Emerita Resources : Financial Statements(YE 2025)

About this update from Emerita Resources Corp.

Consolidated Financial Statements For the years ended September 30, 2025 and 2024 (Expressed in Canadian Dollars) Independent Auditor's Report To the Shareholders of Emerita Resources Corp. Opinion We have audited the consolidated financial statements of Emerita Resources Corp. and its subsidiary (the "Company"), which comprise the consolidated statements of financial position as at September 30, 2025 and 2024 and October 1, 2023, and the consolidated statements of loss and comprehensive loss, consolidated statements of changes in shareholders' equity and consolidated statements of cash flows for the years ended September 30, 2025 and 2024, and notes to the consolidated financial statements, including material accounting policy information. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at September 30, 2025 and 2024 and October 1, 2023, and its consolidated financial performance and its consolidated cash flows for the years ended September 30, 2025 and 2024 in accordance with International Financial Reporting Standards ("IFRS"). 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. We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter We draw attention to Note 3 in the consolidated financial statements, which explains that certain comparative information as at September 30, 2024 and October 1, 2023 and for the year ended September 30, 2024 have been restated. Our opinion is not modified in respect of this matter. Other matter We have audited the restatement to the financial statements as at September 30, 2024 and October 1, 2023 and for the year ended September 30, 2024, as described in Note 3 to the financial statements. In our opinion, such adjustments are appropriate and have been properly applied. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. 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. We have determined that there were no key audit matters to communicate in our report. Other information Management is responsible for the other information. The other information comprises Management's Discussion and Analysis. 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. We obtained Management's Discussion and Analysis prior to the date of this auditor's report. 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 IFRS, 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 related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or 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 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 judgement and maintain professional skepticism 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 risks 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 audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Company as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with thos e 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 disclos ure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partner of the audit resulting in this independent auditor's report is Regina Kwong. McGovern Hurley LLP Chartered Professional Accountants Licensed Public Accountants Toronto, Ontario January 28, 2026 Consolidated Statements of Financial Position Expressed in Canadian Dollars September 30, September 30, October 1, As at: 2025 2024 2023 Note $ $ $ Restated Restated (Note 3) (Note 3) ASSETS Current Cash and cash equivalents 27,241,039 10,943,786 9,759,722 Amounts receivable 5 1,426,624 962,330 2,463,886 Marketable securities 6 5,113 19,666 43,265 Prepaid expenses 7 644,654 771,016 306,136 Total current assets 29,317,430 12,696,798 12,573,009 Long-term Reclamation deposits 10 487,154 330,164 325,065 Equipment 8 244,604 328,187 366,950 Exploration and evaluation assets 3,10 49,849,347 37,260,447 27,878,561 Total assets 79,898,535 50,615,596 41,143,585 LIABILITIES Current liabilities Accounts payable and accrued liabilities 16 1,399,052 2,342,424 1,576,780 Total current liabilities 1,399,052 2,342,424 1,576,780 Non-current liabilities Long term loan payable 11 7,790,943 5,744,644 - Total liabilities 9,189,995 8,087,068 1,576,780 SHAREHOLDERS' EQUITY Common shares 12 93,585,822 60,751,238 57,268,197 Warrant reserve 13 7,027,701 5,567,188 6,567,628 Option reserve 13 29,774,608 23,382,793 23,860,718 Deficit (59,679,591) (47,172,691) (48,129,738) Total shareholders' equity 70,708,540 42,528,528 39,566,805 Total liabilities and shareholders' equity 79,898,535 50,615,596 41,143,585 Nature of operations and going concern 1 Commitments and contingencies 19 Subsequent events 20 Approved on behalf of the Board of Directors on January 28, 2026: Signed: "Catherine Stretch" , Director Signed: "David Gower" , Director Consolidated Statements of Loss and Comprehensive Loss Expressed in Canadian Dollars Year ended September 30, Note 2025 $ 2024 $ Restated (Note 3) Expenses Consulting and management fees 16 2,627,085 2,916,121 Professional fees 445,558 335,216 Shareholder communication and filing fees 215,611 147,578 Promotion expenses 452,023 413,451 Travel expenses 242,544 185,614 Office expenses 166,677 137,520 Share-based compensation 13 6,882,349 - Loss before other items (11,031,847) (4,135,500) Other items Accretion expense 11 (404,142) (18,562) Interest expense 11 (1,452,676) (160,776) Interest income 299,200 139,508 Loss on disposal of equipment 8 (10,330) (8,505) Unrealized loss on marketable securities 6 (14,553) (23,599) Foreign exchange gain 107,448 71,260 Total other items (1,475,053) (674) Net loss before tax (12,506,900) (4,136,174) Deferred income tax recovery 18 - 589,293 Net loss and comprehensive loss for the year (12,506,900) (3,546,881) Loss per share Basic and diluted $ (0.06) $ (0.01) Weighted average number of common shares outstanding Basic and diluted 253,522,473 240,004,793 Consolidated Statements of Changes in Shareholders' Equity Expressed in Canadian Dollars Note Number of shares # Common shares $ Warrant reserve $ Option reserve $ Deficit Restated (Note 3) $ Shareholders' equity Restated (Note 3) $ Balance, September 30, 2024 247,605,968 60,751,238 5,567,188 23,382,793 (47,172,691) 42,528,528 Common shares issued, net of issue costs 12 24,849,500 24,070,187 - - - 24,070,187 Warrants issued, net of issue costs 12,13 - (3,640,928) 3,640,928 - - - Warrants exercised 13 13,413,068 11,351,790 (2,180,415) - - 9,171,375 Options exercised 13 3,250,000 1,053,536 - (490,535) - 563,001 Share-based compensation 13 - - - 6,882,349 - 6,882,349 Loss and comprehensive loss for the year - - - - (12,506,900) (12,506,900) Balance, September 30, 2025 289,118,536 93,585,822 7,027,701 29,774,608 (59,679,591) 70,708,540 Balance, September 30, 2023 234,820,968 57,268,197 6,567,628 23,860,718 (48,129,738) 39,566,805 Common shares issued, net of issue costs 12 12,500,000 4,961,288 - - - 4,961,288 Warrants issued 12,13 - (1,546,689) 1,546,689 - - - Loan warrants issued, net of issue costs and tax 11,13 - - 1,508,316 - - 1,508,316 Warrants exercised 13 35,000 21,145 (7,145) - - 14,000 Warrants expired unexercised 13 - - (4,048,300) - 4,048,300 - Options exercised 13 250,000 47,297 - (22,297) - 25,000 Options expired unexercised 13 - - - (455,628) 455,628 - Loss and comprehensive loss for the year 3 - - - - (3,546,881) (3,546,881) Balance, September 30, 2024 247,605,968 60,751,238 5,567,188 23,382,793 (47,172,691) 42,528,528 Consolidated Statements of Cash Flows Expressed in Canadian Dollars Year ended September 30, Note 2025 $ 2024 $ (Restated) (Note 3) Cash (used in)/prov ided by: Operating activities Net loss for the year (12,506,900) (3,546,881) Items not involving cash: Deferred income tax recovery 18 - (589,293) Accretion expense 11 404,142 18,562 Unrealized foreign exchange 11 189,481 (94,015) Interest expense 11 1,452,676 160,776 Unrealized loss on marketable securities 6 14,553 23,599 Loss on disposal of equipment 8 10,330 8,505 Share-based compensation 13 6,882,349 - Amortization 8 132,508 162,185 Working capital adjustments: (1,281,303) 1,802,320 Net cash (used in) operating activities (4,702,164) (2,054,242) Investing activities Proceeds from sale of equipment 8 95,618 42,335 Additions to equipment 8 (122,859) (184,429) (Refund)/payment of reclamation deposits 10 (129,505) 12,445 Additions to exploration and evaluation assets 3,10 (12,588,900) (9,381,886) Net cash (used in) investing activities (12,745,646) (9,511,535) Financing activities Proceeds from issuance of common shares 12 26,091,975 5,000,000 Cost of issuance of common shares 12 (2,021,788) (38,712) Proceeds from issuance of long term loan 11 - 8,190,600 Cost of issuance of long term loan and loan warrants 11 - (466,458) Options exercised 13 563,001 25,000 Warrants exercised 13 9,171,375 14,000 Net cash provided by financing activities 33,804,563 12,724,430 Effect of foreign exchange on cash and cash equivalents (59,500) 25,411 Change in cash and cash equivalents, during the year 16,297,253 1,184,064 Cash, beginning of year 10,943,786 2,259,722 Cash equivalents, beginning of year - 7,500,000 Cash and cash equivalents, end of year 27,241,039 10,943,786 SUPPLEMENTAL INFORMATION Broker warrants issued 12 $ 550,034 $ - Long term financing fees allocated to warrants 11,13 $ - $ 126,139 Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) NATURE OF OPERATIONS AND GOING CONCERN Emerita Resources Corp. (the "Company", or "Emerita") was incorporated on October 30, 2009 as 0865140 BC Ltd. pursuant to the Business Corporations Act (British Columbia). On January 8, 2013, the Company completed its Qualifying Transaction and ceased to be a Capital Pool Company. The Company changed its name to Emerita Resources Corp. and commenced trading as a Tier 2 Mining Issuer on the TSX Venture Exchange ("TSXV") on January 11, 2013 under the new trading symbol "EMO". The Company also trades on the OTCQB Venture Market in the United States under the trading symbol "EMOTF". The Company owns the following subsidiary: A 100% interest in Emerita Resources Espana SL ("Emerita Espana"), a company incorporated on May 30, 2012 in Spain. The Company is currently engaged in the acquisition, exploration and development of mineral properties. The head office and principal address of the Company is 36 Lombard Street, Floor 4, Toronto, Ontario, M5C 2X3. The business of exploring for minerals involves a high degree of risk and there can be no assurance that the current exploration programs will result in profitable operations. The Company is in the process of exploring its mineral properties and has not yet determined whether these properties contain mineral reserves that are economically recoverable. The recoverability of exploration and evaluation expenditures is dependent upon the establishment of a sufficient quantity of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development and upon future profitable production or proceeds from the disposition of these interests. Although the Company has taken steps to verify title to the properties on which it is conducting its exploration activities, these procedures do not guarantee the Company's title. Property title may be subject to government licensing requirements or regulations, social licensing requirements, unregistered prior agreements, unregistered claims and non-compliance with regulatory and environmental requirements. The Company's property interests may also be subject to increases in taxes and royalties, renegotiation of contracts, currency exchange fluctuations and restrictions, and political uncertainty. As at September 30, 2025, the Company has a history of operating losses and expects to incur additional losses in the development of its properties, and an accumulated deficit of $59,679,591 (September 30, 2024: $47,172,691). The Company has a need for equity financing for working capital and exploration and development of its properties. Because of continuing operating losses, the Company's continuance as a going concern is dependent upon its ability to obtain adequate financing and to reach profitable levels of operation. It is not possible to predict whether financing efforts will be successful or if the Company will attain profitable levels of operation. At September 30, 2025, the Company believes it has sufficient working capital to support planned operations for the next twelve months. These consolidated financial statements have been prepared using accounting policies applicable to a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of operations. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying consolidated financial statements. Such adjustments could be material. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) BASIS OF PRESENTATION Statement of compliance These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and include interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). The policies set out were consistently applied to all the periods presented unless otherwise noted below. Bas is of pres entation These consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information, and have been prepared using the historical cost basis, except for financial instruments carried at fair value. Furthermore, these consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiary. All values are rounded to the nearest dollar. These consolidated financial statements include the accounts of the Company and its subsidiary. All material intercompany transactions and balances between the Company and its subsidiary have been eliminated on consolidation. The Company holds a 38.82% (2024 - 38.82%) interest in Cantabrica del Zinc ("Cantabrica"), along with its joint venture partner, the Aldesa Group. Cantabrica is reported as a joint venture in these consolidated financial statements. Refer to Note 9. Approval of the cons olidated financial s tatements These consolidated financial statements of the Company for the years ended September 30, 2025 and 2024 were reviewed, approved and authorized for issue by the Board of Directors of the Company on January 28, 2026. CHANGES IN ACCOUNTING POLICY All of the Company's exploration and evaluation property interests are in the exploration and evaluation phase. The Company records its interests in exploration and evaluation properties and areas of geological interest at cost. Expenditures incurred prior to obtaining the legal right to explore are capitalized. All direct and indirect costs relating to the acquisition and exploration of these interests are capitalized on the basis of specific claim blocks or areas of geological interest until the properties to which they relate are placed into production, sold or management has determined there to be impairment. These costs will be amortized on the basis of units produced in relation to the reserves available on the related property following commencement of production. The cost of exploration and evaluation properties includes any cash consideration paid and the fair market value of shares issued, if any, on the acquisition of property interests. Acquisition costs of 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 claim acquisition costs and their related exploration and evaluation costs represent actual expenditures incurred and are not intended to reflect present or future values. The Company reviews capitalized costs on its exploration and evaluation properties on a periodic basis and when events or changes in circumstances indicate that its carrying amount may not be recoverable, the Company will recognize an impairment charge in value based upon current exploration results and upon management's assessment of the future probability of revenues from the property or from the sale of the property. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 3. CHANGES IN ACCOUNTING POLICY (continued) During the year ended September 30, 2025, the Company changed its accounting policy of expensing exploration and evaluation expenditures to capitalizing all exploration and evaluation expenditures incurred. The Company believes capitalizing such costs as incurred provides more reliable and relevant financial information. Cost of exploration properties, including the cost of acquiring prospective properties and exploration rights, and exploration and evaluation costs are capitalized in accordance with IFRS 6. The consolidated financial statements for the year ended September 30, 2024 have been restated to reflect adjustments made as a result of this change in accounting policy. The accumulated effect of the change of $37,260,447 has been reflected in the ending deficit of the consolidated financial statements as at September 30, 2024. The following is a reconciliation of the Company's consolidated financial statements as at September 30, 2024 and October 1, 2023 and for the year ended September 30, 2024: Consolidated Statement of Financial Position As at September 30, 2024 As previously reported Adjustment Restated ASSETS Current Cash $ 10,943,786 $ - $ 10,943,786 Amounts receivable 962,330 - 962,330 Marketable securities 19,666 - 19,666 Prepaid expenses 771,016 - 771,016 Total current assets 12,696,798 - 12,696,798 Long-term Reclamation deposit 330,164 - 330,164 Equipment 328,187 - 328,187 Exploration and evaluation assets - 37,260,447 37,260,447 Total assets $ 13,355,149 $ 37,260,447 $ 50,615,596 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 2,342,424 $ - $ 2,342,424 Current liabilities 2,342,424 - 2,342,424 Long term loan payable 5,744,644 - 5,744,644 Total liabilities 8,087,068 - 8,087,068 SHAREHOLDERS' EQUITY Common shares 60,751,238 - 60,751,238 Warrant reserve 5,567,188 - 5,567,188 Option reserve 23,382,793 - 23,382,793 Deficit (84,433,138) (37,260,447) (47,172,691) Total shareholders' equity $ 5,268,081 $ (37,260,447) $ 42,528,528 Total liabilities and shareholders' equity $ 13,355,149 $ (37,260,447) $ 50,615,596 Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 3. CHANGES IN ACCOUNTING POLICY (continued) Consolidated Statement of Financial Position As at October 1, 2023 As previously reported Adjustment Restated ASSETS Current Cash $ 9,759,722 $ - $ 9,759,722 Amounts receivable 2,463,886 - 2,463,886 Marketable securities 43,265 - 43,265 Prepaid expenses 306,136 - 306,136 Total current assets 12,573,009 - 12,573,009 Long-term Reclamation deposit 325,065 - 325,065 Equipment 366,950 - 366,950 Exploration and evaluation assets - 27,878,561 27,878,561 Total assets $ 13,265,024 $ 27,878,561 $ 41,143,585 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 1,576,780 $ - $ 1,576,780 Total liabilities 1,576,780 - 1,576,780 SHAREHOLDERS' EQUITY Common shares 57,268,197 - 57,268,197 Warrant reserve 6,567,628 - 6,567,628 Option reserve 23,860,718 - 23,860,718 Deficit (76,008,299) (27,878,561) (48,129,738) Total shareholders' equity 11,688,244 (27,878,561) 39,566,805 Total liabilities and shareholders' equity $ 13,265,024 $ (27,878,561) $ 41,143,585 Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) CHANGES IN ACCOUNTING POLICY (continued) Consolidated Statement of Loss and Comprehensive Loss For the year ended September 30, 2024 As previously reported Adjustment Restated Expenses Project evaluation expenses $ 9,381,886 $ (9,381,886) $ - Other general and adminstrative costs 4,135,500 - 4,135,500 Loss for the year before other items (13,517,386) (9,381,886) (4,135,500) Other items Accretion expense (18,562) - (18,562) Interest expense (160,776) - (160,776) Interest income 139,508 - 139,508 Loss on disposal of equipment (8,505) - (8,505) Unrealized loss on marketable securities (23,599) - (23,599) Foreign exchange gain 71,260 - 71,260 Total other items (674) - (674) Net loss before tax (13,518,060) (9,381,886) (4,136,174) Deferred income tax recovery 589,293 - 589,293 Net and comprehensive loss for the year $ (12,928,767) $ (9,381,886) $ (3,546,881) Consolidated Statement of Cash Flow For the year ended September 30, 2024 As previously reported Adjustment Restated Cash (used in)/provided by: Operating activities Net loss for the year $ (12,928,767) $ 9,381,886 $ (3,546,881) Adjustments for items not affecting cash: Deferrred income tax recovery (589,293) - (589,293) Accretion expense 18,562 - 18,562 Unealized foreign exchange (94,015) - (94,015) Interest expense 160,776 - 160,776 Unrealized loss on marketable securities 23,599 - 23,599 Loss on disposal of equipment 8,505 - 8,505 Amortization 162,185 - 162,185 Working capital adjustments 1,802,320 - 1,802,320 Net cash (used in) operating activities (11,436,128) 9,381,886 (2,054,242) Investing activities Proceeds from sale of equipment 42,335 - 42,335 Additions to equipment (184,429) - (184,429) Refund of reclamation deposits 12,445 - 12,445 Exploration and evaluation assets - (9,381,886) (9,381,886) Net cash (used in) investing activities (129,649) (9,381,886) (9,511,535) Financing activities Proceeds from issuance of common shares 5,000,000 - 5,000,000 Cost of issuance of common shares (38,712) - (38,712) Proceeds from issuance of long term loan 8,190,600 - 8,190,600 Cost of issuance of long term loan and loan warrants (466,458) - (466,458) Options exercised 25,000 - 25,000 Warrants exercised 14,000 - 14,000 Net cash provided by financing activities 12,724,430 - 12,724,430 Effect of foreign exchange on cash and cash equivalents 25,411 - 25,411 Increase in cash during the year 1,184,064 - 1,184,064 Cash, beginning of year 9,759,722 - 9,759,722 Cash, end of year $ 10,943,786 $ - $ 10,943,786 Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) MATERIAL ACCOUNTING POLICIES Critical judgements and es timation uncertainties The preparation of financial statements in conformity with IFRS requires the Company's management to make judgments, estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes to the financial statements. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may differ from those estimates. The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to: Fair value of financial instruments Marketable securities are measured at fair value. The estimated fair value of financial instruments, by their very nature, are subject to measurement uncertainty. The Company estimates fair value using valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Estimation of decommissioning and restoration costs and the timing of expenditure The cost estimates are updated annually during the life of a mine to reflect known developments, (e.g. revisions to cost estimates and to the estimated lives of operations) and are subject to review at regular intervals. Decommissioning, restoration, and similar liabilities are estimated based on the Company's interpretation of current regulatory requirements, constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration, or similar liabilities that may occur upon decommissioning of the mine. Such estimates are subject to change based on changes in laws and regulations and negotiations with regulatory authorities. Income, value added, withholding and other taxes The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company's provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company's income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company's interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made. Share-based payments Management determines costs for share-based payments using market-based valuation techniques. The fair value of the market-based share awards is determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviors and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Critical judgements and es timation uncertainties (continued) Contingencies Refer to Notes 1 and 19. Joint arrangement The Company has a joint arrangement with the Aldesa Group. The Company has joint control over this arrangement as under the contractual agreement with the Aldesa Group, unanimous consent is required from all parties to the agreements for certain key strategic, operating, investing and financing policies. The Company's joint arrangement is structured as a corporation (JV Company) and provides the Company and the Aldesa Group (parties to the agreements) with rights to net assets of the limited company under the arrangements. Therefore, this arrangement has been classified as a joint venture and has been recorded as an investment in associate. See Note 9. Judgement is required to determine the type of joint arrangement that exists. This judgement involves considering its rights and obligations arising from the arrangement. An entity assesses its rights and obligations by considering the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstances. Estimated useful lives and depreciation of equipment Depreciation and amortization of property and equipment are dependent upon estimates of useful lives and when the asset is available for use, which are determined through the exercise of judgment and are dependent upon estimates that take into account factors such as economic and market conditions, frequency of use, anticipated changes in laws and technological improvements. Impairment of equipment The assessment of any impairment on property and equipment is dependent upon estimates of recoverable amounts. As the recoverable amount is the higher of fair value less costs of disposal ["FVLCD"] and value in use ["VIU"], management must consider factors such as economic and market conditions, estimated future cash flows, discount rates and asset-specific risks. Valuation of long term loan The Company makes estimates and assumptions relating to the fair value measurement and disclosure of its long term debt. Judgments include considerations of a market rate of interest estimated using the Company's credit risk, economic environment, term of the loan, and the interest rate charged to comparable companies. Changes in the assumptions used may have a significant effect on the Company's consolidated financial statements. Capitalization of exploration and evaluation costs Management has determined that exploration and evaluation costs incurred during the year have future economic benefits and are economically recoverable. In making this judgment, management has assessed various sources of information including but not limited to the geologic and metallurgic information, proximity of operating facilities, operating management expertise and existing permits. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Critical judgements and es timation uncertainties (continued) Impairment of exploration and evaluation assets While assessing whether any indications of impairment exist for exploration and evaluation assets, consideration is given to both external and internal sources of information. Information the Company considers includes changes in the market, economic and legal environment in which the Company operates that are not within its control that could affect the recoverable amount of exploration and evaluation assets. Internal sources of information include the manner in which exploration and evaluation assets are being used or are expected to be used and indications of expected economic performance of the assets. Reductions in metal price forecasts, increases in estimated future costs of production, increases in estimated future capital costs, reductions in the amount of recoverable mineral reserves and mineral resources and/or adverse current economics can result in a write-down of the carrying amounts of the Company's exploration and evaluation assets. Cas h and cas h equivalents Cash and cash equivalents consist of highly liquid investments, such as guaranteed investment certificates and deposit accounts with Canadian chartered banks and Spanish banks, redeemable anytime. Subs idiary Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to direct the relevant activities of the entity. Generally, the Company has a shareholding of more than one half of the voting rights in its subsidiaries. The effects of potential voting rights that are currently exercisable are considered when assessing whether control exists. Subsidiaries are fully consolidated from the date control is transferred to the Company and are de-consolidated from the date control ceases. The consolidated financial statements include all the assets, liabilities, revenues, expenses and cash flows of the Company and its subsidiary after eliminating inter-entity balances and transactions. Joint arrangement The Company applies IFRS 11 to all joint arrangements. Under IFRS 11, investments in joint arrangements are classified as either joint operations or joint ventures, depending on the contractual rights and obligations of each investor. The Company has assessed the nature of its joint arrangement and determined it to be a joint venture. Joint ventures are accounted for using the equity method of accounting. Under this method, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Company's share of the post-acquisition profits or losses and movements in other comprehensive income. When the Company's share of losses in a joint venture equals or exceeds its interest in the joint venture, the Company does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint venture. Unrealized gains on transactions between the Company and its joint ventures are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the accounting policies adopted by the Company. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Inves tment in ass ociate Associates are entities over which the Company has significant influence, but not control. Significant influence is generally presumed to exist where the Company has between 20 percent and 50 percent of the voting rights but can also exist where the Company holds less than 20 percent of the voting rights but has the power to be actively involved and influential in policy decisions affecting the entity. The Company accounts for its investment in associate using the equity method. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor's share of the profit or loss of the associate. Dilution gains and losses arising from changes in interests in investment in associate where significant influence is retained are recognized in the consolidated statements of loss. At each reporting date, the Company determines whether there is any objective evidence that the investment is impaired or of previously recorded impairment should be reversed. If impairment is determined to exist, the amount of the impairment is recognized in the consolidated statement of loss and comprehensive loss. The amount of impairment is calculated as the difference between the recoverable amount of the investment in associate and its carrying value. Equipment Equipment is stated at cost, less accumulated amortization and accumulated impairment losses. Cost comprises the fair value of consideration given to acquire or construct an asset and includes the direct charges associated with bringing the asset to the location and condition necessary for putting it into use. When parts of an item of equipment have different useful lives, they are accounted for as separate items (major components) of equipment. Amortization is provided on a straight-line basis over the estimated useful lives of the equipment using the following number of years: Office equipment 4 - 10 years Office furniture 5 - 10 years Software 3 - 5 years Vehicles 3 - 5 years Leas es IFRS 16 states that upon lease commencement, a lessee recognizes a right-of-use asset and a lease liability. The right-of-use asset is initially measured at the amount of the liability plus any initial direct costs. After lease commencement, the right-of-use asset is measured at cost less accumulated depreciation and accumulated impairment. The lease liability is initially measured at the present value of lease payments to be paid subsequent to the commencement date of the lease, discounted either at the interest rate implicit in the lease or the Company's incremental borrowing rate. The lease payments measured in the initial lease liability include payments for an optional renewal period, if any, if the Company is reasonably certain that it will exercise a renewal extension option. The liability is measured at amortized cost using the effective interest method and will be remeasured when there is a change in either the future lease payments or assessment of whether an extension or other option will be exercised. The lease liability is subsequently adjusted for lease payments and interest on the obligation. Interest expens e on the lease obligation is included in the consolidated statement of loss and comprehensive loss. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Leas es (continued) The Company has elected not to recognize right-of-us e assets and lease liabilities for leases with a lease term of less than 12 months and low value assets and recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term, as permitted by IFRS 16. Compound financial ins trument Upon initial recognition, the Company determines whether the compound financial instrument consists of liability and equity components. For compound financial instruments containing an equity component that allows for a fixed number of shares at the option of the holder, the liability component is initially recorded at fair value and subsequently at amortized cost using the effective interest rate method. The liability component is accreted to the face value using the effective interest rate method over the term of the loan. The equity component is recognized as the difference between the fair value of the instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amount. Financial Ass ets and Liabilities Financial Ass ets Initial recognition and measurement Non-derivative financial assets within the scope of IFRS 9 are classified and measured as "financial assets at fair value", as either fair value through profit or loss ("FVPL") or fair value through other comprehensive income ("FVOCI"), and "financial assets at amortized costs", as appropriate. The Company determines the classification of financial assets at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows. All financial assets are recognized initially at fair value plus, in the case of financial assets not at FVPL, directly attributable transaction costs on the trade date at which the Company becomes a party to the contractual provisions of the instrument. Subsequent measurement - financial assets at amortized cost After initial recognition, financial assets measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate ("EIR") method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in the consolidated statements of loss. The Company's cash and cash equivalents, and amounts receivable are recorded at amortized cost. Subsequent measurement - financial assets at FVPL Financial assets measured at FVPL include financial assets management intends to sell in the short term and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial assets measured at FVPL are carried at fair value in the consolidated statements of financial position with changes in fair value recognized in other income or expense in the consolidated statements of loss. The Company measures marketable securities at FVPL. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Financial Assets and Liabilities (continued) Financial Assets (continued) Subsequent measurement - financial assets at FVOCI Financial assets measured at FVOCI are non-derivative financial assets that are not held for trading and the Company has made an irrevocable election at the time of initial recognition to measure the assets at FVOCI. The Company does not measure any financial assets at FVOCI. After initial measurement, investments measured at FVOCI are subsequently measured at fair value with unrealized gains or losses recognized in other comprehensive income or loss in the statements of comprehensive loss. When the investment is sold, the cumulative gain or loss is not reclassified to profit or loss. Dividends from such investments are recognized in other income in the consolidated statements of loss when the right to receive payments is established. Derecognition A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership. The Company's only financial assets subject to impairment are amounts receivable, which are measured at amortized cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, amounts receivable have been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases, and the decrease can be objectively related to an event occurring after the initial impairment was recognized. Financial Liabilities Initial recognition and measurement Financial liabilities are measured at amortized cost, unless they are required to be measured at FVPL as is the case for held for trading or derivative instruments, or the Company has opted to measure the financial liability at FVPL. The Company's financial liabilities include accounts payable and accrued liabilities and long term loan payable, which are each measured at amortized cost. All financial liabilities are recognized initially at fair value and in the case of long term loan payable, net of directly attributable transaction costs. Subsequent measurement - financial liabilities at amortized cost After initial recognition, financial liabilities measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in the consolidated statements of loss. Derecognition A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires with any associated gain or loss recognized in other income or expense in the consolidated statements of loss. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Financial Assets and Liabilities (continued) Financial Liabilities (continued) Fair value of financial ins truments The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations. For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm's length market transactions; reference to the current fair value of another instrument that is substantially the same; discounted cash flow analysis or other valuation models. Development ass ets When economically viable reserves have been determined and the decision to proceed with development has been approved, the expenditures related to development and construction are capitalized as construction-in-progress and classified as a component of property, plant and equipment. Costs associated with the commissioning of new assets incurred in the period before they are operating in the way intended by management are capitalized. Development expenditure is net of the proceeds of the sale of metals from ore extracted during the development phase. Interest on borrowings related to the construction and development of assets are capitalized until substantially all the activities required to make the asset ready for its intended use are complete. Common s hares Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares, warrants and share options are recognized as a deduction from equity, net of any tax effects. Foreign currency trans lation The presentation and functional currency of the Company and its subsidiary is the Canadian dollar. Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the consolidated statement of financial position. Exchange differences are recognized in operations in the period in which they arise. Income taxes Any income tax on profit or loss for the period presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity or other comprehensive loss, in which case the income tax is recognized in equity or other comprehensive loss. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Income taxes (continued) Deferred tax is provided for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, on a non-discounted basis using tax rates at the end of the reporting period applicable to the period of expected realization. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Share-bas ed payments Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity settled share-based transactions are set out in the equity reserves note (Note 13). The fair value determined at the grant date of the equity-settled share-based payments is expensed on a graded vesting basis over the period during which the employee becomes unconditionally entitled to equity instruments, based on the Company's estimate of equity instruments that will eventually vest. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity reserve. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods, or the counterparty renders the service. For those options and warrants that expire after vesting, the recorded value is transferred to deficit. Restricted share units The Company has established a Restricted Share Unit ("RSU") plan for directors, officers, and certain employees of the Company. RSUs are granted at the discretion of the Board of Directors (or a committee thereof) and represent a right to receive common shares of the Company, or cash of equivalent value, upon vesting. RSUs generally vest over a specified service period and are settled upon vesting or at a date determined in accordance with the terms of the plan. Vesting is contingent upon the continued service of the participant and, in certain cases, the achievement of performance or market-based conditions. Unvested RSUs are forfeited upon termination of service, except as otherwise determined by the Board. The fair value of RSUs is measured at the grant date based on the market price of the Company's common shares. The total fair value of RSUs granted is recognized as share-based compensation expense over the vesting period, with a corresponding credit to contributed surplus. The Company estimates forfeitures at the grant date and revises such estimates as necessary throughout the vesting period. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Loss per s hare The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. The diluted loss per share calculation assumes that any proceeds from the exercise of dilutive stock options and warrants would be used to repurchase common shares at the average market price during the period, with the incremental number of shares being included in the denominator of the diluted loss per share calculation. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive. All of the Company's outstanding stock options and warrants were anti-dilutive for the years ended September 30, 2025 and 2024. Impairment of non-financial ass ets The carrying values of equipment and other non-financial assets are assessed for impairment when indicators of such impairment exist. If any indication of impairment exists an estimate of the asset's recoverable amount is calculated. The recoverable amount is determined as the higher of the fair value less costs to sell for the asset and the asset's value in use. Impairment is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If this is the case, the individual assets of the Company are grouped together into cash generating units ("CGUs") for impairment purposes. Such CGUs represent the lowest level for which there are separately identifiable cash inflows that are largely independent of the cash flows from other assets or other groups of assets. This generally results in the Company evaluating its non-financial assets on a geographical basis. If the carrying amount of the asset exceeds its recoverable amount, the asset is impaired, and an impairment loss is charged to loss to reduce the carrying amount to its recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation/amortization, had no impairment loss been recognized for the asset in prior years. Such a reversal is recognized in loss. Rehabilitation provis ions The Company records the present value of estimated costs of legal and constructive obligations required to restore operating locations in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and tailings dams, dismantling operating facilities, closure of plant and waste sites, and restoration, reclamation and re-vegetation of affected areas. The obligation generally arises when the asset is installed, or the ground / environment is disturbed at the production location. When the liability is initially recognized, the present value of the estimated cost is capitalized by increasing the carrying amount of the related mining assets to the extent that it was incurred prior to the production of related ore. Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognized in operations as a finance cost. Additional disturbances or changes in rehabilitation costs will be recognized as additions or charges to the corresponding assets and rehabilitation liability when they occur. For closed sites, changes to estimated costs are recognized immediately in loss. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 4. MATERIAL ACCOUNTING POLICIES (continued) Rehabilitation provis ions (continued) The Company does not currently have any such significant legal or constructive obligations and therefore, no rehabilitation provision has been recorded as at September 30, 2025 or 2024. Current accounting changes During the year ended September 30, 2025, the Company adopted a number of new IFRS standards, interpretations, amendments, and improvement of existing standards. These included IAS 1. The new standards and changes did not have any material impact on the Company's consolidated financial statements. Future accounting changes Certain new standards, interpretations, amendments and improvements to existing standards were issued by IASB or IFRIC that are mandatory for accounting periods beginning on or after October 1, 2025. Updates that are not applicable or are not consequential to the Company have been excluded thereof. The following have not yet been adopted and are being evaluated to determine their impact on the consolidated financial statements. IFRS 10 - Consolidated Financial Statements ("IFRS 10") and IAS 28 - Investments in Associates and Joint Ventures ("IAS 28") were amended in September 2014 to address a conflict between the requirements of IAS 28 and IFRS 10 and clarify that in a transaction involving an associate or joint venture, the extent of gain or loss recognition depends on whether the assets sold or contributed constitute a business. The effective date of these amendments is yet to be determined; however early adoption is permitted. IFRS 9 and IFRS 7 -- In May 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments - Disclosures. The amendments clarify the derecognition of financial liabilities and introduce an accounting policy option to derecognize financial liabilities that are settled through an electronic payment system. The amendments also clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features and the treatment of non-recours e assets and contractually linked instruments (CLIs). Further, the amendments mandate additional disclosures in IFRS 7 for financial instruments with contingent features and equity instruments classified at FVOCI. The amendments are effective for annual periods starting on or after January 1, 2026. Retrospective application is required, and early adoption is permitted. IFRS 18 - In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting of financial performance. The new standard replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new categories and required subtotals in the statement of profit and loss and also requires disclosure of management-defined performance measures. It also includes new requirements for the location, aggregation and disaggregation of financial information. The standard is effective for annual reporting periods beginning on or after January 1, 2027, including interim financial statements. Retrospective application is required, and early adoption is permitted. 5. AMOUNTS RECEIVABLE September 30, 2025 September 30, 2024 October 1, 2023 $ $ $ Value added tax receivable- Spain 1,278,980 858,872 2,094,382 Sales taxes receivable- Canada 146,019 77,220 260,484 Other receivables 1,625 26,238 109,020 1,426,624 962,330 2,463,886 Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) MARKETABLE SECURITIES The Company's marketable securities consist of 78,662 common shares, after a 1:10 share consolidation in July 2025 (September 30, 2024: 78,662 common shares) of Western Metallica Resource Corp. ("Western") (TSXV: WMS.V). The carrying value is calculated based on the estimated fair value determined using the quoted market price of $0.065 per share at September 30, 2025 (2024 - $0.25). The cost of the common shares was $74,730 on acquisition and the shares are classified in Level 1 of the fair value hierarchy. An unrealized loss of $14,553 was recorded in the Company's consolidated statements of loss for the year ended September 30, 2025 (year ended September 30, 2024: $23,599). A director and officer of Western is also a director and officer of the Company. See Notes 10 and 16. PREPAID EXPENSES September 30, 2025 September 30, 2024 October 1, 2023 $ $ $ Prepaid exploration expenses- Spain 106,274 140,934 23,493 Prepaid deposits- Spain 253,135 478,253 96,163 Prepaid promotional expenses 265,757 110,773 145,800 Prepaid corporate overheads 19,488 41,056 40,680 644,654 771,016 306,136 EQUIPMENT Equipment Furniture Software Vehicles Total Cost as at September 30, 2023 $ 65,392 $ 115,042 $ 87,438 $ 188,956 $ 456,828 Additions, 2024 - 14,209 - 170,220 184,429 Disposals, 2024 - - - (82,632) (82,632) Cost as at September 30, 2024 $ 65,392 $ 129,251 $ 87,438 $ 276,544 $ 558,625 Additions, 2025 11,489 - - 111,370 122,859 Disposals, 2025 - - - (95,618) (95,618) Cost as at September 30, 2025 $ 76,881 $ 129,251 $ 87,438 $ 292,295 $ 585,865 Accumulated amortization as at September 30, 2023 $ 20,428 $ 45,944 $ 1,881 $ 21,625 $ 89,878 Disposals, 2024 - - - (21,625) $ (21,625) Charge for the period 7,234 35,832 39,332 79,787 162,185 Accumulated amortization as at September 30, 2024 $ 27,662 $ 81,776 $ 41,213 $ 79,787 $ 230,438 Disposals, 2025 - - - (21,685) (21,685) Charge for the period 25,857 7,510 17,238 81,903 132,508 Accumulated amortization at September 30, 2025 $ 53,519 $ 89,286 $ 58,451 $ 140,005 $ 341,262 Net book value as at October 1, 2023 Net book value as at September 30, 2024 Net book value as at September 30, 2025 $ 44,964 $ $ 37,730 $ $ 23,362 $ 69,098 $ 47,475 $ 39,965 $ 85,557 46,225 28,987 $ 167,331 $ $ 196,757 $ $ 152,290 $ 366,950 328,187 244,604 INVESTMENT IN AND ADVANCES TO ASSOCIATE On October 26, 2017, the Company, along with its Spanish joint venture partner the Aldesa Group ("Aldesa"), were awarded exploration concessions in the Santanilla Syncline (the "Plaza Norte Project"). The Plaza Norte Project is in the Reocin Basin in Cantabria, Spain. In January 2022, the Company determined that the Plaza Norte Project did not have the technical merit to continue to be of strategic interest to the Company and the joint venture partners agreed to dissolve the joint venture after the project is sold or relinquished. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) INVESTMENT IN AND ADVANCES TO ASSOCIATE (continued) As at September 30, 2025, the Company owned a 38.82% interest (September 30, 2024: 38.82%) in Cantabria, a corporation registered in Spain, which is in the process of being disposed of at September 30, 2025. The carrying value of the investment is $nil for the years ended September 30, 2025 and 2024. EXPLORATION AND EVALUATION ASSETS Iberia Belt West Project Nuevo Tintillo Project Other Total Cost as at October 1, 2023 $ 26,269,061 $ 1,609,500 $ - $ 27,878,561 Additions 6,178,969 3,202,917 - 9,381,886 Cost as at September 30, 2024 32,448,030 4,812,417 - 37,260,447 Additions 12,105,503 333,397 150,000 12,588,900 Cost as at September 30, 2025 $ 44,553,533 $ 5,145,814 $ 150,000 $ 49,849,347 As at September 30, 2025, the Company has paid reclamation deposits totalling $487,154, (September 30, 2024: $330,164), detailed as follows: September 30, September 30, October 1, 2025 2024 2023 Project Deposits paid ($) Deposits paid ($) Deposits paid ($) Iberia Belt West 366,304 218,601 210,555 Nuevo Tintillo 62,058 57,289 63,016 Sierra Alta 58,792 54,274 51,494 487,154 330,164 325,065 Iberia Belt West Property The Iberia Belt West Project ("IBW Project") consists of four exploration permits in southwestern Spain. The IBW Project encompasses three polymetallic deposits. From east to west: La Infanta, El Cura, and La Romanera. On September 1, 2020, Emerita was officially notified through a resolution that it was the winning bidder of the IBW Project mining rights in Huelva. The Tender resolution has been issued by the Provincial Secretary of the Regional Ministry of Industry in Huelva. The resolution declares that Emerita Espana is the winning bidder of the tender. Emerita Espana is registered on the Junta de Andalusia official website as the owner of the mining rights to the IBW Project. On July 12, 2021, the Company received the final granted resolution. The initial rights were for a period of 26 months expiring September 12, 2023, and Emerita has the right to apply to have this period extended for a further 36 months. Emerita submitted a renewal extension on July 7, 2023 that is pending and expects to receive approval of the extension, as the Company has met or exceeded all the requirements for a permit extension. On September 8, 2023, the Company submitted a separate application for an Exploitation License that, when granted, has a 30-year term and can be extended for two subsequent 30-year periods. The Company has submitted all the required supporting documentation to support the application. During the time that the application is being reviewed, the Company's rights under its current exploration permit are extended. As at September 30, 2025, the application is under review. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) EXPLORATION AND EVALUATION ASSETS (continued) Iberia Belt West Property On March 9, 2023, the Company was granted an additional exploration permit for certain claims located to the south of the La Infanta depos it. This exploration permit allows the Company to begin exploration work immediately and does not require further environmental or municipal approvals for work to proceed. The Infanta Sur exploration permit rights were awarded for a 3 year period, expiring March 2026, and can be renewed for subsequent additional periods. On February 18, 2025, the Ministry of Industrial Policy and Energy of Huelva, Andalusia granted Emerita the exploration permit for the Ontario Property for a period of three years until February 6, 2028. On September 19, 2025, the Ministry of Indus trial Policy and Energy of Huelva, Andalusia granted Emerita exploration permits for the San Antonio and Terranova claims. Final approval is in process, and the permits will be valid for a period of 26 months from the date of final approval. These claims will be treated as a single exploration project area and referred to as the "San Antonio Project". Exploration can commence immediately in the newly permitted areas. Nueva Celti On September 19, 2025, the Company entered into a non-binding letter of intent ("LOI") with Western to acquire Western's Spanish subsidiary Western Metallica S.L ("WMS Spain"), which holds 100% ownership of the Neuva Celti Project ("Nueva Celti") located in the province of Seville, Andalusia, Spain. The LOI contains an exclusive negotiating period that expired on December 31, 2025. A director and officer of Western is also a director and officer of the Company, and a director of the Western is an officer of the Company. Refer to Note 16. Pursuant to the LOI, Emerita must pay to Western: : $150,000 in cash (paid August 18, 2025); : $250,000 to be settled in Emerita shares using the closing price per Emerita share on the day prior to the execution of a binding share purchase agreement, subject to TSXV approval and other customary closing conditions. Nuevo Tintillo The Nuevo Tintillo Project consists of one exploration permit in Seville province, in the Eastern part of the Iberian Pyrite Belt. The application for the exploration permit was submitted on September 12, 2014. On June 20, 2022, the Company received a final granted resolution for three-year exploration permits that expired June 20, 2025. The Company submitted an application for extension in March 2025. As at September 30, 2025, the application is under review. Sierra Alta Property The Sierra Alta Property is comprised of one exploration permit which consists of certain mining claims in the Asturias region in northwestern Spain. The Company applied for the permit on November 18, 2013 and received notice that the Company was the winning bidder of the tender on July 8, 2015. On July 21, 2017, the Company received the final granted resolution. The conces sion was valid for a three-year term and was renewable for equal and successive periods of three years. Permit renewals were submitted in 2020, and a one-year extension was granted on October 19, 2022. On October 19, 2023, an additional 2-year extension was granted until October 19, 2025. Subsequent to September 30, 2025, the Company received an extension on the permit for one year until October 19, 2026. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) EXPLORATION AND EVALUATION ASSETS (continued) Sierra Alta Property On April 20, 2020, the Company signed a binding letter agreement with Western, pursuant to which Western may earn a 55% interest in the Sierra Alta project (the "Sierra Transaction"). The Company entered into an amending agreement with Western in June 2022. A director and officer of Western is also a director and officer of the Company. Refer to Notes 6 and 16. To earn its 55% interest, Western shall: Pay $50,000 in cash to the Company (paid); Issue 786,632 shares of Western to the Company (completed on September 27, 2022- see Note 6); Spend $500,000 on mineral exploration of the project within 24 months of the signing of the definitive agreement (completed); Enter into a binding joint venture agreement with the Company (not yet completed). Plaza Norte Property Emerita currently has a 38.82% interest in a joint venture with Aldesa. The renewal of the exploration permit (Plaza Norte project) is being adjudicated in the High Administrative Court of Cantabria. Therefore, the resolution is pending. The joint venture partners have agreed to dissolve the joint venture after the project is sold or relinquished. Aldesa is currently leading a process to sell the project. See Note 9. LONG TERM LOAN On August 14, 2024, the Company entered into a credit agreement with Nebari Natural Resources Credit Fund LL, LP (the "Lender") pursuant to which the Company may borrow up to a maximum aggregate principal amount of USD$15,000,000 from the Lender to be issued in three tranches of (i) USD$6,000,000 ("Tranche 1"); (ii) USD$4,500,000 ("Tranche 2"); and (iii) USD$4,500,000 ("Tranche 3" and, together with Tranche 1 and Tranche 2, the "Tranches" and each a "Tranche") (the "Loan"). The Lender is at arms-length to the Company. On September 3, 2025, the Company entered into an amended credit agreement with Nebari, pursuant to which a fourth tranche of USD$35,000,000 will be made available as a standby loan to the Company. As a result, the maximum aggregate principal amount that the Company may borrow from Nebari is USD$50,000,000. This amendment was approved by the TSXV and finalized on December 15, 2025. Pursuant to entering into the upsized loan agreement, the Company was required to issue to Nebari 1,219,512 common share purchase warrants, each warrant exercisable at a price of $1.45 per share until August 16, 2028. Nebari subsequently waived the right to receive the warrants on November 27, 2025, prior to the completion of the amendment. The Company will issue on the closing of each Tranche a number of common share purchase warrants (the "Loan Warrants") equal to: Tranche 1: the Canadian equivalent of USD$6,000,000 divided by a Canadian dollar amount equal to a 25% premium to the lower of: (i) a 20-day VWAP of the Company's share price on the date which the Company issues its request for the advance in respect of such Tranche; and (ii) the Market Price (as such term is defined under the policies of the TSXV) as of the date which the Company issues its request for the advance in respect of such Tranche; Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) 1 1. LONG TERM LOAN (continued) Tranche 2: the Canadian equivalent of USD$1,687,500 divided by a Canadian dollar amount equal to a 25% premium to the lower of: (i) a 20-day VWAP of the Company's share price on the date which the Company issues its request for the advance in respect of such Tranche; and (ii) the Market Price as of the date which the Company issues its request for the advance in respect of such Tranche; Tranche 3: the Canadian equivalent of USD$1,687,500 divided by a Canadian dollar amount equal to a 25% premium to the lower of: (i) a 20-day VWAP of the Company's share price on the date which the Company issues its request for the advance in respect of such Tranche; and (ii) the Market Price as of the date which the Company issues its request for the advance in respect of such Tranche; Tranche 4: the Canadian equivalent of USD$13,125,000 divided by a Canadian dollar amount equal to a 25% premium to the lower of: (i) a 20-day VWAP of the Company's share price on the date which the Company issues its request for the advance in respect of such Tranche; and (ii) the Market Price as of the date which the Company issues its request for the advance in respect of such Tranche; Each Loan Warrant will entitle the holder to purchase one common share of the Company at an exercise price equal to a 25% premium to the lower of: (i) the 20-day VWAP of the Company's share price on the date which the Company issues its request for the advance in respect of the Tranche under which such Loan Warrant is being issued; and (ii) the Market Price (as such term is defined under the policies of the TSXV) as of the date which the Company issues its request for the advance in respect of the Tranche under which such Loan Warrant is being issued until August 16, 2028. Upon the closing of Tranche 1, the Loan will be guaranteed by the Company's wholly owned subsidiary, Emerita Resources Espana SL (the "Guarantor"). The Guarantor and the Company will subsequently enter into the security agreements described below with the Lender while also initially securing the Loan by way of (i) a pledge of 100% of all shares of the Guarantor (the "Share Pledge") and (ii) a registered, perfected first priority security interest in, lien on and pledge of all intercorporate debt between the Company, the Guarantor and all affiliates thereof. Upon receipt of an exploitation concession for the IBW Project, the Share Pledge will be cancelled (unles s receipt follows the closing of Tranche 2), and the following will be granted, registered and fully perfected: A first lien senior security on all future tangible and non-tangible assets and working capital assets of the IBW Project; and A first priority lien senior mortgage over and security interest in, lien on and pledge of (i) all current and future tangible and non-tangible assets and working capital assets relating to or used in connection with the IBW Project; and (ii) all real property and mining claims, mining concessions, permits (including the exploration permit for the IBW Project), usufructs and surface leases in which it now has and hereafter acquires rights relating to or associated with the IBW Project Upon the closing of Tranche 2, the Share Pledge (if it has previously been cancelled in accordance with the above) will be restored. A drawdown of Tranches 2, 3, and 4 are subject to the Company satisfying the applicable condition precedents, including the satisfactory completion of various assessments and reports for the Company's mineral properties held in Spain. Notes to the Consolidated Financial Statements For the years ended September 30, 2025 and 2024 Expressed in Canadian Dollars (unless otherwis e stated) LONG TERM LOAN (continued) Interest will accrue on the advanced outstanding principal amount of the loan based on a floating rate per annum equal to the sum of: (the three-month term SOFR (Secured Overhead Financing Rate) reference rate administered by CME Group Benchmark Administration Limited (i) the "Term SOFR"), as determined on the first date of each calendar month; and (ii) 11.5% per annum, provided that if the Term SOFR is less than 4.0%, it shall be deemed to be 4.0%. The maturity date of the Loan is August 16, 2028. The Loan may be repaid prior to maturity at any time subject to the additional payment of a make-whole threshold. Interest will accrue from the closing date of Tranche 1 for a period of 18 months and will be capitalized and added to the principal amount of the loan. The principal amount is due on maturity and interest is due monthly after the conclusion of the capitalization period, February 16, 2026. On August 16, 2024, Tranche 1 was closed and the Company received proceeds of $8,190,600 (USD$6,000,000). In connection with the receipt of funding, the Company issued 9,963,636 non-transferable Loan Warrants to a nominated affiliate of the Lender, each entitling the holder to acquire one common share of the Company at an exercise price of $0.825 per share until August 16, 2028. During the year ended September 30, 2025, the Company incurred $1,452,676 (USD$1,043,514) in interest on the Loan (year ended September 30, 2024- $160,776), and at September 30, 2025 the outstanding principal balance owed on the Loan was $9,971,978 (USD$7,162,616) (September 30, 2024- $8,270,176). In connection with the issuance of the Loan during the year ended September 30, 2024, the Company paid $466,459 in issuance costs. These costs have been allocated to the long term loan and the Loan Warrants on the basis of their relative carrying values at the time of issuance. $340,320 has been offset against the carrying value of the loan and are being amortized to net loss using the effective interest method, resulting in an effective interest rate of 26.7%. $126,139 has been offset against the value allocated to Loan Warrants. See Note 13. A reconciliation of the proceeds received with the long term loan payable balance at September 30, 2025 and 2024 is as follows: $ Balance, October 1, 2023 - Principal amount 8,190,600 Transaction costs (340,320) Allocation to warrants (2,223,747) Interest expense 160,776 Accretion expense 18,562 Unrealized foreign exchange (61,227) Balance, September 30, 2024 5,744,644 Interest expense 1,452,676 Accretion expense 404,142 Unrealized foreign exchange 189,481 Balance, September 30, 2025 7,790,943 COMMON SHARES Authorized The authorized share capital consists of an unlimited number of common shares without par value.

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