Resource Estimates and Production - Sunshine Oilsands has an estimated recoverable resource of approximately 1.53 billion barrels as of December 31, 2023, with a best estimate of 910 million barrels in the Athabasca region[3]. - The average production of diluted bitumen for the three and six months ended June 30, 2024, was 905.2 barrels per day and 1,045.5 barrels per day, respectively[4]. - For the second quarter of 2024, the company reported bitumen sales of 10,674 barrels per day, a decrease from 11,064 barrels per day in the second quarter of 2023[8]. - The company plans to enter the second phase of the West Ells project, which aims to increase production by an additional 5,000 barrels per day once financing is secured[3]. - Oil sands heavy oil production averaged 905 barrels per day for the three months ended June 30, 2024, down from 1,267 barrels per day in the same period of 2023[14]. - Oil sands heavy oil sales averaged 884 barrels per day for the three months ended June 30, 2024, compared to 1,294 barrels per day in the same period of 2023[15]. - The West Ells project has fully resumed production, and the company will continue to monitor developments in the crude oil market[60]. Financial Performance - The net loss attributable to equity holders for the second quarter of 2024 was CAD 10.97 million, compared to a net loss of CAD 5.75 million in the second quarter of 2023[8]. - For the three months ended June 30, 2024, the company reported oil sands heavy oil revenue of CAD 6.00 million, a decrease of CAD 1.50 million from CAD 7.54 million in the same period of 2023[10]. - The company reported a net income of CAD 0.30 million for the six months ended June 30, 2024, compared to a net loss of CAD 4.40 million in the same period of 2023[12]. - As of June 30, 2024, the company reported a net loss attributable to shareholders of CAD 33.1 million and a working capital deficiency of CAD 83.8 million[34]. - The working capital deficit as of June 30, 2024, was CAD 83.772 million, compared to CAD 79.458 million as of December 31, 2023, reflecting an increase in the deficit[31]. - Shareholders' equity decreased to CAD 57.782 million as of June 30, 2024, down from CAD 91.047 million as of December 31, 2023[31]. Costs and Expenses - The average realized price for diluted bitumen was CAD 50.67 per barrel for the three months ended June 30, 2024, compared to CAD 54.30 per barrel for the same period in 2023[9]. - The company reported operating costs of CAD 3.27 million for the second quarter of 2024, down from CAD 4.47 million in the second quarter of 2023[8]. - The total operating costs, including energy and non-energy costs, for the six months ended June 30, 2024, were CAD 7.6 million, down from CAD 9.0 million in 2023, indicating improved cost efficiency[22]. - The total cost of diluent for the three and six months ended June 30, 2024, was CAD 4.7 million and CAD 9.6 million, respectively, compared to CAD 3.5 million and CAD 7.4 million for the same periods in 2023, reflecting an increase of CAD 1.2 million and CAD 2.2 million[20]. - The average transportation cost per barrel for the three and six months ended June 30, 2024, was CAD 13.29 and CAD 14.87, respectively, down from CAD 24.99 and CAD 23.97 in 2023, reflecting a reduction in transportation distance[21]. - The operating cash flow for the three months ended June 30, 2024, was CAD 0.80 million, compared to a net loss of CAD 0.70 million in the same period of 2023[11]. Debt and Financing - The company has incurred unsecured debt totaling USD 56 million (approximately CAD 76.6 million) as of June 30, 2024[32]. - The company's debt-to-asset ratio increased to 92% as of June 30, 2024, compared to 88% as of December 31, 2023[34]. - The company entered into an interest waiver agreement, resulting in a waiver of accrued interest amounting to USD 31.5 million for the period from January 1, 2024, to December 31, 2024[31]. - The company has unsecured loans from related parties totaling approximately CAD 53,375,000, with an interest rate of 10%, which can be deferred for 2 to 3 years[37]. - The total amount of loans from shareholders is approximately CAD 21,190,000, due within one to three years[37]. Tax and Legal Matters - As of June 30, 2024, the company had total available tax deductions of approximately CAD 1.43 billion, with unrecognized tax losses expiring between 2029 and 2043[30]. - The company received a payment notice from RMWB regarding municipal property taxes amounting to CAD 15.8 million, along with overdue penalties of CAD 13.6 million[32]. - The company is actively negotiating a settlement plan with RMWB to address the overdue penalties and believes the property tax notice is not compliant with relevant laws[32]. - The company has a pending court judgment requiring it to pay USD 19.694 million (approximately CAD 26.048 million) to non-compliant bondholders[33]. Operational and Strategic Developments - The company is focusing on cost control and will restart activities in the Muskwa and Godin areas with joint ventures[60]. - The company confirmed no further indications of impairment losses for exploration and evaluation (E&E) or property, plant, and equipment (PP&E) assets as of June 30, 2024[29]. - The company has entered into a deferral and amendment agreement covering the period from September 1, 2023, to August 31, 2025, with an annual interest rate of 10% on all outstanding amounts[32]. - The company continues to face significant risks and uncertainties in its resource exploration, development, and refining business[41]. Shareholder Information - The company reported a total of 243,478,681 shares of Class "A" common stock issued as of June 30, 2024[57]. - The company’s executive chairman, Mr. Sun Guoping, beneficially owns, controls, or directs 150,232,591 common shares, representing about 61.70% of the company’s issued common shares[37]. - The company did not declare or pay any dividends for the six-month period ended June 30, 2024, consistent with the previous year[58].

Executive Summary [Financial Data Summary](index=1&type=section&id=Financial%20Summary) Oil sales increased, but Q2 net income turned to loss due to exchange losses and royalties, highlighting going concern issues Financial Data Summary (CAD thousands) | Metric | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Oil Sales (Net of Royalties) | 21,458 | 17,945 | | Average Sales Volume of Diluted Bitumen (barrels/day) | 1,484.1 | 1,380.1 | Financial Data Summary (CAD thousands) | Metric | Three Months Ended June 30, 2024 (CAD thousands) | Three Months Ended June 30, 2023 (CAD thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Net Operating Income (Excluding One-Time Exchange Loss) | 1,130 | 1,660 | | Operating Cash Flow | 753 | (702) | | Net Profit (Loss) Attributable to Equity Holders of the Company | (10,974) | 5,745 | - Oil sales (net of royalties) increased from **CAD 17.9 million** in H1 2023 to **CAD 21.5 million** in H1 2024, primarily due to higher sales prices for diluted bitumen[1](index=1&type=chunk) - Net loss attributable to equity holders of the company for Q2 2024 was **CAD 11.0 million**, compared to a net profit of **CAD 5.7 million** in the prior-year period, marking a shift from profit to loss[1](index=1&type=chunk) Condensed Consolidated Interim Financial Statements [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets decreased, liabilities increased, and shareholders' equity significantly reduced, indicating financial pressure Condensed Consolidated Statement of Financial Position (CAD thousands) | Metric | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :--------------- | :--------------------- | :---------------------- | | Total Assets | 742,120 | 745,932 | | Current Assets | 7,862 | 5,951 | | Non-Current Assets | 734,258 | 739,981 | | Total Liabilities | 684,338 | 654,885 | | Current Liabilities | 91,634 | 85,409 | | Non-Current Liabilities | 592,704 | 569,476 | | Total Equity Attributable to Equity Holders of the Company | 57,782 | 91,047 | - Shareholders' equity decreased from **CAD 91,047 thousand** as of December 31, 2023, to **CAD 57,782 thousand** as of June 30, 2024, a **36.5% decrease**[4](index=4&type=chunk)[5](index=5&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Net loss significantly widened due to foreign exchange loss and higher finance costs, despite increased oil sales revenue Condensed Consolidated Statement of Comprehensive Income (CAD thousands) | Metric | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Oil Sales (Net of Royalties) | 21,458 | 17,945 | | Other Income | 916 | 2,684 | | Foreign Exchange (Gain)/Loss | (17,729) | 12,000 | | Net Income/(Loss) | (33,265) | (5,979) | | Net Income/(Loss) Attributable to Equity Holders of the Group for the Year | (33,118) | (5,828) | | Basic and Diluted Earnings/(Loss) Per Share | (0.14) | (0.02) | - Foreign exchange shifted from a **CAD 12.0 million gain** in H1 2023 to a **CAD 17.7 million loss** in H1 2024, significantly impacting net profit[6](index=6&type=chunk) - Finance costs increased from **CAD 4.773 million** in H1 2023 to **CAD 5.660 million** in H1 2024[6](index=6&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to equity holders significantly decreased due to the period's net loss, impacting the capital base Condensed Consolidated Statement of Changes in Equity (CAD thousands) | Metric | Balance as of December 31, 2023 (CAD thousands) | Balance as of June 30, 2024 (CAD thousands) | | :------------------- | :-------------------------- | :------------------------- | | Share Capital | 1,315,265 | 1,315,265 | | Accumulated Deficit | (1,294,508) | (1,327,626) | | Equity Attributable to Equity Holders of the Company | 92,265 | 59,147 | | Total Equity | 91,047 | 57,782 | - Equity attributable to equity holders of the company decreased from **CAD 92,265 thousand** as of December 31, 2023, to **CAD 59,147 thousand** as of June 30, 2024, primarily due to a **CAD 33,118 thousand** net loss during the period[7](index=7&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Operating cash flow was negative, investing cash flow turned positive, and financing cash flow was positive, increasing cash balance Condensed Consolidated Statement of Cash Flows (CAD thousands) | Metric | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :----------------------- | :--------------------------------- | :--------------------------------- | | Net Cash Provided by (Used in) Operating Activities | (1,127) | (1,990) | | Net Cash Provided by (Used in) Investing Activities | 340 | (536) | | Net Cash Generated from Financing Activities | 1,192 | 2,312 | | Cash at End of Period | 914 | 234 | - Net cash used in operating activities improved from a **CAD 1,990 thousand** outflow in H1 2023 to a **CAD 1,127 thousand** outflow in H1 2024, though still negative[9](index=9&type=chunk) - Net cash from investing activities shifted from a **CAD 536 thousand** outflow in H1 2023 to a **CAD 340 thousand** inflow in H1 2024, mainly due to proceeds from asset disposals[9](index=9&type=chunk) Notes to the Condensed Consolidated Interim Financial Statements [1. Company Information](index=9&type=section&id=1.%20Company%20Information) Sunshine Oilsands Ltd. develops oil mineral properties in Alberta, producing bitumen, and has a Chinese joint venture - The company was incorporated on **February 22, 2007**, under Alberta laws, and its shares were listed on the HKEX on **March 1, 2012**[10](index=10&type=chunk) - The Group primarily engages in the evaluation and development of oil mineral properties, currently producing bitumen in the Athabasca oil sands region of Alberta, Canada[10](index=10&type=chunk) - The company has a 51% interest in a joint venture, Sunshine Oilsands Hebei, in China, which had no business activities as of June 30, 2024[10](index=10&type=chunk)[64](index=64&type=chunk) [2. Basis of Preparation](index=9&type=section&id=2.%20Basis%20of%20Preparation) Financial statements are on a going concern basis despite significant losses and net current liabilities, requiring debt restructuring and new financing - For the six months ended June 30, 2024, the Group incurred a net loss of approximately **CAD 33.1 million** and had net current liabilities of approximately **CAD 83.8 million**[11](index=11&type=chunk) - The company's ability to continue as a going concern depends on successfully refinancing or restructuring existing debt, securing additional financing, and achieving profitable operations[11](index=11&type=chunk)[12](index=12&type=chunk) - Management is actively discussing with existing shareholders and creditors to reduce expected cash outflows and secure additional financing for capital and operating expenditures[12](index=12&type=chunk) [2.1 Statement of Compliance](index=10&type=section&id=2.1%20Statement%20of%20Compliance) Interim financial statements comply with IFRS and HKEX Listing Rules, presented in CAD, and should be read with the 2023 annual report - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the HKEX Listing Rules, presented in Canadian dollars[13](index=13&type=chunk) - Certain information and disclosures have been condensed or omitted, and it is recommended to read this report in conjunction with the 2023 annual consolidated financial statements[13](index=13&type=chunk) [3. Adoption of Revised IFRS](index=10&type=section&id=3.%20Adoption%20of%20Revised%20IFRS) New and revised IFRS standards were adopted with no significant expected impact, and future amendments are listed - The company's directors do not expect the application of new and revised IFRS to have a significant impact on the Group's performance and financial position[14](index=14&type=chunk)[15](index=15&type=chunk) - Issued but not yet effective IFRS amendments include revisions to IAS 21, IAS 16, IAS 1, IAS 7, IFRS 10, and IAS 28[15](index=15&type=chunk) [4. Trade and Other Receivables](index=10&type=section&id=4.%20Trade%20and%20Other%20Receivables) Total trade and other receivables slightly increased, with a 30-day credit period and minimal expected credit losses Trade and Other Receivables (CAD thousands) | Receivable Category | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :----------------- | :--------------------- | :---------------------- | | Trade Receivables | 3,494 | 3,501 | | Other Receivables – Current | 3,454 | 1,923 | | Other Receivables – Non-Current | 2,827 | 2,594 | | Other Loan Receivables – Non-Current | 10,665 | 12,049 | | **Total** | **20,440** | **20,067** | - The Group grants an average **30-day credit period** to trade customers, with oil and gas marketing companies typically paying by the 25th of the month following production[15](index=15&type=chunk) - As of June 30, 2024, the company's directors consider the expected credit losses on receivables to be minimal[16](index=16&type=chunk) [5. Exploration and Evaluation Assets](index=11&type=section&id=5.%20Exploration%20and%20Evaluation%20Assets) Exploration and evaluation assets slightly increased, with no impairment losses recognized, using the FVLCD method Exploration and Evaluation Assets (CAD thousands) | Metric | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :----------------------- | :--------------------- | :---------------------- | | Beginning Balance | 237,971 | 235,044 | | Capital Expenditure | 643 | 2,234 | | Disposal of Assets | (750) | - | | **Ending Balance** | **238,346** | **237,971** | - For the six months ended June 30, 2024, the Group did not recognize any impairment losses for exploration and evaluation cash-generating units[18](index=18&type=chunk) - Impairment tests use the FVLCD method, with cash flow data derived from reports by independent qualified reserve evaluators, GLJ Petroleum Consultants[16](index=16&type=chunk) [6. Property, Plant and Equipment](index=12&type=section&id=6.%20Property,%20Plant%20and%20Equipment) Property, plant and equipment carrying amount slightly decreased, with no impairment losses, using the FVLCD method Property, Plant and Equipment (CAD thousands) | Metric | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :----------------------- | :--------------------- | :---------------------- | | Total Cost | 895,567 | 896,096 | | Accumulated Depreciation, Depletion and Impairment | 418,850 | 414,712 | | **Carrying Amount** | **476,717** | **481,384** | - For the six months ended June 30, 2024, the Group did not recognize any impairment losses for the West Ells cash-generating unit[22](index=22&type=chunk) - Impairment tests use the FVLCD method, based on GLJ Petroleum Consultants' oil and gas reserve reports and oil price forecasts[20](index=20&type=chunk) [7. Right-of-Use Assets and Leases](index=13&type=section&id=7.%20Right-of-Use%20Assets%20and%20Leases) Right-of-use assets were CAD 5.7M, lease liabilities CAD 1.7M, and cash flows for leases CAD 0.36M Right-of-Use Assets and Leases (CAD thousands) | Metric | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :--------------- | :--------------------- | :---------------------- | | Total Right-of-Use Assets | 5,703 | 5,983 | | Lease Liabilities | 1,676 | - | - For the six months ended June 30, 2024, total cash flows for leases amounted to **CAD 359 thousand**[24](index=24&type=chunk) [8. Trade and Accrued Payables](index=13&type=section&id=8.%20Trade%20and%20Accrued%20Payables) Total trade and accrued payables increased, with significant interest payable and high overdue trade payables Trade and Accrued Payables (CAD thousands) | Liability Category | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :--------------- | :--------------------- | :---------------------- | | Trade Payables | 19,815 | 18,973 | | Interest Payable | 201,558 | 190,886 | | Other Payables | 23,325 | 21,830 | | Accrued Liabilities | 24,373 | 22,317 | | **Total** | **269,071** | **254,006** | Aging of Trade Payables (CAD thousands) | Aging of Trade Payables | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :--------------- | :--------------------- | :---------------------- | | 0 - 30 Days | 910 | 972 | | 31 – 60 Days | 80 | 480 | | 61 – 90 Days | 172 | 86 | | > 90 Days | 18,653 | 17,435 | - Trade payables over **90 days** reached **CAD 18,653 thousand** as of June 30, 2024, representing the vast majority of total trade payables, indicating pressure on long-term payment obligations[26](index=26&type=chunk) [9. Debt](index=14&type=section&id=9.%20Debt) Debt includes other loans and senior notes with renewed extension and interest waiver agreements, but repayment challenges persist Debt (CAD thousands) | Debt Category | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :--------------- | :--------------------- | :---------------------- | | Total Other Loans | 16,155 | 15,454 | | Senior Notes (Current) | 10,950 | 10,581 | | Senior Notes (Non-Current) | 260,930 | 252,142 | - The company entered into a 2024 interest waiver agreement with the Extension Holders, waiving **USD 31.5 million** of interest accrued on the Senior Notes for the period from January 1 to December 31, 2024[29](index=29&type=chunk) - The Senior Notes extension agreement has been extended to **August 31, 2025**, with an annual interest rate of **10%** during the period[32](index=32&type=chunk) [10. Provisions](index=15&type=section&id=10.%20Provisions) Asset retirement obligation provision increased to CAD 51.0M, based on estimated costs discounted using risk-free rates and inflation Provisions (CAD thousands) | Metric | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :------------------- | :--------------------- | :---------------------- | | Beginning Balance of Decommissioning Liabilities | 49,829 | 44,144 | | Impact of Discount Rate Change | 290 | 4,225 | | Unwinding of Discount | 872 | 1,460 | | **Ending Balance (Non-Current)** | **50,991** | **49,829** | - The total estimated undiscounted cash flows for asset retirement obligations are **CAD 81.4 million**, expected to continue until **2040**[30](index=30&type=chunk) - Retirement costs are discounted using risk-free rates ranging from **2.69% to 2.95%**, and an annual inflation rate of **2.0%** is included[30](index=30&type=chunk) [11. Income Tax](index=16&type=section&id=11.%20Income%20Tax) No deferred tax benefits were recognized, resulting in zero net deferred income tax assets, with non-capital losses offset by liabilities Deferred Tax Assets (Liabilities) (CAD thousands) | Deferred Tax Assets (Liabilities) Category | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :----------------------- | :--------------------- | :---------------------- | | Exploration and Evaluation Assets and Property, Plant and Equipment | (75,651) | (69,567) | | Decommissioning Liabilities | 11,728 | 11,461 | | Non-Capital Losses | 241,090 | 243,242 | | Unrecognized Deferred Tax Benefits | (177,319) | (185,173) | | **Total** | **-** | **-** | - The company has a significant amount of unrecognized deferred tax benefits, indicating that its accumulated losses have not yet fully offset future taxable profits[33](index=33&type=chunk) [12. Share Capital](index=16&type=section&id=12.%20Share%20Capital) Issued share capital remained unchanged, with various authorized share classes, and a placement is underway to settle trade payables Share Capital (CAD thousands) | Metric | Number of Shares as of June 30, 2024 | Amount as of June 30, 2024 (CAD thousands) | Number of Shares as of December 31, 2023 | Amount as of December 31, 2023 (CAD thousands) | | :--------------- | :--------------------- | :-------------------------- | :---------------------- | :-------------------------- | | Beginning Balance | 243,478,681 | 1,315,265 | 243,478,681 | 1,315,265 | | **Ending Balance** | **243,478,681** | **1,315,265** | **243,478,681** | **1,315,265** | - The company's authorized share capital includes an unlimited number of Class A and B voting common shares, Class C, D, E, and F non-voting common shares, and Class G and H non-voting preferred shares[34](index=34&type=chunk) - The company is undertaking a placement to issue **48,695,736 Class A common shares** at **HKD 0.38 per share** to settle trade payables[36](index=36&type=chunk) [13. Share-based Compensation](index=17&type=section&id=13.%20Share-based%20Compensation) Unexercised share options totaled 200,000 with a CAD 0.60 exercise price and 0.19 years remaining, with no compensation expense Share-based Compensation | Metric | Number of Share Options as of June 30, 2024 | Weighted Average Exercise Price as of June 30, 2024 (CAD) | Number of Share Options as of December 31, 2023 | Weighted Average Exercise Price as of December 31, 2023 (CAD) | | :--------------- | :--------------------- | :---------------------------------- | :---------------------- | :---------------------------------- | | Beginning Balance | 200,000 | 0.60 | 6,500,000 | 1.96 | | Expired | - | - | (6,300,000) | 2.00 | | **Ending Balance** | **200,000** | **0.60** | **200,000** | **1.96** | - As of June 30, 2024, the weighted average remaining contractual life of unexercised share options was **0.19 years**, a significant reduction from **0.69 years** at December 31, 2023[38](index=38&type=chunk) - No share-based compensation expense was recognized by the company during the period[39](index=39&type=chunk) [14. Revenue](index=18&type=section&id=14.%20Revenue) Revenue from contracts with customers increased by 19.6% to CAD 21.5M, all from Canadian customers and recognized upon control transfer Revenue (CAD thousands) | Metric | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :--------------- | :--------------------------------- | :--------------------------------- | | Oil Sales | 22,111 | 18,256 | | Royalties | (653) | (311) | | **Revenue from Contracts with Customers** | **21,458** | **17,945** | - All revenue is derived from Canadian customers and recognized when control of goods is transferred, typically collected in the month following delivery[40](index=40&type=chunk) - Royalty rates for West Ells are calculated based on price-sensitive royalty rates determined by the Government of Alberta, currently benchmarked against oil sands operations before break-even[41](index=41&type=chunk) [15. Segment Information](index=18&type=section&id=15.%20Segment%20Information) The Group operates in a single segment: mining, producing, and selling crude oil, with all revenue and most assets in Canada - The Group has only one reportable and operating segment: mining, producing, and selling crude oil products[42](index=42&type=chunk) - All of the Group's revenue is derived from Canadian customers, and the majority of non-current assets are also located in Canada[43](index=43&type=chunk) - Customer A contributed **73.3%** of the Group's total revenue for the six months ended June 30, 2024[44](index=44&type=chunk) [16. Other Income](index=19&type=section&id=16.%20Other%20Income) Total other income significantly decreased due to reduced other income, despite a gain on asset disposal Other Income (CAD thousands) | Income Category | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :------------------- | :--------------------------------- | :--------------------------------- | | Interest Income | 4 | 3 | | Other Income | 746 | 2,681 | | Gain (Loss) on Disposal of Assets | 166 | - | | **Ending Balance** | **916** | **2,684** | - Other income (excluding interest and gain on asset disposal) decreased from **CAD 2,681 thousand** in H1 2023 to **CAD 746 thousand** in H1 2024[45](index=45&type=chunk) [17. General and Administrative Expenses](index=19&type=section&id=17.%20General%20and%20Administrative%20Expenses) General and administrative expenses slightly decreased, with reductions in salaries, consulting, benefits, and legal/audit fees General and Administrative Expenses (CAD thousands) | Expense Category | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :----------------- | :--------------------------------- | :--------------------------------- | | Salaries, Consulting Fees and Benefits | 2,819 | 3,307 | | Rent | 16 | 16 | | Legal and Audit | 88 | 289 | | Other | 3,538 | 3,024 | | **Ending** | **6,461** | **6,636** | - Salaries, consulting fees, and benefits decreased from **CAD 3,307 thousand** in H1 2023 to **CAD 2,819 thousand** in H1 2024[46](index=46&type=chunk) - Legal and audit fees significantly decreased from **CAD 289 thousand** in H1 2023 to **CAD 88 thousand** in H1 2024[46](index=46&type=chunk) [18. Finance Costs](index=19&type=section&id=18.%20Finance%20Costs) Total finance costs increased, driven by higher other interest expenses and unwinding of discount on provisions Finance Costs (CAD thousands) | Finance Cost Category | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :----------------------- | :--------------------------------- | :--------------------------------- | | Interest Expense on Senior Secured Notes | 588 | 583 | | Interest Expense on Other Loans | 133 | 304 | | Other Interest Expense | 3,908 | 3,042 | | Other Interest Expense - Leases | 159 | 125 | | Unwinding of Discount on Provisions | 872 | 719 | | **Ending Balance** | **5,660** | **4,773** | - Other interest expense increased from **CAD 3,042 thousand** in H1 2023 to **CAD 3,908 thousand** in H1 2024[47](index=47&type=chunk) - Unwinding of discount on provisions increased from **CAD 719 thousand** in H1 2023 to **CAD 872 thousand** in H1 2024[47](index=47&type=chunk) [19. Earnings/(Loss) Per Share](index=19&type=section&id=19.%20Earnings%2F%28Loss%29%20Per%20Share) Basic and diluted loss per share significantly increased to CAD 0.14, reflecting substantial profitability deterioration Earnings/(Loss) Per Share | Metric | June 30, 2024 | June 30, 2023 | | :----------------------- | :------------ | :------------ | | Basic and Diluted – Class A Common Shares | 243,478,681 | 243,478,681 | | **Loss Per Share** | **(0.14)** | **(0.02)** | - Loss per share expanded from **CAD 0.02** in H1 2023 to **CAD 0.14** in H1 2024, reflecting a significant deterioration in the company's profitability[49](index=49&type=chunk) [20. Capital and Financial Risk Management](index=20&type=section&id=20.%20Capital%20and%20Financial%20Risk%20Management) Capital risk is managed via equity, JVs, and debt, while currency and liquidity risks are addressed, with a CAD 83.8M working capital deficit - The Group raises sufficient capital through equity issuance, joint ventures, and debt to maintain its capital base and financial flexibility[50](index=50&type=chunk) Capital and Financial Risk Management (CAD thousands) | Metric | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :--------------- | :--------------------- | :---------------------- | | Working Capital Deficit | 83,772 | 79,458 | | Shareholders' Equity | 57,782 | 91,047 | | **Total** | **141,554** | **170,505** | - The Group faces foreign exchange rate fluctuation risks, primarily related to USD, HKD, and RMB denominated expenditure commitments, deposits, payables, and long-term debt[53](index=53&type=chunk) [20.1 Capital Risk Management](index=20&type=section&id=20.1%20Capital%20Risk%20Management) Capital risk is managed via equity, JVs, and debt financing for flexibility, with a CAD 83.8M working capital deficit - The Group's strategy is to raise sufficient capital through equity issuance, joint ventures, and debt to maintain its capital base, aiming for financial flexibility and future business development[50](index=50&type=chunk) Working Capital Deficit (CAD thousands) | Metric | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :----------- | :--------------------- | :---------------------- | | Working Capital Deficit | 83,772 | 79,458 | [20.2 Financial Instruments Categories](index=20&type=section&id=20.2%20Financial%20Instruments%20Categories) Financial assets and liabilities are primarily measured at amortized cost, with carrying and fair values of CAD 20.0M and CAD 631.7M Financial Instruments Categories (CAD thousands) | Category | Carrying Amount as of June 30, 2024 (CAD thousands) | Fair Value as of June 30, 2024 (CAD thousands) | Carrying Amount as of December 31, 2023 (CAD thousands) | Fair Value as of December 31, 2023 (CAD thousands) | | :----------------------- | :---------------------------- | :---------------------------- | :----------------------------- | :----------------------------- | | Financial Assets Measured at Amortized Cost | 20,007 | 20,007 | 19,245 | 19,245 | | Financial Liabilities Measured at Amortized Cost | 631,671 | 631,671 | 603,137 | 603,137 | [20.3 Fair Value of Financial Instruments](index=20&type=section&id=20.3%20Fair%20Value%20of%20Financial%20Instruments) Carrying amounts of amortized cost financial instruments approximate fair values due to short-term maturity - The directors believe that the carrying amounts of financial assets and liabilities recognized at amortized cost approximate their fair values due to their short-term maturity[52](index=52&type=chunk) [20.4 Currency Risk](index=20&type=section&id=20.4%20Currency%20Risk) The Group faces USD, HKD, and RMB currency risks, impacting debt and payables, with a CAD 5.4M unrealized foreign exchange loss - The Group faces foreign exchange rate fluctuation risks, primarily related to USD, HKD, and RMB denominated expenditure commitments, deposits, payables, and long-term debt[53](index=53&type=chunk) Components of Foreign Exchange (Gain)/Loss (CAD thousands) | Components of Foreign Exchange (Gain)/Loss | Three Months Ended June 30, 2024 (CAD thousands) | Three Months Ended June 30, 2023 (CAD thousands) | | :------------------------ | :--------------------------------- | :--------------------------------- | | Unrealized Foreign Exchange Loss/(Gain) | 5,422 | (11,158) | | Realized Foreign Exchange Loss/(Gain) | (2) | - | | **Total Foreign Exchange Loss/(Gain)** | **5,420** | **(11,158)** | - A 1% upward or downward movement in the USD to CAD exchange rate would impact the carrying amount of debt by approximately **CAD 2.7 million**, HKD by **CAD 0.7 million**, and RMB by **CAD 0.1 million**[54](index=54&type=chunk) [20.5 Liquidity Risk](index=21&type=section&id=20.5%20Liquidity%20Risk) Liquidity risk is managed by ensuring sufficient funds to meet obligations, with CAD 91.1M financial liabilities maturing within one year - The Group manages liquidity risk by developing plans to ensure sufficient liquidity to meet financial obligations when due, through proceeds from equity or debt[55](index=55&type=chunk) Financial Liabilities Maturity Analysis (CAD thousands) | Financial Liability Category | Total (CAD thousands) | Within One Year (CAD thousands) | One to Two Years (CAD thousands) | | :--------------- | :------------ | :---------------- | :------------------ | | Trade and Accrued Payables | 269,071 | 76,298 | 192,773 | | Debt | 362,600 | 14,763 | 347,837 | | **Total** | **631,671** | **91,061** | **540,610** | [21. Related Party Transactions](index=21&type=section&id=21.%20Related%20Party%20Transactions) The Group engaged in related party transactions, including management fees and loans, with the Executive Chairman holding 61.70% of common shares - For the six months ended June 30, 2024, a consulting firm related to a director of Sunshine Oilsands charged the Group **CAD 0.25 million** for management and consulting services[58](index=58&type=chunk) - Mr. Sun Guo Ping, the Executive Chairman of the company, beneficially owns or controls approximately **61.70%** of the company's issued common shares[58](index=58&type=chunk) [21.1 Trading Transactions](index=21&type=section&id=21.1%20Trading%20Transactions) The company paid CAD 0.25M for management and consulting services to a related firm; the Executive Chairman holds 61.70% of common shares - For the six months ended June 30, 2024, a consulting firm related to a director of Sunshine Oilsands charged the Group **CAD 0.25 million** for management and consulting services[58](index=58&type=chunk) - Mr. Sun Guo Ping, the Executive Chairman of the company, beneficially owns or controls approximately **61.70%** of the company's issued common shares[58](index=58&type=chunk) [21.2 Key Management Personnel and Directors' Remuneration](index=22&type=section&id=21.2%20Key%20Management%20Personnel%20and%20Directors'%20Remuneration) Key management and directors' remuneration totaled CAD 1.16M, consistent with prior year, primarily salaries and allowances Key Management Personnel and Directors' Remuneration (CAD thousands) | Remuneration Category | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :----------------- | :--------------------------------- | :--------------------------------- | | Directors' Fees | 182 | 180 | | Salaries and Allowances | 980 | 983 | | Share-based Compensation | - | - | | **Total** | **1,162** | **1,163** | [21.3 Related Company Loans](index=22&type=section&id=21.3%20Related%20Company%20Loans) Unsecured loans from related companies totaled CAD 53.4M, bearing 10% annual interest and extendable for 2-3 years Related Company Loans (CAD thousands) | Loan Category | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :------- | :--------------------- | :---------------------- | | Non-Current | 53,375 | 51,933 | | **Total** | **53,375** | **51,933** | - As of June 30, 2024, the Group's unsecured loans from related companies bear an annual interest rate of **10%**, with approximately **CAD 53,375 thousand** extendable for 2 to 3 years[60](index=60&type=chunk) [21.4 Shareholder Loans](index=22&type=section&id=21.4%20Shareholder%20Loans) Unsecured shareholder loans amounted to CAD 21.2M, with a 10% annual interest rate and extendable for 1-3 years - As of June 30, 2024, the Group's unsecured shareholder loans amounted to **CAD 21,190 thousand**, bearing an annual interest rate of **10%** and extendable for 1 to 3 years[61](index=61&type=chunk) [22. Commitments and Contingencies](index=22&type=section&id=22.%20Commitments%20and%20Contingencies) Annual obligations include CAD 2.5M for lease rentals, and the company faces significant litigation, including tax disputes and a court judgment - The Group has annual obligations to pay oil sands mineral lease rentals and surface lease rentals, with annual payments of approximately **CAD 2.5 million**[62](index=62&type=chunk) - The company received demand notices from RMWB for municipal property taxes from 2016 to 2024, totaling **CAD 15.8 million** in accrued taxes and **CAD 17.6 million** in accumulated overdue penalties[63](index=63&type=chunk) - The company received a New York court judgment to pay non-extending holders of senior notes approximately **USD 19.694 million** (approximately **CAD 26.048 million**) in principal and interest, which the company has appealed[63](index=63&type=chunk) [22.1 Commitments](index=22&type=section&id=22.1%20Commitments) Annual obligations include CAD 2.5M for oil sands mineral and surface lease rentals, with no other drilling or contractual commitments - The Group has annual obligations to pay oil sands mineral lease rentals and surface lease rentals, with annual payments of approximately **CAD 2.5 million**[62](index=62&type=chunk) [22.2 Litigation](index=22&type=section&id=22.2%20Litigation) The company faces a CAD 15.8M tax dispute and a CAD 26.048M New York court judgment, both appealed, with uncertain outcomes - The company received demand notices from RMWB for municipal property taxes from 2016 to 2024, totaling **CAD 15.8 million** in accrued taxes and **CAD 17.6 million** in accumulated overdue penalties[63](index=63&type=chunk) - The company received a New York court judgment to pay non-extending holders of senior notes approximately **USD 19.694 million** (approximately **CAD 26.048 million**) in principal and interest, which the company has appealed[63](index=63&type=chunk) - The company believes it has adequately provided for such claims, but the outcome of litigation is uncertain and could materially adversely affect the company's consolidated net income or loss[63](index=63&type=chunk) [23. Subsidiaries](index=23&type=section&id=23.%20Subsidiaries) The Group owns several subsidiaries, including a 51% interest in Sunshine Oilsands Hebei, with most having no operating activities - The Group owns wholly-owned subsidiaries including Sunshine Oilsands (Hong Kong) Ltd., Brighteous Investment Ltd., and Sunshine Oilsands (Shanghai) Ltd[64](index=64&type=chunk) - Sunshine Oilsands Hebei is a joint venture in which the company holds a **51% interest**[64](index=64&type=chunk) - As of June 30, 2024, all subsidiaries except Sunshine Oilsands Hebei had no operating activities[64](index=64&type=chunk) [24. Supplemental Cash Flow Disclosures](index=24&type=section&id=24.%20Supplemental%20Cash%20Flow%20Disclosures) Non-cash working capital changes provided CAD 4.1M to operating cash flow, primarily from increased trade and other payables Supplemental Cash Flow Disclosures (CAD thousands) | Cash Flow Category | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :------------------- | :--------------------------------- | :--------------------------------- | | Trade and Other Receivables | (224) | (2,419) | | Prepaid Expenses and Deposits | (1) | 1,058 | | Trade and Other Payables | 4,393 | 7,605 | | Foreign Exchange Changes | (19) | 115 | | **Total** | **4,149** | **6,359** | - Non-cash working capital changes contributing to operating cash flow decreased from **CAD 6,359 thousand** in H1 2023 to **CAD 4,149 thousand** in H1 2024[65](index=65&type=chunk) [25. Approval of Interim Consolidated Financial Statements](index=24&type=section&id=25.%20Approval%20of%20Interim%20Consolidated%20Financial%20Statements) The Board approved and authorized the issuance of the condensed interim consolidated financial statements on August 8/9, 2024 - The Board of Directors approved and authorized the issuance of the condensed interim consolidated financial statements on **August 8, 2024** (Calgary time) / **August 9, 2024** (Hong Kong time)[66](index=66&type=chunk) Appendix [A1. Sunshine Oilsands Ltd. Non-consolidated Statement of Financial Position](index=25&type=section&id=A1.%20Sunshine%20Oilsands%20Ltd.%20Non-consolidated%20Statement%20of%20Financial%20Position) Non-consolidated total assets were CAD 738.2M, liabilities CAD 673.6M, and equity CAD 64.6M, indicating high liabilities Sunshine Oilsands Ltd. Non-consolidated Statement of Financial Position (CAD thousands) | Metric | June 30, 2024 (CAD thousands) | December 31, 2023 (CAD thousands) | | :--------------- | :--------------------- | :---------------------- | | Total Assets | 738,246 | 740,887 | | Current Assets | 6,915 | 5,215 | | Non-Current Assets | 731,331 | 735,672 | | Total Liabilities | 673,623 | 645,029 | | Current Liabilities | 93,592 | 87,844 | | Non-Current Liabilities | 580,031 | 557,185 | | Total Equity | 64,623 | 95,858 | - Total equity in the non-consolidated statements decreased from **CAD 95,858 thousand** as of December 31, 2023, to **CAD 64,623 thousand** as of June 30, 2024, a decrease of approximately **32.6%**[68](index=68&type=chunk) [A2. Directors' Remuneration and Other Employee Costs](index=26&type=section&id=A2.%20Directors'%20Remuneration%20and%20Other%20Employee%20Costs) Directors' remuneration was CAD 1.16M, other employee costs CAD 2.14M, totaling CAD 3.31M Directors' Remuneration and Other Employee Costs (CAD thousands) | Cost Category | Six Months Ended June 30, 2024 (CAD thousands) | Six Months Ended June 30, 2023 (CAD thousands) | | :----------------- | :--------------------------------- | :--------------------------------- | | Directors' Remuneration | 1,163 | 1,312 | | Other Employee Costs | 2,144 | 1,420 | | **Total Employee Costs** | **3,307** | **2,732** | - Directors' remuneration decreased from **CAD 1,312 thousand** in H1 2023 to **CAD 1,163 thousand** in H1 2024[68](index=68&type=chunk) - Other employee costs increased from **CAD 1,420 thousand** in H1 2023 to **CAD 2,144 thousand** in H1 2024[68](index=68&type=chunk)

Financial Performance - The net loss attributable to equity holders for the first quarter of 2024 was CAD 22.14 million, compared to a net profit of CAD 11.57 million in the first quarter of 2023[10]. - The company recorded diluted oil sands heavy oil revenue of CAD 11.44 million for the first quarter of 2024, compared to CAD 7.19 million in the same period of 2023[13]. - The net revenue from oil sales, after deducting royalties, increased to CAD 11.2 million in Q1 2024 from CAD 7.2 million in Q1 2023, a rise of CAD 4 million[19]. - The average price per barrel of oil sold, net of royalties, increased from CAD 64.65 in Q1 2023 to CAD 73.85 in Q1 2024, an increase of CAD 9.20 per barrel[19]. - The company reported a cash flow from operating activities of CAD (4,551,000), an improvement from CAD (7,906,000) in the same period of 2023[60]. - The company has a cash balance of CAD 390,000 as of March 31, 2024, and its ability to continue operations is dependent on securing financing and generating cash flow from operations[5]. Production and Sales - The average oil sands heavy oil production for the first quarter of 2024 was 1,185.9 barrels per day, with an average diluted oil sands heavy oil sales volume of 1,665.4 barrels per day[6]. - For the first quarter of 2024, the company reported heavy oil sales of 1,227 barrels per day, an increase from 1,025 barrels per day in the first quarter of 2023[10]. - The average production of oil sands heavy oil at West Ells rose to 1,186 barrels per day in Q1 2024, up from 913 barrels per day in Q1 2023, an increase of 273 barrels per day[17]. - The average sales volume of oil sands heavy oil increased to 1,227 barrels per day in Q1 2024, compared to 1,025 barrels per day in Q1 2023, an increase of 202 barrels per day[18]. Costs and Expenses - The operating costs for the first quarter of 2024 were CAD 4.29 million, slightly down from CAD 4.49 million in the first quarter of 2023[10]. - The total cost of diluent increased to CAD 4.94 million in Q1 2024 from CAD 3.86 million in Q1 2023, an increase of CAD 1.08 million[22]. - The transportation cost per barrel decreased from CAD 22.70 in Q1 2023 to CAD 16.11 in Q1 2024, a reduction of CAD 6.59 per barrel[24]. - Operating costs decreased from CAD 4.5 million in Q1 2023 to CAD 4.29 million in Q1 2024, a reduction of CAD 0.2 million, primarily due to lower natural gas prices[26]. - General and administrative expenses increased from CAD 4.54 million in Q1 2023 to CAD 4.604 million in Q1 2024, an increase of CAD 0.1 million, mainly due to higher municipal costs[27]. - Financing costs rose from CAD 2.536 million in Q1 2023 to CAD 2.74 million in Q1 2024, an increase of CAD 0.2 million, attributed to interest expenses from related companies and shareholder loans[29]. - Depreciation and depletion expenses increased from CAD 2.051 million in Q1 2023 to CAD 2.619 million in Q1 2024, an increase of CAD 0.568 million, driven by increased production and higher depletion rates[31]. Assets and Liabilities - The total assets of the company as of March 31, 2024, were CAD 745.96 million, showing a slight increase from CAD 745.93 million in the previous quarter[10]. - As of March 31, 2024, the company reported a net loss attributable to owners of CAD 22.1 million, with a working capital deficit of CAD 84.2 million[40]. - The company's total liabilities to total assets ratio increased to 91% as of March 31, 2024, compared to 88% as of December 31, 2023[40]. - The company has incurred unsecured debt totaling USD 55.3 million (approximately CAD 74.9 million) as of March 31, 2024[37]. - The company has unsecured loans from related parties totaling approximately CAD 52,845,000, with an interest rate of 10%[47]. Strategic Initiatives - The company plans to enter the second phase of the West Ells project, which aims to increase production by an additional 5,000 barrels per day once financing is secured[4]. - The company is focused on evaluating and developing its current oil sands assets in the West Ells project, which is located in the Athabasca region, known for its rich oil sands reserves[4]. - The West Ells project has fully resumed production in 2023, indicating a recovery in operations[80]. - The company is focusing on cost control and closely monitoring developments in the crude oil market[80]. - The company plans to restart activities in the Muskwa and Godin areas in collaboration with joint ventures[80]. Tax and Legal Matters - The company has approximately CAD 1.44 billion in available tax deductions, with unrecognized tax losses expiring between 2029 and 2044[34]. - The company is negotiating a settlement plan with the Regional Municipality of Wood Buffalo regarding property tax claims amounting to CAD 15.41 million, along with overdue penalties of CAD 17.65 million[37]. - The company has received a payment notice from the Regional Municipality of Wood Buffalo regarding municipal property taxes from 2016 to 2024, which it believes is not compliant with relevant laws[37]. - The company has a pending court judgment requiring it to pay approximately USD 19.69 million (approximately CAD 26.05 million) to non-tolerant bondholders[39]. - The company is actively seeking suitable insurance for legal claims against its directors[65]. Corporate Governance - The company has two independent non-executive directors and two audit committee members following a recent resignation[64]. - The company’s financial reporting controls have been assessed as effective as of March 31, 2024[56]. - The company has not identified any significant changes in internal control over financial reporting that could materially affect the financial statements[57]. Shareholder Information - The company’s executive chairman holds 150,232,591 shares, representing approximately 61.70% of the issued common shares[47]. - The company reported a total of 243,478,681 Class "A" common shares issued as of March 31, 2024[73]. - No dividends were declared or paid for the three months ended March 31, 2024, consistent with the previous year[75].

Financial Performance - For Q1 2024, Sunshine Oilsands Ltd. reported a net loss attributable to shareholders of approximately CAD 22.14 million, compared to a net loss of CAD 11.57 million in Q1 2023, representing an increase in loss of 91.5% year-over-year[3]. - The company reported a net loss of CAD 22,217,000 for the three months ended March 31, 2024, compared to a net loss of CAD 11,650,000 for the same period in 2023, representing an increase in losses[14]. - The basic and diluted loss per share for Q1 2024 was CAD 0.09, compared to CAD 0.05 in Q1 2023, reflecting a 80.0% increase in loss per share[9]. - The company reported a net loss attributable to shareholders of approximately $22,144,000 for the three months ended March 31, 2024, compared to a loss of $11,575,000 in the same period of 2023[69]. - The total expenses for Q1 2024 were CAD 21.64 million, compared to CAD 19.99 million in Q1 2023, indicating an increase of 8.2%[9]. Revenue and Sales - The company reported total revenue of CAD 11.19 million from oil sales in Q1 2024, a significant increase from CAD 7.18 million in Q1 2023, representing a growth of 55.5%[9]. - Oil sales revenue for the three months ended March 31, 2024, was $11,437,000, a significant increase from $7,192,000 for the same period in 2023, representing a growth of approximately 58.5%[59]. - Customer contract revenue for the same period was $11,192,000, compared to $7,179,000 in 2023, indicating a year-over-year increase of about 55.5%[59]. - Average diluted oil sands sales increased to 1,665.4 barrels per day in Q1 2024, up from 1,233.8 barrels per day in Q1 2023, reflecting a growth of 35.0%[3]. Assets and Liabilities - Total assets as of March 31, 2024, were CAD 745.96 million, slightly up from CAD 745.93 million as of December 31, 2023[7]. - Current liabilities increased to CAD 90.74 million as of March 31, 2024, compared to CAD 85.41 million as of December 31, 2023, marking an increase of 6.9%[7]. - The company’s equity attributable to shareholders decreased to CAD 68.83 million as of March 31, 2024, down from CAD 91.05 million as of December 31, 2023, a decline of 24.5%[7]. - The company’s total liabilities increased to CAD 1,245,000,000 as of March 31, 2024, compared to CAD 1,294,508,000 as of December 31, 2023, indicating a reduction in overall debt[11]. - The company’s total liabilities as of March 31, 2024, are CAD 666,849,000, compared to CAD 645,029,000 in 2023, indicating an increase of approximately 3.5%[96]. Cash Flow and Financing - The net cash used in operating activities for the three months ended March 31, 2024, is CAD (916,000), compared to CAD (3,062,000) for the same period in 2023, indicating an improvement in cash flow[14]. - The cash balance at the end of the period is CAD 388,000, a decrease from CAD 63,000 at the end of the previous period, indicating a decline in liquidity[14]. - The company incurred financing costs of CAD 2,740,000 for the three months ended March 31, 2024, compared to CAD 2,536,000 for the same period in 2023, reflecting an increase in financing expenses[14]. - The company has a total cash outflow related to financial liabilities of $622,871,000, with $90,174,000 due within one year[79]. - The company is actively monitoring its financing requirements and discussing refinancing options with existing shareholders and creditors[21]. Operational Strategies - Sunshine Oilsands Ltd. continues to focus on operational efficiency and cost management strategies to navigate the challenging market environment[3]. - The company continues to assess and develop oil sands resources in Alberta, Canada, with ongoing projects in the Athabasca oil sands region[16]. - The management's ability to maintain ongoing operations is contingent upon achieving forecasted revenues and obtaining additional financing[20]. - The group has significant control and flexibility over the timing and scope of capital and operating expenditures based on its 2024 budget[20]. Shareholder and Equity Information - The company’s issued and fully paid share capital remained unchanged at 243,478,681 shares, with a total value of $1,315,265 USD as of March 31, 2024[53]. - Shareholders' equity decreased to $68,830,000 as of March 31, 2024, compared to $91,047,000 as of December 31, 2023[72]. - Revenue from customer A contributed 63.2% of total group revenue as of March 31, 2024, down from 88.6% in the previous year[64]. Legal and Compliance Matters - The company has appealed a judgment requiring payment of approximately $19,694,000 due on December 13, 2023, with the appeal expected to take place in July 2024[87]. - The company is required to pay approximately $15,481,000 in principal and interest to non-deferring holders based on a judgment from the New York State Court[87]. Miscellaneous - The company has established a wholly-owned subsidiary in Hong Kong, Sunshine Oil Sands (Hong Kong) Limited, to seek new investment opportunities[88]. - The company has not engaged in any purchases, sales, or redemptions of its securities during the first quarter of 2024[54].

Production and Sales Performance - The average oil sands heavy oil production for the year ended December 31, 2023, was 946.1 barrels per day, with an average diluted oil sands heavy oil sales volume of 1,152.8 barrels per day[5]. - The average production of diluted oil sands heavy oil for the three months and twelve months ended December 31, 2023, was 1,604.4 barrels/day and 946.1 barrels/day, respectively[157]. - The average diluted oil sands heavy oil sales for the fourth quarter of 2023 was 1,550 barrels/day, up from 816 barrels/day in the fourth quarter of 2022[160]. - The company reported diluted oil sands heavy oil revenue of CAD 11,932 thousand for the three months ended December 31, 2023, compared to CAD 7,275 thousand for the same period in 2022, representing a 64.5% increase[162]. - The company's oil sands heavy oil realized revenue increased from CAD 3.7 million in Q4 2022 to CAD 6.9 million in Q4 2023, a rise of CAD 3.2 million[163]. - For the twelve months ending December 31, 2023, the realized revenue from oil sands heavy oil rose to CAD 17.78 million, up CAD 9.2 million from CAD 8.64 million in 2022[163]. Financial Performance - The net loss for the year ended December 31, 2023, was CAD 19.6 million, compared to a net loss of CAD 65.7 million in 2022, representing a significant improvement[3]. - Operating cash flow net loss for the twelve months ended December 31, 2023, was CAD 9.5 million, down from CAD 15.2 million in 2022, indicating a reduction in losses[9]. - The company reported a net loss attributable to equity holders of CAD 2,184 thousand for the fourth quarter of 2023, compared to a net profit of CAD 490,832 thousand in the fourth quarter of 2022[160]. - The company reported a net loss attributable to shareholders of CAD 18.7 million for the twelve months ending December 31, 2023[195]. - As of December 31, 2023, total liabilities increased to CAD 654.9 million from CAD 637.7 million in 2022, while shareholders' equity decreased to CAD 91.0 million from CAD 110.0 million[6]. Cost Management - The company achieved a reduction in operating netback losses from CAD 80.52 per barrel in 2022 to CAD 22.59 per barrel in 2023, a decrease of CAD 57.93 per barrel[9]. - The company reported a decrease in operational costs by L%, improving overall profitability margins[19]. - The company's operating costs for the fourth quarter of 2023 were CAD 4,528 thousand, a decrease from CAD 6,506 thousand in the fourth quarter of 2022[160]. - Operating costs for the twelve months ended December 31, 2023, decreased to CAD 17,068,000 from CAD 18,942,000 in 2022, mainly due to lower natural gas prices[177]. Corporate Governance - The board consists of eight members, including two executive directors and three non-executive directors, with the remaining three being independent non-executive directors[28]. - The company has adopted a board diversity policy to enhance decision-making capabilities, considering factors such as gender, age, and professional experience[40]. - The board confirmed compliance with the corporate disclosure and trading policy throughout the reporting period[66]. - The company has established a whistleblowing policy for employees and business associates to report misconduct[50]. - The audit committee reviewed the financial statements for the year ending December 31, 2023, and discussed significant financial issues with management and external auditors[50]. Strategic Initiatives - The company is actively seeking opportunities to lower transportation costs by negotiating with Tidal Energy to transport diluted heavy oil to a closer terminal, Cheecham, starting February 2024[11]. - The company is committed to securing funding to support current operations and expansion plans for the West Ells project and other regional projects[14]. - The company is considering strategic acquisitions to enhance its product offerings and market presence, with potential targets identified in sectors I and J[19]. - The company is investing in R&D for new technologies, allocating $G million towards the development of innovative solutions in the upcoming fiscal year[19]. Market and Customer Relations - The company had three major customers contributing 100% of total revenue for the year ended December 31, 2023, with the largest customer accounting for approximately 84% of total revenue, amounting to CAD 25.4 million[131]. - The second largest customer contributed approximately 15% of total revenue, totaling CAD 4.69 million for the year ended December 31, 2023[132]. - The company continues to seek to expand its customer base to achieve optimal pricing for its products[132]. Legal and Compliance Issues - The company received a court ruling on December 13, 2023, requiring it to pay approximately USD 19.69 million (approximately CAD 26.05 million) to non-exempt holders[146]. - The company is appealing the court ruling, with the appeal expected to take place in July 2024[146]. - The company has received a property tax notice from RMWB for CAD 15.1 million, along with overdue penalties of CAD 14.9 million[192]. Environmental and Social Responsibility - The company emphasizes a "safety first" principle in health, safety, and environmental practices, maintaining a good safety record in 2023[60]. - Environmental protection and management are fundamental operational principles, with ongoing monitoring and compliance with established procedures[128]. - The company’s environmental, social, and governance report will be published after the annual report and will be available on the Hong Kong Stock Exchange and the company’s website[87].

Production and Revenue - As of December 31, 2023, the company reported an average oil sands heavy oil production of 1,604.4 barrels per day for the last three months and 946.1 barrels per day for the full year[5]. - The company achieved a diluted heavy oil revenue of CAD 11,932 thousand for the fourth quarter of 2023, compared to CAD 7,275 thousand in the same quarter of 2022, representing a year-over-year increase of approximately 64.5%[11]. - The average diluted heavy oil sales volume was 1,847.7 barrels per day for the last three months of 2023, up from 1,152.8 barrels per day for the full year[5]. - For the three months ended December 31, 2023, the realized oil sands heavy oil revenue increased by 320,000 CAD to 690,000 CAD from 370,000 CAD in the same period of 2022[12]. - For the twelve months ended December 31, 2023, the realized oil sands heavy oil revenue rose by 920,000 CAD to 1,780,000 CAD from 860,000 CAD in the same period of 2022[13]. - The average production of oil sands heavy oil for Q4 2023 was 1,604 barrels per day, an increase of 670 barrels per day compared to 934 barrels per day in Q4 2022[17]. - The average sales volume of oil sands heavy oil for Q4 2023 was 1,550 barrels per day, up from 816 barrels per day in Q4 2022, reflecting an increase of 734 barrels per day[18]. - Oil sales (net of royalties) for the twelve months ended December 31, 2023, were CAD 29.6 million, up from CAD 14.7 million in the same period of 2022, driven by increased sales following the full resumption of production at West Ells and a decrease in royalties due to lower WCS prices[20]. Financial Performance - The company reported a net loss attributable to equity holders of CAD 2,184 thousand for the fourth quarter of 2023, compared to a profit of CAD 490,832 thousand in the same quarter of 2022[9]. - The operating cash flow net loss for Q4 2023 was 1,450,000 CAD, a reduction from a net loss of 5,140,000 CAD in Q4 2022[15]. - The total operating cash flow net loss for the twelve months ended December 31, 2023, was 9,506,000 CAD, down from 15,185,000 CAD in the previous year[15]. - The company reported a net loss of CAD 18.7 million and a working capital deficit of CAD 79.5 million for the twelve months ending December 31, 2023[47]. - The debt-to-asset ratio increased to 88% as of December 31, 2023, compared to 85% as of December 31, 2022[47]. Costs and Expenses - Total capital expenditures for the fourth quarter of 2023 were CAD 378 thousand, a decrease from CAD 514 thousand in the fourth quarter of 2022[9]. - Total diluent costs for the three months ended December 31, 2023, were CAD 5.04 million, compared to CAD 3.60 million in the same period of 2022, with a per-barrel cost decrease of CAD 9.15, from CAD 38.80/barrel to CAD 29.65/barrel[22][23]. - Total diluent costs for the twelve months ended December 31, 2023, were CAD 12.46 million, up from CAD 6.98 million in 2022, with a per-barrel cost decrease of CAD 7.41, from CAD 37.03/barrel to CAD 29.62/barrel[24]. - Transportation costs for the three months ended December 31, 2023, were CAD 3.44 million, compared to CAD 2.05 million in the same period of 2022, with a per-barrel cost decrease of CAD 1.91, from CAD 22.12/barrel to CAD 20.21/barrel[25]. - Transportation costs for the twelve months ended December 31, 2023, were CAD 9.53 million, up from CAD 3.93 million in 2022, with a per-barrel cost increase from CAD 20.82/barrel to CAD 22.65/barrel[26]. - Total operating costs for the three months ended December 31, 2023, were CAD 4.53 million, down from CAD 6.51 million in the same period of 2022, with a per-barrel cost of CAD 26.64[27][28]. - Total operating costs for the twelve months ended December 31, 2023, were CAD 17.07 million, down from CAD 18.94 million in 2022, primarily due to lower natural gas prices[28]. - For the three months ended December 31, 2023, general and administrative expenses were CAD 2.883 million, an increase of CAD 0.5 million compared to CAD 2.391 million in the same period of 2022[29]. - For the twelve months ended December 31, 2023, general and administrative expenses totaled CAD 12.553 million, up from CAD 11.064 million in 2022, reflecting an increase of CAD 1.489 million[29]. Impairment and Asset Evaluation - The company evaluates its exploration and evaluation (E&E) and property, plant, and equipment (PP&E) assets for impairment indicators on each reporting date, using future cash flow estimates for impairment testing[35]. - As of December 31, 2023, the company did not recognize any impairment losses in its income statement for the E&E cash-generating unit and West Ells cash-generating unit[36]. - The estimated recoverable amounts for the E&E and West Ells cash-generating units were CAD 236.3 million and CAD 497.6 million, respectively, leading to an impairment of CAD 19.7 million for E&E and a reversal of CAD 20 million for West Ells as of December 31, 2022[38]. Financing and Debt - The company has incurred a total of USD 55 million (approximately CAD 72.8 million) in unsecured permitted debt as of December 31, 2023[41]. - The company has entered into a waiver agreement with deferral holders, allowing for a waiver of accrued interest amounting to USD 31.5 million from January 1, 2023, to December 31, 2023[40]. - The company is involved in ongoing negotiations regarding a municipal property tax claim of CAD 15.1 million, along with overdue penalties of CAD 14.9 million[44]. - A court ruling requires the company to pay USD 19.7 million (approximately CAD 26.0 million) to non-deferral holders, with an appeal expected to take place in July 2024[46]. - The total amount of unsecured loans from related companies is approximately CAD 51.93 million, with a term of 1 to 3 years[54]. Corporate Governance and Management - The company has committed to maintaining high standards of corporate governance to enhance shareholder value[68]. - The company's internal controls over financial reporting (ICFR) were assessed as effective as of December 31, 2023, with no significant changes identified that could materially impact financial reporting[62]. - The management discussion includes forward-looking statements that involve significant risks and uncertainties, which may cause actual results to differ materially from those projected[65]. - The company has applied for a three-month exemption from compliance with certain listing rules due to difficulties in finding suitable candidates for independent non-executive directors[68]. - The company is in the process of obtaining appropriate insurance for legal claims against its directors[69]. Shareholder Information - As of December 31, 2023, Sunshine Oilsands has issued a total of 243,478,681 Class "A" common shares[76]. - The company’s chairman holds approximately 61.70% of the issued common shares[53]. - No dividends were declared or paid for the twelve-month period ending December 31, 2023, consistent with the previous year[78]. Future Plans and Market Outlook - The company plans to enter the second phase of the West Ells project, which aims to increase production by an additional 5,000 barrels per day once financing is secured[3]. - The company will continue to focus on cost control and closely monitor developments in the crude oil market[81]. - The West Ells project has fully resumed production as of the date of this announcement[81]. - The company plans to restart activities in the Muskwa and Godin areas in collaboration with joint ventures[81].

Financial Performance - For the fiscal year ending December 31, 2023, the total comprehensive loss attributable to shareholders was approximately CAD 18.74 million, a significant improvement from a loss of CAD 66.04 million in 2022, representing a reduction of about 71.7%[3][4] - Total revenue for 2023 was CAD 39,377,000, an increase of 4.84% compared to CAD 37,559,000 in 2022[36] - The company reported a net loss of CAD 19,626,000 for 2023, significantly improved from a net loss of CAD 65,705,000 in 2022, representing a reduction of approximately 70%[36] - The diluted loss per share improved to CAD 7.94 in 2023 from CAD 26.86 in 2022, reflecting a significant recovery[38] - The company recorded a foreign exchange gain of CAD 11,683,000 in 2023, a turnaround from a loss of CAD 30,010,000 in 2022[36] Assets and Liabilities - As of December 31, 2023, total liabilities amounted to CAD 654.89 million, up from CAD 637.71 million in 2022, indicating a rise of about 2%[4] - Cash and cash equivalents stood at CAD 0.53 million as of December 31, 2023, slightly down from CAD 0.54 million in the previous year[4] - Shareholders' equity decreased to CAD 91.05 million in 2023 from CAD 110.01 million in 2022, a decline of approximately 17.3%[4] - Total assets decreased marginally to CAD 745,932,000 in 2023 from CAD 747,719,000 in 2022[30] - The total liabilities exceeded total current assets by approximately CAD 79,458,000, raising concerns about the company's liquidity and ability to meet future obligations[57] Operational Efficiency and Strategy - The company is focused on improving operational efficiency and exploring new market opportunities to enhance future performance[4] - The company is actively assessing its oil assets for potential impairment, which involves significant management judgment regarding future cash flows and discount rates[15][16] - The company made payments of CAD 2,234,000 for exploration and evaluation assets in 2023, an increase from CAD 1,053,000 in 2022, reflecting a focus on asset development[47] Audit and Compliance - The independent auditor's report confirmed that the financial statements fairly reflect the group's financial position as of December 31, 2023, in accordance with international financial reporting standards[9] - The audit procedures included evaluating the design and implementation of key controls related to the impairment assessment process[19] - The overall appropriateness of the use of the going concern basis in preparing the financial statements was evaluated[28] Credit and Liquidity Risk - The company has received financial support commitments from major shareholders to ensure operational continuity and debt repayment in the foreseeable future, with a total principal amount of approximately CAD 66,818,000[58] - The company's ability to continue as a going concern is dependent on generating sufficient financing and operational cash flow in the short term[58] - The group has adopted a simplified approach under IFRS 9 to measure expected credit losses over the entire lifetime for trade receivables, significantly reducing credit risk[197] Revenue Recognition and Accounting Policies - Revenue recognition is based on the transfer of control of goods or services to customers, with specific performance obligations identified in contracts[65] - Oil sales revenue is recognized based on floating prices specified in customer contracts, with revenue confirmed upon transferring control of the product[68] - The company applies International Accounting Standards to assess impairment of right-of-use assets, ensuring accurate financial reporting[81] Exploration and Evaluation Assets - The company's exploration and evaluation assets were valued at approximately CAD 237.97 million as of December 31, 2023, compared to CAD 235.04 million in 2022, reflecting a marginal increase[4][15] - Exploration and evaluation assets include costs related to unproven mineral acquisition, geological costs, and exploration drilling costs, which are capitalized until drilling is completed and results are assessed[102] Foreign Currency and Interest Rate Risks - The company has not implemented any foreign currency hedging policies, but management monitors foreign exchange risks and considers hedging significant risks when necessary[189] - Sensitivity analysis indicates that a 5% depreciation of the Hong Kong dollar, US dollar, and Renminbi would impact pre-tax profits by CAD (2,936), CAD (16,811), and CAD (555), respectively[192] - The company faces cash flow interest rate risk related to floating rate bank balances, but due to short-term maturities, the interest rate risk associated with these balances is minimal[193][194]

管理層討論與分析 截至二零二三年九月三十日止三個月和九個月 陽光油砂有限公司 管理層討論與分析 此乃陽光油砂有限公司（「陽光油砂」或「本公司」）於截至二零二三年九月三十日止三個月和九個月的財務狀況及表 現的管理層討論與分析（「管理層討論與分析」），日期為二零二三年十一月十日(香港時間) /日期為二零二三年十一 月九日(卡爾加里時間)，已獲本公司董事會批准。本管理層討論與分析應與本公司截至二零二三年九月三十日止三個月 和九個月止的未經審核綜合財務報表及截至二零二二年十二月三十一日止年度的經審核綜合財務報表及其附註一併閱讀。 除另有指明者外，所有金額及表格金額均以千加元入賬。 概覽 陽光油砂是阿薩巴斯卡地區油砂資源的權益持有人及開發商，具有最佳估計可採資源量約 9.1 億桶。於二零二二年十二 月三十一日本公司的無風險最佳估計可採資源量為大約15.3億桶。本公司擁有超過一百萬英畝的油砂和石油、天然氣的 租賃區塊，具備龐大的商業發展潛能。West Ells 一萬桶熱採商業項目的一期（ 五千桶） 正進行生產並不斷提升以滿足 裝置的設計產能。阿薩巴斯卡地區為加拿大阿爾伯塔省油砂藏量最豐富的地區。加拿大油砂為西半球穩定的政 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈的內容概不負責，對其準確性或完整性亦不發表任何聲明， 並明確表示概不就因本公佈全部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 本公佈僅供參考，並不構成收購、購買或認購陽光油砂有限公司證券之邀請或要約。 SUNSHINE OILSANDS LTD. 陽光油砂有限公司* （香港聯交所：2012） （一家根據加拿大阿爾伯塔省商業公司法註冊成立的有限公司） 截至二零二三年九月三十日止第三季度業績公佈 財務數據總結 二零二三年第三季度，歸屬於本公司股權持有人的淨虧損及全面虧損約為$1,570 萬加元，而二零二二年第三季度歸 屬於本公司股權持有人淨利潤及全面利潤 $3.2 億加元。 於二零二三年九月三十日、二零二二年十二月三十一日及二零二二年九月三十日，本公司節選財務數字如下： 二零二三年 二零二二年 截至九月三十日止三個月 重述 (千加元) 歸屬於本公司股東的淨利潤（虧損）（千加元） (15,686) 322,945 稀釋油砂平均銷量（桶 / 日） 10.6 989.7 (千加元) 二零二三年 二零二二年 ...

Financial Performance - For Q2 2023, the net profit attributable to shareholders was approximately CAD 5.7 million, a significant decrease from CAD 46.2 million in Q2 2022, representing a decline of about 87.7%[4] - The company reported a net loss attributable to shareholders of CAD 5.7 million for Q2 2023, compared to a net profit of CAD 46.2 million in Q2 2022[15] - The company reported a net loss attributable to shareholders of $5,828,000 for the year, compared to a profit of $102,484,000 in 2022, reflecting a substantial decline in profitability[140] - The basic loss per share for the three months ending June 30, 2023, was $(0.02), compared to earnings of $0.42 per share for the same period in 2022[141] - For the six months ended June 30, 2023, the company reported a net loss of approximately CAD 5.8 million, compared to a net loss of CAD 10.2 million for the same period in 2022[95] Revenue and Sales - Total revenue for Q2 2023 reached $24,283 thousand, a significant increase compared to a loss of $2,287 thousand in Q2 2022[87] - Oil sales, net of royalties, amounted to $10,766 thousand for the three months ended June 30, 2023, compared to $569 thousand in the same period last year, reflecting a substantial growth[87] - The company reported oil sales revenue of $11.064 million for the three months ended June 30, 2023, compared to $0.589 million for the same period in 2022[129] - Customer contract revenue for the six months ended June 30, 2023, was $17.945 million, up from $0.569 million in the same period of 2022[129] Production and Operations - The average diluted oil sands sales volume for Q2 2023 was 1,524.8 barrels per day, a substantial increase from 53.5 barrels per day in Q2 2022[5] - The average oil sands heavy oil production for Q2 2023 was 1,267.5 barrels per day, compared to 30 barrels per day in Q2 2022[11] - The average production of oil sands heavy oil was 1,267 barrels per day for the three months ended June 30, 2023, compared to 0 barrels per day in the same period of 2022, reflecting a significant recovery in production[21] - The West Ells project has fully resumed production since 2022[83] Assets and Liabilities - As of June 30, 2023, total assets amounted to CAD 744.5 million, a slight decrease from CAD 747.6 million as of December 31, 2022[15] - The company’s equity as of June 30, 2023, was CAD 104.0 million, down from CAD 110.0 million as of December 31, 2022[5] - The company reported a working capital deficit of CAD 87.08 million as of June 30, 2023, compared to CAD 511.58 million as of December 31, 2022[44] - The company's debt-to-asset ratio was 86% as of June 30, 2023, compared to 85% as of December 31, 2022[48] Costs and Expenses - The company experienced a net operating cash flow loss of CAD 702,000 for the three months ended June 30, 2023, a significant improvement from a loss of CAD 4.818 million in the same period of 2022[20] - The total cost of diluent for the three and six months ended June 30, 2023, was CAD 3.5 million and CAD 7.4 million, respectively, compared to CAD 0.3 million in the same periods of 2022, reflecting an increase of CAD 3.2 million and CAD 7.1 million due to the full resumption of production at West Ells[27] - General and administrative expenses for the three months ending June 30, 2023, were $2,098,000, compared to $2,496,000 for the same period in 2022, showing a reduction in costs[138] Financing and Debt - The company has incurred a total of USD 52 million (approximately CAD 68.9 million) in unsecured convertible debt as of June 30, 2023[45] - The company has unsecured loans from related parties totaling approximately CAD 55.48 million, with an interest rate of 10%[52] - The company entered into an interest waiver agreement with deferral holders, waiving approximately $31.5 million in interest from January 1, 2022, to December 31, 2022, and again for the period from January 1, 2023, to December 31, 2023[121][122] Tax and Regulatory Matters - The company received a municipal tax payment notice of CAD 14.4 million from the Wood Buffalo region, along with overdue penalties of CAD 13.6 million, and is negotiating a settlement plan[46] - As of June 30, 2023, the company had total available tax deductions of approximately CAD 1.53 billion, with unrecognized tax losses expiring between 2029 and 2043[42] Corporate Governance and Compliance - The company has confirmed compliance with the corporate governance code and is in the process of obtaining appropriate insurance for its directors against legal claims[65] - The company is actively seeking suitable candidates to fill the vacancies for independent non-executive directors and audit committee members[74] Market and Economic Conditions - The company emphasizes that non-GAAP measures, such as operating netback and operating cash flow, are used to provide additional insights to investors[60] - The management has indicated that any forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially[62]