Management's Comments on Unaudited Condensed Interim Consolidated Financial Statements
These unaudited condensed interim consolidated financial statements of Forsys Metals Corp. (the "Company") have been prepared by management and approved by the Board of Directors of the Company.
These unaudited condensed interim consolidated financial statements have not been reviewed by the Company's external auditors.
Forsys Metals Corp. Consolidated Statement of Financial Position(expressed in Canadian dollars) (unaudited)
September 30, | December 31, | ||
2025 | 2024 | ||
Notes | $ | $ | |
Assets Current | |||
Cash and cash equivalents | 5 and 13 | 2,818,035 | 3,329,334 |
Receivables | 316,782 | 136,369 | |
Prepaid expenses and other assets | 335,459 | 203,727 | |
3,470,276 | 3,669,430 | ||
Non-current | |||
Loan receivable | 6 | 581,660 | - |
Exploration and evaluation | 6 | 22,213,683 | 17,955,477 |
Total assets | 26,265,619 | 21,624,907 | |
Liabilities
Current
Accounts payable and accrued liabilities | 358,537 | 342,733 | |||
Shareholders' equity | |||||
Share capital | 7 and 13 | 180,356,927 | 176,207,588 | ||
Warrants | 8 | 1,136,000 | - | ||
Contributed surplus | 49,822,289 | 50,183,534 | |||
Equity reserve | 33,364 | 33,364 | |||
Accumulated loss | (186,350,647) | (184,749,819) | |||
Accumulated other comprehensive loss | (19,090,851) | (20,392,493) | |||
Total shareholders' equity | 25,907,082 | 21,282,174 | |||
Total liabilities and shareholders' equity | 26,265,619 | 21,624,907 | |||
Events occuring after the reporting period | 13 | ||||
On behalf of the Board: | |||||
Martin Rowley | Mark Frewin | ||||
Director | Director | ||||
(expressed in Canadian dollars) (unaudited)
3 | months ended | 9 | months ended | ||
September 30, | September 30, | ||||
2025 | 2024 | 2025 | 2024 | ||
Notes | $ | $ | $ | $ | |
Expenses | |||||
Professional fees | 27,852 | 61,639 | 86,229 | 191,239 | |
Directors' fees | 12 | 155,652 | 127,477 | 472,568 | 433,428 |
Consulting fees | 12 | 149,333 | 228,291 | 452,302 | 626,513 |
Stock-based compensation | 12 | - | - | - | 343,378 |
Advisory fees | 30,000 | 30,000 | 94,000 | 100,000 | |
Lease costs | 6 | 73,003 | - | 73,003 | - |
Public company costs | 42,441 | 45,440 | 166,662 | 223,209 | |
General and administrative | 99,231 | 89,903 | 346,838 | 241,102 | |
Foreign exchange loss | (10,938) | 1,668 | (10,481) | 2,705 | |
Other income | (3,791) | (128) | (18,970) | (3,826) | |
Interest income | (15,159) | (69,435) | (61,323) | (262,918) | |
547,624 | 514,855 | 1,600,828 | 1,894,830 | ||
Net loss | (547,624) | (514,855) | (1,600,828) | (1,894,830) | |
Other comprehensive income (loss), net of taxes | |||||
Item that may be reclassified subsequently to loss | |||||
Foreign currency translation | 1,040,272 | 1,564,842 | 1,301,642 | 1,433,638 | |
Comprehensive income (loss) | 492,648 | 1,049,987 | (299,186) | (461,192) | |
Net loss per Class A common share - | |||||
basic and diluted | - | - | (0.01) | (0.01) | |
Weighted average number of Class A common shares outstanding | 210,679,467 | 195,500,989 | 208,671,518 | 195,280,781 | |
Forsys Metals Corp. Consolidated Statement of Changes in Equity | |||
(expressed in Canadian dollars) | |||
(unaudited) | |||
9 2025 | months ended September 30, 2024 | ||
Share capital | Notes | $ | $ |
Balance, beginning of period | 176,207,588 | 174,210,964 | |
Private placement of units | 7 | 5,005,000 | - |
Fair value of warrants issued | 7 and 8 | (1,136,000) | - |
Share issue costs | (80,906) | - | |
Exercise of stock options | - | 127,500 | |
Fair value of stock options exercised | - | 100,555 | |
Fair value of PSUs exercised | 361,245 | 568,500 | |
Balance, end of period | 180,356,927 | 175,007,519 | |
Warrants | |||
Balance, beginning of period Fair value of warrants issued | 7 and 8 | -1,136,000 | - - |
Balance, end of period | 1,136,000 | - | |
Contributed surplus | |||
Balance, beginning of period | 50,183,534 | 51,207,780 | |
Stock-based compensation | - | 343,378 | |
Fair value of stock options exercised | - | (100,555) | |
Fair value of PSUs exercised | (361,245) | (568,500) | |
Balance, end of period | 49,822,289 | 50,882,103 | |
Equity reserve | |||
Balance, beginning and end of period | 33,364 | 33,364 | |
Accumulated loss | |||
Balance, beginning of period | (184,749,819) | (182,089,125) | |
Net loss | (1,600,828) | (1,894,830) | |
Balance, end of period | (186,350,647) | (183,983,955) | |
Accumulated other comprehensive loss | |||
Balance, beginning of period | (20,392,493) | (21,123,999) | |
Currency translation differences on foreign operations | 1,301,642 | 1,433,638 | |
Balance, end of period | (19,090,851) | (19,690,361) | |
(expressed in Canadian dollars) (unaudited)
9 months ended
September 30,
2025 2024
Notes $ $
Cash from (used in) Operating activities
Net loss (1,600,828) (1,894,830)
Interest income (61,323) (262,918)
Item not affecting cash
Stock-based compensation - 343,378
Changes in non-cash operating working capital
Receivables | (180,413) | (72,315) | |
Prepaid expenses and other assets | (131,732) | (62,896) | |
Accounts payable and accrued liabilities | 15,804 | 608,921 | |
Income taxes payable | - | (1,890,753) | |
Total cash outflow from operating activities | (1,958,492) | (3,231,413) | |
Financing activities Private placement of units | 7 | 5,005,000 | - |
Share issue costs | 7 | (80,906) | - |
Exercise of stock options | - | 127,500 | |
4,924,094 | 127,500 | ||
Investing activities | |||
Loan receivable | 6 | (581,660) | - |
Exploration and evaluation | 6 | (3,123,706) | (4,415,122) |
Interest income | 61,323 | 262,918 | |
Total cash outflow from investing activities | (3,644,043) | (4,152,204) | |
Net increase (decrease) in cash | (678,441) | (7,256,117) | |
Cash and cash equivalents, beginning of period | 3,329,334 | 12,405,165 | |
Effect of exchange rate changes on cash | 167,142 | 77,766 | |
Cash and cash equivalents, end of period | 5 | 2,818,035 | 5,226,814 |
(expressed in Canadian dollars) (unaudited)
Nature of operations
Forsys Metals Corp. and its subsidiary companies (collectively the "Company") are engaged in the acquisition, exploration and development of mineral properties located in Namibia, Africa. The Company's principal focus is on bringing its wholly owned Norasa Uranium Project ("Norasa") into production. Norasa is the consolidation of the Valencia uranium project ("Valencia") and Namibplaas uranium project ("Namibplaas").
As an exploration stage company, the Company's income is limited to interest income and other incidental income. The recoverability of the amount shown for mineral properties, exploration and evaluation costs is dependent upon, but not limited to the existence and economic recovery of mineral reserves in the future; the ability to obtain necessary permits and financing to complete the exploration and development of these properties; government policies and regulations; and attaining profitable production or proceeds from the disposition of properties. The Company may be adversely affected by governmental amendments or changes to mining laws, regulations and requirements in Namibia.
The Company is incorporated under the Business Corporations Act (Ontario) and the primary listing of its common shares is on the Toronto Stock Exchange, with secondary listings on the Namibian Stock Exchange and Frankfurt Stock Exchange. The Company's registered office is at 20 Adelaide Street East, Suite 200, Toronto, Ontario, Canada, M5C 2T6.
Going concern
These consolidated financial statements are prepared on the going concern basis which assumes the continuity of normal business activity and the realization of assets and settlement of liabilities in the normal course of business.
Basis of presentation Statement of compliance
These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards and its interpretations adopted by the International Accounting Standards Board.
The accounting policies used in these condensed interim consolidated financial statements are consistent with those disclosed in the Company's audited consolidated financial statements for the year ended December 31, 2024.
These condensed interim consolidated financial statements do not include certain information and disclosures normally included in annual financial statements prepared in accordance with IFRS and should be read in conjunction with the Company's annual financial statements for the year ended December 31, 2024.
These condensed interim consolidated financial statements were approved and authorized for issue by the Board of Directors on November 12, 2025.
Material accounting policy information Lease accounting
The Company applies IFRS 16 Leases to all lease contracts, except for leases of intangible assets, short-term leases (lease
term of 12 months or less), and leases of low-value assets, which are accounted for as an expense on a straight-line basis over the lease term. A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company assesses whether a contract is or contains a lease at inception.
Recognition and measurement
At the commencement date, the Company recognizes a right-of-use asset and a corresponding lease liability. The lease liability is initially measured at the present value of lease payments that are not paid at that date, discounted using the interest rate implicit in the lease, or, if that rate cannot be readily determined, the Company's incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payments that depend on an index or a rate;
amounts expected to be payable under residual value guarantees;
the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The right-of-use asset is initially measured at cost, comprising:
the amount of the initial lease liability,
any lease payments made at or before the commencement date less any lease incentives received,
any initial direct costs incurred, and
an estimate of restoration costs (if applicable).
Subsequent measurement
The right-of-use asset is subsequently depreciated on a straight-line basis over the shorter of the lease term and the useful life of the underlying asset, and adjusted for any remeasurements of the lease liability.
The lease liability is subsequently measured at amortized cost using the effective interest method and remeasured when:
there is a change in future lease payments arising from a change in an index or rate,
there is a change in the assessment of an option to purchase, extend, or terminate the lease, or
there is a lease modification not accounted for as a separate lease.
Cash and cash equivalents
September 30,
2025
$
December 31,
2024
$
Cash at bank
1,557,674
1,793,384
Cash on deposit
1,260,361
1,535,950
2,818,035
3,329,334
Exploration and evaluation
$
Norasa
Balance, December 31, 2024
17,955,477
Additions to exploration and evaluation
3,123,706
Foreign exchange movement
1,134,500
Balance, September 30, 2025
22,213,683
Norasa Uranium Project
The Norasa Uranium Project is the consolidation of the Valencia Uranium Project and the Namibplaas Uranium Project in Namibia.
Valencia Uranium Project
Through its wholly owned subsidiary Valencia Uranium (Proprietary) Limited ("Valencia"), the Company holds Mining Licence 149 for the Valencia Uranium Project ("ML149"). ML149 was granted effective June 23, 2008 for a period of 25 years until June 22, 2033.
Namibplaas Uranium Project
Through Valencia, the Company holds Exclusive Prospecting Licence 3638 for Namibplaas ("EPL 3638"). EPL 3638 was renewed on February 1, 2024 for a period of 2 years until February 1, 2026.
Lease with an option to purchase
On May 15, 2025, Valencia entered into a Lease with the purchaser ("Lessor") of the shares of a company that owns Portion-1 of Farm Namibplaas No. 93 ("Property"), which covers approximately 6,700 hectares, including 1,179 hectares that is covered by EPL 3638. The Lessor agreed to pay N$24,000,000 to the vendor and Valencia guaranteed the obligations of the Lessor to the vendor.
Under the terms of the Lease, Valencia will have the right of occupation of the Property and an option to purchase the Property ("Option") under the following terms:
Commencement
Date
July 25, 2025, the date upon which the Lessor completed the acquisition of the Property.
Term
Earliest of the termination by Valencia, exercise of the purchase option and 10 years from the Commencement Date.
Loan
The Lease provides for Valencia to advance a loan to the Lessor:
Advances
N$7,000,000 which was advanced on May 15, 2025, and thereafter, a further
N$17,000,000 in 17 monthly advances of N$1,000,000 commencing on the Commencement Date.
Interest rate
None.
Repayment
To be negotiated, however, upon exercise the Purchase option, the loan will be offset against the purchase price of the property or shares of the company holding the title
deed.
Payment of costs
Valencia will pay all operating, administrative, interest and tax costs incurred by the Lessor in
respect of the Property.
Purchase option
Valencia will have the option to purchase the Property or the outstanding shares of the Lessor for par value of N$1 per share.
Loan receivable
The Company and the Lessor have agreed to amend the Loan to provide that the further advances of N$17,000,000 will be advanced in 120 monthly advances. Since the Commencement Date, the Company has made, and the Lessor has accepted, monthly advances in accordance with the amendment.
A continuity of a loan receivable is presented below:
N$
$
Balance, December 31, 2024
-
-
Initial advance
7,000,000
538,300
Advances
217,519
16,484
Foreign exchange movement
-
26,876
Balance, September 30, 2025
7,217,519
581,660
Lease accounting
The Lease meets the definition of a lease under IFRS 16, as it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease payments consist solely of the payment of costs which are variable lease payments not based on an index or rate and therefore, lease payments are expensed and no right-of-use asset or lease liability is recognized. In the 9 months ended September 30, 2025, the Company expensed lease payments of
$73,003.
Impairment
At December 31, 2024 and September 30, 2025, the Board reviewed the carrying value of the capitalized exploration and evaluation of Norasa. The Board considered the impairment indicators contained within IFRS 6 and concluded that no impairment indicators have been identified.
Share capital Authorized
An unlimited number of Class A common shares without par value
An unlimited number of redeemable, voting non-participating Class B shares
An unlimited number of Class C shares with rights and privileges to be determined by the Company's Board of Directors
Issued
Number of Class A common shares
Amount
$
Balance, December 31, 2024
200,319,467
176,207,588
Private placement of units
10,010,000
5,005,000
Fair value of warrants issued
-
(1,136,000)
Share issue costs
-
(80,906)
Exercise of PSUs
350,000
209,720
Balance, September 30, 2025
210,679,467
180,205,402
Private placement of units
On February 21, 2025, the Company completed a private placement of 10,010,000 units at a price of $0.50 per unit for gross proceeds of $5,005,000. Each unit consisted of one Class A common share and one warrant entitling the holder to purchase one Class A common share for $0.75 until February 21, 2027. Directors and officers of the Company subscribed for the entirety of the private placement.
The fair value of the unit warrants was calculated using the Black-Scholes option pricing model with the following assumptions:
Issue date
February 21, 2025
Expiry date
February 21, 2027
Warrants issued
10,010,000
Exercise price
$0.75
Share price
$0.44
Risk-free interest rate
2.73%
Expected volatility based on historical volatility
54%
Expected life of warrants
2 years
Expected dividend yield
0%
Fair value
$1,136,000
Fair value per warrant
$0.11
The Company has not issued any Class B or Class C shares.
See note 13, Events occurring after the reporting period, Bought deal private placement of units.
Warrants
Weighted-average exercise price
$
Number of warrants outstanding
and exercisable
Balance, December 31, 2024
-
-
Issued (note 7, Share capital, Private placement of units)
0.75
10,010,000
Balance, September 30, 2025
0.75
10,010,000
Incentive plan
The Company has an Amended and Restated Omnibus Incentive Plan (the "Plan") that permits the Board to make awards of stock options, restricted share units, performance share units and deferred stock units. The maximum number of Class A common shares for issuance under the Plan will not exceed 10% of the Company's then issued and outstanding shares. At September 30, 2025, the maximum number of Class A common shares for issuance under the Plan is 21,067,946.
Stock options
All stock options granted under the Plan have an exercise price determined and approved by the Board at the time of grant, which shall not be less than the closing price of the Class A common shares on the TSX on the trading day immediately preceding the date of the granting of the option. Subject to any vesting conditions set forth in a participant's grant agreement, options vest in equal portions in successive annual periods over a period of three years after they are granted. Options are exercisable during a period established by the Board which shall not be more than 10 years from the grant of the option.
A continuity of the activity in the Company's stock options is presented below:
Weighted-average exercise price
$
Number of stock options outstanding
and exercisable
Balance, December 31, 2024
0.74
9,350,000
Cancelled
0.76
(1,650,000)
Balance, September 30, 2025
0.73
7,700,000
A summary of the Company's stock options outstanding and exercisable as at September 30, 2025 is presented below:
Exercise price
Expiry date
Number of stock options outstanding
and exercisable
$0.93
May 20, 2026
3,250,000
$0.59
September 20, 2028
4,450,000
7,700,000
Performance share units, restricted share units and deferred stock units
A continuity of the number of the Company's performance share units outstanding at September 30, 2025 is presented below:
Vested
Unvested
Total
Balance, December 31, 2024
2,350,000
650,000
3,000,000
Exercised
(600,000)
-
(600,000)
Balance, September 30, 2025
1,750,000
650,000
2,400,000
A summary of the number of the Company's performance share units outstanding at September 30, 2025 is presented below:
Number of PSUs
Vesting condition
Status
outstanding
PSU 1
Vest in full upon the Company's share price reaching $0.80
Vested
1,500,000
PSU 2
Vest in full upon granting of an EPL for Namibplaas
Vested
250,000
PSU 3
Vest in full upon the granting of a Mining Licence for Namibplaas
Unvested
650,000
2,400,000
PSU 3
The achievement of the vesting condition of granting of a Mining Licence for Namibplaas is dependent on a number of variables being satisfied. As a result, as at the reporting date, given the uncertainty, the Company has assessed the probability of achieving this vesting condition as not probable of being achieved within the required timeframe and no stock-based compensation has been recognized for this tranche.
Restricted share units and deferred stock units
At September 30, 2025, the Company has not issued any restricted share units or deferred stock units.
Financial risk management
The Company's activities expose it to a variety of risks arising from financial instruments. These risks, and management's objectives, policies and procedures for managing these risks, are discussed below.
Credit risk
Credit risk is the risk of loss associated with a counter party's inability to fulfil its payment objectives. The Company's credit risk primarily relates to cash and cash equivalents.
The Company manages its credit risk over cash and cash equivalents by purchasing short-term investment grade securities, such as banker's acceptances and bank deposit notes issued by Canadian banks. Under the Company's risk management policy, allowable counterparty exposure limits are determined by the level of the rating unless exceptional circumstances apply. A rating of "A"- grade or equivalent is the minimum allowable rating required as assessed by international credit rating agencies.
Liquidity risk
Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial liabilities as they come due. The Company's approach to managing its liquidity risk is to prepare company-wide rolling cash forecasts to determine the funding required to support the Company's normal operating activities on an ongoing basis.
At September 30, 2025, the Company had working capital of $3,111,740, calculated as follows:
$
Current assets
3,470,276
Current liabilities
358,536
3,111,740
Market risk
Market risk is the risk that changes in market price, foreign exchange rates and interest rates will affect the Company's future cash flows and earnings. The impact of each of these components is discussed below.
Price risk - The Company is not exposed to equity securities price risk.
Interest rate risk - Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. At September 30, 2025, the Company's exposure to the risk of changes in market interest rates relates primarily to the Company's cash and cash equivalents held in bank accounts that earn variable interest rates. Because of the short-term nature of these financial instruments, fluctuations in market rates do not have a significant impact on estimated fair values at September 30, 2025. Future cash flows from interest income on cash will be affected by interest rate fluctuations. Future fluctuations in interest rates will impact the Company's cost of capital which it will require in order to develop its mineral properties.
Foreign currency risk - The Company's foreign currency exposures currently related to the currency in which expenses for exploration and development occur. Future profitability may be materially impacted by fluctuations between the Namibian dollar in which production costs will be incurred and the US dollar in which most sales of uranium occur. Expenses are incurred in Canadian dollars, United States dollars, Namibian dollars, Australian dollars, Euros and British Pounds. The Company is subject to gains and losses due to fluctuations in these currencies.
US dollars
At September 30, 2025, the Company had cash and cash equivalents of US$13,521.
Namibian dollars
At September 30, 2025, the Company had cash and cash equivalents of N$18,249,611 (Canadian dollar equivalent -
$1,470,736), receivables of N$3,794,351 (Canadian dollar equivalent - $305,787), loan receivable of N$7,746,518 (Canadian dollar equivalent - $624,292) and accounts payable and accrued liabilities of N$2,908,088 (Canadian dollar equivalent - $234,363). If the foreign exchange rate related to the Company's Namibian dollar balances increased or decreased by 1%, with all other variables held constant, the currency translation adjustment would have increased or decreased by $21,665.
Capital management
The Company's objective when managing capital resources is to ensure it has sufficient capital to support its ongoing operations including a sufficient level of funds to support continued exploration and development in Namibia and to provide returns for shareholders and benefits for other stakeholders.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the risk characteristics of the Company's assets. The Board of Directors of the Company has not yet made a formal decision to commence the development of Norasa, which decision, remains subject to, amongst other factors, suitable financing arrangements and prevailing market and economic conditions. Management will consider the issue of senior debt, convertible investments, other financial instruments and the introduction of strategic partners as a means to finance development of Norasa while minimizing equity dilution.
As of September 30, 2025, the Company is not subject to any externally imposed capital requirements and there has been no change during the year with respect to the overall capital risk management strategy.
Related party transactions Compensation of key management personnel
Key management personnel as defined under IFRS are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company's Chief Executive Officer, Chief Financial Officer, Investor Relations and members of the Company's Board of Directors.
Compensation awarded to key management personnel is as follows:
9 months ended September 30,
2025
$
2024
$
Director fees
472,568
305,951
Consulting fees
452,302
250,537
Stock-based compensation
-
151,170
924,870
707,658
Segment information
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are reviewed regularly by the Company's chief operating decision maker, the Chief Executive Officer and for which discrete financial information is available. The Company has determined that it has one operating segment, the acquisition, exploration and development of uranium and gold mineral properties, all of which are currently located in Namibia. The Company's corporate head office earns nominal interest income which is considered incidental to the activities of the Company and therefore does not meet the definition of an operating segment.
Non-current assets excluding financial assets by geographic area are as follows:
September 30,
2025
$
December 31,
2024
$
Namibia
22,213,683
17,955,477
Events occurring after the reporting period
At the date of this report, except as outlined below, there are no other matters or circumstances which have arisen since September 30, 2025 that have significantly affected or may significantly affect operations, results of operations or the state of affairs of the Company.
Bought deal private placement of units
On October 16, 2025, the Company completed a bought deal private placement of 33,796,000 units at a price of $0.56 per unit for gross proceeds of $18,925,760. Each unit consisted of one Class A common share and one-half of one warrant, with each whole warrant entitling the holder to purchase one Class A common share for $0.80 until October 16, 2028.
In connection with the bought deal private placement, the Company paid cash fees of $1,135,545.60 and issued 2,027,760 broker warrants entitling the holder to purchase one class A common share for $0.66 until October 16, 2028.