Q4 Report 2025 MD&A

The following Management's Discussion and Analysis ("MD&A") of the financial condition and results of operations of EDM Resources Inc. ("EDM" or the "Company") constitutes management's review of the factors that affected the Company's financial and operating performance as at and for the year ended December 31, 2025. This MD&A has been prepared in compliance with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited annual consolidated financial statements of the Company for the year ended December 31, 2025, together with the notes thereto. Information contained herein is presented as at April 28, 2026, unless otherwise indicated.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of EDM's common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) if it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

EDM is a Canadian based exploration and mining development company with mineral prospects, mineral deposits and mineral processing facilities in Nova Scotia, Canada.

As the Company progresses into 2026, EDM Resources is focused on advancing the Scotia Mine toward final regulatory approvals and a production restart. Building on successful private placements in 2024 and 2025, a Gypsum Offtake and a Silver Royalty, the Company is strategically allocating capital to final regulatory authorizations, technical, and strategic pre-development activities of the Scotia Mine.

On the environmental and community fronts, EDM continues to take considerable strides in advancing the final regulatory approvals, engaging with the local community and First Nations of Nova Scotia, communicating the Scotia Mine's plans for mining and development, and liaising with the Nova Scotia Government and Federal Government. Notably, the Company is continuing the important Department of Fisheries and Ocean's authorization process with the intent of receiving the Fisheries Act Authorization application in 2026. In addition, EDM has launched expanded ecological and habitat studies and continues to collaborate with regulators and local communities to align the project with best-in-class environmental practices. A Dense Media Separation (DMS) study for the mill was completed during the period, with the positive results to further support our environmentally sustainable operations by improving processing efficiency and reducing tailings produced.

From a financial and operational standpoint, the expiration of the IXM Credit Agreement in December 2023 provided flexibility for the Company to pursue new financing terms and arrangements tailored to its evolving capital needs. EDM is actively engaged in sourcing project financing, including potential strategic royalty and offtaker partnerships.

With zinc, lead and gypsum markets supported by infrastructure investment and energy transition dynamics, and the CAD:USD exchange rate remaining favorable to the Company's revenue-cost structure, the macroeconomic environment remains broadly constructive. The Company believes that the robust fundamentals of the Scotia Mine, as highlighted in its 2021 PFS, combined with its disciplined execution strategy, position EDM to deliver long-term value to both its shareholders and the Province of Nova Scotia.

Current Global Financial Conditions and Trends

Securities of mining and mineral exploration companies, including the common shares of the Company, continue to experience considerable volatility, driven by global macroeconomic conditions rather than company-specific fundamentals. Factors such as fluctuating commodity prices, monetary tightening, and inflationary pressures across OECD countries have significantly influenced capital markets.

As of April 28, 2026, the global economy continues to be in a state of heightened uncertainty. Most Western economies face persistent inflation, aggressive interest rate policies, and weakened equity markets as valuations correct toward historical norms. Recession risks remain elevated over the next 12 to 24 months.

The global supply chains have renewed demand for industrial metals and minerals, including zinc, lead and gypsum, which the Scotia Mine expects to take advantage of with production expected to commence in 2027. In addition, the continued strength of the U.S. dollar relative to the Canadian dollar-attributable to the U.S. Federal Reserve's sustained monetary tightening-provides a natural economic hedge for the Company's operations. This is particularly beneficial as most of the Scotia Mine's revenues are expected in U.S. dollars, while costs are primarily incurred in Canadian dollars.

Overall zinc metal prices have improved since from 2025 with current levels now above US$1.50/lb, supported by recovering demand from infrastructure and construction sectors and constrained global inventories. With China's reopening and infrastructure stimulus policies, zinc demand is expected to remain robust.

Lead prices have also shown resilience, bolstered by the continued energy transition that is driving demand for electrical applications, EV production, and renewable energy infrastructure. Supply chain limitations and investment gaps in new mines are expected to support sustained price strength over the medium to long term.

Gypsum is also seeing increasing demand with prices of crude gypsum and off-spec gypsum increasing, and expected to continue to increase throughout 2026 into 2027.

Overall market sentiment in the metals and mining sector has improved for critical mineral producers in Canada and the U.S. This broader optimism may indirectly support the Company's valuation and appeal to equity investors.

Moreover, the evolving policy stance of the U.S. Federal Reserve, which is increasingly signaling a pause or potential reversal in rate hikes, may lead to improved financing conditions for junior mining companies. While a moderation in the USD strength could modestly reduce the currency advantage enjoyed by the Company (revenues in USD, costs in CAD), it would likely facilitate capital raising efforts and reignite investor interest across the sector.

Taken together, the commodity market backdrop-characterized by strong fundamentals for zinc, lead and gypsum, supportive currency dynamics, and improving monetary sentiment-offers a constructive environment for the Company as it advances toward the targeted restart of production at the Scotia Mine.

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 provided 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 must begin by December 31, 2026. This commencement date has since been extended to 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 deliveries. Management believes this agreement provides a secure and longterm sales channel for gypsum by-products of the Scotia Mine development.

As previously announced on May 16, 2024, and January 6, 2025, a DMS study was commissioned to determine the viability of utilizing DMS equipment at the Scotia Mine (the "DMS Study"). EDM engaged SGS Laboratories ("SGS") to conduct the DMS Study and to utilize their DMS pilot plant located in Lakefield, Ontario to complete the necessary sample runs with ore from the Scotia Mine. Final results of the DMS Study were announced in August 2025, which concluded that may be possible to pre-concentrate crushed run-of-mine material using Dense Media Separation ("DMS") prior to flotation, thereby potentially reducing the overall cost of mineral processing at the Scotia Mine.

EDM advanced the ongoing surface and ground water modelling as part of the application for the Department of Fisheries and Oceans ("DFO") and submitted the application for the Fisheries Act Authorization in early February 2026. The Company expects the application to be approved during 2026, possibly as early as June 2026 being the prescribed completion of the formal review period.

Furthermore, as part of the important social license initiatives for re-starting the mine, the Company continues its outreach and engagement with the First Nation Stakeholders in Nova Scotia as well as the community near the Scotia Mine.

On August 6, 2025, the Company entered into a Silver Royalty Purchase Agreement with Silver Crown Royalties Inc. ("SCRi") in respect of silver production from the Scotia Mine. Under the agreement, the Company received total consideration of C$500,000 in cash (C$250,000 payable on closing and C$250,000 payable within 30 business days of August 6, 2025) and 60,000 units of SCRi, each consisting of one common share and one warrant. Each Warrant has a strike price of $13.00.

In exchange, SCRi was granted a 90% silver royalty on net proceeds from the Scotia Mine for a 10-year term commencing upon commercial production, with a minimum annual delivery obligation equivalent to 7,000 ounces of silver. Management views this transaction as a source of non-dilutive financing that provides near-term funding while securing a long-term partnership with SCRi.

2021 Pre-Feasibility Study Highlights

All dollar amounts are expressed in Canadian Dollars unless otherwise noted

1. After Lead credits deducted

2. All-In-Sustaining-Costs ("AISC") are C1 Costs plus Sustaining Capital and Financing Costs

On March 22, 2021, the Company announced results of its 2021 Mineral Resource Estimate which includes a significant Gypsum mineral resource for the Scotia Mine. The 2021 Mineral Resource Statement is provided below:

Mineral Resource Statement

Source: MineTech 2021

• Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into Mineral Reserves;

• Determination of reasonable prospects of eventual economic extraction was based on assumed prices for Zinc of US$1.35/lb, and for Lead of US$1.14/lb, a Zinc recovery of 86% and a Lead recovery of 93%, mining and processing costs varying by zone, and pit slopes of 45 degrees in rock and 22 degrees in overburden;

• Near surface resources are reported based on a Zinc equivalent ("ZnEq") grade of 0.90% and a Gypsum grade of 80%. The ZnEq grade incorporates Zinc and Lead sales costs of US$0.19/lb and US$0.11/lb respectively, and a 2% royalty to the Government of Nova Scotia; and

• Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.

Scotia Mine

On May 21, 2011, the Company completed the $10 million acquisition of all shares and assets of Scotia Mine Limited (formerly ScoZinc Limited), including the Scotia Mine in Nova Scotia, an extensive mineral claims package that is subject to a mineral royalty to the Government of Nova Scotia and other royalties on certain other mineral interests. A portion of the gross sale proceeds was paid directly to the Government of Nova Scotia to increase bonding requirements for an amended reclamation and closure plan for the Scotia Mine and to pay all outstanding production royalties to the Government of Nova Scotia that were payable prior to the closure of the Scotia Mine in 2009. Since the mine's closure, the key permits, mineral claims, and other approvals necessary to proceed with a restart have been maintained or renewed.

In October 2011, the Company completed a 4,940-metre, 39-hole drill program at the Scotia Mine site to better define mineral resources adjacent to the Main Pit and improve confidence in the block model. The results of the drill program provided a basis to re-assess the block model used in an independent preliminary economic assessment ("PEA") report dated 7th October 2011. Subsequently, a new inventory of mineral resources was published in a technical report to NI 43-101 standards on 9th October 2012.

In the first quarter of 2012, the Company completed an airborne geophysical survey of its exploration properties in Nova Scotia using the helicopter-borne Versatile Time Domain Electromagnetic system. The work area covered geological strata that contain former producing mines, such as Walton Mine, Smithfield Mine, and Mindamar (Stirling) Mine. Following the initial findings of the survey, the Company expanded the survey to include its mineral claim holdings in the Musquodoboit area along an interpreted northeast extension of the favourable carbonate reef structures that host the Gays River and Getty deposits. As a result of this survey, exploration targets were identified for future exploration fieldwork.

In the first, second, and fourth quarters of 2013, the Company's geologic personnel completed soil sampling programs on exploration licenses and claim blocks held within Nova Scotia and Cape Breton. The purpose of the soil sampling program was to follow up and evaluate certain high-priority geophysical targets identified from the 2012 airborne geophysical survey. In addition, expenditures incurred from the soil surveys were utilized to fulfill the annual assessment requirements needed to keep the claims and licenses in good standing. All work was conducted in areas underlain by favorable geologic lithologies known to host zinc-lead mineralization as exemplified by former producing mines.

On May 18 2012, the Company received approval from the Government of Nova Scotia for an amended Industrial Approval to develop the southwest side of the Main Pit (the "SW Expansion"). As a result, and as of that date, the Scotia Mine had all of the necessary permits and approvals to proceed with mining operations at the Main Pit and the SW Expansion. Additional reclamation and closure bonding would be required before the Company can develop the SW Expansion.

In the third quarter of 2013, the then Company's Board of Directors conducted an in-depth review of the Company's 100% owned Scotia Mine and the Company's exploration prospects (collectively, "EDM's Projects"), the outlook for commodity prices, and the current environment for financing mining operations. Based upon the findings of this review, the Board determined that the Scotia Mine is a valuable asset. However, in light of the uncertain prevailing environment for metal prices and mine development financing at that time, the Board decided to suspend the restart of the Scotia Mine and place the project on care and maintenance in order to preserve its value and reduce Company expenditures.

As part of the care and maintenance program, an ongoing objective of the Company is to maintain all of the key permits, mineral claims, and other approvals necessary to proceed with the restart of the Scotia Mine. In the fourth quarter of 2016, the Company initiated discussions with the Nova Scotia departments of the Environment and Natural Resources for the renewal of the industrial approval (the "IA") for Mineral Lease 10-1 that contains the Scotia Mine. The IA which expired in February 2017 was renewed in September 2017 for an additional 10 years. Similarly, the environmental assessment which expired in October 2017 was renewed.

In the fourth quarter of 2017 the Company initiated an independent update to the Preliminary Economic Assessment based on a more detailed mine plan, contract mining with bids from major Nova Scotia contractors, updated capital costs, and updated milling and other operating costs. Results of the study were disclosed in a news release dated 19th December 2017 and the NI 43-101 technical report with the final results was disclosed in February 2018. As the study showed robust economics for the restart of operations, necessary key permits were in place, and a favorable metal price and exchange rate environment was expected for the foreseeable future, the Company initiated efforts to raise funds for restarting operations. On December 18, 2019, the Company announced a new mineral resource estimate (the "2019 MRE") which

effectively doubled the total measured and indicated resources applied in all past PEAs on the Scotia Mine.

Highlights of the 2019 MRE include:

• Total Measured & Indicated Resources of 25,450,000 tonnes at a Zinc equivalent grade of 2.84% (1.89% Zinc, 0.99% Lead), an increase in tonnage of 105% from previous resource estimates on the deposit.

• Total Inferred Resources of 5,010,000 tonnes at a Zinc equivalent grade of 2.13% (1.55% Zinc, 0.66% Lead), an increase in tonnage of 7% from the previous resource estimates on the deposit.

Additionally, on February 5, 2020, the Company announced the results of a mill optimization trade-off study completed by Ausenco Engineering Canada Inc. The trade-off study evaluated the mill and its processing bottlenecks and determined that a number of low-cost improvements could be made during a relatively short refurbishment period to significantly de-risk the processing operations.

Based upon the new 2019 MRE and the Ausenco optimization study, the Company then decided to complete a Preliminary Feasibility Study on the project, which would determine the Scotia Mine's first NI 43-101 mineral reserve estimate and a provide an independent NI 43-101 technical evaluation on the entire project.

On July 7, 2020, the Company announced the results of its first Preliminary Feasibility Study (the "2020 PFS") including its first NI 43-101 Mineral Reserve Estimate. The 2020 PFS was prepared in collaboration with the independent engineering firms of Ausenco Engineering Canada Inc., MineTech International Limited, SRK Consulting (U.S.), Inc., and Terrane Geoscience Inc. The 2020 PFS NI 43-101 Technical Report was filed on https://www.sedarplus.ca under EDM's profile on July 29, 2020.

On March 22, 2021, the Company announced the results of its 2021 Mineral Resource Estimate which included a significant Gypsum mineral resource for the Scotia Mine.

The 2021 Mineral Resource Statement is provided below, and the NI 43-101 Technical Report was filed on

https://www.sedarplus.ca under EDM's profile on May 6, 2021:2021 Mineral Resource Statement

Source: MineTech 2021

• Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources estimated will be converted into Mineral Reserves;

• Determination of reasonable prospects of eventual economic extraction was based on assumed prices for Zinc of US$1.35/lb, and for Lead of US$1.14/lb, a Zinc recovery of 86% and a Lead recovery of 93%, mining and processing costs varying by zone, and pit slopes of 45 degrees in rock and 22 degrees in overburden;

• Near surface resources are reported based on a Zinc equivalent ("ZnEq") grade of 0.90% and a Gypsum grade of 80%. The ZnEq grade incorporates Zinc and Lead sales costs of US$0.19/lb and US$0.11/lb respectively, and a 2% royalty to the Government of Nova Scotia; and

• Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.

On November 16, 2021, the Company announced the results of an updated Preliminary Feasibility Study (the "2021 PFS") including its first NI 43-101 Mineral Reserve Estimate on its gypsum mineral resources. The 2021 PFS was prepared by MineTech International Limited.

The 2021 PFS NI 43-101 Technical Report was filed on https://www.sedarplus.ca under EDM's profile on

December 30, 2021.

The following selected annual financial data derived from the audited consolidated financial statements of the Company as at December 31, 2025 and 2024:

For the year ended December 31, 2025, the Company reported a net loss of $739,780 compared to a net loss of $1,920,078 in the prior year. The significant improvement in overall results was primarily driven by higher non-operating income and a meaningful reduction in operating expenditures, partially offset by an increase in stock-based compensation and continued accretion of decommissioning liabilities.

Operating expenses decreased to $1,391,026 in 2025 from $1,824,271 in 2024, reflecting a lower cost structure and a shift away from intensive external consulting and advisory support that characterized the prior year.

Consulting expenses declined significantly to $223,000 in 2025 (2024: $646,167), as the Company reduced reliance on third-party consultants following the completion of key permitting, feasibility, and market-readiness initiatives undertaken in the prior year. This reduction reflects a transition from a preparatory phase to a more execution-oriented stage of operations.

Salaries and benefits decreased to $405,102 in 2025 (2024: $543,319), reflecting continued cost optimization and streamlined staffing levels during mine permitting stages, while maintaining core operational capabilities.

Office and general expenses increased to $272,236 in 2025 (2024: $237,716), primarily due to inflationary pressures and ongoing administrative costs associated with maintaining operational readiness and advancing corporate initiatives.

Legal and accounting fees decreased modestly to $197,546 in 2025 (2024: $214,048), reflecting lower levels of regulatory and transactional activity compared to the prior year.

Stock-based payments increased to $235,500 in 2025 (2024: $126,143), driven by equity-based compensation granted during the year as part of the Company's efforts to incentivize and retain key personnel and advisors.

Regulatory fees remained relatively stable at $37,713 in 2025 (2024: $38,054), reflecting consistent compliance requirements, while investor relations expenses increased modestly to $7,882 (2024: $5,007) in line with continued stakeholder engagement efforts during the Company's permitting stage.

Amortization expense remained consistent at $12,047 in 2025 (2024: $13,817), reflecting the steady consumption of capitalized assets.

Other gains and losses had a significant positive impact on the Company's financial performance. Interest income decreased to $137,814 in 2025 (2024: $353,125), reflecting lower average cash balances during the year. The Company recognized other income of $995,067 in 2025 (2024: nil), primarily arising from the execution of a royalty purchase agreement with Silver Crown Royalties Inc. Under this agreement, the Company granted a ten-year silver royalty over production from the Scotia Mine in exchange for cash consideration of $500,000 and equity instruments, including 60,000 units of Silver Crown Royalties Inc.

The equity consideration was measured at fair value on receipt, including shares valued at approximately

$459,000 and warrants valued at $36,067 using a Black-Scholes model. The total consideration received during the year was recognized as other income, as there are no repayment obligations and royalty payments are contingent upon the commencement of commercial production. Additional contingent consideration linked to future milestones has not been recognized, as the achievement of such milestones remains uncertain.

The Company also recorded an unrealized loss on marketable securities of $18,473 in 2025 (2024: nil), reflecting fair value adjustments on its investment holdings.

Accretion of the decommissioning liability increased to $463,162 in 2025 (2024: $448,932), consistent with the passage of time and the unwinding of the discount applied to the Company's environmental rehabilitation obligations.

Overall, the Company's results for 2025 reflect a transition toward a more controlled and efficient cost base, with reduced reliance on external consultants and continued discipline in managing overheads. The improvement in net loss was largely driven by non-recurring income recognized in connection with the royalty transaction, and the Company remains focused on advancing its development objectives while maintaining prudent financial management.

The selected financial information is derived from the Company's consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"). Amounts are expressed in thousands of Canadian dollars, except for loss per share, which is rounded to the nearest cent.

The overall net and comprehensive income for the quarter ended December 31, 2025 was $434,878 compared to a net and comprehensive loss of $2,354,956 in Q4 2024. The significant improvement in results was primarily driven by the recognition of non-recurring other income during the period, together with a substantial reduction in operating expenditures, partially offset by lower interest income and higher stock-based compensation.

Consulting

Consulting expenses decreased significantly to $73,000 (Q4 2024: $573,167), reflecting a marked reduction in reliance on external consultants following the completion of key permitting, feasibility, and strategic advisory initiatives in the prior year. The prior period included extensive third-party engagement related to operational readiness and regulatory planning, which did not recur at the same level in 2025.

Salaries and Benefits

Salaries and benefits declined substantially to $109,366 (Q4 2024: $433,953), reflecting a streamlined cost structure and optimized staffing levels. The reduction is consistent with the Company's continued focus on cost discipline while maintaining essential operational capabilities.

Office and General

Office and general expenses decreased to $106,793 (Q4 2024: $130,923), reflecting tighter control over administrative expenditures and the absence of certain one-time costs incurred in the prior year. The current period reflects normalized operating overheads.

Legal and Accounting Fees

Legal and accounting fees decreased to $47,049 (Q4 2024: $166,999), reflecting reduced regulatory and transactional activity compared to the prior year, which had included higher costs associated with compliance, advisory, and corporate development initiatives.

Investor Relations

Investor relations expenses remained relatively low at $1,903 (Q4 2024: $3,104), consistent with controlled spending on market communication and stakeholder engagement activities.

Amortization

Amortization expense decreased to $3,009 (Q4 2024: $10,808), reflecting a reduction in depreciable asset balances and the natural run-off of previously capitalized assets.

Stock-Based Payments

Stock-based payments increased to $168,000 (Q4 2024: $(41,857)), reflecting the issuance of equity-based compensation during the quarter. The prior year included a reversal of previously recognized expenses, resulting in a negative balance, whereas the current period reflects fresh grants aligned with retention and incentive objectives.

Regulatory Fees

Regulatory fees decreased significantly to $2,828 (Q4 2024: $35,226), reflecting lower filing activity and reduced compliance costs relative to the prior year.

Interest Income

Interest income decreased to approximately $86,023 (Q4 2024: $267,102), reflecting lower average cash balances during the quarter compared to the prior period.

Other Income

Other income amounted to $995,067 (Q4 2024: $(995,067)), representing the recognition of consideration received in connection with the royalty transaction entered into during the quarter. This includes both cash proceeds and the fair value of equity instruments received. The prior year included a corresponding negative adjustment, resulting in a significant period-over-period variance.

Loss / (Gain) on Investments

The Company recorded a gain of $18,473 on investments (Q4 2024: loss of $18,473), reflecting fair value movements in marketable securities during the period.

Accretion of Decommissioning Liability

Accretion expense decreased to $115,791 (Q4 2024: $333,141), reflecting changes in the underlying assumptions or timing of the asset retirement obligation, as well as the unwinding of the discount over time.

Overall, the Company's performance in Q4 2025 reflects a materially improved cost base and the impact of non-recurring income recognized during the period. While operating expenditures have been significantly reduced as the Company transitions away from intensive advisory and preparatory activities, the improvement in net results is largely attributable to the royalty-related income, and such gains are not expected to recur on a regular basis.

As at December 31, 2025, the Company had working capital of $599,702 compared to a working capital deficit of $(169,342) at December 31, 2024. Working capital is defined as current assets less current liabilities and, while not a measure recognized under IFRS, is used by management to assess short-term liquidity.

The improvement in working capital during the year was driven by a reduction in accounts payable and accrued liabilities, the receipt of proceeds from financing activities, and the recognition of deferred revenue associated with the gypsum offtake arrangement. Current assets increased to $1,138,041 (2024: $835,146), while current liabilities decreased to $538,339 (2024: $1,004,488).

The Company's primary assets consist of cash, reclamation deposits, property, plant and equipment, and exploration and evaluation assets related to the Scotia Mine. As the Company has not yet commenced revenue-generating operations, it continues to rely on external financing to fund its activities.

For the year ended December 31, 2025, the Company reported an increase in cash of $53,428 compared to an increase of $478,893 in 2024. Cash at year end was $540,986 (2024: $487,558).

Cash used in operating activities was $758,751 in 2025 compared to $1,442,002 in 2024. The decrease reflects a lower net loss adjusted for non-cash items and favourable changes in working capital.

Cash used in investing activities was $511,735 (2024: $1,063,151), primarily relating to expenditures on

exploration and evaluation assets and minor additions to property, plant and equipment. The decrease from the prior year reflects reduced pre-development activity.

Cash provided by financing activities included proceeds from a private placement completed in December 2025, which generated gross proceeds of approximately $1.0 million, and an advance of $339,930 received under the gypsum offtake agreement. These inflows were lower than in 2024, which included two larger equity financings.

In addition to financing activities, the Company received cash proceeds of $250,000 and $250,000 worth of Units (60,000 Units) in connection with a silver royalty transaction with Silver Crown Royalties Inc. which was entered into during the year. Under the arrangement, the Company granted a ten-year royalty over silver production from the Scotia Mine in exchange for upfront consideration comprising cash and equity instruments. The cash component contributed to the Company's liquidity during the period. The transaction does not create any repayment obligation; however, future royalty payments are contingent upon the commencement of commercial production.

During December 2025, the Company completed a non-brokered private placement of 9,090,909 units at a price of $0.11 per unit, each unit consisting of one common share and one warrant exercisable at $0.14 until December 12, 2028.

The Company also received an upfront prepayment under its gypsum offtake agreement, which has been recorded as deferred revenue and will be applied against future product deliveries.

The Company ended the year with cash of $540,986 and continues to manage its expenditures in line with available resources.

The Company has not yet generated revenue from operations and continues to incur losses. Its ability to continue as a going concern is dependent on its ability to raise additional financing, advance the Scotia Mine toward production, and ultimately generate positive cash flows. There can be no assurance that sufficient funding will be available on acceptable terms, or at all. If adequate financing is not obtained, the Company may be required to curtail its activities.

These conditions indicate the existence of material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern, as described in Note 1 to the consolidated financial statements.

The operations of the Company may require licenses and permits from various local, provincial, and federal governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits that may be required to carry out mineral exploration, development, or mining operations at its project.

Even if the Company's exploration and development programs are successful, factors beyond the control of the Company may affect the marketability of any minerals discovered. The prices of mineral have historically fluctuated widely and are affected by numerous factors beyond the Company's control, including international, economic and political trends, geopolitical conflicts, expectations for inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns, speculative

activities, and worldwide production levels. The effect of these factors cannot accurately be predicted.

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 currently exposed to significant foreign currency risk. However, the Company may be exposed to currency risk in the future as the prices for the metals produced by the Company's Scotia Mine, which is currently in care-and-maintenance, are sold throughout the world based principally upon the United States dollar price. The appreciation of the Canadian dollar against the United States dollar may reduce the Company's future revenues relative to the costs at the Company's operations, making such operations less profitable. As a result, currency fluctuations may affect its future operations, operating results, and cash flows when the Scotia Mine is restarted.

   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 success of the Company's Scotia Mine and its other prospects will be primarily dependent on the future price of zinc and lead. Metal prices have historically been subject to significant price fluctuation. No assurance may be given that metal prices will remain stable and significant reductions or volatility in metal prices may have an adverse effect on the Company's business, including the economic attractiveness of the Company's projects, the Company's ability to obtain financing and the amount of the Company's revenue or profit or loss. Significant price fluctuations over short periods of time may be generated by numerous factors beyond the control of the Company, including domestic and international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns, speculative activities, and increases or decreases in production due to improved mining and production methods. 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 $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.

3. 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 routinely to ensure there is sufficient working capital to discharge all financial obligations.

   OFF BALANCE SHEET ARRANGEMENTS

   The Company has no off-balance sheet arrangements as of the date of this document.

   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

   SHARE CAPITAL

   As at the date of this MD&A, the Company had the following securities issued and outstanding:

   Common Shares	69,103,865
   Stock Options	5,790,000	Exercisable at a price between $0.09 and $0.60
   Warrants	37,453,601	Exercisable at a price between $0.14 and $0.75
   Share price	$0.25

   There are no restricted stock units ("RSUs") outstanding as of the date of this document.

   DISCLOSURE CONTROLS AND PROCEDURES

   Management has established processes, which are in place to provide them sufficient knowledge to support management representations that they have exercised reasonable diligence that:

   1. 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

   2. the consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented by the consolidated financial statements.

In contrast to the certificate required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109"), the Company utilizes the Venture Issuer Basic Certificate which does not include representations relating to the establishment and maintenance of disclosure controls and procedures ("DC&P") and internal controls over financial reporting ("ICFR"), as defined in NI 52-109. In particular, the certifying officers filing the Certificate are not making any representations relating to the establishment and maintenance of:

1. controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

2. a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

The Company's certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.

Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in

additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

The Company's consolidated financial statements are the responsibility of the Company's management and have been approved by the Board of Directors. The consolidated financial statements were prepared by the Company's management in accordance with International Financial Reporting Standards. The consolidated financial statements include certain amounts based on the use of estimates and assumptions. Management has established these amounts in a reasonable manner, in order to ensure that the consolidated financial statements are presented fairly in all material respects.

Securities of mining and mineral exploration companies, including the common shares of the Company, continue to experience volatility, driven largely by macroeconomic conditions rather than company-specific fundamentals. Factors such as interest rate uncertainty, inflationary pressures, and fluctuations in commodity prices have continued to influence capital markets and investor sentiment toward junior resource issuers.

As at December 31, 2025, global economic conditions remain uncertain. While inflationary pressures have begun to moderate in certain jurisdictions, interest rates remain elevated relative to historical levels, and access to capital for early-stage mining companies continues to be constrained. As a result, equity markets for junior issuers remain selective, with investors prioritizing projects that demonstrate clear pathways to development and production.

Demand fundamentals for base metals remain generally supportive. Zinc and lead markets have benefited from steady demand in infrastructure and construction sectors, while copper continues to be supported by long-term structural demand associated with electrification, renewable energy, and the global energy transition. Supply constraints and limited investment in new mining projects are expected to provide underlying support to prices over the medium term.

The Company expects that a significant portion of its future revenues will be denominated in U.S. dollars, while a substantial portion of its costs are incurred in Canadian dollars. As such, a stronger U.S. dollar relative to the Canadian dollar may provide a favourable economic impact on future operations, although currency movements remain subject to market volatility.

Overall, while commodity price fundamentals remain constructive, the Company's ability to advance the Scotia Mine and execute its development strategy will continue to depend on access to capital and broader market conditions.

Taken together, the commodity market backdrop-characterized by strong fundamentals for zinc and copper, supportive currency dynamics, and improving monetary sentiment-offers a constructive environment for the Company as it advances toward the targeted restart of production at the Scotia Mine in early 2027.

The issue of common shares of the Company upon the exercise of stock options and/or the warrants will

dilute the ownership interest of the Company's current shareholders. The Company may also issue additional options and warrants or additional common shares from time to time in the future. If it does so, the ownership interest of the Company's then current shareholders could also be diluted.

The Company's business and operations are dependent on retaining the services of a small number of key personnel. The success of the Company is, and will continue to be, to a significant extent, dependent on the expertise and experience of these people. The loss of one or more of these key people could have a materially adverse effect on the Company. The Company does not maintain insurance on any of its key people.

All transactions with related parties have occurred in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Except as noted, amounts with related parties are non-interest bearing, unsecured, payable on demand and have arisen from the provision of services and expense reimbursements described.

Management and key personnel compensation is as follows:

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).

The above noted transactions are in the normal course of business and are measured at the exchange amount, as agreed to by the parties, and approved by the Board of Directors in strict adherence to conflict of interest laws and regulations.

There are no proposed other transactions as of the date of this document.

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 the management team 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 non-dilutive net proceeds from the sale.

Financial statements in conformity with IFRS require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results may differ from those estimates. A full description of the Company's significant accounting policies may be found in Note 3 of the Company's December 31, 2025, audited consolidated financial statements. A summary of the Company's critical accounting estimates is set out below.

Exploration and Evaluation Assets and Property, Plant and Equipment

The Company reviews capitalized costs on its property interests on a periodic, or annual, basis and will determine whether any persuasive evidence exists that indicates impairment. In assessing impairment of exploration and evaluation properties, and associated property, plant and equipment, management makes certain assumptions about whether the capitalized costs are unlikely to be recovered in full from successful development or by sale.

Decommissioning Liability

The Company conducts its operations in compliance with applicable laws and regulations governing protection of the environment. Reclamation and remediation obligations arise throughout the life of the Scotia Mine. The Company estimates future reclamation costs based on the level of current activity and estimates of costs required to fulfill its future obligations.

Share-based payments and Warrant Values

The Company utilizes the Black-Scholes Option Pricing Model ("Black-Scholes") to estimate the fair value of stock options granted to directors, officers and employees and to estimate the fair value of warrants issued in connection with private placements. The use of Black-Scholes requires management to make various estimates and assumptions that impact the value assigned to the stock options including the forecast future volatility of the stock price, the risk-free interest rate, dividend yield and the expected life of the stock options. Any changes in these assumptions could have a material impact on the share-based payment calculation value.

The carrying values of cash, amounts receivable, cash held for reclamation, accounts payable and accrued liabilities, and amounts due to related parties approximate their fair value 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

Office and General expenses for the years ended December 31, 2025 and 2024 are comprised of the following:

Additional information relating to the Company is available on SEDAR+ (https://www.sedarplus.ca).

This MD&A contains forward-looking statements within the meaning of Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the closing of the Transaction, the future price of metals, the estimation of Mineral Reserves and Resources, the realization of Mineral Reserve and Resource estimates, the timing and amount of estimated future production, costs of production and capital expenditures, costs and timing of the development of deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, the possibility of title disputes or claims, limitations on insurance coverage, and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as "plans," "expects" or "does not expect," "is expected," "budget," "scheduled," "estimates," "forecasts," "intends," "anticipates" or "does not anticipate," or "believes," or variations of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might" or "will be taken," "occur" or "be achieved."

Forward-looking statements and other information contained in this MD&A concerning the mining industry and our general expectations concerning the mining industry are based on estimates prepared by us using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which we believe to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While we are not aware of any misstatements regarding any industry data presented in this MD&A, the mining industry involves risks and uncertainties and is subject to change based on various factors. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. We believe that the assumptions and expectations reflected in such forward-looking information are reasonable. Assumptions have been made regarding, among other things, our ability to carry on exploration and development activities, the timely receipt of required approvals, the price of zinc, lead and other metals, our ability to operate in a safe, efficient and effective manner and our ability to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions that may have been used.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, risks related to operations; risks associated with current exploration and development activities; uncertainties associated with conclusions of economic evaluations; changes in project parameters as plans continue to be refined; assumptions related to the future prices of metals; possible variations in Mineral Reserves or Mineral Resources, the grade of contained metals or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; and risks related to joint venture operations. Although we have attempted to identify important factors that could affect us and may cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this MD&A speak only as of the date of this MD&A. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this MD&A to reflect the occurrence of unanticipated events save and except as required by applicable securities laws.