287)
Other items
Foreign exchange gain (loss)			(5,747)		17,630		61
Interest income			491		2,607		-
Loss on investment in Akkerman Finland OY	7		(27,569)		(62,973)		-
Write-off of payables			-		-		10,231
Write-down of property deposits	6		(1,460)		-		-
			(34,285)		(42,736)		10,292

Net loss for the year			(56,781)		(329,789)		(5,997)
Exchange difference arising on the translation of foreign subsidiaries			1,144		(11,320)		(8,111)

Comprehensive loss for the year		$	(55,637)	$	(341,109)	$	(14,108)
Basic and diluted loss per share	10	$	(0.00)	$	(0.01)		(0.00)

See notes to the consolidated financial statements

AVRUPA MINERALS LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN (DEFICIENCY) / EQUITY

(Presented in Canadian Dollars)

	Share capital		Reserves
	Number of shares	Amount	Warrants	Finder’s options	Equity-settled employee benefits	Exchange	Subtotal	Deficit	Total shareholders' (deficiency) / equity

Balance as at December 31, 2020	32,738,087	9,994,879	5,405,052	277,893	1,298,472	7,258	6,988,675	(17,383,891)	(400,337)
Share issues:
Share issue costs	-	(392)	-	-	-	-	-	-	(392)
Comprehensive loss	-	-	-	-	-	(8,111)	(8,111)	(5,997)	(14,108)
Balance as at December 31, 2021	32,738,087	$ 9,994,487	$ 5,405,052	$ 277,893	$ 1,298,472	$ (853)	$ 6,980,564	$ (17,389,888)	$ (414,837)
Share issues:
Shares issued for private placements	16,666,667	695,475	554,525	-	-	-	554,525	-	1,250,000
Share issue costs	-	(80,257)	-	19,841	-	-	19,841	-	(60,461)
Shares issued for debt settlement	3,800,000	285,000	-	-	-	-	-	-	285,000
Shares issued for investment in Akkerman Finland OY	1,470,000	95,550	-	-	-	-	-	-	95,550
Share-based payment	-	-	-	-	98,123	-	98,123	-	98,123
Comprehensive loss	-	-	-	-	-	(11,320)	(11,320)	(329,789)	(341,109)
Balance as at December 31, 2022	54,674,754	10,990,255	5,959,577	297,734	1,396,595	(12,173)	7,641,733	(17,719,677)	912,311
Comprehensive loss	-	-	-	-	-	1,144	1,144	(56,781)	(55,637)
Balance as at December 31, 2023	54,674,754	$ 10,990,255	$ 5,959,577	$ 297,734	$ 1,396,595	$ (11,029)	$ 7,642,877	$ (17,776,458)	$ 856,674

See notes to the consolidated financial statements

AVRUPA MINERALS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

(Presented in Canadian Dollars)

	2023		2022		2021

Cash flows from operating activities
Net loss for the year	$	(56,781)	$	(329,789)	$	(5,997)
Items not involving cash:
Depreciation		1,775		1,923		3,143
Bad debt expenses		12,934		-		10,679
Loss on investment in Akkerman Finland OY		27,569		62,973		-
Share-based payment		-		98,123		-
Write-off of payables		-		-		(10,231)
Write-down of property deposits		1,460		-		-
Changes in non-cash working capital items:
Sales tax receivables		(586)		(1,858)		20,153
Due from optionee		(18,532)		-		48,498
Advance to related party		(49,761)		(22,323)		-
Prepaid expenses and advances		6,677		(9,131)		54,521
Other receivables		(2,846)		(3,070)		10,589
Accounts payable and accrued liabilities		(48,534)		(29,089)		(20,511)
Accounts payable owed by optionees		-		-		(61,249)
Due from/to related parties		(60,264)		(278,013)		(83,277)
Exchange difference arising on the translation of foreign subsidiaries		1,103		(11,696)		(8,498)

Net cash used in operating activities		(185,786)		(521,950)		(42,180)

Cash flows from investing activities
Investment in Akkerman Finland OY		-		(211,800)		-
Deposit – Akkerman Finland OY		-		-		(14,155)
Advance to Akkerman Finland OY		-		(282,400)		-
Purchase of equipment		-		(5,067)		(7,542)

Net cash used in investing activities		-		(499,267)		(21,697)

Cash flows from financing activities
Proceeds from issuance of common shares		-		1,250,000		-
Share issue costs		-		(60,416)		(2,197)

Net cash provided by (used in) financing activities		-		1,189,584		(2,197)

Change in cash for the year		(185,786)		168,367		(66,074)
Cash, beginning of the year		307,531		139,164		205,238
Cash, end of the year	$	121,745	$	307,531	$	139,164

Supplemental disclosure with respect to cash flows (Note 12)

See notes to the consolidated financial statements

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

1.NATURE OF OPERATIONS AND CONTINUANCE OF OPERATIONS

Avrupa Minerals Ltd. (the “Company”) was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia and its registered office is 10th floor, 595 Howe Street, Vancouver, BC, Canada, V6C 2T5. The Company changed its name on July 7, 2010 and began trading under the symbol “AVU” on the TSX Venture Exchange (the “Exchange”) on July 14, 2010. On September 20, 2012, the Company listed in Europe on the Frankfurt Stock Exchange under the trading symbol “8AM”. The Company is primarily engaged in the acquisition and exploration of mineral properties in Europe.

These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to meet its commitments, continue operations and realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. There are material uncertainties that cast significant doubt about the appropriateness of the going concern assumption.

If the Company is to advance or develop its mineral properties further, it will be necessary to obtain additional financing and while it has been successful in the past, there can be no assurance that it will be able to do so in the future. Failure to raise sufficient funds would result in the Company’s inability to make future required property payments, which would result in the loss of those property options.

These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption inappropriate, and these adjustments could be material.

2.BASIS OF PREPARATION

a)Statement of compliance

These consolidated financial statements have been prepared in accordance and compliance 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”).

b)Basis of preparation

These consolidated financial statements have been prepared on a historical cost basis except certain financial instruments which are measured at fair value (‘FVPL”). In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

These consolidated financial statements, including comparatives, have been prepared on the basis of IFRS standards that are effective as at December 31, 2023.

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

3.MATERIAL ACCOUNTING POLICY INFORMATION

a)Basis of consolidation

These consolidated financial statements include the accounts of the Company and its subsidiaries as follows:

	% of ownership	Jurisdiction	Nature of operations

MAEPA Empreendimentos Mineiros e Participacoes Lda	100%	Portugal	Exploration
Innomatik Exploration Kosovo LLC	100%	Kosovo	Exploration
AVU Kosova LLC	100%	Kosovo	Exploration
Akkerman Finland OY (1)	49%	Finland	Exploration

(1) This company is accounted for using the equity method.

All subsidiaries are entities that are controlled, either directly or indirectly. Control is defined as the exposure, or rights, to variable returns from involvement with an investee and the ability to affect those returns through power over the investee. Power over an investee exists when the Company has existing rights that give it the ability to direct the activities that significantly affect the investee’s returns. This control is generally evidenced through owning more than 50% of the voting rights or currently exercisable potential voting rights of a company’s share capital. All of the intra-group balances and transactions, including unrealized profits and losses arising from intra-group transactions, have been eliminated in full. For subsidiaries that the Company controls, but does not own 100% of, the net assets and net profit attributable to outside shareholders are presented as amounts attributable to non-controlling interests in the consolidated statements of financial position and consolidated statements of comprehensive loss.

Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated in preparing the consolidated financial statements.

b)Interests in Joint Arrangements

A joint arrangement can take the form of a joint venture or joint operation. All joint arrangements involve a contractual arrangement that establishes joint control, which exists only when decisions about the activities that significantly affect the returns of the investee require unanimous consent of the parties sharing control. A joint operation is a joint arrangement in which the Company has rights to the assets and obligations for the liabilities relating to the arrangement. A joint venture is a joint arrangement in which the Company has rights to only the net assets of the arrangement.

Joint ventures are accounted for in accordance with the policy “Investments in Associates and Joint Ventures.” Joint operations are accounted for by recognizing the Company’s share of the assets, liabilities, revenue, expenses and cash flows of the joint operation in the consolidated financial statements.

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

3.MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

c)Investments in Associates and Joint Ventures

Investments over which the Company exercises significant influence and which it does not control or jointly control are associates. Investments in associates are accounted for using the equity method, except when classified as held for sale. Investments in joint ventures as determined in accordance with the policy “Interests in Joint Arrangements” are also accounted for using the equity method.

The equity method involves recording the initial investment at cost and subsequently adjusting the carrying value of the investment for the Company’s proportionate share of the profit or loss, other comprehensive income or loss and any other changes in the associate’s or joint venture’s net assets.

The Company’s proportionate share of the associate’s or joint venture’s profit or loss and other comprehensive income or loss is based on its most recent financial statements. Adjustments are made to align any inconsistencies between the Company’s accounting policies and the associate’s or joint venture’s policies before applying the equity method. Adjustments are also made to account for depreciable assets based on their fair values at the acquisition date of the investment and for any impairment losses recognized by the associate or joint venture.

If the Company’s share of the associate’s or joint venture’s losses equals or exceeds the investment in the associate or joint venture, recognition of further losses is discontinued. After the Company’s interest is reduced to zero, additional losses will be provided for and a liability recognized only to the extent that the Company has incurred legal or constructive obligations to provide additional funding or make payments on behalf of the associate or joint venture. If the associate or joint venture subsequently reports profits, the Company resumes recognizing its share of those profits only after its share of the profits equals the share of losses not recognized.

At each statement of financial position date, management considers whether there is objective evidence of impairment in associates and joint ventures. If there is such evidence, management determines if there is a need to record an impairment in relation to the associate or joint venture.

d)Foreign currencies

The Company assesses functional currency on an entity by entity basis based on the related fact pattern; however, the presentation currency used in these consolidated financial statements is determined at management’s discretion.

The currency of the parent company, and the presentation currency applicable to these consolidated financial statements, is the Canadian dollar.

Transactions in currencies other than the functional currency are recorded at the rates of the exchange prevailing on dates of transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at each reporting date. Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

The Company has determined that the functional currency of its wholly-owned subsidiaries in Europe is the Euro. Exchange differences arising from the translation of the subsidiaries’ functional currencies into the Company’s presentation currency are taken directly to the exchange reserve.

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

3.MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

e)Exploration and evaluation assets and expenditures

Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures are expensed as incurred except for expenditures associated with the acquisition of exploration and evaluation assets through a business combination or asset acquisition which are recognized as assets. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in the consolidated statement of comprehensive loss.

Capitalized costs, including general and administrative costs, are only allocated to the extent that these costs can be related directly to operational activities in the relevant area of interest where they are considered likely to be recoverable by future exploitation or sale or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves.

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

f)Share-based payment transactions

The share option plan allows the Company’s employees and consultants to acquire shares of the Company. The fair value of options granted is recognized as a share-based payment expense with a corresponding increase in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee.

The fair value is measured at grant date and each tranche is recognized on a graded-vesting basis over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. At each statement of financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.

g)Earnings (Loss) per share

The Company presents the basic and diluted earnings (loss) per share data for its common shares, calculated by dividing the income (loss) attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is determined by adjusting the income (loss) attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares. In the Company’s case, diluted earnings (loss) per share is the same as basic earnings (loss) per share as the effects of including all outstanding options and warrants would be anti-dilutive.

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

3.MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

h)Significant accounting judgments and estimates

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout these consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and further periods if the revision affects both current and future periods.

Critical judgments

·The analysis of the functional currency for each entity of the Company. In concluding that the Canadian dollar is the functional currency of the parent, management considered both the funds from financing activities and the currency in which goods and services are paid. The functional currency of its wholly-owned subsidiaries in Europe is the Euro as management considered the currencies which mainly influence the cost of providing goods and services in those subsidiaries. The Company chooses to report in Canadian dollar as the presentation currency;

·The assessment of indications of impairment of each mineral property and related determination of the net realized value and write-down of those properties where applicable;

·The determination that the Company will continue as a going concern for the next year; and

·The Company’s interest in PorMining is less than 50%, therefore it does not have the current ability to control the key operating activities of the company. Pursuant to the Shareholders’ Agreement entered into by the companies, MAEPA, a wholly-owned subsidiary of the Company, was appointed operator during the Phase I period and the board of directors of PorMining is comprised of three directors appointed by SMP and two by MAEPA. The operator prepares and submits annual budgets and programs to the board for approval. Management has determined that the Company does not have significant influence over PorMining. Accordingly, the investment in PorMining is accounted for at cost and not as an investment in associate (Note 5).

·The Company’s interest in AFOy is less than 50%, therefore it does not have the current ability to control the key operating activities of the company. However, pursuant to the Share Purchase Agreement entered into by the companies, the board of directors of AFOy is comprised of one director appointed by the Company and one director by AEBv. Despite the operator being AEBv, the Company provides the necessary funding as part of the earn-in and therefore can influence AFOy’s annual budgets and exploration programs. Management has determined that the Company has significant influence over AFOy and accordingly, the investment in AFOy is accounted for as an investment in associate (Note 7).

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

3.MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

h)Significant accounting judgments and estimates (Continued)

Significant estimates

The estimate that 50% of the tax deposits will be recovered within one to two years.

i)Provisions

Provisions are recognized in the consolidated statement of financial position when the Company has a legal or constructive obligation as a result of past events and it is probable that an outflow of economic benefit will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

j)Financial instruments

The following financial assets are classified as measured at amortized cost - cash, due from optionee, advance to related party, certain other receivables and property deposits.

The following financial liabilities are classified as measured at amortized cost – accounts payable and accrued liabilities and due to related parties.

The classification of financial assets is based on how an entity manages its financial instruments and the contractual cash flow characteristics of the financial asset. Transaction costs with respect to financial instruments classified as fair value through profit or loss are recognized as an adjustment to the cost of the underlying instruments.

The Company’s financial assets are classified into one of the following two measurement categories:

Financial assets held within a business model for the purpose of collecting contractual cash flows (“held to collect”) that represent solely payments of principal and interest (“SPPI”) are measured at amortized cost. Financial assets held within a business model where assets are both held for the purpose of collecting contractual cash flows or sold prior to maturity and the contractual cash flows represent solely payments of principal and interest are measured at FVPL.

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

3.MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

k)Income taxes

Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recorded using the statement of financial position liability method, providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting or taxable loss; nor differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted that are expected to apply when temporary differences are expected to settle.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. To the extent that the Company does not consider it probable that a future tax asset will be recovered, it provides a valuation allowance against that excess.

Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

l)New accounting standards and interpretations

There were no new accounting standards and interpretations which had a material impact on adoption during the year ended December 31, 2023.

Pronouncements that are not applicable or that do not have a significant impact on the Company have not been included in these consolidated financial statements.

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

4.EQUIPMENT

		Furniture and other equipment
Cost
As at January 1, 2022		$ 114,795
Additions during the year		2,531
Exchange adjustment		535
As at December 31, 2022		$ 117,861
Exchange adjustment		1,370
As at December 31, 2023		$ 119,231

Accumulated depreciation
As at January 1, 2022		$ 112,705
Depreciation for the year		1,923
Exchange adjustment		631
As at December 31, 2022		$ 115,259
Depreciation for the year		1,775
Exchange adjustment		1,343
As at December 31, 2023		$ 118,377

Net book value
As at January 1, 2022		$ 2,090
As at December 31, 2022		$ 2,602
As at December 31, 2023		$ 854

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

5. EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES

	Portugal		Kosovo		Others	Total
	Alvalade	Others	Slivova	Others
Exploration and evaluation assets
Acquisition costs
As of January 1, 2023	$ 167,920	$ -	$ -	$ -	$ -	$ 167,920
As of December 31, 2023	$ 167,920	$ -	$ -	$ -	$ -	$ 167,920

Mineral exploration expenses for the year ended December 31, 2023
Geological salaries and consulting	$ 24,589	$ -	$ 13,338	$ -	$ -	$ 37,927
Insurance	149	-	-	-	-	149
Office and administrative fees	214	-	2,437	-	-	2,651
Rent	-	-	6,068	-	-	6,068
Report			15,767			15,767
Site costs	158	-	1,321	-	-	1,479
Travel	2,451	-	-	-	-	2,451
Reimbursements from optionees	(378,861)	-	(103,591)	-	-	(482,452)
	$ (351,300)	$ -	$ (64,660)	$ -	$ -	$ (415,960)
Cumulative mineral exploration expenses since acquisition
Assaying	$ -	$ -	$ 297,975	$ 65,936	$ 10,846	$ 374,757
Concession fees and taxes	361,864	693,608	20,505	206,975	4	1,282,956
Depreciation	17,178	98,722	-	-	-	115,900
Drilling	610,197	472,513	1,180,217	-	-	2,262,927
Geological salaries and consulting	6,585,470	6,317,147	157,687	720,879	12,359	13,793,542
Geology work	-	32,377	891,582	402,515	364,525	1,690,999
Insurance	25,469	52,112	14,604	15,007	-	107,192
Legal and accounting	1,020	1,244	58,158	13,958	-	74,380
Office and administrative fees	254,272	279,739	83,665	101,624	68,446	787,746
Rent	606,084	596,896	42,158	88,221	20,560	1,353,919
Report	-	-	39.999	-	-	39,999
Site costs	194,363	244,377	188,571	194,582	8,865	830,758
Travel	243,895	247,277	63,047	22,478	15,326	592,023
Trenching and road work	-	-	34,339	-	-	34,339
Reimbursements from optionees	(9,339,910)	(4,890,826)	(2,992,643)	(45,158)	-	(17,268,537)
	$ (440,098)	$ 4,145,186	$ 79,864	$ 1,787,017	$ 500,931	$ 6,072,900

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

5. EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)

	Portugal		Kosovo		Others	Total
	Alvalade	Others	Slivovo	Others
Exploration and evaluation assets
Acquisition costs
As of January 1, 2022	$ 167,920	$ -	$ -	$ -	$ -	$ 167,920
As of December 31, 2022	$ 167,920	$ -	$ -	$ -	$ -	$ 167,920

Mineral exploration expenses for the year ended December 31, 2022
Concession fees and taxes	$ -	$ -	$ 8,666	$ -	$ -	$ 8,666
Geological salaries and consulting	23,066	-	24,548	-	-	47,614
Insurance	698	-	-	-	-	698
Office and administrative fees	108	-	1,005	-	-	1,113
Rent	-	-	7,396	-	-	7,396
Site costs	2	-	2,123	-	-	2,125
Travel	1,777	-	2,940	-	-	4,717
Reimbursements from optionee	(348,277)	-	(56,066)	-	-	(402,343)
	$ (322,626)	$ -	$ (7,388)	$ -	$ -	$ (330,014)
Cumulative mineral exploration expenses since acquisition
Assaying	$ -	$ -	$ 297,975	$ 65,936	$ 10,846	$ 374,757
Concession fees and taxes	361,864	693,608	20,505	206,975	4	1,282,956
Depreciation	17,178	98,722	-	-	-	115,900
Drilling	610,197	472,513	1,180,217	-	-	2,262,927
Geological salaries and consulting	6,560,881	6,317,147	144,349	720,879	12,359	13,755,615
Geology work	-	32,377	891,582	402,515	364,525	1,690,999
Insurance	25,320	52,112	14,604	15,007	-	107,043
Legal and accounting	1,020	1,244	58,158	13,958	-	74,380
Office and administrative fees	254,058	279,739	81,228	101,624	68,446	785,095
Rent	606,084	596,896	36,090	88,221	20,560	1,347,851
Report	-	-	24,232	-	-	24,232
Site costs	194,205	244,377	187,250	194,582	8,865	829,279
Travel	241,444	247,277	63,047	22,478	15,326	589,572
Trenching and road work	-	-	34,339	-	-	34,339
Reimbursements from optionee	(8,961,049)	(4,890,826)	(2,889,052)	(45,158)	-	(16,786,085)
	$ (88,798)	$ 4,145,186	$ 144,524	$ 1,787,017	$ 500,931	$ 6,488,860

5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)

Portugal

Licenses have varying required work commitments and carry a 3% Net Smelter Return (“NSR”) payable to the government of Portugal.

Alvalade:

On November 19, 2019, the Company and MAEPA (collectively the “Company”) and Minas de Aguas Teñidas, S.A. (“Sandfire MATSA” or “MATSA”) and its wholly-owned subsidiary Sandfire Mineira Portugal,Unipessoal Lda. (“SMP”), formerly “EUL”, collectively “Sandfire MATSA” entered into an Earn-In Joint Venture Agreement (the “Agreement”) with respect to the Alvalade Project. Pursuant to the Agreement, PorMining, Unipessoal Lda. (“PorMining”) was incorporated on December 17, 2019 to hold assets and develop mineral rights (both as defined) and SMP can earn up to an 85% interest in PorMining. The earning of this interest, subsequent arrangements that may be entered into to explore the assets and, if warranted, the development of one or more projects are referred to as the “Transaction”.

On March 27, 2020, MAEPA and SMP entered into a Quota Transfer Agreement pursuant to which MAEPA split its 100% interest in the share capital of PorMining into two quotas, representing 51% and 49% of the company’s share capital, and sold the 51% quota to SMP for the nominal value of €510.

On March 27, 2020, the Company, MAEPA, Sandfire MATSA and SMP entered into the PorMining Lda. Shareholders’ Agreement (the “Agreement”). Pursuant to the Agreement:

·PorMining has five directors. From the effective date until the second option exercise date, three will be nominated by SMP and two by MAEPA. Thereafter, four will be nominated by SMP and one will be nominated by MAEPA. Upon the occurrence of the 51/49 Phase and thereafter, SMP is entitled to nominate three directors and MAEPA two directors. In the event of dilution of the interest of SMP or MAEPA, each will be entitled to proportional representation (as described) equal to its then interest;

·In the event that SMP and/or MAEPA wish to sell or transfer their shares in PorMining, PorMining has a right of first refusal to purchase all or a portion of the shares. To the extent that PorMining does not exercise its right of first refusal to all the shares, each of SMP and/or MAEPA has a right of first refusal; and

The effective date of the Transaction is the date that PorMining receives (received on June 15, 2020) the mineral rights in its name from the General Directorate of Energy and Geology of Portugal (“DGEG”). The Transaction is comprised of the following phases:

·Phase I – First Option;

·Phase II – Second Option;

·51/49 Phase; and

·Phase III – Development and Operation.

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)

Alvalade: (Continued)

Phase I – First Option

During Phase I, MAEPA granted SMP the sole and exclusive right to hold an undivided 51% interest in PorMining (the first option) for at least three years from the effective date or the issue (issued on June 15, 2020) of the Experimental Exploitation License (the “EEL”) by DGEG to PorMining. SMP’s right to maintain its 51% interest is conditional upon Sandfire MATSA:

·Paying €400,000 to the Company on or before the effective date (€200,000 was received in December 2019 and the remaining €200,000 was received in June 2020);

·Funding or providing the necessary financial instrument to cover the guarantee, which will be returned to Sandfire MATSA following the release of the guarantee by DGEG (funded €100,000 in June 2020); and

·Funding expenditures (the first option expenditures) on the mineral rights in an aggregate amount of €2,400,000 (€1,200,000 within the first 12 months following the effective date [met] and €1,200,000 in the next 24 months [met]) on or before three years from the effective date or the issue of the EEL.

Effectively in March 2022, Sandfire MATSA completed the Phase I First Option by funding a total of €2,500,000 on the Alvalade project, including the €100,000 guarantee with DGEG, and SMP unconditionally earned the 51% interest in PorMining.

During Phase I, MAEPA acted as the operator of the mineral rights with PorMining paying MAEPA an operator’s fee equal to €100,000 per year, paid monthly starting June 16, 2020, funded by Sandfire MATSA and which formed part of the first option expenditures.

In all other phases, PorMining will be the operator unless it appoints another person to act as operator. The operator is responsible for developing and submitting work programs to the technical committee or the board of directors for consideration and approval and to implement work programs when approved according to the approved budget. The technical committee is comprised of two representatives from each of SMP and MAEPA and will be in effect until the first option exercise date. Thereafter, the board of directors will make all decisions with respect to the mineral rights.

Upon the completion of Phase I, Sandfire MATSA and PorMining continued with having MAEPA acting as the operator and PorMining continued paying the operator’s fee. During the year ended December 31, 2023, MAEPA received €100,000 ($145,970) (2022 - €100,000 ($136,960)) operator’s fee where the fund was included in reimbursements from optionee.

AVRUPA MINERALS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(Presented in Canadian Dollars)

5.EXPLORATION AND EVALUATION ASSETS AND MINERAL EXPLORATION EXPENSES (Continued)

Alvalade: (Continued)

Phase II – Second Option

Phase II commenced on the first option exercise date and continues until the first to occur of the second option exercise date and the termination of the second option. On the first option exercise date, the Company granted SMP the sole and exclusive right and option to acquire an additional 34% (for an aggregate 85% interest) in PorMining (the second option). SMP’s right to exercise the second option is conditional on Sandfire MATSA satisfying the second option conditions as follows: