Financial statements
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Arizona Sonoran Copper Company Inc. Unaudited Interim condensed consolidated financial statements - September 30, 2025 (Expressed in thousands of United States dollars, except where otherwise indicated)
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Arizona Sonoran Copper Company Inc. UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in thousands of United States dollars) 5 The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. As at Notes Septem ber 30, 2025 December 31, 2024 ASSETS Current assets Cash 1 $ 44,370 $ 31,741 Receivables 151 123 Prepaid expenses and other 589 170 45,110 32,034 Non-current assets Exploration and evaluation assets 5 131,329 99,148 Property and equipment 6 102,612 4,267 Right-of-use asset 21 16 233,962 103,431 Total assets $ 279,072 $ 135,465 LIABILITIES Current liabilities Accounts payable and accrued liabilities 7 $ 4,021 $ 2,591 Other current liabilities 6 5,935 5,980 Current portion of lease liability 16 16 9,972 8,587 Non-current Liabilities Other long-term liabilities 6 86,097 - Nuton option deposit 11,843 11,484 Nuton option 10,000 10,000 DSU liability 8 1,586 785 109,526 22,269 Total liabilities 119,498 30,856 SHA REHOLDERS’ EQUITY Share capital 8 195,908 137,424 Contributed surplus 8 9,854 8,701 Deficit (46,188) (41,516) Total shareholders' equity 159,574 104,609 Total liabilities and shareholders' equity $ 279,072 $ 135,465
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Arizona Sonoran Copper Company Inc. UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in thousands of United States dollars, except for per share amounts) 6 The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. Three months ended For the periods ended Septem ber 30, 2025 Septem ber 30, 2024 Septem ber 30, 2025 Septem ber 30, 2024 Expenses Salaries and wages 287$ 246$ 867$ 731$ Share-based compensation 287 560 1,017 1,402 Professional fees 276 183 554 474 Directors' fees 138 143 436 450 Marketing and administration 384 362 1,160 862 Loss before other items 1,372 1,494 4,034 3,919 Other expenses/(income) Accretion 232 313 412 912 Finance expenses (income) and foreign exchange 817 (27) 117 206 Depreciation and amortization (15) 16 13 49 Interest income (300) (102) (818) (409) Incentive plan expense (gain) 382 147 914 (100) 1,116 347 638 658 Loss and comprehensive loss for the period 2,488$ 1,841$ 4,672$ 4,577$ Loss per share Basic and diluted 0.01 0.02 0.04 0.04 Weighted average number of common shares outstanding Basic and diluted 178,255,638 109,516,209 133,482,936 109,359,557 Nine months ended
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Arizona Sonoran Copper Company Inc. UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Expressed in thousands of United States dollars) 7 The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. Number of Common Shares Share Capital Contributed Surplus Deficit Total $ $ $ $ Balance at January 1, 2024 109,067,336 111,167 7,456 (34,076) 84,547 Options exercised 299,552 209 (76) - 133 Warrants exercised 114,583 46 (12) 34 RSUs vesting 86,222 109 (109) - - Stock options reserve - - 1,386 - 1,386 RSU reserve - - 262 - 262 Loss for the period - - - (4,577) (4,577) Balance at September 30, 2024 109,567,693 111,531 8,907 (38,653) 81,785 Balance at January 1, 2025 135,523,952 137,424 8,701 (41,516) 104,609 Shares issued for cash, net 41,667,769 54,519 - - 54,519 Shares issued for land 1,549,487 3,000 - - 3,000 Options exercised 819,494 714 (318) - 396 DSU exercised 152,282 251 - - 251 Stock options reserve - - 1,259 - 1,259 RSU reserve - - 213 - 213 Loss for the period - - - (4,672) (4,672) Balance at September 30, 2025 179,712,984 195,908 9,854 (46,188) 159,574
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Arizona Sonoran Copper Company Inc. UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of United States dollars) 8 The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. For the periods ended Notes Septem ber 30, 2025 Septem ber 30, 2024 Cash used in: Operating activities Loss for the period ($4,672) ($4,577) Adjustments to reconcile loss to net cash flows: Share-based compensation 1,472 1,857 Accretion 407 728 Depreciation and amortization 10 90 Interest and finance expense, net - 3 Directors' fees paid in shares 801 245 Unrealized (gain)/loss on foreign exchange (559) - Changes in working capital items Receivables - 49 Prepaid expenses and other current assets (419) (187) Accounts payable and accrued liabilities 1,404 (6,826) Net cash provided/(used) in operating activities (1,556) (8,618) Investing activities Adjustments to reconcile loss to net cash flows: Land acquisition 6 (15,483) - Expenditures on exploration and evaluation assets (32,181) (14,914) Expenditures on equipment (18) - Property payments 3,190 (794) Net cash used in investing activities (44,492) (15,708) Financing activities Proceeds from sale of shares, net of expenses 57,770 - Payments received from Nuton - 22,399 Proceeds from stock options exercise 396 (76) Proceeds from warrants exercise - 34 Lease payments (48) (48) Net cash provided by financing activities 58,118 22,309 Net increase/(decrease) in cash 12,070 (2,017) Effect of exchange rate changes on cash 559 - Cash at beginning of the period 31,741 10,494 Cash at the end of the period $44,370 $8,477 Nine months ended
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 9 1. Description of Business Arizona Sonoran Copper Company Inc. (“ASCU” or the “Company”) is a company focused on the assessment, consolidation, exploration, development, and eventual mining in the Santa Cruz Copper Mining District in southern Arizona. Its common shares trade on the Toronto Stock Exchange (“TSX”) under the symbol “ASCU ” and on the Over -the-Counter Markets (“OTCQX”) under the symbol “ASCUF”. The Company is incorporated in British Columbia, Canada and is the parent company of its direct and indirect wholly-owned subsidiaries Arizona Sonoran Copper Company USA Inc. (“ASUSA”) and Cactus 110, LLC (“Cactus 110”). ASUSA and Cactus 110 are incorporated in the State of Delaware and the entities with activities in the US A at the Cactus Project, which is a brownfield copper porphyry project, entirely on private and State land in Pinal County, Arizona, comprised of the Cactus East, Cactus West and Parks/Salyer properties and Parks/Salyer properties and underlying copper deposits (including surface and mineral rights), among other private and State landholdings, water rights and other assets (the “Project” or the “Cactus Project”). The Company holds 100% ownership of, and/or control over, the Cactus Project through ASCUSA and Cactus 110. The business of mining and exploration involves a high degree of risk and there can be no assurance that current exploration and development projects will result in profitable mining operations. The recoverability of amounts shown for mineral resource properties is dependent on several factors. These factors include the discovery of economically recoverable mineral reserves, the ability to complete development of these properties, and future profitable production or proceeds from the disposition of mineral properties. Ownership interests in mineral properties involve risks due to the difficulties of determining and obtaining clear title to mineral interests as well as the potential for problems arising from the frequently ambiguous conveyance history of many mineral properties. The Company has investigated ownership of its mineral properties and to the best of its knowledge, ownership of its interests is in good standing. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The unaudited interim condensed consolidated financial statements were prepared on a going concern basis and do not reflect the adjustments to carrying values of assets and liabilities and the reported expenses and the consolidated statement of financial position classifications that would be necessary if the going concern assumption was deemed inappropriate. These adjustments could be material. The Company has incurred significant operating losses (a net loss of $4, 672 for the nine-month period ended September 30, 2025) and has yet to achieve profitable operations resulting in an accumulated deficit of $46,188 as at September 30, 2025. The Company had $44,370 of cash as at September 30, 2025 (December 31, 2024 - $31,741) and working capital of $35,138 (December 31, 2024 - $23,447). Based on the Company’s liquidity position as at September 30, 2025, management has forecasted its cash flow requirements, and believes that it has sufficient cash resources to support its planned committed operations for the next twelve months from September 30, 2025. The Company has further discretionary exploration and development activities which, if undertaken, are expected to result in the Company needing to obtain further financing in the form of debt, equity, or a combination thereof before September 30, 2026 . Notwithstanding the Company’s recent financings (see note 8) and historic funding, there is a risk that sufficient additional financing may not be available to the Company on acceptable terms, or at all.
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 10 2. Basis of Preparation a) Statement of compliance These consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, and with interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) which the Canadian Accounting Standards Board has approved for incorporation into Part 1 of the CPA Canada Handbook – Accounting (“IFRS A ccounting Standards”) applicable to the preparation of interim financial statements, including International Accounting Standard (“IAS”) 34. These unaudited interim condensed consolidated financial statements do not include all the information and notes required by IFRS for annual financial statements and, therefore, should be read in conjunction with the audited annual consolidated financial statements and notes for the Company’s fiscal year ended December 31, 2024, which are available on SEDAR+ at www.sedarplus.ca. These consolidated financial statements were authorized for issuance on November 6, 2025 by the Audit Committee on behalf of the Company’s Board of Directors. e) Significant accounting judgments and sources of estimation uncertainty The preparation of financial statements in conformity with IFRS Accounting Standards requires management to make judgments, estimates and assumptions that affect the reported amounts and the valuation of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenditures during the periods reported. Management uses its best estimates for these purposes, based on assumptions that it believes reflect the most probable set of economic conditions and planned courses of action. However, actual results could differ materially from these estimates. In preparing the interim financial statements, the significant judgments made by management in applying the Company’s accounting policies and key sources of estimation uncertainty were the same as those applied to the annual audited consolidated financial statements for the year ended December 31, 2024, except as noted below. Discount rate for deferred land acquisition payments liability Management's determination regarding the Company’s market rate of interest on the deferred land acquisition payments liability in note 6 involves significant judgment regarding the Company’s estimation of future debt and cash flows of the related vendor loans. The Company has estimated its market rate of lending to be 9.12% based on Secured Overnight Financing Rate (“SOFR”) data and publicly available peer transactions. Going concern uncertainty Management's determination regarding the Company’s ability to continue as a going concern for the twelve months from the date of the statement of financial position involves significant judgment regarding the Company’s estimation of future cashflows. The Company has $4 4,370 cash as at September 30, 2025. The Company has certain commitments and contractually required payments based on events in 2025 and potentially required based on future events, if they arise. Such payments would have an impact on the future
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 11 cash requirements of the company to meet its obligations as they arise based on the operating plans currently in place. These planned expenditures include payments that are discretionary, which the Company can adjust to ensure it will have cash to continue its operations for the foreseeable future, absent any future financing activities the Company may undertake. The Company’s objectives are to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, pursuit of accretive opportunities, and to maximize shareholder return by enhancing the share value. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investment and financing activities. There is no assurance that these initiatives will be successful. 3. Material Accounting Policy Information The Company’s accounting policies applied to all periods presented in these interim financial statements are consistent with the Company’s annual consolidated financial statements as at and for the year ended December 31, 2024. The Company has considered any new accounting pronouncements as relevant. 4. Accounting standards recently adopted or effective The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2024. The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. 5. Exploration and evaluation assets The following is the detail of the total Exploration and evaluation assets of the Company: The Company’s mineral properties consist of capitalized exploration expenditures on the lands mentioned below as well as the acquisition costs of real property that make up the Cactus Project. 6. Property and equipment The following is the detail of the total property and equipment of the Company: Capitalized Exploration Costs Assets ($) Balance at December 31, 2024 99,148 Additions 32,181 Balance at September 30, 2025 131,329
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 12 The Company completed the acquisition of 2,123 acres of land for the Project on August 29, 2025 comprised of 2,043 acres from a consortium (“Consortium Land”) of related private corporate landowners and 80 acres from a single private landowner (collectively “2025 Purchased Lands”). The 80-acre parcel includes 100% of both surface and mineral rights. The 80-acre purchase price was $30,000 per acre, with $1,200 paid in cash on closing, with the remaining $1,2 00 deferred subject to a non-interest-bearing Vendor Loan, to be paid in full in cash by maturity on June 27, 2026, with Cactus 110 having the right to pre-pay such loan, in whole or in part, at any time, without penalty. The deferred payment has been discounted to its initial carrying amount of $1,149. The Consortium Land includes 100% of the surface rights to such lands as well as all mineral rights held by the Consortium Vendors. The purchase price for the Consortium Land was comprised of cash on closing of $2,000 and $105 in transaction costs and 1,549,487 common shares with an accounting value of $3,000 based on the share price on the date of issuance, and further deferred payments (the “Vendor Loans”) as follows: 2026 $5,000 (up to $3,000 in ASCU common shares, at Cactus 110’s sole option) 2027 $5,000 (up to $2,000 in ASCU common shares, at Cactus 110’s sole option) 2028 $5,000 (up to $2,000 in ASCU common shares, at Cactus 110’s sole option) Surface rights (Land) ($) Mine Fleet Light Vehicles and Equipment ($) Office Furniture and Equipment ($) Total ($) Cost 3,379 311 11 3,701 Additions 794 - - 794 Balance at December 31, 2024 4,173 311 11 4,495 Accumulated depreciation, amortization and impairment Depreciation - (71) - (71) Balance at December 31, 2024 - (217) (11) (228) Net book value at December 31, 2024 4,173 94 - 4,267 Cost Additions 98,342 48 - 98,390 Disposals - (30) - (30) Balance at September 30, 2025 102,515 329 11 102,855 Accumulated depreciation, amortization and impairment Depreciation - (15) - (15) Balance at September 30, 2025 - (232) (11) (243) Net book value at September 30, 2025 102,515 97 - 102,612
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 13 2029 $82,152 price plus accrued interest. The Vendor Loans bear interest of 6% per annum accruing and capitalized annually, and is payable on maturity on August 28, 2029, with Cactus 110 having the right to pre-pay such loans, in whole or in part, at any time, without penalty. The initial carrying amount of the Vendor Loans of $90,276 was determined using a discount rate of 9.12% based on Secured Overnight Financing Rate (“SOFR”) data and publicly available peer transactions. The Vendor Loans had a carrying value of $90,276 at September 30, 2025. The amount is included in other current liabilities and other long-term liabilities on consolidated statement of financial position. Each of the Vendor Loans are secured by deed of trust on their respectively sold portions of the Consortium Land (and fixtures thereon) and a deed of trust on the ~750 acre ARCUS lands already owned by Cactus 110. In addition, one of the Consortium Vendors will hold additional security for its Vendor Loan pursuant to a modified deed of trust on 1,000 ac res purchased by Cactus 110 in 2022. In addition to the Consortium Purchase Price, an aggregate 0.5% net smelter returns royalty (“NSR”) on the Consortium Land was granted to a designee of the Consortium Vendors, on terms consistent with other NSRs on the Cactus Project. Cactus 110 has a right of first refusal on any sale, transfer, assignment or other conveyance of the NSR by the Consortium Vendors’ designee, other than to an affiliate. The NSR is not considered to be a liability as it represents future revenue from the Company’s mineral resources, not a present obligation to the third party. 7. Accounts payable and accrued liabilities Accounts payable and accrued liabilities comprise the following: 8. Equity a) Authorized share capital The Company is authorized to issue an unlimited number of common shares without par value. As at September 30, 2025, there were 179,712,984 common shares outstanding (December 31, 2024 – 135,523,952 common shares outstanding). b) Issued Shares The following are the equity transactions that occurred in the nine-month period ended September 30, 2025: ● The Company issued 819,494 common shares related to stock option exercises and 152,282 common shares related to DSU exercises. ● On January 31, 2025, the Company closed a private placement with Hudbay Minerals Inc. (“Hudbay”) of 11,955,270 common shares at a price of C$1.68 for gross proceeds to the Septem ber 30, 2025 December 31, 2024 Trade payables $ 2,641 $ 467 Accrued liabilities 1,259 2,018 Other payables 121 106 $ 4,021 $ 2,591
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 14 Company of C$20,085 ($13,837). Additionally, Nuton LLC exercised its pre-emptive rights in respect of the Hudbay Placement, pursuant to the terms of its investor rights agreement to maintain its 7.2% equity interest in the Company by acquiring 929,887 shares of the Company for gross proceeds of C$1,562 ($1,078). On June 20, 2025, the Company closed a bought deal financing of 25 ,875,000 common shares in the capital of the Company at a price of C$2.00 per Common Share, for gross proceeds to the Company of C$51,750 ($37,697) (the “June 2025 Offering”) less C$2,672 ($1,949) of transaction costs. Additionally, Hudbay exercised its pre-emptive rights in respect of the June 2025 Offering, pursuant to the terms of its investor rights agreement to maintain its 9.9% equity interest in the Company by acquiring 2,907,612 shares of the Company for gross proceeds of C$5,815 ($4,247). ● On July 10, 2025, the Company closed a non-brokered private placement financing in respect of the exercise by Hudbay of its pre-emptive rights under its Investor Rights Agreement relating to the June 2025 Offering. Hudbay subscribed for 2,907,612 common shares of the Company at a price of C$2.00 per Common Share for aggregate gross proceeds to the Company of C$5,815 ($4,250). ● On August 29, 2025, the Company issued 1,549,487 common shares at a price of $2.66 per common share in connection with the acquisition of the Consortium Land. c) Stock Options On July 7, 2020 (amended July 21, 2021), the Board of Directors implemented an equity incentive plan under which the Company is authorized to grant a combination of stock options and restricted share units up to 10% of the total number of common shares issued and outstanding at any given time. The following is a continuity of the Company’s stock options outstanding as at and for the nine- month period ended September 30, 2025: Details of stock options outstanding as at September 30, 2025 are as follows: For the period ended September 30, 2025 Number of options Weighted average exercis e price Options outstanding, beginning of period 7,201,739 $ 1.25 Granted 2,649,968 1.32 Forfeited (385,060) 1.23 Expired (737,375) 1.34 Exercised (819,494) 0.45 Options outstanding, end of period 7,909,778 $ 1.33 Options exercisable, end of period 6,074,634 $ 1.29
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 15 The following Black Scholes assumptions were used in the valuation of stock options granted during the period ended September 30, 2025: Total stock-based compensation recognized related to stock options during the nine-month period ended September 30, 2025 was $1,259 (September 30, 2024: $1,386). d) Restricted Share Units (“RSUs”) RSUs can be settled in either cash, shares, or a combination thereof at the sole discretion of the Company. Such a decision is to be made on each vesting date. The Company considers these RSUs as equity-settled share-based payments and has no history of settling in cash to-date. The Company had the following RSUs outstanding as at and for the nine-month period ended September 30, 2025: Total stock-based compensation recognized related to RSUs during the nine-month period ended September 30, 2025 was $213 (September 30, 2024: $262). e) Warrants As at September 30, 2025 the Company had no warrants outstanding. Range Weighted A verage Contractual Life Weighted A verage Exercise Price Exercisable $0.25-$0.75 85,986 0.10 0.41$ 85,986 $0.75-$1.15 1,598,909 3.41 1.13$ 1,109,521 $1.15-$1.48 5,974,883 3.74 1.40$ 4,629,127 $1.48-$2.00 250,000 0.76 1.92$ 250,000 Totals 7,909,778 3.54 1.29$ 6,074,634 For the period ended September 30, 2025 Number of RSUs Weighted average price RSUs outstanding, beginning of period 894,054 $ 1.18 Granted 274,743 1.31 Forfeited (144,624) 1.15 RSUs outstanding, end of period 1,024,173 $ 1.21
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 16 f) Deferred Share Units (“DSUs”) DSUs can be settled in either cash, shares, or a combination thereof at the discretion of the Board of Directors. The DSUs granted to the holders are to be held in a deferred share unit account until they become payable to the DSU holder on their termination date as a director. The Company considers these DSUs as cash -settled share-based payments based on a history of settling in cash to-date. The DSU liability was revalued at September 30, 2025, with a resulting loss of $382 (September 30, 2024: $914) recognized in the consolidated statements of loss and comprehensive loss under gain on incentive plan for the period. The Company had the following DSUs outstanding as at and for the nine-month period ended September 30, 2025: The fair value of each DSU granted was estimated to be $1.31, which was based on the value of the director’s compensation on the date of the grants. 9. Related Party Transactions The following are the related party transactions: As at September 30, 2025, no material amounts were owed to or from the Company by key management personnel and directors. The remuneration of the key executive management and directors was as follows: *Share-based compensation includes shares issued for services, stock options, RSUs and DSUs. For the period ended September 30, 2025 Number of DSUs Weighted average price DSUs outstanding, beginning of period 768,321 $ 1.55 Exercised (152,282) $ 1.65 Cancelled (8,484) $ 1.31 Granted 106,382 1.31 DSUs outstanding, end of period 713,937 $ 1.38 Septem ber 30, 2025 Septem ber 30, 2024 Salaries and wages $ 838 $ 1,119 Salaries and wages capitalized as exploration 309 456 Share-based compensation* 685 623 Directors’ fees 436 450 $ 2,268 $ 2,648
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 17 10. Financial Instruments and Risk Management Currency risk The Company is exposed to financial risk due to changes in foreign exchange rates. The Company operates in the United States and Canada, and a portion of its expenses are incurred in Canadian dollars. A significant change in the exchange rates between the Canadian dollar relative to the US dollar could have an effect on the Company’s results of operations, financial position and cash flows. The Company has not hedged its exposure to currency fluctuations. At September 30, 2025, the Company is exposed to currency risk mainly through its cash denominated in Canadian dollars totaling C$53,011 (December 31, 2024 – C$31,681). Based on the exposure as at September 30, 2025, and assuming that all other variables remain constant, a 10% depreciation or appreciation of the US dollar against the Canadian dollar would result in an increase/decrease of approximately $3,808 in the Company’s reported loss for the period. Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The maximum credit risk the Company is exposed to is 100% of cash and receivables. The Company’s cash is held in large Canadian or US financial institutions. As a result, the Company concludes that there are negligible expected losses because the holdings are in cash. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requir ements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements by taking into account anticipated cash expenditures for its exploration and operational activities. The Company will pursue additional equity or debt financing as required to meet its long-term commitments. There is no assurance that such financing will be available or that it will be available on favorable terms. As at September 30, 2025, the contractual undiscounted future cash flows of the Company’s significant financial liabilities are as follows:
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Arizona Sonoran Copper Company Inc. NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in thousands of United States dollars except for share and per share amounts) 18 As at September 30, 2025, the carrying values of all financial assets and financial liabilities approximate their fair value. The DSU Liability is considered a level 1 instrument in the fair value hierarchy as its inputs use quoted share prices and exchange rates for remeasurement. < 6 months 6 – 12 months 1 - 2 ye ars Total cash flows at Septem ber 30, 2025 DSU liability - - 1,586 1,586 Accounts payable 2,641 - - 2,641 Accruals 1,259 - - 1,259 Nuton deposit - - 11,843 11,843 Other current liabilities 121 5,935 - 6,056 Other long-term liabilities - - 86,097 86,097 4,021 5,935 99,526 109,482 Financial liabilities at amortized cost: Financial liabilities at fair value: