Japan Gold: Financial StatementsYear End - Dec 31, 2025

(Expressed in Canadian dollars)

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Japan Gold Corp.

Opinion

We have audited the accompanying consolidated financial statements of Japan Gold Corp. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2025 and 2024, and the consolidated statements of loss and comprehensive loss, cash flows, and changes in shareholders' equity for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2025 and 2024, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

Basis for Opinion

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

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which indicates that the Company incurred negative cash flows from operations of $3,561,969, and recorded a net loss of $4,985,884. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current year. 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.

In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have

determined the matters described below to be the key audit matters to be communicated in our auditor's report.

Assessment of Impairment Indicators of Exploration and Evaluation Assets ("EhE Assets")

As described in Note 4 to the consolidated financial statements, the carrying amount of the Company's E&E Assets was $20,372,360 as of December 31, 2025. As more fully described in Note 2 to the consolidated financial statements, management assesses E&E Assets for indicators of impairment at each reporting period.

The principal considerations for our determination that the assessment of impairment indicators of the E&E Assets is a key audit matter are that there was judgment made by management when assessing whether there were indicators of impairment for the E&E Assets, specifically relating to the assets' carrying amount which is impacted by the Company's intent and ability to continue to explore and evaluate these assets. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of impairment that could give rise to the requirement to prepare an estimate of the recoverable amount of the E&E Asset.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures included, among others:

• Evaluating management's assessment of impairment indicators.

• Evaluating the intent for the E&E Assets through discussion and communication with management.

• Reviewing the Company's recent expenditure activity and expenditure budgets for future periods.

• Assessing compliance with agreements and expenditure requirement including reviewing option agreements.

• Obtaining, on a test basis, confirmation of title to ensure mineral rights underlying the E&E Assets are in good standing.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes 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 Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance are responsible for overseeing the Company's financial reporting process. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional 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 risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

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

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

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

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

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

Chartered Professional Accountants Vancouver, Canada

April 21, 2026

Nature and continuance of operations (Note 1) Subsequent events (Notes 6 and 12)

Approved by the Board of Directors and authorized for issuance on April 21, 2026:

"Murray Flanigan" Director "John Proust" Director

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

During the year ended December 31, 2025, the Company issued 250,000 common shares upon the exercise of restricted share units, resulting in a non-cash reclassification of $18,750 from contributed surplus to share capital.

During the year ended December 31, 2025, the Company recognized $126,000 in non-cash financing expense related to the fair value of warrants issued in connection with a prior loan arrangement, with a corresponding increase in contributed surplus. During the year ended December 31, 2024, there was a conversion of $2,899,921 of convertible debt to 22,338,738 common shares.

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

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND DECEMBER 31, 2024

(Expressed in Canadian dollars)

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

1. NATURE AND CONTINUANCE OF OPERATIONS

   Japan Gold Corp. ("Japan Gold" or "the Company") is incorporated under the laws of British Columbia.

   The Company is exploring and evaluating mineral properties across the three largest islands of Japan: Hokkaido, Honshu and Kyushu. The Company's head office is at Suite 650-669 Howe Street, Vancouver, British Columbia, Canada, V6C 0B4. The Company's shares are traded on the TSX Venture Exchange ("TSX-V") under the symbol "JG" and on the OTC Markets ("OTCQB") under the symbol "JGLDF".

   These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they become due. The Company has not generated any revenues or cash flows from operations to date. For the year ended December 31, 2025, the Company incurred negative cash flows from operations of $3,561,969 and recorded a net loss of

   $4,985,884. The Company's ability to continue as a going concern is dependent on its ability to successfully raise additional financing, entering into a joint venture, sale of all or a portion of the Company's assets, the outright sale of the Company, the successful development of the Company's mineral property interests, or a combination thereof. The Company believes that it will be able to continue as a going concern for the foreseeable future based on the Company's historical and anticipated ability to raise additional financing to further advance its projects. However, the Company will continue to incur negative cash flows from operations and the Company will require additional funding in the future. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company. These factors indicate the existence of a material uncertainty that may cast significant doubt upon the Company's ability to continue as a going concern. These consolidated financial statements do not give effect to any adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

2. MATERIAL ACCOUNTING POLICY INFORMATION

These consolidated financial statements have been prepared in accordance with the IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). These consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments, which are stated at fair value.

These consolidated financial statements were approved for issuance by the Company's Board of Directors on April 21, 2026.

These consolidated financial statements include the accounts of the Company and its wholly owned Japanese subsidiary, Japan Gold KK ("JGKK"). All intercompany balances and transactions have been eliminated on consolidation. The Company consolidates subsidiaries where it has the ability to exercise control. Control over an investee is defined to exist when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Particularly, the Company controls investees, if and only if, the Company has all of the following: power over the investee, exposure or rights to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect its returns.

1. MATERIAL ACCOUNTING POLICY INFORMATION (continued) Significant accounting judgments and estimates

   The preparation of these consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and in future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

   Estimation uncertainty

   Significant assumptions about the future and other major sources of estimation uncertainty that management has made at the end of the reporting period, which could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

   1. The application of the Company's accounting policy for exploration and evaluation expenditures and the assessment of impairment indicators requires the use of estimates in determining whether it is likely that future economic benefits will flow to the Company. These estimates often rely on assumptions regarding future events or circumstances and are subject to change as new information becomes available. If, after an expenditure has been capitalized, new information becomes available suggesting that the recovery of the expenditure is unlikely, the amount capitalized is written off in profit or loss in the year the new information becomes available. Ownership of exploration and evaluation assets involves certain inherent risks, including geological, commodity prices, operating costs and permitting risks. Many of these risks are outside of the Company's control.

      For the year ended December 31, 2025, there were no indicators of impairment identified with respect to the Company's exploration and evaluation assets. For the year ended December 31, 2024, there were indicators of impairment identified with respect to some of the Company's exploration and evaluation assets. This was due to the expiration of the rights to explore the area of interest, with no expectation of renewal.

   2. The determination of fair value of share-based compensation associated with stock options and RSUs requires assumptions with respect to volatility, expected life and discount rates. Changes in these assumptions impact the share-based compensation recognized in profit or loss over the vesting period of the stock options and RSUs.

1. MATERIAL ACCOUNTING POLICY INFORMATION (continued) Significant accounting judgments and estimates (continued)

   Judgements

   Judgements that can significantly affect the amounts recognized in the financial statements are as follows:

   1. The Company's assessment of its ability to continue as a going concern requires significant judgments about whether there are material uncertainties that may cast significant doubt about the Company's ability to continue as a going concern. See note 1.

   2. Recoverability of exploration and evaluation assets

      The application of the Company's accounting policy for exploration and evaluation assets and expenditures requires judgment to determine whether future economic benefits are likely, from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.

      At the end of each reporting period, the Company assesses its exploration and evaluation assets to determine whether any indication of impairment exists. Judgment is required in determining whether indicators of impairment exist, including factors such as the period for which the Company has the right to explore, expected renewals of exploration rights, whether substantive expenditure on further exploration and evaluation of exploration projects are budgeted and results of exploration and evaluation activities on the exploration and evaluation assets.

   3. The determination of the functional currency of the Company and of its subsidiary requires significant judgment of the primary economic environment in which the Company and its subsidiary operates. This can have a significant impact on the consolidated results of the Company based on the foreign currency translation method.

The functional and reporting currency of the Company is the Canadian dollar while the functional currency of JGKK is the Japanese yen.

Transactions in currencies other than the functional currency of the Company or JGKK are initially translated into the functional currency by applying the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate prevailing at the date of the statement of financial position. Non-monetary assets and liabilities are translated at historical exchange rates, unless the item is carried at fair value, in which case it will be translated at the exchange rate in effect at the date when the fair value was determined. Resulting foreign exchange gains and losses are recognized in profit or loss.

The assets and liabilities of JGKK are translated from Japanese yen into the Canadian dollar presentation currency at exchange rates prevailing at the date of the statement of financial position. Income and expenses of JGKK are translated at average exchange rates. All resulting differences are recognized in other comprehensive loss. As a result of the change in the Yen to Canadian dollar exchange rate, the translation of JGKK amounts to the Canadian dollar presentation currency in 2025 resulted in the Company recognizing a foreign exchange translation loss of $1,260,530 (2024: $404,424) in other comprehensive loss.

Foreign exchange gains and losses arising from monetary items that in substance form part of the Company's net investment in JGKK are recorded in other comprehensive loss and are presented within shareholders' equity as foreign currency translation in Accumulated Other Comprehensive Loss.

Cash and cash equivalents include short-term guaranteed investment certificates and other similar instruments, including those with terms to maturity of less than three months or more from the date of purchase or that can be redeemed at any time and have insignificant risk of changes in fair value.

Restricted cash relates to funding provided in connection with the Barrick Alliance which can only be used for projects that are subject to the Barrick Alliance agreement (Note 4).

Once the legal right to explore a property has been acquired (in the form of a prospecting right license), costs directly related to exploration and evaluation, in addition to acquisition costs, are recognized and capitalized by projects. Prior to receiving legal rights, the costs are expensed as project evaluation expenses. These direct expenditures include such costs as field supplies, drilling costs, payments made to contractors or consultants for surveying or geoscience costs, and depreciation on property, plant and equipment used during the exploration phase. Costs not directly attributable to exploration activities, including general administrative overhead costs, are expensed in the period in which they occur.

An exploration property is reviewed by project license for which there may be separately identifiable cash-flows (cash-generating units) for impairment whenever events or changes in circumstances indicate that the carrying amount may exceed its recoverable amount. If economically recoverable ore reserves are developed, capitalized costs of the related property are first tested for impairment and then reclassified as mining assets. When a property is abandoned, all related costs are written off.

The recoverability of amounts capitalized as exploration properties is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete property development, and future profitable production or proceeds from the disposition thereof.

Any incidental revenues earned in connection with exploration activities are recognized in profit or loss together with the costs associated with the items sold.

Property, plant and equipment are carried at cost, less accumulated depreciation. Cost comprises the fair value of consideration given to acquire an asset and includes the direct charges associated with bringing the asset to the location and condition necessary for putting it into use along with the future cost of dismantling and removing the asset (if any). When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Property, plant and equipment are depreciated to their residual values over the estimated useful life of the assets using the straight-line method as follows:

Furniture and fixtures 2 years

Building 4 years

Heavy drilling equipment 3 years

Vehicles 1-2 years

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

For exploration and evaluation assets, the Company follows the guidance in IFRS 6 - Exploration for and Evaluation of Mineral Resources to determine whether exploration and evaluation assets are impaired. Impairment indicators relevant for exploration and evaluation properties include:

• whether the rights to explore the area of interest have expired during the period or will expire in the near future, and the rights are not expected to be renewed;

• substantive expenditure on further exploration and evaluation is not planned or budgeted;

• the exploration activities have not led to a discovery of commercial reserves and the Company has decided not to continue such activities in the area of interest being explored; or

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

The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Fair value less costs to sell is the amount obtainable from the sale of an asset or cash generating unit in an arm's length transaction between knowledgeable, willing parties, less costs of disposal. When a binding sale agreement is not available, fair value less costs to sell is estimated using a discounted cash flow approach with inputs and assumptions consistent with those of a market participant. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of cash inflows of other assets or groups of assets (the "cash generating unit" or "CGU"). This generally results in the Company evaluating its non-financial assets on a property-by-property basis.

An impairment loss is recognized if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in net income or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount. An impairment charge is reversed through net income or loss only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of any applicable depreciation, if no impairment loss had been recognized.

The Company's share option plan allows the Company to grant options to its employees and consultants. The fair value of options granted is recognized as a share-based payment expense with a corresponding increase in contributed surplus. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee.

The fair value for employee options is measured at grant date and each tranche is recognized on a graded-vesting basis over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.

Equity-settled share-based payment transactions with non-employees, including warrants issued as finders' fees in equity transactions, are measured at the fair value of the goods or services received. However, if the fair value cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instruments granted at the date the non-employee provides the goods or the services.

Restricted Share Units ("RSUs") are share-based payments, which are measured at the fair value on grant date and amortized over their applicable vesting periods. The offset to the recorded cost is to share-based payment reserve, and ultimately any amounts in share-based payment reserve are transferred to share capital upon settlement of the RSUs with common shares.

RSUs do not require the payment of any monetary consideration to the Company. Instead, they represent the right to receive common shares, or a payment representing common shares, following the attainment of vesting criteria determined at date of grant, notably a requirement that an individual remains eligible for awards for a specified period of time. The option to settle the RSUs in common shares or cash is at the Company's election, and the Company intends to settle its RSUs with common shares issued from treasury.

Current tax and deferred tax are recognized in profit or loss except to the extent that they relate to items recognized directly in equity or in other comprehensive loss/income.

Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting nor taxable profit or loss.

Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which these deductions can be applied. At the end of each reporting period, the Company reassesses unrecognized deferred tax assets. The Company would recognize a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. The Company determines each financial instrument's classification upon initial recognition. Measurement subsequent to initial recognition depends on the financial instrument's classification.

Financial assets

Financial assets are classified and measured at: amortized cost, fair value through other comprehensive income

("FVOCI") or fair value through profit or loss ("FVTPL").

Financial assets at amortized cost

The Company measures financial assets at amortized cost if both of the following conditions are met: the financial asset is held with the objective to collect contractual cash flows; and the contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest ("SPPI").

Financial assets are recognized initially at fair value plus attributable transaction costs and subsequently at amortized cost measured using the effective interest rate ("EIR"). Interest received is recognized as part of finance income. Gains and losses are recognized when the asset is derecognized, modified or impaired.

The Company's financial assets at amortized cost include:

• Cash and cash equivalents

• Restricted cash

• Accounts receivable and deposits

  Financial assets at fair value through other comprehensive income ("FVTOCI")

  Financial assets that meet the following conditions are measured at FVTOCI:

  • The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

  • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition, the Company may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income ("OCI"). Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is a contingent consideration recognized by an acquirer in a business combination. Investments in equity instruments at FVTOCI are initially measured at fair value including transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in OCI. The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity instrument; instead, it is transferred to retained earnings (deficit).

The Company does not hold any financial assets classified as FVTOCI.

Financial assets at fair value through profit and Loss ("FVTPL")

Financial assets at FVTPL include financial assets held for trading, financial assets designated upon initial recognition at FVTPL, or financial assets mandatorily required to be measured at fair value i.e. fail the SPPI test. Derivatives are classified as FVTPL unless they are designated as effective hedging instruments.

Financial assets at FVTPL are carried in the statement of financial position at fair value with net changes in fair value recognized in profit or loss. Transaction costs related to financial assets at FVTPL are recognized in profit or loss. The Company does not hold any financial assets classified as FVTPL.

Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, derivatives designated as hedging instruments in an effective hedge, or financial liabilities at amortized cost as appropriate.

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. FVTPL category also includes derivative financial instruments that are not designated as hedging instruments.

Financial liabilities at FVTPL are carried in the statement of financial position at fair value with net changes in fair value recognized in profit or loss. Transaction costs related to financial liabilities at FVTPL are recognized in profit or loss.

The Company does not hold any financial liabilities classified as FVTPL. Financial liabilities at amortized cost

Financial liabilities at amortized cost are initially recognized at fair value net of attributable transaction costs. Subsequently, these financial liabilities are measured at amortized cost using the effective interest rate ("EIR") method. Gains and losses are recognized in profit or loss when the liabilities are derecognized, as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of loss and comprehensive loss. Gains and losses are recognized when the financial liability is derecognized.

The Company's financial liabilities at amortized cost includes accounts payable and accrued liabilities.

A financial liability is derecognized when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss.

Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties subject to common control are also considered to be related. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

The Company presents basic loss per share data for its common shares, calculated by dividing the net loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined by adjusting the earnings attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares. In reporting periods when a loss is incurred, potential issuance of shares would be anti-dilutive and, therefore, basic and diluted loss per share are the same.

The Company is subject to various government laws and regulations relating to environmental disturbances caused by exploration and evaluation activities. The Company records the present value of the estimated costs of legal and constructive obligations required to restore the exploration sites in the period in which the obligation is incurred. The nature of the rehabilitation activities includes restoration, reclamation and re-vegetation of the affected exploration sites. When the liability is recognized, the present value of the estimated costs is capitalized by increasing the carrying amount of the related exploration and evaluation assets. Over time, the discounted liability is increased for the changes in present value based on current market discount rates and liability specific risks. Additional environmental disturbances or changes in rehabilitation costs will be recognized as additions to the corresponding assets and rehabilitation liability in the period which they occur.

The Company does not currently have material rehabilitation requirements.

IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date.

The Company is currently assessing the impact of the new standard on the Company's annual financial statements.

1. MATERIAL ACCOUNTING POLICY INFORMATION (continued) Adoption of new accounting standards in 2025 (continued) New standards issued and not yet effective

   There are no other upcoming changes in accounting standards which are expected to materially impact the Company.

2. CASH AND CASH EQUIVALENTS

   As at December 31, 2025, the balance of cash and cash equivalents is $2,969,607 (December 31, 2024: $80,230) of which $2,864,554 (December 31, 2024: $Nil) is cash equivalents related to Guaranteed Investment Certificates ("GICs") purchased during the year. During the period ended December 31, 2025, the Company redeemed $Nil of Canadian dollar denominated GIC's to fund operations (December 31, 2024: $1,750,000). During the year ended December 31, 2025, the Company redeemed $2,810,000 of US dollar denominated GIC's to fund operations (December 31, 2024: $Nil).

3. EXPLORATION AND EVALUATION ASSETS

1. EXPLORATION AND EVALUATION ASSETS (continued)

   The Company's current project portfolio consists of prospecting rights licenses and prospecting rights license applications for a combined area of 276,699 hectares over 26 separate projects on the three main islands of Japan. See below for a summary of the Company's current Prospecting Rights as at December 31, 2025:

   • 9 Prospecting Rights at the Aibetsu Project (2,840 hectares)

   • 21 Prospecting Rights at the Bajo Project (6,332 hectares)

   • 51 Prospecting Rights at the Ebino Project (15,741 hectares)

   • 39 Prospecting Rights at the Gumyo Project (10,529 hectares)

   • 3 Prospecting Rights at the Hakuryu Project (1,017 hectares)

   • 18 Prospecting Rights at the Ikutahara Project (6,293 hectares)

   • 20 Prospecting Rights at the Isa Project (5,959 hectares)

   • 6 Prospecting Rights at the Kurino Project (933 hectares)

   • 35 Prospecting Rights at the Kushikino-Iriki Project (11,163 hectares)

   • 22 Prospecting Rights at the Mizobe Project (5,163 hectares)

   • 20 Prospecting Rights at the Mizobe-Onoyama Project (5,125 hectares)

   • 9 Prospecting Rights at the Mizobe West Project (2,416 hectares)

   • 22 Prospecting Rights at the North Taio Project (7,009 hectares)

   • 11 Prospecting Rights at the Onoyama Project (2,784 hectares)

   • 18 Prospecting Rights at the Onoyama-Yamagano Project (5,774 hectares)

   • 20 Prospecting Rights at the OT-Yaeyama Project (6,175 hectares)

   • 37 Prospecting Rights at the Tobaru-Fuke Project (10,935 hectares)

   • 15 Prospecting Rights at the Togi Project (3,990 hectares)

   • Tobaru Project (1,347 hectares): In September 2024, the 4 Prospecting Rights at Tobaru expired and were successfully re-applied.

   • Ohra-Takamine Project (2,024 hectares): In October 2025, the 6 Prospecting Rights at Ohra-Takamine expired and were successfully re-applied.

Osisko Royalty Sale

On February 4, 2025, the Company along with its wholly-owned subsidiary JGKK entered into an investment agreement ("Investment Agreement") with Osisko Gold Royalties Ltd ("Osisko") to sell to Osisko 1.5% net smelter royalty (the "Initial Royalty") on Japan Gold Corp. properties and assets in Japan that are not (or subsequently are not) subject to the Barrick Alliance (collectively, the "Royalty Properties'), as evidenced by a royalty agreement entered into by the Company and Osisko concurrently with the Investment Agreement, for cash consideration of US$5,000,000 ($7,029,050). On the first anniversary of the Investment Agreement, or such other date mutually agreed to between the Company and Osisko, Osisko will have the option to purchase an additional 0.5% net smelter return royalty (together with the Initial Royalty, as the case may be, the "Royalty") from JGKK on the Royalty Properties, for additional cash consideration of US$3,000,000 payable by Osisko to the Company on such date.

The Royalty is a secured obligation of the Company evidenced initially by, among other things, a share pledge by the Company of JGKK's shares as well as by a guarantee from Japan Gold Corp., with a full security package to be put in place by the parties following further consultation with the applicable governmental authorities and to the extent permitted under applicable laws. Following the conclusion of the Barrick Alliance, the former Barrick Alliance Projects, Hakuryu, Togi and Ebino have now been added to the Royalty Properties. The Company has granted Osisko certain rights as part of the transaction, including a right of first refusal on future royalty and stream transactions on present and future Japan Gold Corp. properties that are not subject to the Barrick Alliance.

As at December 31, 2025, the Company received net proceeds of $7,029,050 from the royalty sale and recorded this against the exploration and evaluation assets.

1. EXPLORATION AND EVALUATION ASSETS (continued)

   Barrick Alliance

   On February 23, 2020, the Company entered into a country wide alliance with Barrick Mining Corporation ("Barrick") to jointly explore, develop and mine certain gold mineral properties in Japan (the "Barrick Alliance"). The Barrick Alliance covered 29 out of 31 projects that were held by JGKK at that time. The Barrick Alliance did not include the Ikutahara Project in Hokkaido and the Ohra-Takamine Project in Kyushu and the Company will continue to advance these two projects independently. Barrick funded a 2-year Initial Evaluation Phase comprising a majority of the projects (minimum funding of US$3,000,000 per year) and funded a subsequent 3-year Second Evaluation Phase on three projects (minimum funding of US$4 million per year) that met Barrick's inclusion criteria and returned 26 projects to the Company. The three projects were the Togi, Hakuryu and Ebino projects. Barrick continued to provide full support and management and sole fund all Barrick Alliance activities for the three selected projects.

   The Company acted as the Manager of the remaining projects, subject to Barrick's right at any time to become the Manager of a project. Barrick had the ability to identify a project as a Designated Project at any time during the Initial Evaluation Phase or the Second Evaluation Phase and could elect to sole fund to completion of a pre-feasibility study ("PFS"). Upon completion of a PFS, Barrick would then earn a 51% interest in the Designated Project. Barrick could elect to continue to sole fund a Designated Project following the completion of a PFS to a bankable feasibility study ("BFS"). Barrick's interest in the Designated Project at the completion of the BFS would increase to 75%. Where Barrick had elected to sole fund a Designated Project through to completion of a BFS, Japan Gold would have been fully carried through completion of the BFS and would have retained a 25% interest in the Designated Project. Barrick and Japan Gold established a Technical Committee to, among other matters, provide input in respect of the preparation of programs and budgets for, and the conduct of operations on, projects that were part of the Barrick Alliance. All programs and budgets for projects that were part of the Barrick Alliance would be subject to approval by Barrick. Under the terms of the Barrick Alliance agreement, if Barrick acquired common shares of Japan Gold and Barrick's ownership interest in Japan Gold of at least 10%, Barrick would have the right, but not the obligation, to appoint a nominee to Japan Gold's Board of Directors.

   On September 29, 2025, the Company announced the conclusion of the Barrick Alliance where Barrick and the Company mutually agreed to terminate the strategic alliance agreement to be effective as at October 31, 2025 ("Effective date"). As of the Effective date, Barrick no longer hold any right to or interest in any of the Company's portfolio of mineral rights in Japan, including the Barrick Alliance Projects, Hakuryu, Togi and Ebino.

   The Company is internally evaluating all projects with a view to determining which project to advance independently or by bringing in new joint venture partners.

   During the year ended December 31, 2025, Barrick paid $3,283,432 (US$2,353,991) (December 31, 2024 -

   $4,072,681 (US$2,976,737)) to the Company as funding for the Barrick Alliance work programs. On receipt of funds from Barrick, the Company recorded amounts received as restricted cash with an offsetting payable to Barrick. The payable to Barrick was decreased as qualifying expenditures were incurred on Barrick Alliance work programs. As at December 31, 2025, $Nil (December 31, 2024, $237) was recorded as restricted cash representing amounts funded by Barrick in excess of amounts paid by the Company for exploration and evaluation expenditures and/or amounts to be reimbursed to the Company by Barrick for exploration and evaluation expenditures. As at December 31, 2025, the Company had a receivable of $Nil from Barrick (December 31, 2024: $616,981).

   The Company received total funding of $23,257,218 (US$17,447,251) for the Barrick Alliance activities.

2. PROPERTY, PLANT AND EQUIPMENT

   Cost	Heavy Equipment		Vehicles	Building	Land	Furniture and Fixtures	Total
   At December 31, 2023	$ 830,879		$ 109,775	$ 113,046	$ 9,583	$ 264,295	$ 1,327,578
   Purchases	62,089		19,909	1,045	-	23,445	106,488
   Foreign currency translation adjustment	(15,170)		(1,848)	(2,162)	(185)	(4,776)	(24,141)
   At December 31, 2024	877,798		127,836	111,929	9,398	282,964	1,409,925
   Purchases	-		23,984	24,319	-	58,055	106,358
   Foreign currency translation adjustment	(41,162)		(7,554)	(6,831)	(441)	(17,045)	(73,033)
   At December 31, 2025 $ 836,636 $ 144,266				$ 129,417	$ 8,957	$ 323,974	$ 1,443,250
   Accumulated depreciation
   At December 31, 2023 $ 764,494 $ 101,215				$ 65,047	$ -	$ 211,801	$ 1,142,557
   Depreciation capitalized to exploration and
   evaluation assets 42,797 6,080				13,733	-	22,160	84,770
   Depreciation expense - -				-	-	4,893	4,893
   Foreign currency translation adjustment		(14,148)	(1,867)	(1,070)	-	(4,129)	(21,214)
   At December 31, 2024		793,143	105,428	77,710	-	234,725	1,211,006
   Depreciation capitalized to exploration	and
   evaluation assets		39,374	19,037	14,487	-	14,889	87,787
   Depreciation expense		-	-	-	-	10,229	10,229
   Foreign currency translation adjustment		(39,753)	(6,181)	(4,587)	-	(12,641)	(63,162)
   At December 31, 2025		$ 792,764	$ 118,284	$ 87,610	$ -	$ 247,202	$ 1,245,860
   Net carrying value, December 31, 2024		$ 84,655	$ 22,408	$ 34,219	$ 9,398	$ 48,239	$ 198,919
   Net carrying value, December 31, 2025		$ 43,872	$ 25,982	$ 41,807	$ 8,957	$ 76,772	$ 197,390

3. SHARE CAPITAL

The Company is authorized to issue an unlimited number of common and preferred shares without par value. There are currently no preferred shares issued and outstanding.

On November 18, 2025, the Company issued 250,000 common shares upon the vesting of restricted share units.

On August 22, 2025, the Company closed a non-brokered private placement financing of 25,845,000 common shares of the Company at a price of $0.08 per share for gross proceeds of $2,067,600, which includes 17,182,500 shares sold to a strategic investor and major shareholder of the Company. In connection with the financing, the Company issued 150,000 shares in finder's fees to an arm's-length finder valued at $12,000. The Company also incurred $10,870 in filing and regulatory fees and $16,320 in professional fees related to the financing.

On November 7, 2024, the Company converted Convertible Debentures totaling $2,866,034 including principal and interest expense into common shares at a price of $0.13 per share (and the greater of Market Price and $0.13 per common share, in the case of the interest accrued). As a result, the Company converted the Debentures (including interest) into 22,338,738 common shares of the Company.

The Company has a "rolling" Share Option Plan (the "Plan") in compliance with the TSX-V's policy for granting share options. Under the Plan, the maximum number of common shares reserved for issuance may not exceed 10% of the total number of issued and outstanding common shares and, to any one optionee, may not exceed 5% of the issued common shares on a yearly basis. The exercise price of each option shall not be less than the market price of the Company's stock at the date of grant. Options have expiry dates of no later than 10 years after the grant date. Vesting of options is determined by the Board of Directors at the time of grant.

The Company adopted an updated omnibus equity incentive plan (the "Compensation Plan") which was approved at the Company's annual general meeting of stockholders held on October 24, 2024. The Compensation Plan supersedes the above Share Option Plan with the Company's Board of Directors passing a resolution capping all types of consideration referred to in the Compensation Plan for 2023 to a rolling maximum of 10% of the total number of issued and outstanding common shares of the Company as measured on the date of each grant.

A summary of the changes in share options is presented below:

On April 10, 2024, the Company granted 200,000 stock options to a consultant. The stock options are exercisable at a price of $0.20 per share for a period of five years with a vesting schedule of 25% on the grant date and 25% every six months thereafter.

On April 11, 2024, the Company granted 1,200,000 stock options to the President and Chief Operating Officer (who is now serving as a Senior Technical Advisor to the Company). The stock options are exercisable at a price of $0.20 per share for a period of five years with a vesting schedule over three years, 33.3% at the end of each year from the anniversary date of the grant date.

On May 21, 2024, the Company granted 200,000 stock options to a director. The stock options are exercisable at

$0.20 per share for a period of five years, with one-third of the options vesting on grant and one-third of the options vesting every six months thereafter. On January 20, 2025, 200,000 options were cancelled.

On January 20, 2025, the Company granted 2,450,000 options to employees and consultants. The stock options are exercisable at $0.13 per share for a period of five years, with one-third of the options vesting on grant and one-third of the options vesting every six months thereafter. On September 28, 2025, 215,000 options were forfeited.

The Company recorded share-based compensation expense of $148,444 for the year ended December 31, 2025 relating to the options granted in 2025 along with options granted and vested from prior years (December 31, 2024:

$61,823).

1. SHARE CAPITAL (continued) Share options (continued)

   The following weighted average assumptions were used for the Black-Scholes valuation of share options granted in 2025 and 2024:

   	April 10, 2024	April 11, 2024	May 21, 2024	January 20, 2025
   Risk-free interest rate	3.54%	3.54%	3.71%	2.95%
   Expected life of options (in years)	5	5	5	5
   Expected volatility	82%	82%	82%	83%
   Share price at grant date	$ 0.13	$ 0.12	$ 0.09	$ 0.09
   Exercise price	$ 0.20	$ 0.20	$ 0.20	$ 0.13
   Fair value	$ 0.08	$ 0.07	$ 0.05	$ 0.05
   Forfeiture rate	-	-	-	-
   Dividend rate	-	-	-	-

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

   Outstanding	Weighted average exercise price	Expiry date	Weighted average remaining life (years)
   900,000	$ 0.40	September 15, 2026	0.71
   250,000	$ 0.16	December 13, 2028	2.95
   1,180,000	$ 0.20	January 24, 2029	3.07
   1,000,000	$ 0.30	May 13, 2030	4.37
   590,000	$ 0.35	December 23, 2026	0.98
   200,000	$ 0.20	April 10, 2029	3.28
   1,200,000	$ 0.20	April 11, 2029	3.28
   2,235,000	$ 0.13	January 20, 2030	4.08
   7,555,000	$ 0.23		3.13

   As at December 31, 2025, the Company has 7,555,000 options issued and outstanding where 6,010,003 options are exercisable as at December 31, 2025 with a weighted average exercise price of $0.23.

   Restricted Share Units

   Restricted Share Units ("RSUs") are share-based payments, which are measured at the grant date fair value and amortized over their applicable vesting periods. The offset to the recorded cost is to share-based payment reserve, and ultimately any amounts in share-based payment reserve are transferred to share capital upon settlement of the RSUs with common shares.

   RSUs do not require the payment of any monetary consideration to the Company. Instead, they represent the right to receive common shares, or a payment representing common shares, following the attainment of vesting criteria determined at date of grant, notably a requirement that an individual remains eligible for awards for a specified period of time. The option to settle the RSUs in common shares or cash is at the Company's election, and the Company intends to settle its RSUs with common shares issued from treasury.

   SHARE CAPITAL (continued)
   Restricted Share Units (continued)
   A summary of the changes in RSUs is presented below:	Number of RSUs
   Outstanding at December 31, 2023	-
   Granted	12,061,682
   Outstanding at December 31, 2024	12,061,682
   Granted	2,534,615
   Exercised	(250,000)
   Forfeited	(500,000)
   Outstanding at December 31, 2025	13,846,297

   6.

   On April 11, 2024, the Company granted 1,561,682 RSUs to the President and Chief Operating Officer (who is now serving as a Senior Technical Advisor to the Company). The RSUs vest and become exercisable over three years, 33.3% at the end of each year from the anniversary of the grant date. The share price at grant date was $0.12.

   On November 7, 2024, the Company granted 10,500,000 RSUs to directors, officers and non-insiders of the Company. The RSUs will vest over two years from the grant date. The share price at grant date was $0.08 per share.

   On January 16, 2025, the Company granted 300,000 RSUs to a consultant of the Company. The RSUs will vest over a 24-month period, with 50% vesting after 12 months from the date of grant. The share price on the grant date was

   $0.07.

   On January 20, 2025, the Company granted 950,000 RSUs to non-insiders of the Company. The RSUs will vest over a 24-month period, with 50% vesting after 12 months from the date of grant. The share price on the grant date was

   $0.09.

   On March 26, 2025, the Company granted 900,000 RSUs to an officer and a consultant of the Company. The RSUs will vest over a 24-month period, with 50% vesting after 12 months from the date of grant. The share price on the grant date was $0.14.

   On May 1, 2025, the Company granted 384,615 RSUs to the VP Exploration, an employee of the Company. The RSUs will vest over a 24-month period, with 50% vesting after 12 months from the date of grant. The share price on the grant date was $0.12.

   The following table summarizes information about the RSUs outstanding as at December 31, 2025:

   Outstanding	Share price on date of grant	Expiry date	Weighted average remaining life (years)
   1,561,682	$ 0.12	April 11, 2027	1.28
   9,750,000	$ 0.08	November 7, 2026	0.85
   300,000	$ 0.07	January 16, 2027	1.04
   950,000	$ 0.09	January 20, 2027	1.05
   900,000	$ 0.14	March 26, 2027	1.23
   384,615	$ 0.12	May 1, 2027	1.33
   13,846,297			0.96

   The Company recorded share-based compensation expense of $734,374 for the year ended December 31, 2025, relating to RSUs granted (December 31, 2024: $184,330).

   Subsequent to the year ended December 31, 2025, 150,000 RSUs vested and shares were issued to settle these RSUs.

   6.	SHARE CAPITAL (continued) Warrants A summary of the changes in warrants is presented below:
   		Number of Warrants	Weighted Average Exercise Price
   	Outstanding at December 31, 2023	1,947,500	$ 0.20
   	Expired	(1,947,500)	0.20
   	Outstanding at December 31, 2024	-	$ -
   	Granted	2,000,000	0.07
   	Outstanding at December 31, 2025	2,000,000	$ 0.07

   The following table summarizes information about the warrants outstanding as at December 31, 2025:

   Outstanding Weighted average exercise price Expiry date Weighted average remaining life (years)

   2,000,000 $

   0.07

   March 19, 2026 0.21

   The warrants outstanding as at December 31, 2025 were issued in connection with a related party loan (see Note 7). The warrants are exercisable at $0.07 per share and expire on March 19, 2026. The warrants were measured at fair value on the grant date of March 19, 2025, resulting in a value of $126,000, which was recognized in contributed surplus with a corresponding financing expense recognized in the statement of loss.

   No warrants were exercised or expired during the year ended December 31, 2025.

   Subsequent to the year ended December 31, 2025, 2,000,000 warrants were exercised at an exercise price of $0.07 per warrant for gross proceeds of $140,000.

2. RELATED PARTY TRANSACTIONS

Key management personnel include the officers and directors of the Company. Key management compensation and amounts paid to companies controlled by key management consists of the following:

During the year ended December 31, 2025, the Company incurred $516,000 (December 31, 2024: $468,000) in management fees and $312,400 (December 31, 2024: $210,300) in consulting fees for administrative, finance and accounting services to a private company controlled by the Chief Executive Officer of the Company. The Company also reimbursed such private company $147,897 in occupancy costs during the year ended December 31, 2025 (December 31, 2024: $106,566). As at December 31, 2025, $Nil (December 31, 2024: $Nil) of these fees were outstanding and payable to the officer. During the year ended December 31, 2025, the Company recorded $2,462 (December 31, 2024: $2,421) in other income relating to a private Japanese entity controlled by the Chief Executive Officer. As at December 31, 2025, $4,883 (December 31, 2024: $2,421) was receivable to the Company.

The Company incurred $97,667 in project evaluation (December 31, 2024: $Nil) to the VP Exploration of the Company. As at December 31, 2025, $Nil (December 31, 2024: $Nil) of these fees were outstanding and payable to the officer.

The Company incurred $129,449 in project evaluation (December 31, 2024: $66,100 in consulting fees) to the Chief Operating Officer (previously General Manager of Exploration). As at December 31, 2025, $13,358 (December 31, 2023: $5,085) of these fees were outstanding and payable to the officer.

1. RELATED PARTY TRANSACTIONS (continued) Key management and personnel compensation (continued)

   The Company incurred $153,467 (December 31, 2024: $153,566) in director fees to directors of the Company. As at December 31, 2025, $Nil (December 31, 2024: $42,150) of these fees were outstanding and payable to the directors.

   The Company incurred $446,207 (December 31, 2024 - $227,284) in share-based compensation expense to related parties.

   Other related party transactions

   On January 14, 2025, the Company entered into a loan agreement for $140,000 with a director of the Company. The loan was repayable in full by March 18, 2025, or such earlier date as the Company may elect, and bears interest at a rate of 12% per annum. The proceeds of the loan were used by the Company for short-term working capital purposes.

   The loan was fully repaid on February 13, 2025 for total cash consideration of $141,381, which included contractual interest of $1,381.

   In connection with the loan, the Company granted 2,000,000 non-transferable share purchase warrants exercisable at

   $0.07 per share for a period of 12 months. The warrants were subject to TSX Venture Exchange approval and were issued on March 19, 2025.

   As the warrants were approved and issued after the loan had been fully repaid, the loan and warrants were accounted for as separate transactions. The warrants were measured at fair value on March 19, 2025 using the Black-Scholes option pricing model, resulting in a value of $126,000, which was recognized as a financing expense with a corresponding increase in contributed surplus.

   The valuation incorporated key assumptions including a share price of $0.125, an exercise price of $0.07, an expected life of one year, volatility of approximately 70%, a risk-free interest rate of approximately 3%-4%, and no expected dividends.

   The above transactions occurred in the normal course of operations and are recorded at the consideration established and agreed to by the related parties.

2. FINANCIAL INSTRUMENTS

The nature of the Company's operations exposes the Company to liquidity risk, credit risk and market risk, which may have a material effect on cash flows, operations and net loss.

The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and to monitor market conditions and the Company's activities. The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework and policies.

Liquidity risk is the risk that the Company is not able to meet its financial obligations as they fall due. The Company's financial liabilities, comprising its accounts payable and accrued liabilities, are classified as current. The Company's approach to managing liquidity risk is to ensure as far as possible that it will have sufficient funds to meet liabilities when due (see also Note 1).

Credit risk Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, restricted cash, deposits and accounts receivable. The Company limits its credit exposure on cash and cash equivalents and restricted cash by holding its deposits mainly with high credit quality financial institutions as determined by credit agencies. The carrying value of these financial assets represents the maximum exposure to credit risk. The Company has no history of credit loss and no allowance for credit loss recorded at December 31, 2025 and 2024.

1. FINANCIAL INSTRUMENTS (continued)

   Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. The Company is currently exposed to interest rate risk to the extent that the cash and short-term investment maintained at the financial institutions are subject to a floating rate of interest. The interest rate risk on the Company's cash and short-term investment is not significant.

   The Company operates in Japan and is subject to foreign currency fluctuations primarily on its cash and accounts payable and accrued liabilities denominated in a currency other than Japanese yen ("Yen or ¥"). As at December 31, 2025, the Company limits its exposure by holding its cash mostly in Canadian dollars. Additionally, the Company is exposed to foreign exchange risk on non-Canadian denominated monetary assets and liabilities recorded in Japan. As at December 31, 2025, every 1% change in foreign exchange rate in either direction would result in a change in net loss of approximately $2,600.

   Fair value

   IFRS requires disclosure about fair value measurements for financial instruments and liquidity risk using a three-level hierarchy that reflects the significance of the inputs used in making the fair value measurements. The three-level hierarchy is as follows:

   Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

   Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

   Level 3 - Inputs that are not based on observable market data.

   The carrying values of the Company's cash and cash equivalents, restricted cash, accounts receivable, deposits and accounts payable and accrued liabilities approximate their fair values due to their short terms to maturity.

2. CAPITAL MANAGEMENT

   The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the exploration and development of its mineral properties, and to maintain a flexible capital structure. The Company considers items included in shareholders' equity as capital. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of its underlying assets. In order to maintain or adjust its capital structure, the Company may issue new shares or return capital to its shareholder.

   The Company currently does not earn any revenue and has relied on existing cash balances and capital financing to fund its operations. The Company is currently not subject to externally imposed capital requirements.

   There were no changes in the Company's approach to capital management for the year ended December 31, 2025.

3. SEGMENTED INFORMATION

   Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer. The Company has identified one reportable operating segment - the exploration and evaluation of mineral properties across the three largest islands of Japan: Hokkaido, Honshu and Kyushu.

   The breakdown by geographic area as at December 31, 2025 is as follows:

   	Canada	Japan	Consolidated
   Current assets	$ 3,036,584	$ 272,749	$ 3,309,333
   Non-current assets	2,343,214	18,295,732	20,638,946
   Total assets	$ 5,379,798	$ 18,568,481	$ 23,948,279
   Total liabilities	$ 325,009	$ 322,922	$ 647,931

   The breakdown by geographic area as at December 31, 2024 is as follows:

   		Canada	Japan	Consolidated
   	Current assets	$ 762,201	$ 107,763	$ 869,964
   	Non-current assets	2,596,667	23,970,951	26,567,618
   	Total assets	$ 3,358,868	$ 24,078,714	$ 27,437,582
   	Total liabilities	$ 520,040	$ 420,008	$ 940,048
   11.	INCOME TAXES

   Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes. These differences result from the following items:

   	December 31, 2025	December 31, 2024
   Loss for the year, before income taxes	$ (4,985,884)	$ (4,156,605)
   Tax rate	27.0%	27.0%
   Expected income tax recovery	$ (1,346,189)	$ (1,122,283)
   Impact of foreign tax rates	(54,455)	(116,789)
   Non-deductible expenses	1,787,236	184,931
   Changes in estimates related to prior years and other	(1,243,804)	(9,426)
   Tax benefits unrecognized	857,212	1,063,567
   Income tax expense (recovery)	$ -	$ -

   Deferred income tax assets have not been recognized for the following temporary differences:

   	December 31, 2025	December 31, 2024
   Non-capital losses - Canada	$ 4,119,010	$ 4,673,045
   Non-capital losses - Japan	25,967,266	21,895,274
   Share issuance costs and other	215,952	479,282
   	$ 30,302,228	$ 27,047,601

4. INCOME TAXES (continued)

   The gross amount of the tax losses for which a tax benefit has not been recorded expire as follows:

   Year of expiry	Canada	Japan
   2026	$ -	$ 780,609
   2027	-	1,428,157
   2029	-	844,432
   2030	-	703,953
   2031	-	1,176,329
   2032	-	5,896,069
   2033	-	3,435,160
   2034	-	6,603,852
   2035	-	5,098,705
   2039	249,300	-
   2040	2,132,860	-
   2041	1,159,848	-
   2042	577,002	-
   	$ 4,119,010	$ 25,967,266

5. SUBSEQUENT EVENTS

On April 10, 2026, the Company announced a non-brokered private placement of unsecured convertible debentures (the "Debenture") for gross proceeds of US$1,000,000 ($1,390,700) (the "Offering") to Equinox Partners Investment Management, LLC ("Equinox"), a strategic investor and major shareholder of the Company.

The Debenture will mature on the date that is three years from the date of issuance (the "Maturity Date"). The Debenture bears interest at a rate of 10% per annum (non-compounded), accruing daily but payable, in cash, only at the Maturity Date, on the occurrence of an Event of Default or upon an early redemption. The Company will have the right, at its option, to make an early redemption in cash of all or any part of the principal amount together with payment of any accrued but unpaid interest. In addition, the Company will have the right, at its election, to satisfy its obligation to pay cash to the Debenture holder through the delivery of common shares of the Company ("Shares") in lieu of cash, at a price per share which equals the greater of: (i) the most recent Market Price of the Shares on the TSX Venture Exchange on the date that the accrued interest becomes payable; (ii) $0.11; and (iii) a price per security or conversion price of debt securities in a Future Financing Event. A "Future Financing Event" will be considered the most recent issuance and sale of securities by the Company in which the Company issues or sells any common shares (or units consisting of common shares and warrants), or in which the Company issues or sells any convertible debt security issued by the Company by way of a private placement during the twelve (12) month period immediately following the closing date of the Offering, provided that such Future Financing Event results in gross offering proceeds of not less than $2,000,000.

The net proceeds from the Offering will be used for general working capital purposes. The Debenture and any securities issuable upon conversion will be subject to a statutory hold period of four months from the date of issuance of the Debenture. The Offering and conversion of the Debenture into Shares is subject to final approval by the TSX Venture Exchange.

Subsequent to December 31, 2025, the Company granted a 9-month extension to OR Royalties through an amending agreement, giving OR Royalties until November 4, 2026, to exercise the right to increase its existing royalty interest. The amending agreement includes a 30 day's notice acceleration clause if the Company enters into a joint venture agreement with a mid-tier or major mining company, and that agreement requires the partner to invest a minimum of $5.0 million in cash proceeds into Japan Gold or the properties covered by the royalty in favour of OR Royalties, within six months of the date on which the joint venture agreement is executed.