2. Basis of Preparation

Basis of Presentation

The Company’s consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”). These are the Company’s first financial statements prepared under US GAAP. The Company’s consolidated financial statements have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. The Company’s consolidated financial statements are presented in U.S. dollars (“$” or “dollars”), expressed in thousands except as indicated. All values are rounded to the nearest thousand except where otherwise indicated.

Principles of Consolidation

The consolidated financial statements include the financial statements of Uranium Royalty Corp. and its wholly-owned subsidiaries, being Uranium Royalty (USA) Corp. (“URUSA”) and Reserve Minerals, LLC (“RM”). Subsidiaries are consolidated from the date the Company obtains control and continue to be consolidated until the date that control ceases. Control exists where the Company has controlling voting interest and is deemed to be the primary beneficiary. Subsidiaries are included in the consolidated financial statements of the Company from the date control commences until the date control ceases.

All inter-company transactions, balances, income and expenses are eliminated through the consolidation process.

The Company presents consolidated financial statements using a U.S. dollar reporting currency. URC has a Canadian dollar (“CAD”) functional currency. The accounts of URUSA and RM are prepared for the same reporting period as the parent company, using consistent accounting policies. The functional currency of URUSA and RM is the U.S. dollar. The financial statements of URC are translated into U.S. dollars using the period end exchange rate as to assets and liabilities and the average exchange rate as to income and expenses. All resulting exchange differences are recognized in other comprehensive income (loss).