Ares Strategic Mining : Condensed Interim Consolidated Financial Statements For the Three Months Ended 31 December 2025

About this update from Ares Strategic Mining Inc

2020 2026 Ares Strategic Mining Inc. Condensed Interim Consolidated Financial Statements For the Three Months Ended 31 December 2025 Stated in Canadian Dollars Notice of No Auditor Review of Condensed Interim Consolidated Financial Statements The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor. Table of Contents Management's Responsibility 1 Condensed Interim Consolidated Statements of Financial Position 2 Condensed Interim Consolidated Statements of Loss and Comprehensive Loss 3 Condensed Interim Consolidated Statements of Changes in Equity 4 Condensed Interim Consolidated Statements of Cash Flows 5 Nature of operations and going concern 6 Basis of presentation - Statement of Compliance 7 Summary of significant accounting policies 7 Critical accounting judgements and key sources of estimation uncertainty 7 Financial instruments and risk management 9 Amounts receivable 10 Share proceeds receivable 11 Construction in progress 13 Deposits 14 Property, plant, and equipment 14 Exploration and evaluation assets 15 Short-term loans 16 Convertible debentures 16 USDA loan payable 17 PAB loan payable 18 State of Utah loan payable 19 Share capital 20 Related party transactions and obligations 25 Segmented disclosure 26 Capital management 26 Commitments and contingencies 27 Subsequent events 27 ‌Management's Responsibility To the Shareholders of Ares Strategic Mining Inc.: Management is responsible for the preparation and presentation of the accompanying Condensed Interim Consolidated Financial Statements, including responsibility for significant accounting judgments and estimates in accordance with International Financial Reporting Standards. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required. In discharging its responsibilities for the integrity and fairness of the Condensed Interim Consolidated Financial Statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and financial records are properly maintained to provide reliable information for the preparation of the condensed interim consolidated financial statements. The Board of Directors and the Audit Committee are composed primarily of Directors who are neither management nor employees of the Company. The Board is responsible for overseeing management in the performance of its financial reporting responsibilities, and for approving the financial information included in the annual report. The Board fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and the external auditors. The Audit Committee has the responsibility of meeting with management, and the external auditors to discuss the internal controls over the financial reporting process, auditing matters and financial reporting issues. The Audit Committee is also responsible for recommending the appointment of Ares Strategic Mining Inc.'s external auditors. We draw attention to Note 1 in the Condensed Interim Consolidated Financial Statements which indicates the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. "James Walker" "Viktoriya Griffin" James Walker, CEO Viktoriya Griffin, CFO ‌Condensed Interim Consolidated Statements of Financial Position Note As at 31 December 2025 As at 30 September 2025 Assets Current Assets Cash and cash equivalents 9,930,955 $ 6,580,793 Restricted cash (14)(15)(16) 1,345,897 1,370,912 Share proceeds receivable (7) 2,866,526 1,374,825 Amounts receivable (6) 122,425 101,386 Prepaid amounts and other assets 1,468,652 1,403,006 15,734,455 10,830,922 Non-current Assets Deposits (9) 107,553 109,798 Share proceeds receivable (7) 351,237 333,613 Construction in progress (8) 30,919,299 25,721,163 Property, plant, and equipment (10) 8,559,963 8,053,448 Exploration and evaluation assets (11) 8,956,882 8,822,414 48,894,934 43,040,436 64,629,389 $ 53,871,358 Liabilities Current Liabilities Accounts payable and accrued liabilities (18) 3,968,470 $ 2,027,556 Short-term loans (12) 712,908 839,906 Convertible debentures (13) - 244,400 PAB loan payable - current portion (15) 2,254,625 2,255,550 USDA loan payable - current portion (14) 6,057,913 6,289,193 Non-Current Liabilities 12,993,916 11,656,605 State of Utah loan payable (16) 14,280,351 14,403,425 PAB loan payable (15) 9,385,378 10,775,253 USDA loan payable (14) 995,060 989,775 37,654,705 37,825,058 Equity Equity Attributable to Shareholders Share capital (17) 61,297,812 51,538,331 Options - Contributed surplus (17) 1,543,500 1,543,500 Warrants - Contributed surplus (17) 3,136,535 2,353,921 Accumulated other comprehensive income ("OCI") 160,599 146,702 Deficit (37,941,647) (38,318,063) 28,196,799 17,264,391 Non-controlling interests (17) (1,222,115) (1,218,091) Total Equity 26,974,684 16,046,300 64,629,389 $ 53,871,358 Nature of operations and going concern (1) Capital management (20) Basis of preparation - Statement of Compliance (2) Commitments and contingencies (21) Related party transactions and obligations (18) Subsequent events (22) The Condensed Interim Consolidated Financial Statements were approved by the Board of Directors on 27 February 2026 and were signed on its behalf by: "Paul Sarjeant" "Michael Li" Paul Sarjeant, Director Michael Li, Director Ares Strategic Mining Inc . (Unaudited) Canadian Dollars ‌Condensed Interim Consolidated Statements of Loss and Comprehensive Loss Note 3 Months Ended 31 December 2025 3 Months Ended 31 December 2024 General and Administrative Accretion and interest (13)(14)(15) $ 293,427 $ 868,808 Professional fees 218,011 164,737 Office and marketing 154,998 19,498 Foreign exchange loss/(gain) 125,561 (356,955) Depreciation (10) 74,561 9,226 Management fees (18) 72,000 48,000 Insurance 34,044 9,449 Transfer agent and filing fees 11,238 9,751 Bank charges 8,702 1,771 Travel 7,287 - Resource property (income) 5,298 (6,737) Shareholder relations 4,470 3,948 Other Income/ (Expenses) (1,009,597) (771,496) Unrealized gain on share proceeds receivable (7) 1,363,751 18,437 Interest income 18,238 22,857 Gain/(loss) on settlement of debt - 51,887 Net Gain/(Loss) for the Period 372,392 (678,315) Other Comprehensive Income (Loss) Foreign operations - foreign exchange 13,897 (170,900) Comprehensive Income/(Loss) for the Period $ 386,289 $ (849,215) Net Gain/(Loss) Attributed to: Shareholders 376,416 (679,326) Non-controlling interest (4,024) 1,011 Comprehensive Gain/(Loss) Attributed to: $ 372,392 $ (678,315) Shareholders 390,313 (850,226) Non-controlling interest (4,024) 1,011 $ 386,289 $ (849,215) Basic and Diluted Loss per Share $ 0.0016 $ (0.0039) Weighted Average Shares Outstanding 232,453,120 174,693,929 3 | P a g e -- The accompanying notes form an integral part of the condensed interim consolidated financial statements -- ‌Condensed Interim Consolidated Statements of Changes in Equity Equity attributable to shareholders Ares Strategic Mining Inc . (Unaudited) Canadian Dollars Shares Share capital Subscriptions received Options Warrants Accumulated OCI Deficit Total Shareholders Equity Equity attributable to NCI Total # $ $ $ $ $ $ $ $ $ Balance as at 1 October 2024 173,417,021 44,383,773 95,600 1,905,500 1,930,007 158,411 (34,674,978) 13,798,313 (1,220,065) 12,578,248 Shares issued for private placement, net 765,170 137,731 (95,600) - - - 42,131 - 42,131 Shares issued for convertible debt 5,346,642 1,390,127 - - - - - 1,390,127 - 1,390,127 Shares issued for debt settlement 18,004,197 4,069,432 - - - - - 4,069,432 - 4,069,432 Shares issued for Sorbie 7,229,730 312,291 - - 423,914 - - 736,205 - 736,205 Stock options exercised 6,792,131 1,244,977 - (362,000) - - - 882,977 - 882,977 Other comprehensive income - - - - - (11,709) - (11,709) - (11,709) Net loss for the year - - - - - - (3,643,085) (3,643,085) 1,974 (3,641,111) Balance as at 30 September 2025 211,554,891 51,538,331 1,543,500 2,353,921 146,702 (38,318,063) 17,264,391 (1,218,091) 16,046,300 Shares issued for private placement, net 21,110,778 8,468,453 - - 423,000 - - 8,891,453 - 8,891,453 Shares issued for convertible debt 521,923 135,700 - - - - - 135,700 - 135,700 Shares issued for debt settlement 283,095 103,473 - - - - - 103,473 - 103,473 Warrants exercised 1,969,861 545,634 - - (33,470) - - 512,164 - 512,164 Shares issued for Sorbie 2,377,779 506,221 - - 393,084 - - 899,305 - 899,305 Other comprehensive income - - - - - 13,897 - 13,897 - 13,897 Net income (loss) for the period - - - - - - 376,416 376,416 (4,024) 372,392 Balance as at 31 December 2025 237,818,327 61,297,812 - 1,543,500 3,136,535 160,599 (37,941,647) 28,196,799 (1,222,115) 26,974,684 4 | P a g e -- The accompanying notes form an integral part of the condensed interim consolidated financial statements -- ‌Condensed Interim Consolidated Statements of Cash Flows Note 3 Months Ended 31 December 2025 3 Months Ended 31 December 2024 Operating Activities Loss for the period 372,392 $ (678,315) Items not Affecting Cash Interest and accretion on convertible debt (13) 195,630 397,691 Interest and accretion on USDA loan (14) 31,754 8,607 Interest and accretion on PAB loan (15) 34,441 49,598 Depreciation (10) 74,561 9,226 Unrealized gain on share proceeds receivable (7) (1,364,161) (7,087) Net Change in Non-cash Working Capital (655,383) (220,280) Accounts payable and accrued liabilities 2,044,387 883,195 Amounts receivable (21,039) (10,552) Prepaid amounts and other assets (65,646) (58,073) Investing Activities 1,302,319 594,290 Construction progress (8) (5,198,136) (1,539,329) Resource property - expenditures (11) (202,865) (137,094) Purchase of Equipment (768,209) - Financing Activities (6,169,210) (1,676,423) Proceeds from warrants exercised 512,164 - Loan (paid)/received (12) (1,055,422) 247,822 Proceeds from LIFE Offering, net 8,891,453 119,020 Proceeds from share proceeds receivable (7) 813,732 123,958 Proceeds from options exercised - 115,505 9,161,927 606,305 Net effect of foreign currency translation (969,889) (190,274) Net Increase/(Decrease) in cash and cash equivalents 3,325,147 (666,102) Cash and cash equivalents - Beginning of Period 7,951,705 2,217,113 Cash and cash equivalents - End of Period 11,276,852 1,551,011 Notes to the Condensed Interim Consolidated Financial Statements ‌Nature of operations and going concern Ares Strategic Mining Inc. ("Ares" or the "Company"), was incorporated pursuant to the Company Act (Ontario) by registration of its Memorandum and Articles on 20 November 2009. On 9 July 2010, the Company registered in British Columbia for extra provincial registration as the Company's administrative office is located at 1001-409 Granville Street, Vancouver BC, V6C 1T2. The Company is classified as a Junior Natural Resource Mining Company and is listed on the Canadian Securities Exchange under the stock symbol "ARS". The Company was previously in the business of acquiring and exploring lithium properties in Nevada and Arizona. On 18 February 2020, the Company completed a three-cornered amalgamation transaction (the "Amalgamation") with American Strategic Minerals Inc. ("ASM"). As a result, Ares is focusing on progressing its fluorspar projects towards exploitation, production, and supplying metspar and acidspar to the markets. These consolidated financial statements (the "Financial Statements") have been prepared on the basis of the accounting principles applicable to a going concern, which assumes the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. There are several adverse conditions that cast significant doubt upon the soundness of this assumption. The business of mining and exploration involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of exploration and evaluation expenditures and construction in progress is dependent upon several factors; these factors include the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties and construction in progress, and future profitable production or proceeds from the disposition of mineral properties or construction in progress once completed. Consistent with other companies in the mineral exploration sector, the Company has incurred operating losses since inception, has limited sources of revenue, is unable to self-finance operations and has significant cash requirements to meet its overhead, maintain its mineral interests and fund the completion of its construction in progress. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. As discussed in Note 14, the Company was in breach of certain financial covenants as at December 31, 2025 and September 30, 2025. The lender has not demanded repayment; however, this condition contributes to the material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. For the Company to continue to operate as a going concern, it must continue to obtain additional financing to maintain operations. Although the Company has been successful in the past at raising funds, there can be no assurance that this will continue in the future. Subsequent to year-end , the Company has raised additional equity financing and plans to obtain additional equity and debt financing to continue to explore and develop its mineral properties and complete its construction in progress. If the going concern assumptions were not appropriate for these Financial Statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported expenses and the statement of financial position classifications used, and such adjustments could be material. (Rounded 000's) 31 December 2025 30 September 2025 Working capital (deficit) $ 2,741,000 $ (826,000) Accumulated deficit attributed to shareholders $ (39,164,000) $ (38,318,000) Notes to the Condensed Interim Consolidated Financial Statements (Cont.) ‌Basis of presentation - Statement of Compliance Statement of Compliance These Financial Statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The Financial Statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting except for cash flow information. Since the Financial Statements do not include all disclosures required by the International Financial Reporting Standards ("IFRS") for annual financial statements, they should be read in conjunction with the Company's audited annual consolidated financial statements for the year ended 30 September 2025. The policies set out were consistently applied to all the years presented unless otherwise noted below. The preparation of the condensed interim consolidated financial statements requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies. The preparation of the Financial Statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, profit and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. ‌Summary of significant accounting policies The accounting policies and methods of computation followed in preparing these Financial Statements are the same as those followed in preparing the most recent audited annual financial statements. For a complete summary of significant accounting policies, please refer to the Company's audited annual consolidated financial statements for the year ended 30 September 2025. ‌Critical accounting judgements and key sources of estimation uncertainty In the application of the Company's accounting policies, management is required to make judgments, estimates and assumptions about the carrying amount and classification of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revisions affect only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. The following are the critical judgments and areas involving estimates, that management have made in the process of applying the Company's accounting policies and that have the most significant effect on the amount recognized in the Financial Statements. Judgements Income taxes Deferred tax assets are recognized for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that probable that future taxable profit will be available against which the Notes to the Condensed Interim Consolidated Financial Statements (Cont.) deductible temporary differences and carry-forward of unused tax assets and unused tax losses can be utilized. In addition, the valuation of tax credits receivable requires management to make judgements on the amount and timing of recovery. Going concern evaluation As discussed on Note 1, these Financial Statements have been prepared under the assumptions applicable to a going concern. If the going concern assumption were not appropriate for these Financial Statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported expenses and the consolidated statement of financial position classifications used and such adjustments could be material. The Company reviews the going concern assessment at the end of each reporting period. There were no material changes to the assessment as at 31 December 2025. Exploration evaluation assets The Company makes certain estimates and assumptions regarding the recoverability of the carrying values of exploration and evaluation assets. The amounts shown for exploration and evaluation assets do not necessarily represent present or future values. The recoverability of the assets' carrying values is dependent upon the determination of economically recoverable reserves, the ability of the Company to obtain the necessary financing and permits to complete development and future profitable production or proceeds from the disposition thereof. The Company has taken steps to verify title to exploration and evaluation assets in which it has or is in the process of earning an interest, including review of condition of title reports, vesting deeds, mining claim location notices and filings, and property tax and other public records and is not presently aware of any title defects. The procedures the Company has undertaken and may undertake in the future to verify title provide no assurance that the underlying properties are not subject to prior agreements or transfers of which the Company is unaware. Long-lived assets The Company makes certain judgements in its assessment of whether indicators of impairment exist with respect to its long-lived assets. The carrying amounts of the Company's long-lived assets are reviewed at each reporting date for indicators of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the amount of the impairment, if any. The recoverable amount of an asset is evaluated at the cash-generating unit level, which is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. The recoverable amount of a CGU is the greater of its fair value less costs to sell and its value in use. Estimates Useful lives of property, plant and equipment Useful lives are estimated by management based on the expected period over which the assets are anticipated to be available for use, taking into consideration factors such as expected usage, physical wear and tear, technical or commercial obsolescence, and legal or other limits on the use of the assets. The useful lives and residual values of property, plant and equipment are reviewed at least annually and are adjusted prospectively if expectations differ from previous estimates. Changes in the estimated useful lives of assets could result in changes to depreciation expense in current and future periods. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) ‌Financial instruments and risk management Financial instrument classification and measurement Financial instruments of the Company carried on the consolidated statement of financial position are carried at amortized cost. There are no significant differences between the carrying value of financial instruments and their estimated fair values as at 31 December 2025. There have been no changes in levels during the period. The Company classifies the fair value of these transactions according to the following hierarchy: Level 1 - quoted prices in active markets for identical financial instruments. Level 2 - quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 - valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Fair values of financial assets and liabilities The Company's financial instruments include cash and cash equivalents, accounts payable, short-term loans and long-term loans. As at 31 December 2025, the carrying value of cash and cash equivalents is at fair value. Accounts payable and short-term loans approximate their fair value due to their short-term nature. Market risk Market risk is the risk that changes in market prices will affect the Company's earnings or the value of its financial instruments. Market risk is comprised of commodity price risk and interest rate risk. The objective of market risk management is to manage and control exposures within acceptable limits, while maximizing returns. The Company is not exposed to significant market risk. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company's primary exposure to credit risk is on its bank accounts. The Company's bank accounts are held with major banks in Canada, accordingly the Company is not exposed to significant credit risk. Interest rate risk Interest rate risk is the risk of losses that arise as a result of changes in contracted interest rates. The Company is not exposed to significant interest rate risk. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) Currency risk Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign currency risk on its restricted cash and USDA and PAB loans payable balances that are denominated in other than the functional currencies. As at 31 December 2025, the Company held currency totalling the following: Currency (Rounded) 31 December 2025 30 September 2025 Canadian (Dollars) $ 9,720,000 183,000 US (Dollars) $ 1,143,000 5,580,000 Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company controls liquidity risk by ensuring that it has sufficient cash resources to pay for its financial obligations. As at 31 December 2025, the Company had a cash balance of $9,930,955 to settle current liabilities of $12,993,916 that are due within one year. The Company's outstanding liabilities, their current values and the principal amounts along with the due dates are as stated in the table below: Carrying value Principal amount Less than 1 year 1 - 5 years 5+ years Accounts payable and accrued liabilities $ 3,968,470 $ 3,968,470 $ 3,968,470 $ - $ - Short-term loans 712,908 712,908 712,908 - - USDA loan 7,052,973 7,052,973 7,052,973 - - State of Utah bill 14,280,351 14,980,900 - - 14,280,351 PAB loan 11,640,003 13,489,620 2,254,625 10,985,085 9,833,939 Total $ 37,654,705 $ 40,204,871 $ 13,988,976 $ 10,985,085 $ 24,114,290 ‌Amounts receivable Amounts receivable consists of: Amounts Receivable 31 December 2025 30 September 2025 Goods and services tax receivable $ 57,422 $ 36,393 Receivable on disposition 64,993 64,993 122,425 101,386 Notes to the Condensed Interim Consolidated Financial Statements (Cont.) ‌Share proceeds receivable As at 30 December 2025, the Company entered into three share proceeds receivable equity swap agreements with Sorbie Bornholm LP (" Sorbie" or collectively, "Sorbie Agreements". Under each agreement, Sorbie subscribed for Units payable over 24 months. Each Unit consists of one Common Share and either one full common share purchase warrant or one-half warrant, as described below. In connection with each subscription, the parties entered into a sharing agreement (equity swap arrangement) under which the Company's economic interest is realized in 24 monthly settlement tranches measured against a defined benchmark price. The monthly settlement amount is based on the 20-day volume weighted average price ("Settlement Price") prior to each settlement date. If the Settlement Price exceeds the benchmark price, the Company receives more than 100% of the monthly tranche on a pro rata basis, with no upper limit. If the Settlement Price is below the benchmark price, the Company receives less than 100% of the monthly tranche on a pro rata basis. Summary of Sorbie Agreements: Agreement Date Units Issued Issue Price Gross Proceeds Benchmark Price Warrant Terms Term 30 September 2024 8,333,333 $0.1800 $1,500,000 $0.2610 1 full Warrant 24 months 2 April 2025 7,229,730 $0.1998 $1,000,000 $0.1998 1 full Warrant 24 months 20 October 2025 2,222,223 $0.4500 $1,000,000 $0.6300 1/2 Warrant 24 months The share proceeds receivable relating to the cash receivable did not meet the classification of a financial asset measured at amortized cost or at fair value through other comprehensive income as the Company does not have a business model whose objective is to hold financial assets in order to collect contractual cash flows, and the financial asset does not give rise to cash flows that are solely payments of principal and interest. Therefore, the cash receivable is classified as a financial asset measured at fair value through profit or loss. In accordance with IFRS 9, the Units issued were initially measured based on the fair value of the related share proceeds receivable, with the corresponding amount allocated between Common Shares and Warrants based on their relative fair values in accordance with IAS 32 and the Company's accounting policy. Subsequently, the financial assets are revalued at each reporting period with the difference between the initial valuation and the value recognized in profit or loss as an unrealized gain (loss) on financial asset. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) The following table summarizes the movement in the share proceeds receivable: SHARE PROCEEDS RECEIVABLE 2025 October 2025 April 2024 September Total Initial fair value $ - 842,006 830,086 1,672,092 Less: portion derecognized upon settlement (195,3550) (436,088) (631,443) Fair value adjustment - 326,632 341,158 667,789 Balance as at 30 September 2025 - 973,282 735,156 1,708,438 Initial fair value 959,305 959,305 Less: portion derecognized upon settlement (90,562) (168,335) (193,443) (452,340) Fair value adjustment (211,020) 703,812 509,564 1,002,359 Balance as at 31 December 2025 $ 657,723 1,508,762 1,051,277 3,217,762 The following table summarizes the settlement activity: 2025 SETTLEMENT October 2025 April 2024 September Total Cash received $ - 266,101 573,505 839,606 Carrying value of cash received derecognized - (195,355) (436,088) (631,443) Realized gain (loss) during 30 September 2025 - 70,746 137,417 208,163 Cash received 62,514 349,685 401,533 813,732 Carrying value of cash received derecognized (90,562) (168,335) (193,443) (452,340) Realized gain (loss) during 31 December 2025 $ (28,048) 181,350 208,090 361,392 The following table provides a breakdown of the share proceeds receivable between current and non-current assets based on the timing of the expected cash flows: SHARE PROCEEDS RECEIVABLE 31 December 2025 30 September 2025 Current $ 2,866,526 $ 1,374,825 Non-current 351,237 333,613 $ 3,217,763 $ 1,708,438 The realized loss represents the difference between the carrying amount of the portion settled and the cash received. The unrealized loss represents the fair value adjustment on the remaining receivable at period end date. All gains and losses are recognized in the consolidated statements of loss and comprehensive loss. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) ‌Construction in progress During the period ended 30 September 2021, the Company entered into an agreement to acquire a fluorspar lump manufacturing facility (the "Facility") pursuant to the terms and conditions of a Profit-Sharing Agreement dated 9 February 2021, as amended (the "Profit Sharing Agreement") between the Company and the Mujim Group, a non-arm's length private Shanghai company ("Mujim"). Pursuant to the terms of the Profit-Sharing Agreement, the Company had agreed to acquire the Facility by issuing an aggregate of 5,300,000 common shares in the capital of the Company (each, a "Share"), the fair value of which was determined based on the date when they were issued, i.e. $0.67, and the consideration was recorded as a capital advance to Mujim as at 30 September 2021. The Company has agreed that, upon completion of the Facility, it would incur costs pertaining to the installation of the Facility, including compensating contractors from Mujim to assist with installation and to begin operating the Facility. Furthermore, once the Facility is operational within parameters and specifications defined in the Profit-Sharing Agreement, the company will pay Mujim, US$20 per ton for ongoing technical support, and has also agreed to pay Mujim, US$10 per ton as agency fee for any sales in Asia. The final purchase price may vary depending on certain target production output metrics defined in the Profit-Sharing agreement. During the period ended 30 September 2022, the Company received significant components (including the structure) of the Facility and incurred an additional $572,139 to acquire these additional components and structure for the Facility and received their delivery. During the period ended 30 September 2023, the Company completed the acquisition of industrial land (Note 10) for installation of the Facility and a flotation plant and incurred further costs towards its completion such as design work and other prerequisites. As at 31 December 2025, the construction of the Facility is in progress and significantly all components of the flotation plant were received. As at 31 December 2025, the Company has incurred $30,919,299 (2025 - $25,721,163) in construction costs on the Facility which included $3,220,160 (2025 - $2,747,544) of capitalized borrowing costs. The Company is expected to incur additional costs to complete the installation of the Facility and the flotation plant, and begin operations. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) ‌Deposits Deposits consist of: Deposits 31 December 2025 30 September 2025 Office lease $ 6,309 $ 6,309 Surety deposits 101,244 103,489 $ 107,553 $ 109,798 As at 31 December 2025, the balance in deposits of $6,309 (2025 - $6,309) increased with the renewal of short term lease and represents a deposit for office lease; reclamation surety and bond in the amount of $101,244 (2025 - Addition Adjustment on currency translation - - - - - 768,209 768,209 - (187,340) (187,340) Balance as at 31 December 2025 $ 568,562 $ 72,737 $ 2,876,794 $ 5,554,051 $ 9,072,144 $103,489) paid to the State of Utah for a five-year escalation at Lost Sheep and Bell Hill. ‌10) Property, plant, and equipment Property, Plant, and Equipment Equipment Auto Land Ramp Total Cost Balance as at 1 October 2024 $ 161,329 $ 70,537 $ 2,792,062 $ 3,317,500 $ 6,341,428 Addition 407,233 - - 1,559,472 1,966,705 Adjustment on currency translation 2,200 84,732 96,210 183,142 Balance as at 30 September 2025 $ 568,562 $ 72,737 $ 2,876,794 $ 4,973,182 $ 8,491,275 Depreciation Balance as at 1 October 2024 $ 139,087 $ 24,077 $ - $ - $ 163,164 Depreciation for the year 17,985 7,301 - 249,820 275,106 Adjustment on currency translation - 718 - (1,161) (443) Balance as at 30 September 2025 $ 157,072 $ 32,096 $ - $ 248,659 $ 437,828 Carrying Amounts Balance as at 30 September 2025 $ 411,489 $ 40,642 $ 2,876,794 $ 4,724,523 $ 8,053,448 Balance as at 31 December 2025 $ 401,323 $ 39,374 $ 2,876,794 $ 5,242,473 $ 8,614,675 Depreciation for the year Adjustments on currency translation 10,167 - 1,814 (547) - - 62,580 339 74,561 (208) Balance as at 31 December 2025 $ 167,239 $ 33,363 $ - $ 311,578 $ 512,181 Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is charged to recognize the cost of the asset on the consolidated statements of loss and comprehensive loss using the straight-line method over the estimated useful life of the asset. During the period ended 30 September 2023, the Company acquired an industrial land parcel located in Millard County, State of Utah in the United States for the purpose of setting up its fluorspar plant, which was pledged as collateral on the USDA loan. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) In addition to the land parcel acquired during the year, land comprises five Canadian properties located in Ontario, Canada (Note 11(f)). The Company earns revenues from sale of quarry rock located on these properties. These revenues are offset against maintenance payments made on the property and are included within the resource property expense on the consolidated statement of loss and comprehensive loss. ‌Exploration and evaluation assets The following table summarizes exploration and evaluation assets: Spor Ontario Exploration and Evaluation Assets Mountain Properties Total Balance as at 1 October 2024 $ 8,362,147 $ 4 $ 8,362,151 Drilling 147,860 147,860 Geological consulting 251,449 - 251,449 Administration and camp 54,369 54,369 Staking and claiming 3,518 - 3,518 Adjustments on currency translation 3,067 - 3,067 Balance as at 30 September 2025 $ 8,822,410 $ 4 $ 8,822,414 Geological consulting 47,120 - 47,120 Staking and claiming 127,738 - 127,738 Administration and camp 28,007 - 28,007 Adjustments on currency translation (68,397) - (68,397) Balance as at 31 December 2025 $ 8,956,878 $ 4 $ 8,956,882 Spor Mountain (also known as Lost Sheep) The Company holds a 100% interest in and rights to certain U.S. federal mining claims located at the north-east end of the Spor Mountain Mining District, in section 21, T.12S. 12W, and T.13S. 12W, SLBM of Juab County, western Utah, USA (the "Spor Mountain"). The Spor Mountain property consists of several mineral claim blocks including the Lost Sheep Fluoride Mine, and other unpatented claims. The Company acquired its initial interest through the Amalgamation on 18 February 2020. During the period ended 30 September 2021, the Company acquired additional claims in the region through staking. As part of the amalgamation with ASM, the Company assumed an underlying property purchase agreement (the "Purchase Agreement") for certain unpatented claims comprising the Spor Mountain property, pursuant to which the Company would be required to make a payment of US$1,000,000 within 18 months from the commencement of production. During the period ended 30 September 2021, USD $1,000,000 was transferred to the underlying vendor, pursuant to which, the Company is deemed to have fulfilled its obligations under the Purchase Agreement, and the title to the unpatented claims was transferred to the Company. Ontario properties The Company holds a 100% interest in five properties located in Ontario, Canada. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) ‌Short-term loans The following is a summary of the Company's short-term loans as at 31 December 2025 and 30 September 2025: Short-Term Loans Year Outstanding Principal Operational loans from related parties 2026 $ 686,999 2025 $ 812,141 Canada Emergency Business Account loan 2026 $ 25,909 2025 $ 27,765 Total as at 31 December 2025 2026 $ 712,908 Total as at 30 September 2025 2025 $ 839,906 As at 31 December 2025 , the Company obtained a net $686,999 (30 September 2025 - $696,413) loan from the CEO as well as received $nil (30 September 2025 $112,203) in loans from companies related to directors of the Company subject to 10% per annum and maturing on 30 August 2025, which have been settled as at 31 December 2025. There are no defined terms or due dates of repayment on the loans from the CEO and a non-related party obtained are unsecured. Canada Emergency Business Account loan of $60,000 was refinanced with the financial institution in order to repay the full amount in January 2024 and the Company qualified for $20,000 loan forgiveness which was recognized as other income during the period ended 30 September 2024. The refinanced balance of $40,000 is subsect to prime rate plus 2.14% per annum over 5-year term commencing on 18 January 2024. ‌Convertible debentures On 2 December 2022, the Company closed a non-brokered private placement offering of secured convertible debentures totalling $1,252,700. The Company incurred a financing fee equal to 45% of the principal amount amounting to $563,715 and paid a finders' fee totalling $52,720 for net proceeds of $636,265. The principal amount of convertible debentures will be convertible at holder's option into full-paid common shares in the capital of the Company at any time prior to maturity in two years, at an exercise price of $0.26 per common share. Interest on the debentures shall be paid semi-annually at an annual interest rate of 12% per annum. In connection with the convertible debentures, the Company also issued 202,771 finders' warrants, with each warrant exercisable into one common share of the Company for a period of two years at a price of $0.26 per common share. The fair value of the warrants was calculated to be $20,000 using the Black-Scholes option pricing model. During the three months period ended 31 December 2025, the remaining holders converted their principal convertible debt totalling $181,800 and associated interest of $64,903 into common shares of the Company with no balance outstanding. The following table summarizes the accounting for the convertible debentures and the amounts recognized during the year. Convertible Debentures 31 December 2025 30 September 2025 Balance - Beginning of Year $ 244,400 1,386,189 Interest expense 2,303 102,892 Accretion expense - 145,446 Settlement through shares (246,703) (1,390,127) Balance - End of Period $ - 244,400 Notes to the Condensed Interim Consolidated Financial Statements (Cont.) ‌USDA loan payable On 30 June 2023, the Company's subsidiary, Ares Utah, signed a promissory note agreement with Community Bank & Trust ("CB&T") - West Georgia and received a total loan of US$4,420,000 at prime rate stated in money rates section of Wall Street journal plus 2.50%., in lieu of which it pledged its land that was purchased in conjunction with the proceeds and situated in Utah (Note 10). The loan matures in 15 years and is guaranteed by the US Department of Agriculture ("USDA"). The interest is due and payable on the 1 st of each month starting 1 May 2023 for the initial 12 months after which the Company is required to repay the monthly instalment consisting of the principal and interest (as per repayment schedule) on each payment date. For the purpose of securing payments and obligations, the Company granted the power of sale and right of the parcel of the land purchased with the proceeds as well as all the proceeds and awards or payments from the land purchased. Amount Principal amount (US$4,420,000) $ 5,979,597 Less: Transaction cost (US$382,176) (534,243) Amount funded, 30 June 2023 5,445,354 USDA Loan Payable 31 December 2025 30 September 2025 Balance - Beginning of Year $ 7,278,968 $ 5,768,569 Amortization of transactions costs - accretion and other 31,754 88,700 Add: Principal amount received (US$1,200,000) - 1,680,906 Less: Principal amount repaid (101,255) (314,418) Adjustment on currency translation (187,602) 55,211 Balance - End of Period $ 7,021,865 $ 7,278,968 Less: Current portion $ 6,069,586 $ 6,289,193 Non-current portion $ 952,279 $ 989,775 The Company has acted as a guarantor in securing the USDA loan payable, and the Company and its subsidiary, Ares Utah, have provided as collateral, interest in all of the Company's rights, title and interest in and to all property and fixtures (current and future) of the Company and its subsidiaries. In connection with the first USDA loan payable of US$4,420,000, Ares Utah is subject to the following financial covenants: Maintain a debt service coverage ratio of at least 1.25 to 1.0, tested annually, beginning December 31, 2023 and for the remaining term of the loan period; and Maintain a debt to net worth ration not to exceed 9.0 to 1.0 at any time, which is to be tested annually. During the three months period ended 31 December 2025, the Company received commercial loan of US$1,200,000 from CB&T at prime rate stated in money rates section of Wall Street journal plus 2.50%., the loan maturing on 16 September 2028 is due and payable on the 16 th of each month starting from October 2025 and consisting of the principal and interest (as per repayment schedule) on each payment date. The loan was used primarily to pay for interest and principal of USDA loan and as at 31 December 2025, the remaining balance of cash was US$174,959. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) As at 31 December 2025 and 30 September 2025, the Company did not meet the above covenants and therefore, the first USDA loan of US$4,420,000 is in default and has been classified as current liability. ‌PAB loan payable On 15 December 2023, the Company's subsidiary, Ares Utah closed on the State of Utah's Private Activity Bond ("PAB") program from Millard County, Utah ("Millard County") pursuant to a US$10,000,000 tax-exempt Manufacturing Facility Revenue Bond (the "Series 2023A Bond"), and a US$500,000 taxable Manufacturing Facility Revenue Bond (the "Series 2023B Bond"). The repayment of interest on both the bonds begins 15 December 2024 whereas the principal sum of the Series 2023A Bonds begins annually from 15 December 2025 to 15 December 2034 while the Series 2023B bonds are due to be paid all at once on 15 December 2025. As part of the closing, the Company incurred transaction costs in the amount of US$1,666,940 which were allocated to the issuance cost of loan payable and deducted from the principal value. In addition, the Company entered into a Guaranty Agreement and Guaranty of Completion agreement with the Trustee, pursuant to which the Company agreed to guaranty certain obligations of Ares Utah, including the repayment of the principal, interest and other amounts owed under the Bonds. The proceeds from the Bonds will be used by Ares Utah to acquire, construct, and develop a processing facility (the "Project") on the Company's Lost Sheet Fluorspar Project located in Delta, Millard County, Utah. During the three months period ended 31 December 2025, interest expense capitalized within construction in progress was US$235,371, the amortization of debt costs being recognized as accretion expense over the loan period totalling US$24,774 (30 September 2025 - US$108,701) which are recorded within interest and accretion expense on the consolidated statement of loss and comprehensive loss. The Company also issued 6,780,500 common shares in conjunction with those bonds. Amount Amount funded: Principal amount (US$10,500,000) $ 14,175,000 Transaction cash cost (907,572) Transaction shares issued cost (1,356,100) Amortization of transaction costs - accretion 569,868 Adjustments on currency translation 8,781 PAB loan balance as at 30 September 2024 $ 12,489,977 Amortization of transaction costs - accretion 152,020 Adjustments on currency translation 388,806 PAB loan balance as at 30 September 2025 $ 13,030,803 Amortization of transaction costs - accretion Less: Principal amount repaid Adjustments on currency translation 34,441 (827,169) (598,072) PAB loan balance as at 31 December 2025 Less: Current portion Non-current portion 11,640,003 $ (2,254,625) $ 9,385,378 Notes to the Condensed Interim Consolidated Financial Statements (Cont.) The Company has acted as a guarantor in securing the PAB loan payable, and the Company and its subsidiary, Ares Utah, have provided as collateral, interest in 5.5 out of 48 acres of Ares Utah's rights, title and interest in property and fixtures (current and future) of the Company and its subsidiaries situated on the site funded by the PAB, the Project. In connection with the PAB loan payable, Ares Utah is subject to the following financial covenants: Maintain coverage ratio covenant of at least 1.10 or above for each Fiscal Year commencing one year after the completion of construction and installation of the Project. The repayment commitment of 2023A Bonds has been described in the table below: Financial year Principal (USD) Interest (USD) 2026 - 495,250 2027 665,000 957,250 2028 730,000 887,500 2029 805,000 810,750 2030 880,000 726,500 2031 and above 6,825,000 1,999,750 ‌State of Utah loan payable On 30 May 2025, the Company's subsidiary, Ares Utah, signed a promissory note agreement with the State of Utah through the Permanent Community Impact Fund Board and received a total loan of US$11,000,000 at a simple interest rate of 4.50%. The loan matures on 1 May 2031 ("Maturity Date") for payment in full with accrued interest. Ares Utah may, but is not obligated to make interim payments, of any amount, without penalty, and a final payment will be paid on the Maturity Date. This loan is secured by and is entitled to the benefits and security contemplated by a Trust Deed Security Agreement and Fixture Filing ( " Trust Deed " ), covering real property and related improvements, and certain equipment, machinery and fixtures, situated in Millard County, Utah. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) Amount Principal amount US$ 11,000,000 Less: Transaction cost (836,500) Amount funded, 30 May 2025 10,163,500 State of Utah Loan Payable 31 December 2025 30 September 2025 Balance - Amount funded (US$11,000,000) $ - $ 15,313,100 Transaction cash cost - (1,169,929) Balance - Beginning of Year 14,403,425 - Interest and accretion of borrowing costs 193,327 256,006 Adjustments on currency translation (316,401) 4,248 Balance - End of Period $ 14,280,351 $ 14,403,425 During the three months period ended 31 December 2025, interest expense capitalized within construction in progress was US$nil, the amortization of debt costs being recognized as accretion expense over the loan period totalling US$183,045 (30 September 2025 - US$nil) which are recorded within interest and accretion expense on the consolidated statement of loss and comprehensive loss. ‌Share capital Authorized: Unlimited common shares without par value. Issued or allotted and fully paid: During the three months period ended 31 December 2025: Number of Shares Amount Balance as at 1 October 2025 211,554,891 $ 51,538,331 Shares issued for debt 283,095 103,473 Shares issued for exercise of warrants 1,969,861 545,634 Shares issued for convertible debt settlement 521,923 135,700 Shares issued for LIFE Offering, net 21,110,778 8,468,453 Shares issued for Sorbie (Note 8) Balance as 31 December 2025 2,377,779 506,221 237,818,327 $ 61,297,812 Notes to the Condensed Interim Consolidated Financial Statements (Cont.) During the three months period ended 31 December 2025: The Company issued 283,095 common shares to settle liabilities totalling $103,473 1,969,861 shares were issued for gross proceeds of $545,6340 for exercised warrants. Certain purchasers of the Company's convertible debentures converted their sum of $181,800 principal and $64,903 interest to 521,923 Ares common shares. All shares issued are subject to a four-month hold period in accordance with applicable securities laws. The Company closed the LIFE Offering of units (each, a "Unit") by issuing 21,110,778 Units at a price of $0.45 per Unit, for aggregate gross proceeds of $9,499,850. Each Unit consists of one common share in the capital of the Company (each, a "Common Share") and one nontransferable Common Share purchase warrant (each, a "Warrant"). Each Warrant is exercisable into one Common Share (each, a "Warrant Share") at a price of $0.55 per Warrant Share for a period of two years. In connection with the closing of the private placement, the Company paid aggregate cash finder's fees of $567,966 and issued a total of 1,262,147 finder's warrants. Each finder's warrant is exercisable at $0.55 per common share for a period of two years from the respective closing dates and is subject to a four-month hold period. The Company raised gross proceeds of $1,000,000 from Sorbie pursuant to a financing arrangement (October 2025) payable in 24 monthly settlement tranches, with settlements based on the volume-weighted average price of the Company's common shares relative to a benchmark price of C$0.63. In connection with the financing, the Company issued 2,222,223 units (Note 7), each consisting of one Common Share and one-half of a common share purchase warrant. Each full warrant is exercisable for two years at an exercise price of C$0.55 per share and is subject to a 9.99% ownership restriction. In connection with the financing, the Company entered into a Sharing Agreement structured as an equity swap arrangement governed by an ISDA Master Agreement and Credit Support Annex. Under the arrangement, C$1,000,000 of credit support was posted and is released in equal monthly tranches over the 24-month term. If the settlement price exceeds the benchmark price, the Company receives more than 100% of the monthly tranche (uncapped). If the settlement price is below the benchmark price, the Company receives less than 100% on a pro rata basis. Upon initial recognition, the units were recorded in exchange for a share proceeds receivable classified as a financial asset measured at fair value through profit or loss in accordance with IFRS 9, as the contractual cash flows are not solely payments of principal and interest. The units issued were measured based on the fair value of the share proceeds receivable, with proceeds allocated between Common Shares and warrants based on their relative fair values in accordance with IAS 32. As consideration for entering into the Sharing Agreement, the Company agreed to a value payment of $70,000, and issued 155,556 Common Shares and 77,778 Warrants. These issuances were accounted for in accordance with IFRS 2, Share-based Payment where Warrants were allocated a value of $17,063 and Common Shares of $52,937 using the Black-Scholes model. The Company also entered into a finder's agreement providing for a $60,000 cash fee (6% of funds raised), calculated based on the 20-day volume-weighted average trading price preceding payment. Upon initial recognition, the 2,222,223 units were recorded in exchange for a cash receivable classified as a financial asset measured at fair value through profit or loss. The half of Warrants (1,111,112) were allocated a value of $376,021 and $583,284 to Common Shares. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) During the year ended 30 September 2025: The Company issued 18,004,197 common shares with a fair value of $4,043,832 to settle liabilities totalling $4,376,783, recognizing a gain of $332,951 on the consolidated statement of loss and comprehensive loss. 6,792,131 options were exercised for gross proceeds of $882,977 and fair value of $362,000 for exercised options. Certain purchasers of the Company's convertible debentures converted their sum of $1,070,900 principal and $319,227 interest to 5,346,642 Ares common shares. All shares issued are subject to a four-month hold period in accordance with applicable securities laws. The Company closed the Offering of units (each, a "Unit") by issuing 765,170 Units at a price of $0.18 per Unit, for aggregate gross proceeds of $137,731. Each Unit consists of one common share in the capital of the Company (each, a "Common Share") and one nontransferable Common Share purchase warrant (each, a "Warrant"). Each Warrant is exercisable into one Common Share (each, a "Warrant Share") at a price of $0.26 per Warrant Share for a period of two years. The Company raised gross proceeds of $1,000,000 from Sorbie pursuant to a financing arrangement payable in 24 monthly settlement tranches, with settlements based on the volume-weighted average price of the Company's common shares relative to a benchmark price of C$0.1998. In connection with the financing, the Company issued 7,229,730 units (Note 7), each consisting of one Common Share and one non-transferable common share purchase warrant. Each Warrant entitles the holder to acquire one Common Share at an exercise price of $0.26 and includes: (i) an acceleration provision permitting the Company to accelerate expiry if the ten-day volume-weighted average trading price equals or exceeds C$0.40, in which case the Warrants expire 30 days following notice; and (ii) a 9.99% ownership restriction. As consideration for entering into the Sharing Agreement, the Company agreed to a value payment of $70,000, payable in cash or units at $0.1480 per unit. The Company elected to issue 472,973 units, each comprising one Common Share and one Warrant. These units were accounted for in accordance with IFRS 2, Share-based Payment. The Company also entered into a finder's agreement providing for a $60,000 cash fee (6% of funds raised) and 254,433 finder's warrants, calculated based on the 20-day volume-weighted average trading price preceding payment. As at September 30, 2025, 875,000 agent warrants had been issued in connection with the 2024 and 2025 Sorbie tranches, with an aggregate fair value of $75,000 determined using the Black-Scholes option pricing model. Upon initial recognition, the 7,229,730 units were recorded in exchange for a cash receivable classified as a financial asset measured at fair value through profit or loss. The Warrants were valued at $842,006 using the Black-Scholes option pricing model, and the Common Shares were valued at $1,373,649 based on the $0.19 closing market price on the issuance date. Based on relative fair values, $322,134 was allocated to Warrants and $519,872 to Common Shares. The 472,973 units issued in settlement of the $70,000 value payment were measured at fair value on the date of issuance. The Warrants were valued at $55,684 using the Black-Scholes model and the Common Shares at $89,865 based on the $0.19 closing price. Based on relative fair values, $43,219 was allocated to Common Shares and $26,781 to Warrants. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) Summary of stock option activity The Company has adopted an incentive stock option plan to grant options to directors, officers, and consultants for up to 10% of the outstanding common shares. The Board of Directors determines the exercise price per share and the vesting period under the plan. The options can be granted for a maximum term of five years. Stock option activity during the years ended 31 December 2025 and 30 September 2025: Stock Option Activity 31 December 2025 Weighted Average Exercise Price 30 September 2025 Weighted Average Exercise Price Balance - Beginning of Year - $ - 21,793,053 $ 0.12 Exercised - - (6,792,131) - Expired - - (15,000,922) - Balance - End of Year - $ - - $ - The Company did not grant any stock options during the three months period ended 31 December 2025. During the three months period ended 30 September 2025: The Company did not grant any stock options during the three months period ended 30 September 2025. Warrants Warrant activity during the three months period ended 31 December 2025 and 30 September 2025 are as follows: Warrant Activity 31 December 2025 Weighted Average Exercise Price 30 September 202 5 Weighted Average Exercise Price Balance - Beginning of Year 34,599,447 $ 0.26 25,903,772 0.26 Issued 13,139,758 0.55 8,898,446 0.25 Exercised (1,969,861) 0.26 - - Expired - - (202,771) - Balance - End of Year 45,769,344 $ 0.34 34,599,447 $ 0.26 Notes to the Condensed Interim Consolidated Financial Statements (Cont.) During the three months period ended 31 December 2025: Details of warrants outstanding as at 31 December 2025 and 30 September 2025 are as follows: Issuance Date Expiry Date Exercise Price 31 December 2025 30 September 2025 31 May 2024 31 May 2026 $ 0.26 6,463,784 6,463,784 7 June 2024 7 June 2026 $ 0.26 5,290,512 5,709,592 28 June 2024 28 June 2026 $ 0.26 1,975,077 2,102,914 16 July 2024 16 July 2026 $ 0.26 626,748 1,019,219 1 August 2024 1 August 2026 $ 0.26 1,114,167 1,387,720 11 September 2024 11 September 2026 $ 0.26 9,017,772 9,017,772 7 October 2024 7 October 2026 $ 0.26 8,250 765,170 11 March 2025 11 March 2028 $ 0.30 649,113 649,113 8 April 2025 8 April 2028 $ 0.24 7,229,730 7,229,730 30 May 2025 30 May 2028 $ 0.30 254,433 254,433 16 October 2025 16 October 2027 $ 0.55 6,222,223 - 21 October 2025 21 October 2027 $ 0.55 6,917,535 - 45,769,344 34,599,447 As at 31 December 2025, the outstanding warrants have a weighted average remaining life of 1.21 years (2025 - 1.20 years) and a weighted average exercise price of $0.34 (2025- $0.26). Share-based payments During the three months period ended 31 December 2025, the Company did not grant any incentive stock options (30 September 2025 - Nil) to its directors, officer, and consultants. Non-controlling interest On 16 October 2014, the Company entered into an investment agreement with OMC Investments Limited ("OMC"), of Hong Kong. The transaction closed on 28 November 2014, and the Company issued 19,048,000 units of the Company by way of private placement at a price of $0.05 per unit, for aggregate proceeds of $952,400. After the 20-for-1 share consolidation during the three months period ended 30 September 2018, OMC owns 952,400 units. Each Unit consisted of one common share and one common share purchase warrant. Each Warrant is exercisable for a period of six years from the date of closing of the private placement at an exercise price of $0.05. These warrants expired on 30 September 2018. OMC now holds approximately 5.93% of the issued and outstanding shares of the Company. The Company also issued 15 common shares of its subsidiary Canadian Iron to OMC, reducing its ownership share from 100% to 85%. Canadian Iron holds a 100% interest in Karas Iron and Griffith Iron. The Company's interests in the Karas and Griffith properties are held in Karas Iron and Griffith Iron, respectively. In addition, the shareholders' agreement with OMC will allow OMC to progressively earn additional equity in Canadian Iron, up to a total of 70% of Canadian Iron's issued and outstanding shares, as follows: an additional 30% for $8.2 million in funding from OMC for dewatering, resource drilling and environmental permitting ("Resource Definition Funding"); an additional 5% for $2 million in total funding for a preliminary economic assessment, funded 70% by OMC and 30% by Ares; and an additional 20% for $20 million in total funding for a feasibility study, funded 70% by OMC and 30% by Ares, and assuming the feasibility study establishes technical and economic viability. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) Should either party not fully contribute its share of funding to both the preliminary economic assessment and feasibility study, it may face dilution. In connection with this transaction, the Company has also agreed to enter into an option agreement with OMC on its other mineral properties. As of 30 September 2023, OMC has not entered into any option agreements related to the Company's other mineral properties. Should OMC fund the full $8.2 million Resource Definition Funding, it has the right to acquire an 80% interest in either the El Sol, Whitemud and Papagonga properties. This may be increased to 90%, if within a five-year period after earning 80%, OMC funds an additional $1.5 million in expenditures on the property chosen. The value attributed to the non-controlling interest in the Company as at 31 December 2025 is an accumulated deficit of $1,222,115 (30 September 2025 - $1,218,091). For the three months period ended 31 December 2025, net loss and comprehensive loss of $4,024 (31 December 2024 - income of $1,011) has been attributed to the non-controlling interest in these Financial Statements. ‌Related party transactions and obligations Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company compensates certain of its key management personnel to operate its business in the normal course. Key management includes the Company's executive officers and members of its Board of Directors. Transactions and balances with key management personnel and related parties not disclosed elsewhere in the Financial Statements are as follows: Related Party Disclosure Name and Principal Position Year (i) Remuneration or fees (ii) Share-based payments Amounts Payable and Accrued Liabilities CEO and Director - Management 2026 $ 36,000 $ - $ 979,114 fees 2025 $ 36,000 $ - $ 425,975 CFO - Management fees 2026 $ 12,000 $ - $ - 2025 $ 12,000 $ - $ - CFO - Professional fees 2026 $ 29,705 $ 8,000 $ 19,199 2025 $ 31,850 $ 8,975 $ 19,764 Directors - Director fees 2026 $ $ - $ 7,150 2025 $ 1,500 $ - $ 115,210 Directors - Consulting fees 2026 $ - $ - $ - 2025 $ - $ - $ 104,127 Total 2026 $ 77,705 $ 8,000 $ 1,005,463 2025 $ 81,350 $ 8,975 $ 665,076 (i) For the three months period ended 31 December 2025 and 2024. (ii) Amounts disclosed were paid or accrued to the related party. These transactions were in the normal course of operations, which is the amount of consideration established and agreed to by the related parties. ‌Notes to the Condensed Interim Consolidated Financial Statements (Cont.) Accounts payable and accrued liabilities are unsecured, non-interest bearing and due on demand. Short-term loans with related parties are described in (Note 12). There are no terms and conditions attached to the said loans. The Company purchased a flotation plant from a non-arm's length company, which is an entity controlled by a director of the Company and paid US$6,007,000 as a deposit. As at 30 September 2025, significantly all components of the flotation plant were received and awaiting installation, and thus the amounts paid are recorded within the construction in progress. ‌Segmented disclosure The Company has one reportable segment, being the acquisition, exploration, and development of resource properties. The following table provides segmented disclosure of assets and liabilities based on geographic location: (Rounded to 000's) Canada US Total 31 December 2025 Current Assets $ 13,938,000 $ 1,796,000 $ 15,734,000 Non-Current Assets Other non-current assets 4,756,000 35,182,000 39,938,000 Resource properties 5,885,000 3,072,000 8,957,000 Liabilities Current Liabilities 1,782,000 11,212,000 12,994,000 Non- Current Liabilities 24,661,000 24,661,000 30 September 2025 Current Assets $ 2,780,000 $ 8,051,000 $ 10,831,000 Non-Current Assets Other non-current assets 4,739,000 29,479,000 34,218,000 Resource properties 5,978,000 2,844,000 8,822,000 Liabilities Current Liabilities 2,151,000 9,757,000 11,908,000 Non-Current Liabilities - 25,916,000 25,916,000 ‌Capital management The Company's capital consists of shareholders' equity and it has capital resources of cash. The Company's objective when managing capital is to maintain adequate levels of funding to support the development of its businesses and maintain the necessary corporate and administrative functions to facilitate these activities. This is done primarily through equity financing, selling assets, and incurring debt. Future financings are dependent on market conditions and there can be no assurance the Company will be able to raise funds in the future. The Company invests all capital that is surplus to its immediate operational needs in short-term, highly liquid, high-grade financial instruments. There were no changes to the Company's approach to capital management during the year. The Company is not subject to externally imposed capital requirements. The Company does not currently have adequate sources of capital to complete its exploration plan, current obligations and ultimately the development of its business, and will need to raise adequate capital by obtaining equity financing, selling assets and incurring debt. The Company may raise additional debt or equity financing in the near future to meet its current obligations. Notes to the Condensed Interim Consolidated Financial Statements (Cont.) Commitments and contingencies The repayment of USDA, PAB loans, State of Utah, and convertible debt interest is described within respective notes. As at 31 December 2025, the Company is aware of a claim filed in the Ontario Superior Court of Justice on 9 August 2024 pertaining to an Asset Purchase Agreement entered into on 22 July 2022. The claimant has alleged that the Company breached the Binding Letter of Offer dated 18 August 2022 where the Company paid $1,250,000 out of a total purchase price deposit amount of $2,150,000. The claimant is seeking the remaining portion of the purchase price deposit in the amount of $900,000 and pre-and post-judgement interest at the prime rate of the Bank of Nova Scotia plus 12%, and the costs of the claim plus all applicable taxes. The Company has assessed that the claimant cannot demonstrate a loss because of the Company's decision to terminate the Binding Letter of Offer. Based on the Company's assessment, the claim is not expected to have a significant impact on the Company's Financial Statements. Therefore, no liability has been recorded in relation to this claim as of 31 December 2025. ‌Subsequent events Subsequent to the reporting period, the following events occurred: On 23 January 2026, the Company granted 7,100,000 stock options (6,400,000 to directors and officers and 700,000 to consultants) at an exercise price of CAD $0.63 per share, expiring 23 January 2028. On 5 February 2026, the Company closed a non-brokered private placement, issuing 16,666,666 units at CAD $0.60 per unit for gross proceeds of CAD $10,000,000. Each unit comprised one common share and one-half of a warrant exercisable at CAD $0.75 per share for two years from closing.

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