Q4 Report 2025 Financials

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of EDM Resources Inc. (the "Company") were prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the consolidated financial statements. Management acknowledges responsibility for the preparation and presentation of the annual consolidated financial statements, including responsibility for significant accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Company's circumstances. In the opinion of management, the consolidated financial statements have been prepared within acceptable limits of materiality using accounting policies consistent with International Financial Reporting Standards appropriate in the circumstances.

Management has established processes which are in place to provide them sufficient knowledge to support management representations that they have exercised reasonable diligence that (i) the consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the consolidated financial statements and (ii) the consolidated financial statements fairly present in all material respects the financial condition, financial performance and cash flows of the Company, as of the date of and for the periods presented by the consolidated financial statements.

The Board of Directors is responsible for reviewing and approving the consolidated financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the consolidated financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the consolidated financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company's affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

"Mark Haywood" "Arnab De"

Chief Executive Officer Chief Financial Officer

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of

EDM Resources Inc.

Report on the Audit of the Consolidated Financial Statements Opinion

We have audited the consolidated financial statements of EDM Resources Inc. (the Company), which

comprise the consolidated statements of financial position as at December 31, 2025 and 2024, and the consolidated statements of loss and comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2025 and 2024, and its financial performance and its cash flows for the years then ended, in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Relating to Going Concern

We draw your attention to Note 1 in the consolidated financial statements, which indicates that the Company incurred a comprehensive loss of $739,780 during the year ended December 31, 2025. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Emphasis of Matter - Material Uncertainty Related to Going Concern section of our report, we have determined that there are no other key audit matters to communicate in our auditor's report.

Information Other than the Consolidated Financial Statements and Auditor's Report Thereon Management is responsible for the other information. The other information comprises the annual management's discussion and analysis, but does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the 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.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  
  
  

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such

  disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because of the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Pat Kenney.

Chartered Professional Accountants Licensed Public Accountants

Mississauga, Ontario April 28, 2026

Total Liabilities and Shareholders' Equity 27,746,458 26,975,433

Nature of Operations and Going Concern (Note 1)

Subsequent Event (Note 19)

Approved on Behalf of the Board:

"Ashwath Mehra" "Mark Billings"

Director Director

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (PRESENTED IN CANADIAN DOLLARS)

Weighted average number of common shares

outstanding - basic and diluted 53,614,614 38,103,647

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (PRESENTED IN CANADIAN DOLLARS, EXCEPT SHARE AMOUNTS)

Number of

Shares

Share Capital ($)

Warrants ($)

Contributed Surplus ($)

Deficit ($)

Total ($)

Balance, December 31, 2023 24,048,943 89,092,181 648,589 1,989,620 (81,500,344) 10,230,046

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

- 3 -

CONSOLIDATED STATEMENTS OF CASH FLOWS (PRESENTED IN CANADIAN DOLLARS)

For the years ended December 31, 2025

2024

($) ($)

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

1. NATURE OF OPERATIONS AND GOING CONCERN

   EDM Resources Inc. (the "Company" or "EDM"), and its wholly owned subsidiary Scotia Mine Limited (collectively the "Group"), is engaged in base metals mining and related activities, including the exploration and evaluation of mineral property interests that are considered to have the potential for economic mineralization and development. The Company is a public company, which is listed on the TSX Venture Exchange (Ticker: EDM), incorporated on March 9, 2004 and domiciled in Canada. The address of its registered office is Purdy's Wharf, 1959 Upper Water Street, Suite 1301, Nova Scotia, B3J 3N2.

   On January 12, 2022, the Company changed its name to EDM Resources Inc. On March 25, 2022, the Company changed the name of its wholly owned subsidiary to Scotia Mine Limited.

   The consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue in operation through the fiscal year and into the foreseeable future and will be able to realize assets and discharge its liabilities and commitments in the normal course of operations at the amounts stated in the consolidated financial statements.

   The Company has not generated revenue from operations. The Company has incurred a loss of $739,780 for the year ended December 31, 2025 (2024 - $1,920,078) and as of that date has an accumulated deficit of

   $84,160,202 (2024 - $83,420,422). As at December 31, 2025, cash amounted to $540,986(2024 - $487,558) and the Company had working capital of $ 599,702 ( 2024 - working capital deficit of $(169,342)). The ability of the Company to carry out its planned business objectives is dependent on its ability to raise adequate financing from lenders, shareholders and other investors, obtain required governmental permits to advance mine development and/or generate operating profitability and positive cash flow. There can be no assurances that the Company will continue to obtain the additional financial resources necessary and/or achieve profitability or positive cash flows. If the Company is unable to obtain adequate financing, the Company will be required to curtail operations, and development activities and there would be significant uncertainty whether the Company would continue as a going concern and realize its assets and settle its liabilities and commitments in the normal course of business.

   The above factors indicate the existence of material uncertainties that may cast significant doubt on the ability of the Company to continue as a going concern.

   The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. If management is unsuccessful in securing capital, the Company's assets may not be realized or its liabilities discharged at their carrying amounts and these differences could be material.

2. BASIS OF PRESENTATION

Statement of Compliance

These consolidated financial statements of the Company, including comparatives, have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

These consolidated financial statements were authorized for issuance by the Board of Directors of the Company on April 28, 2026.

Basis of Measurement

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit and loss which are stated at their fair values. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

2. BASIS OF PRESENTATION (Continued)

Functional and Presentation Currency

The consolidated financial statements are presented in Canadian Dollars, which is the functional and presentation currency of the Company and its subsidiary.

Use of Estimates, Judgments and Assumptions

The preparation of the consolidated financial statements requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and the disclosure of any contingent assets and liabilities as at the date of the financial statements, as well as the reported expenses incurred during the year. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following:

- going concern assessment (Note 1)

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following:

Carrying Value and Recoverability of Non-Financial Assets

The carrying amount of the Company's exploration and evaluation assets do not necessarily represent present or future values, and the Company's exploration and evaluation assets have been accounted for under the assumption that the carrying amount will be recoverable. Recoverability is dependent on various factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development and upon future profitable production or proceeds from the disposition of the mineral properties themselves.

The Recoverability of Property, Plant and Equipment

The Scotia Mine is considered as one Cash Generating Unit ("CGU") and is tested for impairment when potential indicators of impairment are present. Where an indicator of impairment exists for its non-current assets, the Company performs an analysis to estimate the recoverable amount. The estimated useful lives and residual value of property, plant and equipment which are included in the consolidated statements of financial position and the related depreciation included in the consolidated statements of loss.

Share-based Payments

Share-based payments expense is measured by reference to the fair value of the stock options, warrants, restricted stock units (RSUs) at the date at which they are granted. Estimating fair value for granted stock options, warrants and RSUs requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the equity instrument, volatility, dividend yield, and rate of forfeitures and making assumptions about them. The value of the share-based payments expense for the years ended December 31, 2025 and 2024 are disclosed in Note 14.

Exploration and Evaluation Assets

The determination of the demonstration of technical feasibility and commercial viability is subject to a significant degree of judgment and assessment of all relevant factors.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

1. BASIS OF PRESENTATION (Continued)

   Environmental Rehabilitation Obligation

   The Company recognizes statutory, contractual or other legal obligations related to the retirement of its exploration and evaluation assets and its tangible long-lived assets when such obligations are incurred, if a reasonable estimate of fair value can be made. These obligations are measured initially at the net present value

   of estimated future cash flows and the resulting costs are expensed to the statement of loss and comprehensive loss.

   In subsequent periods, the liability is adjusted for any changes in the amount or timing and for the discounting of the underlying future cash flows. The capitalized asset retirement cost is amortized to operations over the life of the asset.

   Provisions and contingencies

   The recognition and measurement of provisions and contingencies including an application brought by the Province of Nova Scotia over environmental contamination (see Note 4); and key assumptions about the likelihood and magnitude of an outflow of resources.

2. MATERIAL ACCOUNTING POLICIES

   The significant accounting policies of the Company include the following and have been applied consistently to all periods presented.

   Basis of Consolidation

   These consolidated financial statements include the accounts of the Company, and its active subsidiary. All significant intercompany transactions are eliminated on consolidation.

   1. Business Combinations

      A business combination is a transaction or other event in which control over one or more businesses is obtained. A business is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits.

      Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the purchase consideration over such fair value being recorded as goodwill and allocated to cash generating units. If the fair value of the net assets acquired exceeds the purchase consideration, the difference is recognized immediately as a gain in the consolidated statement of comprehensive income (loss). Acquisition-related costs are expensed during the period in which they are incurred. If the assets acquired are not a business, the transaction is accounted for as an asset acquisition.

   2. Subsidiary

A subsidiary is an entity controlled by the Company. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of a subsidiary are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Foreign Currency Transactions

Transactions in foreign currency are translated to the respective functional currencies of Company entities at the exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in other than the functional currency are translated at the exchange rate in effect at the date of the statements of financial position. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the end of the reporting

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

3. MATERIAL ACCOUNTING POLICIES (Continued)

Foreign Currency Transactions (Continued)

period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognized in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Financial Instruments

(i) Non-Derivative Financial Assets

The Company initially recognizes loans and receivables on the date that they originated. All other financial assets (including assets designated at fair value through profit or loss) are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

The Company classifies its financial assets in the following categories: at fair value through profit and loss ("FVTPL"), at fair value through other comprehensive income ("FVTOCI") or at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determined the classification of its financial assets on initial recognition. Measurement and classification of its financial assets is dependent on the business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

Financial Assets at Fair Value Through Profit or Loss

A financial asset is classified at FVTPL if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated at FVTPL if the Company manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Company's risk management or investment strategy. Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit and loss as incurred. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in profit and loss in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges. As at December 31, 2025, the company has financial asset classified as FVTPL of $476,594.

Financial Assets at FVTOCI

Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. At December 31, 2025 and 2024, the Company had no financial instruments classified as FVTOCI.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

3. MATERIAL ACCOUNTING POLICIES (Continued)

Financial Instruments (Continued)

Financial Assets at Amortized Cost

Financial assets at amortized cost are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses. They are classified as current assets or non-current assets based on their maturity date. Financial assets at amortized cost are comprised of cash, amounts receivable, and cash held for reclamation.

(i) Non-Derivative Financial Liabilities

Financial liabilities are recognized initially on the trade date, which is the date the Company becomes a party to the contractual provisions of the instrument. Such financial liabilities are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

The Company classifies non-derivative financial liabilities into the other financial liabilities category.

The Company's amortized cost financial liabilities comprise amounts payable to related parties, and accounts payable and accrued liabilities.

Share Capital

The Company records proceeds from share issuances net of issue costs and any tax effects. Common shares issued for consideration other than cash are valued on their market value of the shares as of the date of issuance.

The Company has adopted the residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component.

The fair value of the common shares issued in private placements is determined to be the more easily measurable component and they were valued at their fair value, as determined by the closing quoted bid price on the day prior to the announcement date. The balance, if any, is allocated to the attached warrants. Any fair value attributed to the warrants is recorded as contributed surplus.

Flow-through Shares

Under the Canadian Income Tax Act, an enterprise may issue securities referred to as flow-through shares, whereby the investor may claim the tax deductions arising from qualifying expenditures that the Company made with the proceeds. The increase to share capital when flow-through shares are issued is measured based on the current market price of common shares. The incremental proceeds, or "premium," are recorded as a deferred credit. When expenditures are renounced, a deferred tax liability is recognized and the deferred credit is reversed. The net amount is recognized as a flow-through shares liability recovery .

Provisions

Provisions are recognized where a legal or constructive obligation has been incurred as a result of past events, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. If material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The increase in any provision due to passage of time is recognized as a finance cost.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

3. MATERIAL ACCOUNTING POLICIES (Continued)

Exploration and Evaluation Assets

The cost of acquiring mineral properties and related exploration and evaluation expenditures are capitalized until the properties are placed into production, sold or abandoned. These capitalized costs are transferred to property, plant and equipment and amortized over the estimated useful life of the properties following the commencement of production or written off if the properties are sold, allowed to lapse or abandoned. Costs incurred prior to obtaining the right to explore are expensed as incurred.

Cost includes any cash consideration and advance royalties paid and the fair market value of shares issued on the acquisition of property interests. Costs also include, but are not exclusive to, acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching and sampling as well as depreciation related to exploration field equipment and employee compensation costs attributed to exploration activities. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are recorded in the accounts when the payments are made. The recorded amounts of property acquisition costs and their related deferred exploration costs represent actual expenditures incurred and are not intended to reflect present or future values.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property may be subject to unregistered prior agreements or inadvertent noncompliance with regulatory requirements.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of a mineral property interest may exceed its recoverable amount. An impairment review is undertaken when indicators of impairment arise but normally when one of the following conditions applies:

• the right to explore in the specific area has expired or will expire in the near future;

• substantive expenditure on further exploration and evaluation activities in the specific areas are neither budgeted nor planned;

• exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; and

• sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

Once the technical feasibility and commercial viability of extracting a mineral resource of a project are demonstrable, the relevant exploration and evaluation asset is assessed for impairment, and any impairment loss recognized, prior to the balance being reclassified as a development asset in property, plant and equipment. The determination of the demonstration of technical feasibility and commercial viability is subject to a significant degree of judgment and assessment of all relevant factors. In general, technical feasibility may be demonstrable once a positive feasibility study is completed. When determining the commercial viability of a project, in addition to the receipt of a feasibility study, the Company also considers factors such as the availability of project financing, the existence of markets and/or long-term contracts for the product, and the ability of obtaining the relevant operating permits.

Loss Per Share

The Company presents basic and diluted loss per share data for its common shares. Basic loss per share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period adjusted for own shares held. Diluted loss per share is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held, for the effects of all dilutive potential common shares, which comprise share options granted and warrants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

3. MATERIAL ACCOUNTING POLICIES (Continued)

Stock-Based Payments

The Company's stock option plan allows Company employees, directors, officers and consultants to acquire shares of the Company. The fair value of options granted is recognized as share-based payment expense with a corresponding increase in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee. Fair value is measured at grant date, and each tranche is recognized using the graded vesting method over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted.

At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of stock options that are expected to vest. In situations where equity instruments are issued to consultants and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at the fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of goods or services received.

The Company also operates a Restricted Stock Unit ("RSU") Plan, where RSUs are granted to directors, employees and consultants from time to time. RSUs are measured at the fair value of the date of grant, based on the closing price of the Company's common shares on the date of grant. The fair value of stock-based compensation on RSUs is recognized as an expense with a corresponding increase in the reserve for RSUs over the vesting period.

Income Taxes

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

1. MATERIAL ACCOUNTING POLICIES (Continued)

   Property and Equipment

   1. Recognition and Measurement

      On initial recognition, property, plant and equipment are recorded at cost, being the purchase price and directly attributable cost of acquisition or construction required to bring the asset to the location and condition necessary to be capable of operating in the manner intended by the Company, including appropriate borrowing costs and the estimated present value of any future unavoidable costs of dismantling and removing items. The corresponding liability is recognized within provisions.

      Property, plant and equipment is subsequently measured at cost less accumulated depreciation and accumulated impairment losses, with the exception of land which is not depreciated.

      When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

      Any gains or loss on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized net within other income in profit or loss.

   2. Subsequent Costs

      The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. Ongoing maintenance of property, plant and equipment are recognized in profit or loss as incurred.

   3. Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Depreciation is recognized in profit or loss on a unit-of-production basis or declining balance basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Land typically has an unlimited useful life and is not depreciated.

Assets under construction are depreciated when they are capable of being put into production in their intended use. Expenditures related to PPE under construction are capitalized as work in progress until the asset is available for use. The cost of work in progress includes its purchase price and any costs directly attributable to bringing it into working condition for its intended use. On completion, the cost of construction is transferred to the appropriate category of PPE, and depreciation will commence when the asset is available for its intended use.

The estimated useful lives for the current and comparative periods are as follows:

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

1. MATERIAL ACCOUNTING POLICIES (Continued)

   Unearned Revenue

   The company records revenue when control of the goods is transferred to the customer. Where payments are received in advance of performance, the company recognises deferred revenue and subsequently recognise revenue as the related performance obligations are satisfied. As at December 31, 2025, the company recognised deferred revenue relating to the Gypsum offtake agreement of $339,930 (Note 14).

   Royalty Arrangement

   The company recognises upfront payment received under royalty agreement as other income at inception, as the arrangement does not constitute a contract with customer and no ongoing performance obligation exists.

   Future payments are contingent on production and are recognised as royalty expense in the period incurred. A contingent liability is disclosed at inception of the agreement.

   Decommissioning Liability

   An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration, development or ongoing production of mineral property interests. A liability is recognized in the period in which it is incurred and when a reliable estimate of the fair value of the liability can be made. The costs are amortized to profit or loss over the life of the related asset. The initial fair value of the liability is adjusted each period for the unwinding of the discount cost.

   Impairment

   1. Non-Financial Assets

      The carrying amounts of non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.

      The recoverable amount of an asset or cash-generating unit is the greater of fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit, or CGU").

      The Company's corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.

      An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss.

      An impairment loss is reversed when there is an indication that the impairment loss may no longer exist. The maximum amount of the reversal is the lower of the amount necessary to bring the carrying amount of the asset to its recoverable amount; and the amount necessary to restore the assets of the cash generating unit to their carrying amount prior to impairment. For the years ended December 31, 2024 and 2025, there is no impairment recorded in the Company's non-financial assets (Note 7).

   2. Financial Assets

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial assets has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the loss allowance is measured at an amount equal

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

1. MATERIAL ACCOUNTING POLICIES (Continued)

   to the twelve-month expected credit loss. For trade receivables, the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision. Given the nature and balances of the Company's financial assets at amortized cost, the Company has no material credit loss allowance.

   Finance Income and Finance Costs

   Finance income comprises interest on cash, cash equivalents and deposits. Interest income is recognized as it accrues in profit or loss, using the effective interest method.

   Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, and impairment losses recognized on financial assets. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in profit or loss using the effective interest method.

   Borrowing Costs

   General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale.

   Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

   Other borrowing costs are expensed in the period in which they are incurred.

   Adoption of new accounting standards

   No new policies were adopted during the year ended December 31, 2025.

   Accounting standards issued but not yet adopted

   IFRS 18 Presentation and Disclosure in Financial Statements ("IFRS 18")

   In April 2024, the IASB issued IFRS 18, which will replace IAS 1. IFRS 18 is effective for periods beginning on or after January 1, 2027, with early adoption permitted. IFRS 18 will require defined categories and subtotals in the statement of profit or loss, require disclosure about management-defined performance measures, and adds new principles for aggregation and disaggregation of information. The Company is assessing the impact of this standard on its disclosures.

   IFRS 19 Subsidiaries without Public Accountability: Disclosures ("IFRS 1")

   In May 2024, the IASB issued IFRS 19, which is effective for annual reporting periods on or after January 1, 2027, with earlier application permitted. IFRS 19 permits some subsidiaries to apply IFRS Accounting Standards with reduced disclosure requirements. These entities apply the requirements in other IFRS Accounting Standards except for the disclosure requirements. Instead, these entities apply the requirements in IFRS 19. The Company is assessing the impact of this standard on its disclosures.

   The IASB issued amendments to IFRS 9 and IFRS 7 in May 2024 to clarify classification, measurement, derec ognition, and disclosure requirements, effective for annual periods beginning on or after January 1, 2026. The Company is assessing the impact of this standard on its disclosures.

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

   (PRESENTED IN CANADIAN DOLLARS)

2. CASH HELD FOR RECLAMATION

   The Company is required to make reclamation deposits in respect of its expected rehabilitation obligations as set out below.

   The Company has agreed with the Province of Nova Scotia (Department of Natural Resources) to remediate the Scotia Mine facility to an agreed status at the end of the mining operations at the site; as a result, the Company is required to make reclamation deposits in respect of this obligation. As at December 31, 2025 a $ 3,436,574 (2024 - $3,328,393) cash bond, including accrued interest, is posted with the Province of Nova Scotia.

   In addition, the Company has a reclamation bond with the Nova Scotia Department of Environment for

   $191,640 (2024 - $186,014), including accrued interest, which is required to address the potential replacement of domestic water supplies that could potentially be downgraded by mining operations.

   In addition, the Company has a reclamation bond with the Nova Scotia Department of Environment for

   $23,399 (2024 - $23,142), including accrued interest, which is required to address the potential replacement of domestic water supplies that could potentially be downgraded by mining operations.

   Nova Scotia Business Inc. ("NSBI") holds a reclamation bond in the amount of $100,000 (2024 - $100,000), in relation to the land which the Company leased from the organization in Sheet Harbour. The Company terminated its lease during the year ended December 31, 2020. NSBI has withheld the bond, pending determination of additional remediation costs which may be assessed to the Company, if any. The Company has disputed withholding the bond and the parties have commenced formal litigation procedures to resolve the matter. It is the Company's position that it has met, if not exceeded, its obligation, and accordingly no associated provision has been recognized in the company's financial statements for the years ended December 31, 2025 or 2024.

   EDM Resources Inc.

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

   (PRESENTED IN CANADIAN DOLLARS)

3. PROPERTY, PLANT AND EQUIPMENT

   Land &

   Buildings

   Plant &

   Equipment

   Motor

   Vehicles

   Office

   equipment

   Assets under

   construction

   Total

   Cost Balance, December 31, 2023	1,578,840	4,490,826	145,690	155,073	3,989,042	10,359,471
   Disposal Additions					37,131	-37,131
   Balance, December 2024	1,578,840	4,490,826	145,690	155,073	4,026,173	10,396,602
   Disposal Additions					24,505	-24,505
   Balance, December 2025	1,578,840	4,490,826	145,690	155,073	4,050,678	10,421,107
   Accumulated Amortisation Balance, December 31, 2023	1,014,308	965,524	109,446	154,130	-	2,243,408
   Disposal Amortisation			12,520	1,297	-	-13,817
   Balance, December 31, 2024 Disposal/ Adjustment Amortisation	1,014,308	965,524	121,966 12,401	155,427 (354)	- -	2,257,225 -12,047
   Balance, December 2025	1,014,308	965,524	134,367	155,073	-	2,269,272
   Net Book Value, December 31, 2024	564,532	3,525,302	23,724	(354)	4,026,173	8,139,377
   Net Book Value, December 31, 2025	564,532	3,525,302	11,323	-	4,050,678	8,151,835

4. ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

   2025 2024

   Refundable GST/HST $ 92,971 $ 174,540

   Prepaid expenses 22,771 173,048

   Others 4,719

   $ 120,461 $ 347,588

5. EXPLORATION AND EVALUATION ASSETS

   EDM's Projects, Nova Scotia

   As part of the acquisition of ScoZinc Limited on May 31, 2011, the Company acquired 100% of the Scotia Mine and several other mineral resource prospects in Halifax, Nova Scotia. The properties are comprised of exploration licences that provides for zinc and lead exploration and development.

   The following is a continuity of the Company's Projects:

   Balance, December 31, 2023 $ 13,437,342

   Additions 1,026,020

   Balance, December 31, 2024 $ 14,463,362

   Change in decommissioning estimate (145,622)

   Additions 487,229

   Balance, December 31, 2025 $14,804,969

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

   2025 2024

   Trade payables $ 289,100 $ 806,271

   Accrued expenses 226,368 57,540

   $ 515,468 $ 863,811

7. DECOMMISSIONING LIABILITY

   The Company has estimated the present value of future rehabilitation costs required to remediate the Scotia Mine facility based on its current state. Although the ultimate amount of the rehabilitation liability is uncertain, the best estimate of these obligations is based on information currently available. Current significant closure and rehabilitation activities include dismantling and removing facilities, equipment removal and remediation of the mine site.

   The total amount of estimated undiscounted cash flow required to settle the Company's estimated obligation as at December 31, 2025 was $ $14,778,917 (2024 - $14,806,219). The calculation of present value of estimated future cash flows assumed a discount rate of 3.17% (2024 - 3.17%) and an inflation rate of 2.9% (2024 - 2.9%) which resulted in a net present value of $14,928,329. Rehabilitation costs are estimated to be settled at various dates between 2032 and 2035.

   The continuity of the Company's decommissioning liability is as follows:

   Balance, December 31, 2023	$14,161,857
   Accretion	448,931
   Balance, December 31, 2024	$14,610,788
   Change in decommissioning estimate	(145,622)
   Accretion	463,162
   Balance, December 31, 2025	$14,928,329

8. SHARE CAPITAL

   1. AUTHORIZED

      Unlimited number of common shares without par value Unlimited number of Class A preferred shares with no par value

      Unlimited number of Class B preferred shares with a par value of $10 per share

   2. ISSUED - COMMON SHARES

      Shares Amount

      Balance, December 31, 2023 24,048,943 89,092,181

      Private placement, net of costs 28,101,319 3,024,045

      Transfer of premium for warrants - (1,163,083) Issued on exercise of restricted share units 194,862 65,000 Balance, December 31, 2024 52,345,124 91,018,143

      Issued on exercise of restricted share units 1,045,455 115,000

      Private placement, net of costs 9,090,909 978,160 Transfer of premium for warrants (363,636) Balance, December 31, 2025 62,481,488 91,747,667

      1. During January 2024, the Company made a private placement of 12,727,272 units ("Units") of the Company at a price of $0.11 per Unit for gross proceeds of $1,400,000, each Unit consisting of one common share of the Company and one share purchase warrant entitling the holder to purchase one common share of the Company at a price of $0.14 for each Warrant Share, until January 30, 2027. In connection with the same, the Company has paid $20,944 in cash compensation and issued 190,400 broker warrants to eligible brokers. Each broker warrant is exercisable into a Common Share until January 30, 2027.

      2. During October 2024, the Company made a private placement of 7,070,046 units ("Units") of the Company at a price of $0.11 per Unit for gross proceeds of $777,705, each Unit consisting of one common share of the Company and one share purchase warrant entitling the holder to purchase one common share of the Company at a price of $0.14 for each Warrant Share, until October 17, 2027. In connection with the same, the Company has paid $17,094 in cash compensation and issued 155,400 broker warrants to eligible brokers. Each broker warrant is exercisable into a Common Share until October 17, 2027.

      3. During November 2024, the Company made a private placement of 8,304,001 units ("Units") of the Company at a price of $0.11 per Unit for gross proceeds of $913,440, each Unit consisting of one common share of the Company and one share purchase warrant entitling the holder to purchase one common share of the Company at a price of $0.14 for each Warrant Share, until November 28, 2027. In connection with the same, the Company has paid $15,161 in cash compensation and issued 137,830 broker warrants to eligible brokers. Each broker warrant is exercisable into a Common Share until November 28, 2027.

      4. During December 2025, the Company made a private placement of 9,090,909 units ("Units") of the Company at a price of C$0.11 per Unit for gross proceeds of C$1,000,000 each Unit consisting of one common share of the Company and one share purchase warrant entitling the holder to purchase one common share of the Company at a price of C$0.14 for each Warrant Share, until December 12, 2028. In connection with the same, the Company has paid C$16,016 in cash compensation and issued 145,600 broker warrants. Each broker warrant is exercisable for one common share of the Company at a price of $0.14 per share until December 12, 2028.

9. SHARE BASED PAYMENTS

1. Stock Option Plan

   A stock option plan (the "Plan") was established to provide incentive to qualified parties to increase their proprietary interest in the Company and thereby encourage their continuing association with the Company. Each year, shareholders of the Company approve the Plan at the Annual General Meeting. The Plan provides that the Board of Directors of the Company may from time to time, in its discretion, grant directors, officers, employees and consultants of the Company, or any subsidiary of the Company, the option to purchase common shares. The Plan provides for a floating maximum limit of 10% of the outstanding common shares of the common shares as permitted by the policies of the TSX-V. Options under the Plan have terms and vesting as determined by the Board. The expiry date shall not be more than 10 years from the date of grant.

   Share option activity for the years ended December 31, 2025 and 2024 are as follows:

   Weighted

   	Number of Stock Options Outstanding	Average Exercise Price ($)
   Balance - December 31, 2023	1,605,000	0.53
   Stock options expired	(325,000)	0.52
   Balance - December 31, 2024	1,280,000	0.53
   Stock options cancelled	(40,000)	0.56
   Stock options issued	3,800,000	0.18
   Balance - December 31, 2025	5,040,000	0.27

   1. A total of 1,000,000 stock options have been granted to Mr. Mark Haywood as follows: 500,000 stock options at a strike price of C$0.25, 250,000 stock options at a price of $0.50, and 250,000 stock options at a price of $0.75. All options expire on February 11, 2030, and are subject to the Company's Stock Option Plan and the policies of the TSX Venture Exchange ("TSX.V"). A fair value of $52,500 was assigned to these stock options, estimated using the Black-Scholes valuation model with the following weighted average assumptions:

      No of warrants	Fair value ($)	Share price	Exercise Price ($)	Dividend yield	Expected Volatility	Risk Free Rate	Expected life (Years)
      500,000	30,000	0.11	0.25	0%	91.13%	2.78%	5
      250,000	12,500	0.11	0.50	0%	91.13%	2.78%	5
      250,000	10,000	0.11	0.75	0%	91.13%	2.78%	5
      1,000,000	52,500

   2. A total of 2,800,000 stock options have been granted to officers, directors and consultants of the Company at strike price of $0.09. A fair value of $168,000 was booked as share based compensation estimated using the Black-Scholes valuation model with the following weighted average assumptions: Share price:

      $0.075; Expected Volatility 133.54%; Risk Free rate: 2.92%, Expected life 5 years.

      1. SHARE BASED PAYMENTS (Continued)

         1. Stock Option Plan (Continued)

            The following table summarizes information about stock options outstanding as at December 31, 2025:

            Number of			Weighted Average Remaining	Number of
            Options Outstanding	Expiry Date	Exercise Price ($)	Contractual Life (years)	Options Vested (Exercisable)
            770,000	09-May-28	0.50	2.36	770,000
            100,000	18-Jun-30	0.45	4.47	100,000
            370,000	29-Oct-31	0.60	5.83	370,000
            1,000,000	11-Feb-35	0.44	9.12	1,000,000
            2,800,000	7-Aug-30	0.09	4.60	2,800,000
            5,040,000		0.27	5.24	5,040,000

            During the year ended December 31, 2025, the Company recognized $220,500 (2024 - $26,143) related to vesting of stock options.

         2. Warrants

            The following table reflects the continuity of warrants for the year ended December 31, 2025 and 2024:

            	Number of Warrants Outstanding	Weighted Average Exercise Price
            Balance, December 31, 2023	4,041,974	0.75
            Issued	28,584,949	0.14
            Balance, December 31, 2024	32,626,923	0.22
            Balance, December 31, 2024	32,626,923	0.22
            Issued	9,236,509	0.14
            Balance, December 31, 2025	41,863,432	0.20

   3. During the year 2024, the Company granted 28,584,949 warrants. A fair value of $1,163,083 was assigned to these warrants, estimated using the Black-Scholes valuation model with the following weighted average assumptions:

      Grant Date	No of warrants	Fair value ($)	Share price	Dividend yield	Expected Volatility	Risk Free Rate	Forfeiture rate	Expected life (Years)
      Jan-24	12,917,672	546,195	0.160	0%	92.51%	3.820%	0%	3
      Oct-24	7,225,446	299,160	0.140	0%	92.22%	3.100%	0%	3
      Nov-24	8,441,831	317,728	0.100	0%	92.51%	3.170%	0%	3
      	28,584,949	1,163,083

   4. During the year 2025, the Company granted 9,236,509 warrants. A fair value of $369,460 was assigned to these warrants, estimated using the Black-Scholes valuation model with the following weighted average assumptions: Share price: $0.09; Expected Volatility 95.82%; Risk Free rate: 2.61%, Expected life 3 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(PRESENTED IN CANADIAN DOLLARS)

1. SHARE BASED PAYMENTS (Continued)

   1. Restricted Share Units

   During the year ended December 31, 2025, the Company recognized $15,000 (2024 - $100,000) in stock-based compensation expense on the vesting of RSUs.

   As at December 31, 2024 and 2025, there were Nil restricted stock units issued and outstanding.

2. BASIC AND DILUTED LOSS PER SHARE

   Basic loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted loss per share, which reflects the maximum possible dilution from the potential exercise of warrants and stock options, is the same as basic loss per share for the period ended. The effect of potential issuances of shares under options, warrants and RSUs would be anti-dilutive for the year ended December 31, 2025 and 2024 as they would decrease the loss per share, consequently the weighted average number of common shares outstanding for basic and diluted are the same.

3. RELATED PARTY TRANSACTIONS

   Key Management Personnel Compensation

   Key management personnel include those persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company's board of directors and corporate officers and/or companies controlled by those individuals.

   Remuneration attributed to key management personnel during the years ended December 31, 2025 and 2024 is as follows:

   	2025	2024
   Consulting fees and wages	$ 187,724	$ 294,623
   Share-based compensation	208,500	132,435
   	$ 396,224	$ 427,058

   As at December 31, 2025, amounts due to related parties totaled $22,871 (2024 - $140,677) pertaining to amounts payable for key management remuneration, director's fees, and reimbursement of expenses paid on behalf of the Company. During the year ended December 31, 2025, the directors, officers and other related parties subscribed for 1,765,455 shares in the Company (2024: 6,386,637 shares in the Company).

4. DEFERRED REVENUE

   In September 2025, the Company, through its subsidiary Scotia Mine Limited, entered into a long-term gypsum offtake agreement with a large vertically-integrated gypsum producer and wallboard manufacturer (the "Gypsum Offtaker"). The agreement provides for the exclusive sale of gypsum and related by-products from the Scotia Mine for an initial five-year term commencing upon commercial operations, which is intended to begin by December 31, 2027. The Gypsum Offtaker is obligated to purchase, on a take-or-pay basis, annual volumes of 250,000 tonnes of gypsum and 500,000 tonnes of off-specification gypsum/anhydrite at agreed prices, subject to modest annual index-based adjustments. An upfront prepayment of US$250,000 was received, with an option for an additional US$250,000 advance, both of which are creditable against initial gypsum deliveries.

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

   (PRESENTED IN CANADIAN DOLLARS)

5. OTHER INCOME

   On August 6 2025, the Company entered into a Royalty Purchase Agreement with Silver Crown Royalties Inc. ("SCRI") pursuant to which the Company granted a ten-year Silver Royalty over silver production from the Scotia Mine, Nova Scotia. Under the agreement, SCRI is entitled to receive 90 % of the net proceeds from the sale of silver produced from the Scotia Mine, subject to a minimum annual payment equivalent to 7,000 ounces of silver multiplied by the average London Bullion Market Association (LBMA) price for the relevant period. The royalty term commences upon the start of commercial production and continues for ten years.

   As consideration for the grant of the royalty, the Company received:

   • Cash consideration of C$ 500,000 (C$ 250 000 on closing and C$ 250,000 within 30 days thereafter); and

   • 60,000 units of SCRI valued at C$ 10 per unit (each comprising one common share and one warrant exercisable at C$ 13 for 36 months).

     The shares were valued at $7.65 per share totaling a value of $459,000. A fair value of $36,067 was assigned to these warrants, estimated using the Black-Scholes valuation model with the following weighted average assumptions: dividend yield 0%, share price of $7.65 expected volatility 54.97% a risk-free rate of return 2.7%, forfeiture rate of 0%, and expected life of 3 years. The warrants are exercisable as at the date of issue.

     According to the terms of the contract there is no obligation to pay any royalty until the facility begins operations.

     The consideration received during the year ended December 31, 2025 was recorded as other income in the statement of comprehensive loss.

6. INCOME TAXES

   A reconciliation of income taxes at statutory rates with the reported taxes is as follows:

   	2025		2024
   Loss before income taxes	$ (739,780)		$ (1,920,078)
   Combined federal and provincial rates at expected rates	29.00%		29.00%
   Expected income tax expense (recovery) based on statutory rates Increase (decrease) to the income tax expense resulting from: Permanent and temporary differences	$ (214,538) 199,769		$ (566,423) 162,354
   Change in rates and other	7,654		(557,951)
   Share issue cost	(15,657)		(17,487)
   Change in deferred income tax asset not recognized	22,772		979,507
   Deferred income tax expense (recovery)	$	-	$	-

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

   (PRESENTED IN CANADIAN DOLLARS)

   1. INCOME TAXES (Continued)

      The significant components of the Company's deferred tax assets and liabilities are as follows:

      	2025	2024
      Capital and non-capital losses available for future periods	$ 17,279,803	$ 17,336,196
      Exploration and evaluation assets	3,297,277	3,297,166
      Share issue costs	15,392	17,191
      Decommissioning liability and other	834,854	754,000
      	$ 21,427,326	$ 21,404,553
      Less: deferred tax assets not recognized	(21,427,326)	(21,404,553)
      Deferred tax assets	$ -	$ -

      At December 31, 2025, the Group has accumulated non-capital losses of approximately $59 million. The non-capital losses can be carried forward to reduce taxable income derived in future years. The Group has approximately $1.1 million of capital losses not subject to expiry and $1.9 million in investment tax credits that expire between 2026 and 2035.

      The non-capital tax losses will expire as follows:

      Year of Expiry Amount

      2026	$ 3,737,079
      2027	6,613,353
      2028	3,122,183
      2029	744,714
      2030	10,586,402
      2031	4,624,571
      2032	11,233,033
      2033	4,159,612
      2034	2,030,682
      2035	1,626,449
      2036	802,770
      2037	1,003,019
      2038	1,396,017
      2039	1,246,185
      2040	965,230
      2041	970,607
      2042	1,525,660
      2043	1,475,487
      2044	1,286,025
      2045	441,211
      	$ 59,590,289

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

      (PRESENTED IN CANADIAN DOLLARS)

   2. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

      The Company has exposure to the following risks from its use of financial instruments:

      1. Market risk

      2. Credit risk

      3. Liquidity risk

   This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

   Risk Management Framework

   The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework and while retaining ultimate responsibility for them, it has delegated the authority for designing policies and systems that ensure the effective execution of the objectives and policies to the Company's finance function.

   1. Market Risk

      Market risk is the risk that changes in market prices will affect the fair value of future cash flows of a financial instrument. Market prices are comprised of three types of risk for the Company: currency risk, interest rate risk, and commodity price risk.

      Currency Risk

      Currency risk is the risk that fluctuation in exchange rates between the Canadian dollar or other foreign currencies will affect the Company's financial results. The Company's operations and financing activities are conducted primarily in Canadian dollars and as a result, it is not exposed to significant foreign currency risk.

      Interest Rate Risk

      Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market interest rates. The Company is exposed to interest risk arising primarily from its cash held mainly in short-term interest-bearing accounts with Canadian chartered banks. The impact of a change in interest rates is not significant.

      Commodity Price Risk

      The value of the Company's mineral resource properties is related to the price of zinc, lead and gypsum and the outlook for these; however, the Company does not currently have an operating mine and does not have any derivative commodity contracts or other commodity-based risks in respect of operations.

   2. Credit Risk

      Credit risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet its contractual obligations. To minimize credit risk, cash is deposited in a Canadian chartered bank and may be redeemed on demand and cash held for reclamation is held by government authorities where credit risk is minimal. Amounts receivable primarily consists of GST/HST refunds amounting to $92,971 (2024 - $174,540) from the Canadian government. The Company monitors the collectability of its amounts receivable and has not had difficulty collecting amounts receivable. Consequently, management considers credit risk to be minimal.

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

      (PRESENTED IN CANADIAN DOLLARS)

7. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)

   1. Liquidity Risk

   Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses. The Company reviews its expenditure budgets against actual expenditures weekly to ensure there is sufficient working capital to discharge all financial obligations (see Note 1).

   The following are the remaining contractual maturities (representing undiscounted contractual cashflows) of financial liabilities, including interest payments:

   December 31, 2025

   Accounts payables and accrued liabilities,

   Up to 3 Months

   Between 3

   and 12 Months

   Between 1 and 5

   Years Total

   and amounts payable to related parties $ 538,339 $ - $ - $ 538,339

   December 31, 2024	Up to 3 Months		Between 3 and 12 Months	Between 1 and 5 Years		Total
   Accounts payables and accrued liabilities,
   and amounts payable to related parties	$	1,004,488	$	-	$	- $	1,004,488

   Fair Value of Financial Instruments

   The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments which are measured at fair value by valuation technique:

   Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

   Level 2 inputs are inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly, such as prices, or indirectly (derived from prices).

   Level 3 inputs are unobservable and supported by little to no market data.

   The fair value of cash, amounts receivable, cash held for reclamation, accounts payable, accrued liabilities, and amounts due to related parties approximate their carrying values due to the short-term nature of these instruments, or in the case of reclamation deposits, the rate of interest being applied on the funds deposited.

   When applicable, further information about the assumptions made in determining fair value is disclosed in the notes specific to that asset or liability.

   As at December 31, 2025, the Company's financial instruments carried at fair value consisted of its cash, which is classified as Level 1, and its marketable securities, which have been classified as Level 1 (SCRI Shares) and Level 2 (SCRI Warrants). There were no transfers between fair value levels during the years ended December 31, 2025 and 2024.

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

   (PRESENTED IN CANADIAN DOLLARS)

8. CAPITAL MANAGEMENT

   The Company manages its capital with the following objectives:

   1. to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and

   2. to maximize shareholder return through enhancing the share value.

   The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by management and the Board of Directors on an ongoing basis.

   The Company considers its capital to be equity, comprising share capital, contributed surplus, warrants and deficit, which at December 31, 2025 totaled $11,939,860 (2024 - $11,360,156). The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities. The forecast is updated based on activities related to its mineral properties. Information is provided to the Board of Directors of the Company. The Company's capital management objectives, policies and processes have remained unchanged during the year ended December 31, 2025. The Company is not subject to any capital requirements imposed by a lending institution or regulatory body.

9. SUBSEQUENT EVENTS

On February 25, 2026, the Company issued 1,962,546 common shares to Novus Merchant Partners Inc. as compensation for advisory services provided under an agreement.

The Company granted 1,000,000 stock options to management on February 26, 2026.

During the first quarter of 2026, 4,409,831 warrants with a strike price of $0.14 were exercised, generating gross proceeds of $617,376, and 250,000 stock options with an exercise price of $0.09 were exercised, generating gross proceeds of $22,500.

The Company also completed the sale of 60,000 shares of Silver Crown Royalties, generating approximately

$1,185,835 in net proceeds from the sale.