Opta Minerals : Consolidated Financial Statements | December 31, 2015 and 2014

Opta Minerals

Opta Minerals Inc. Consolidated Financial Statements December 31, 2015 and 2014 Expressed in Thousands of US Dollars INDEPENDENT AUDITORS' REPORT

To the Shareholders of

Opta Minerals Inc.

We have audited the accompanying consolidated financial statements of Opta Minerals Inc., which comprise the consolidated balance sheets as at December 31, 2015 and 2014, and the consolidated statements of loss, comprehensive loss, changes in equity and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Opta Minerals Inc. as at December 31, 2015 and 2014, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 2 in the Financial Statements, which indicates that the Company's cash balance as at December 31, 2015 is $1.7 million, current liabilities exceeded its current assets by $5.6 million, primarily due to the current nature of Borrowings of $37,8 million and incurred a loss for the year attributable to shareholders of the Company of $21.9 million. These conditions, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

Toronto, Ontario March 1, 2016

Consolidated Balance Sheets As at December 31, 2015 and 2014 Expressed in Thousands of US Dollars (except number of shares)

Basis of Presentation and Going Concern Uncertainty (note 2)

December 31, 2015	December 31, 2014
Assets
Current
Cash and cash equivalents	$ 1,694	$ 2,170
Trade receivables, other receivables and prepayments (note 7)	16,259	20,236
Inventories (note 8)	25,819	34,486
Income taxes receivable	147	996
43,919	57,888
Property, Plant and Equipment (notes 9 and 11)	16,019	21,926
Intangible Assets (notes 10 and 11)	13,104	26,827
Goodwill (notes 10 and 11)	3,300	9,447
Deferred Income Tax Assets (note 16)	-	1,645
$ 76,342	$ 117,733
Liabilities
Current
Trade and other payables (note 12)	$ 10,088	$ 17,216
Borrowings (note 13)	37,811	17,492
Derivative financial instruments (note 5)	298	-
Provisions (note 14)	912	772
Other liabilities (note 15)	181	492
Income taxes payable	226	136
49,516	36,108
Borrowings (note 13)	140	30,103
Derivative Financial Instruments (note 5)	-	285
Provisions (note 14)	656	447
Other Liabilities (note 15)	13	242
Deferred Income Tax Liabilities (note 16)	1,113	3,040
51,438	70,225
Equity Attributable to the Shareholders of the Company
Capital Stock (note 17)
Authorized without limit as to number - Preference shares (without par value) Common shares
Issued -
18,129,566 common shares (2014 - 18,125,164)	17,911	17,905
Contributed Surplus (note 17)	4,857	4,696
Accumulated Other Comprehensive Loss	(2,367)	(1,491)
Retained Earnings	4,503	26,398
24,904	47,508
$ 76,342	$ 117,733

Commitments and contingencies (note 24)

The accompanying notes are an integral part of these consolidated financial statements.

Approved by the Board of Directors on February 25, 2016

(signed) "Donald Loeb" (signed) "Joseph Riz"

Director

Director

Consolidated Statements of Loss For the Years Ended December 31, 2015 and 2014 Expressed in Thousands of US Dollars (except per share amounts)

2015	2014
Revenue	$ 113,805	$ 139,856
Cost of Goods Sold (notes 19 and 26)	99,729	118,939
Gross Profit	14,076	20,917
Expenses
Selling, general and administrative (note 19)	14,589	16,676
Goodwill and intangible asset write-downs (note 11)	14,977	870
Property, plant and equipment write-downs (note 11)	2,366	3,170
Fair value adjustments to contingent consideration (note 15)	(79)	309
Foreign exchange (gain) loss (note 19)	(660)	1,238
31,193	22,263
Loss Before Finance Expense and Income Taxes	(17,117)	(1,346)
Finance expense	4,269	3,689
Loss Before Income Taxes	(21,386)	(5,035)
Income tax expense (recovery) (note 16)	509	(3,153)
Loss for the Year Attributable to the Shareholders of the Company	$ (21,895)	$ (1,882)
Loss per share for the year - basic and diluted (note 21)	$ (1.21)	$ (0.10)

The accompanying notes are an integral part of these consolidated financial statements.