Financial statements
Page 1
Page 1 CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025 (EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)
Page 2
Page 2 Notice of no Auditor review of Interim Financial Statements Under National Instrument 51-102, if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditors have not performed a review of these condensed interim consolidated financial statements in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.
Page 3
Page 3 BARKSDALE RESOURCES CORP. Index to Condensed Interim Consolidated Financial Statements For the three months ended June 30, 2026 and 2025 PAGE FINANCIAL STATEMENTS Condensed Interim Consolidated Statements of Financial Position .............................. 4 Condensed Interim Consolidated Statements of Loss and Comprehensive Loss ........ 5 Condensed Interim Consolidated Statements of Cash Flows ....................................... 6 Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity ...... 7 Notes to the Condensed Interim Consolidated Financial Statements……………….......8
Page 4
Page 4 BARKSDALE RESOURCES CORP. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian Dollars - Unaudited) June 30, 2026 March 31, 2026 $ $ ASSETS Current Cash 3,586,035 4,508,875 Receivables 12,639 8,391 Prepaids 245,340 235,295 Total current assets 3,844,014 4,752,561 Exploration and evaluation assets (Notes 4 and 9) 31,111,247 29,119,797 Reclamation bond 294,289 288,677 Right-of-use assets (Note 5) 18,607 25,439 Total assets 35,268,157 34,186,474 LIABILITIES Current Accounts payable and accrued liabilities (Notes 6 and 9) 560,693 624,239 Current portion of lease liabilities (Note 5) 18,932 27,615 Total current liabilities 579,625 651,854 Convertible debentures (Note 7) 3,201,237 2,950,237 Total liabilities 3,780,862 3,602,091 SHAREHOLDERS' EQUITY Share capital (Note 8) 66,845,102 64,978,005 Reserves (Note 8) 2,944,195 3,174,013 Equity component of convertible debentures (Note 7) 674,858 674,858 Deficit (39,026,860) (38,242,493) Total shareholders’ equity 31,487,295 30,584,383 Total liabilities and shareholders’ equity 35,268,157 34,186,474 Nature of Operations and Going Concern (Note 1) Subsequent events (Note 14) Approved on behalf of the Board of Directors on August 31, 2026: “Darren Blasutti” Director “Peter McRae” Director The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Page 5
Page 5 BARKSDALE RESOURCES CORP. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in Canadian Dollars - Unaudited) For the three months ended June 30, 2026 2025 $ $ Operating expenses Advertising and marketing 72,436 50,870 Consulting fees - 28,875 Depreciation (Note 5) 9,063 6,719 Financing charges 138,808 86,760 Foreign exchange (gain) loss (48,125) 12,939 Insurance 3,806 12,402 Interest expense (Notes 5 and 7) 114,754 87,970 Investor relations 2,350 9,334 Management fees (Note 9) 45,570 60,292 Office and general 35,750 15,665 Professional fees (Note 9) 76,376 77,089 Rent 14,628 33,498 Share-based compensation (Notes 8 and 9) 129,960 89,518 Transfer agent and filing fees 9,615 22,207 Total operating expenses (604,991) (594,138) Other income (expenses) Write off of exploration and evaluation asset (304,731) (306,412) Loss on settlement of debt - (579,666) Interest and other income 18,970 134,332 Total other income (expenses) Loss before income tax (890,752) (1,345,884) Deferred tax recovery - 273,237 Loss and comprehensive loss for the period (890,752) (1,072,647) Loss per share – basic and diluted (0.00) (0.01) Weighted average number of common shares outstanding – basic and diluted 221,867,788 136,374,135 The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Page 6
Page 6 BARKSDALE RESOURCES CORP. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian Dollars - Unaudited) For the three months ended June 30, 2026 2025 $ $ Cash flows used in operating activities Loss for the period (890,752) (1,072,647) Items not affecting cash Depreciation 9,063 6,719 Write off of exploration and evaluation assets 304,731 302,034 Financing charges 138,808 86,758 Loss on settlement of debt - 580,228 Deferred tax recovery - (273,795) Share-based compensation 129,960 89,518 Interest expense 115,193 87,534 Unrealized foreign exchange gain (loss) (9,867) 5,860 (202,864) (187,791) Changes in non-cash working capital items Receivables (4,248) (5,590) Prepaids (10,045) 58,280 Accounts payable and accrued liabilities 3,270 (138,029) Cash used in operating activities (213,887) (273,130) Cash flows used in investing activities Exploration and evaluation asset expenditures (2,362,997) (928,466) Cash provided by investing activities (2,362,997) (928,466) Cash flows provided from financing activities Share issuance costs - (374,237) Proceeds from warrants exercised 1,663,704 - Proceeds from convertible debenture - 3,000,000 Repayment of lease liabilities (9,660) - Cash provided by financing activities 1,654,044 2,625,763 Net change in cash (922,840) (1,424,167) Cash, beginning of the period 4,508,875 46,287 Cash, end of the period 3,586,035 1,470,454 Supplemental cash flow information (Note 11) The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Page 7
Page 7 BARKSDALE RESOURCES CORP. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Expressed in Canadian Dollars - Unaudited) Number of Shares Issued Share Capital Reserves Equity component of convertible debentures Accumulated Deficit Total Shareholders' Equity $ $ $ $ $ Balance at March 31, 2025 135,556,553 57,761,703 3,104,331 117,018 (36,841,277) 24,141,775 Convertible debenture equity - - - 740,269 - 740,269 Share-based compensation - - 89,519 - - 89,519 Share issuance costs - (494,237) - - - (494,237) Shares issued for finder’s fees 1,200,000 120,000 - - - 120,000 Warrants expired for convertible debentures - - (251,515) - - (251,515) Warrants issued for convertible debentures - - 884,588 - - 884,588 Net loss for the year - - - - (1,072,647) (1,072,647) Balance at June 30, 2025 136,756,553 57,387,466 3,826,923 857,287 (37,913,924) 24,157,752 Units issued for cash 68,523,793 6,385,968 (83,827) - - 6,302,141 Shares issued for advisory fees 2,994,780 269,530 269,530 Shares issued for E&E acquisition costs 6,300,000 535,500 - - - 535,500 Shares issued for convertible debentures 3,904,110 351,370 - - - 351,370 Convertible debenture equity - - - (182,429) - (182,429) Share-based compensation - - 335,419 - - 335,419 Share issuance costs - 48,170 172,137 - - 220,307 Warrants expired for convertible debentures due to extension - - 251,515 - - 251,515 Warrants issued for convertible debentures - - (9,630) - - (9,630) Warrants expired unexercised - - (26,175) - 26,175 - Stock options expired unexercised - - (1,292,348) - 1,292,348 - Net loss for the period - - - - (1,647,092) (1,647,092) Balance at March 31, 2026 218,479,236 64,978,005 3,174,013 674,858 (38,242,493) 30,584,383 Units issued for cash – warrants exercised 6,938,274 1,663,704 - - - 1,663,704 Share-based compensation - - 129,960 - - 129,960 Residual value allocated to warrants - 203,393 (203,393) - - - Stock options expired unexercised - - (106,385) - 106,385 - Net loss for the period - - - - (890,752) (890,752) Balance at June 30, 2026 225,417,510 66,845,102 2,994,195 674,858 (39,026,860) (31,487,295) The accompanying notes are an integral part of these condensed interim consolidated financial statements
Page 8
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 8 1. NATURE OF OPERATIONS AND GOING CONCERN Barksdale Resources Corp. (“Barksdale” or the “Company”), incorporated in British Columbia, is a public company listed on the TSX Venture Exchange (“TSXV”) and the OTCQX in the United States and trades under the symbol BRO.V and BRKCF respectively. The Company’s registered office is at 67 East 5th Avenue, Vancouver, British Columbia, Canada, V5T 1G7. The Company’s principal business activities include the acquisition and exploration of precious and base metal mineral properties in Arizona, USA and Sonora, Mexico. The Company has not yet determined whether its exploration and evaluation assets contain ore reserves that are economically recoverable. The recoverability of the amounts shown for exploration and evaluation assets is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production. To date, the Company has not earned any revenue and is considered to be in the exploration stage. These condensed interim consolidated financial statements have been prepared by management on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred ongoing losses. A number of alternatives are being evaluated with the objective of funding ongoing activities and obtaining additional working capital. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future and repay its liabilities arising from normal business operations as they become due. The Company has not generated revenues from its operations to date. As at June 30, 2026, the Company has accumulated net losses of $39,026,860 since inception and has working capital of $3,264,389. The operations of the Company have primarily been funded by the issuance of common shares and convertible debentures. The Company’s ability to continue its operations and to realize its assets at their carrying values is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs. These factors indicate the existence of a material uncertainty that may cast significant doubt on the ability of the Company to continue as a going concern. The Company's ability to continue its operations and to realize its assets at their carrying values is dependent upon obtaining additional financing and commencing profitable operations in the future. These condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue in existence. 2. BASIS OF PRESENTATION a) Statement of Compliance These condensed interim consolidated financial statements, including comparatives, have been prepared in accordance with IFRS® Accounting Standards and International Accounting Standards (“IAS”) 34 “Interim Financial Reporting” as issued by the “International Accounting Standards Board (IASB)”. This condensed interim consolidated financial report does not include all of the information required of a full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period. It is therefore recommended that this financial report be read in conjunction with the audited annual consolidated financial statements of the Company for the years ended March 31, 2026 and 2025.
Page 9
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 9 2. BASIS OF PRESENTATION (CONTINUED) a) Statement of Compliance (continued) These condensed interim consolidated financial statements for the three months ended June 30, 2026 and 2025 were authorized by the Board of Directors for issuance on August 31, 2026. b) Basis of Presentation These condensed interim consolidated financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The condensed interim consolidated financial statements are presented in Canadian dollars unless otherwise noted. c) Basis of Consolidation These condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, TBJ Resources (US) Inc., Arizona Standard Resources Corp., Arizona Standard (US) Corp., Arizona Standard LLC., IC Exploration Ltd., IC Exploration (US) Ltd., 1260938 BC Ltd., and Estrella de Cobre, S.A. de C.V. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated upon consolidation. d) Use of Estimates and Judgements The preparation of these condensed interim consolidated financial statements in conformity with IFRS Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from management’s best estimates as additional information becomes available. Significant areas requiring the use of management estimates and judgments include: (i) The determination of deferred income tax assets or liabilities requires subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carry-forwards. Changes in these assumptions could materially affect the recorded amounts and therefore do not necessarily provide certainty as to their recorded values. (ii) The determination that exploration, evaluation, and related costs incurred which were capitalized may have future economic benefits and may be economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including, geologic and other technical information, a history of conversion of mineral deposits with similar characteristics to its own properties to proven and probable mineral reserves, the quality and capacity of existing infrastructure facilities, evaluation of permitting and environmental issues and local support for the project. (iii) Inputs used in the valuation model to determine the fair value of stock options. (iv) The Company estimates a market interest rate in determining the fair value of the liability component of its convertible debentures. The determination of the market interest rate is subjective and could materially affect these fair value estimates.
Page 10
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 10 3. MATERIAL ACCOUNTING POLICY INFORMATION These condensed interim consolidated financial statements have been prepared in accordance with IFRS Accounting Standards and reflect management’s consideration of the following significant accounting policies: a) Foreign Currency Transactions The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and each of its subsidiaries is the Canadian dollar. The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates. Transactions in currencies other than Canadian dollars are recorded at exchange rates prevailing on the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the period end exchange rate while non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at the exchange rates approximating those in effect on the date of the transactions. Exchange gains and losses arising on translation are included in profit or loss. b) Exploration and Evaluation Assets Pre-acquisition costs are expensed as incurred. Costs directly related to the acquisition and exploration of exploration and evaluation assets are capitalized once the legal rights to explore the exploration and evaluation assets are acquired or obtained. When the technical and commercial viability of a mineral resource has been demonstrated and a development decision has been made, the capitalized costs of the related property are first tested for impairment, then transferred to mining assets and depreciated using the units of production method on commencement of commercial production. If it is determined that capitalized acquisition, exploration and evaluation costs are not recoverable, or the property is abandoned or management has determined an impairment in value, the property is written down to its recoverable amount. Exploration and evaluation assets are reviewed for impairment when facts and circumstances suggest that the carrying amount may exceed its recoverable amount. c) Recent Accounting Pronouncements A number of amendments to standards and interpretations applicable to the Company are not yet effective for the three months ended June 30, 2026 and have not been applied in preparing these condensed interim consolidated financial statements nor does the Company expect these amendments to have a significant effect on its financial statement. d) New accounting standards issued and not yet effective 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 and disaggregation 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 this amendment on its consolidated financial statements.
Page 11
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 11 4. EXPLORATION AND EVALUATION ASSETS The total cumulative acquisition and deferred exploration costs of the Company to June 30, 2026 are summarized as follows: Sunnyside Four Metals San Antonio Guajolote Canelo and Goat Canyon San Javier Total $ $ $ $ $ $ $ Balance, March 31, 2025 19,142,499 1 1 1 1 6,454,236 25,596,739 Acquisition and staking costs 1,425,000 - - - - 175,500 1,600,500 Exploration expenditures: Claim maintenance fees 87,224 12,540 146,335 - 183,810 30,176 460,085 Consulting 336,345 - - - - 26,808 356,153 Drilling 936,754 - - - - 8,691 945,445 Geological 93,312 - - - - - 93,312 Insurance 8,565 - - - - - 8,565 Food/accommodation 59,835 - - - - - 59,835 Legal 132,719 - - - - - 132,719 Permitting 22,788 - - - - - 22,788 Sampling and processing 33,019 - - - - - 33,019 Storage - - - - - 52,072 52,072 Supplies and fuel 91,156 - - - - - 91,156 Truck rental 3,094 - - - - - 3,094 Impairment of exploration and evaluation assets - (12,540) (146,335) - (183,810) - (342,685) Balance, March 31, 2026 22,372,310 1 1 1 1 6,747,483 29,119,797 Exploration expenditures: Claim maintenance fees 81,244 12,542 231,053 - 61,136 6,077 392,052 Consulting 36,262 - - - - - 36,262 Drilling 1,210,404 - - - - 3,666 1,214,070 Geological 154,737 - - - - - 154,737 Insurance 3,901 - - - - - 3,901 Food/accommodation 52,477 - - - - - 52,477 Legal 12,346 - - - - - 12,346 Permitting 4,872 - - - - - 4,872 Sampling and processing 256,851 - - - - 9,618 266,469 Supplies and fuel 154,306 - - - - - 154,306 Truck rental 4,689 - - - - - 4,689 Impairment of exploration and evaluation assets - (12,542) (231,053) - (61,136) - (304,731) Balance, June 30, 2026 24,344,399 1 1 1 1 6,766,844 31,111,247
Page 12
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 12 4. EXPLORATION AND EVALUATION ASSETS (CONTINUED) Sunnyside Project In August 2017, the Company entered into an arm’s length definitive agreement (the “Sunnyside Agreement”) with Great Basin Metals Inc. (formerly Regal Resources Inc.) to acquire, by way of option (the “Option”), up to 67.5% of the Sunnyside Property located in Santa Cruz County, Arizona. The Option is exercisable in two stages with the Company entitled to acquire an initial 51% interest in the Sunnyside Property upon making payments totalling $2,950,000 cash and the issuance of 10,100,000 common shares to Great Basin and cumulative expenditures of $6,000,000 on the property during the first two years of the Option (following receipt of all required governmental permits). The following is a summary of the Option earn-in requirements: Period Cash $ Exploration Requirement $ Number of Shares To Earn 51% Interest Upon execution of Sunnyside Agreements 100,000 (paid) - - Within 3 days following TSXV acceptance of Option 650,000 (paid) - 1,250,000 (issued) On or before end of Year 1* 1,200,000 (paid) 3,000,000 (incurred) 3,850,000 (issued) On or before end of Year 2** 1,000,000 (paid) 3,000,000 (incurred) 5,000,000 (issued) To Increase Interest to 67.5% On or before end of Year 3*** - 3,000,000 (incurred) - On or before end of Year 4*** 550,000 (paid subsequently) 3,000,000 (incurred) 4,900,000 (issued subsequently) Total 3,500,000 12,000,000 15,000,000 *Year 1 commenced on September 7, 2023, the date the Company received all required governmental permits including drilling permits to carry out its initial exploration program on the Sunnyside Property. In November 2017, the Company paid the final option payment of $254,700 (US$200,000) to the original optionors on behalf of Great Basin. Pursuant to the Great Basin (see below), the Company offset $150,000 of transaction costs and $78,229 proxy costs against its option payment obligations due to Great Basin under the Sunnyside Agreement. In September 2024, the balance of $717,071 was paid to fulfil the Year 1 cash commitment as defined above. **In June 2025, the Company completed all expenditures and drilling footage required to maintain a 51% interest in Sunnyside and paid the $1,000,000 cash and issued the 5,000,000 shares of the Company per the Sunnyside agreement. ***In August 2026, subsequent to the period-end, the Company had completed all expenditures and drilling footage to earn a 67.50% interest in the Sunnyside Property and paid $550,000 cash and issued 4,900,000 shares of the Company, as per the Sunnyside Agreement (see Note 14). Upon the Company earning 51% interest in the Sunnyside Property, the Company and Regal US would participate in a joint venture for the purpose of further exploring and developing the property. The Sunnyside Agreements contain provisions for dilution of a party’s working interest for failure to fund joint venture cash calls, subject to automatic conversion of a party’s interest into a 5% net proceeds interest (not to exceed 90% of the net amount of the party’s contributed capital) if diluted to less than 10%. Barksdale is the operator of the Sunnyside Property during the term of the Option and the joint venture. As at June 30, 2026, the parties have not formally formed a joint venture but continue to jointly explore the property.
Page 13
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 13 4. EXPLORATION AND EVALUATION ASSETS (CONTINUED) Sunnyside Project (continued) The Sunnyside Agreement further provides that: a) during the first two years of the Option, Great Basin shall vote all of its Barksdale shares in accordance with the recommendations of the Company’s management from time to time, other than matters relating solely to Great Basin or the Sunnyside Property and subject to Great Basin right to abstain from voting in its discretion; b) Great Basin shall give the Company not less than five (5) days advance notice of any proposed sale of Barksdale shares for so long as Great Basin owns 5% or more of the Company’s outstanding shares; c) until such time as the Company has earned a 51% interest in the Sunnyside Property, the Company will not acquire, directly or indirectly, any common shares of Great Basin without the prior consent of Great Basin; d) the Company has a 15 day right of first refusal to acquire all or any part of Great Basin remaining interest in the Sunnyside Property in the event of a proposed sale or transfer of such interest by Great Basin; e) the Company is subject to an acceleration payment clause in the case of change of control of the Company or a transfer of the interest in the Sunnyside Property to a third party during the Option earn-in period; and f) the Sunnyside Agreement is subject to a net smelter return (“NSR”) between 1.5% to 3%. The Company may terminate the Option at any time, in its discretion, subject to satisfying any accrued obligations or liabilities including reclamation requirements, as required. Four Metals Project In April 2018, the Company entered into a definitive option agreement with MinQuest, Ltd. and Allegiant Gold (U.S.) Ltd., a wholly-owned subsidiary of Allegiant Gold Ltd. (together “Allegiant”) to acquire a 100% undivided interest in the Four Metals property (“Four Metals”) located in Santa Cruz County, Arizona. In April 2023, the Company completed the acquisition of Four Metals by making option payments totaling US$450,000 (the “Option Payments”) to MinQuest Ltd. and Allegiant on a 50/50 basis, in cash and common shares of Barksdale (based on the volume weighted average of the Company’s shares for the twenty trading days immediately preceding the date of issue subject to a minimum issue price of $0.68) over a period of five years. As at June 30, 2026, the Company did not have any future exploration expenditures planned for the property, and as such recognized an impairment of exploration and evaluation asset of $12,542 (March 31, 2026 - $12,540) on the statements of loss and comprehensive loss.
Page 14
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 14 4. EXPLORATION AND EVALUATION ASSETS (CONTINUED) San Antonio Project In July 2019, the Company closed a purchase and sale agreement with Teck Resources Limited (“Teck”) to acquire a 100% undivided interest in the San Antonio Property located in Santa Cruz County, Arizona, southeast of the Sunnyside Property. As at June 30, 2026, the Company did not have any future exploration expenditures planned for the property, and as such recognized an impairment of exploration and evaluation asset of $231,053 (March 31, 2026 - $146,335) on the statements of loss and comprehensive loss. Guajolote Patented Mining Claim In June 2021, through an option agreement, the Company acquired 100% interest in a patented mining claim. The property is located within close proximity to the Company’s projects located in Santa Cruz County, Arizona. In order to exercise the option, the Company made option payments of US$125,000 in cash and common shares of the Company. As at June 30, 2026, the Company did not have any future exploration expenditures planned for the property, and as such recognized an impairment of exploration and evaluation asset of $nil (March 31, 2026 - $nil) on the statements of loss and comprehensive loss. Canelo and Goat Canyon Property In March 2021, the Company entered into a purchase and sale agreement to acquire a 100% interest in two separate copper exploration projects, the Canelo and Goat Canyon properties located in Santa Cruz Country, Arizona, from Kennecott Exploration Inc. (“Kennecott”). Consideration for the projects consisted of $44,310 (US$35,000) in cash (paid) as well as a 2.0% NSR that covers both properties. The Company will retain the right to repurchase half of the NSR at any time for a cash payment of US$10,000,000. In the event that a mine is put into production on either property, a one-time cash payment of US$3,500,000 will be payable to Kennecott upon reaching commercial production. In June 2022, the Company dropped certain federal mining claims at Goat Canyon Property that were deemed to have limited geologic potential. As at June 30, 2026, the Company did not have any future exploration expenditures planned for the property, and as such recognized an impairment of exploration and evaluation asset of $61,136 (March 31, 2026 - $183,810) on the statements of loss and comprehensive loss. San Javier Project In September 2020, the Company entered into a definitive option agreement to acquire a 100% interest in the San Javier copper-gold project from Tusk Exploration Ltd. (“Tusk”) The San Javier property is located in central Sonora, Mexico.
Page 15
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 15 4. EXPLORATION AND EVALUATION ASSETS (CONTINUED) San Javier Project (continued) In order to exercise the option, the Company will make option payments to the optionors as follows: Date Cash $ Number of Shares Within 3 business days following the later of (a) execution and delivery of option agreement and (b) TSXV conditional acceptance (“Year 1”) 50,000* 4,000,000* (2,600,000 issued)* On or before September 22, 2021 (“Year 2”) 100,000* 2,000,000* (1,300,000 issued)* On or before the earlier of (a) September 22, 2023 and (b) the completion of a “pre-feasibility study” on the Property 150,000* 3,000,000* On or before the earlier of (a) September 22, 2026 and (b) the date Barksdale enters into definitive documentation for financing the construction of a mine on the Property 200,000* 4,000,000* Total 500,000* 13,000,000* * Certain title issues existed with respect to three of the twelve mining concessions. Under the original definitive option agreement, Tusk agreed to defer 35% of the Year 1 and Year 2 option cash and share payments. If Tusk is able to rectify the title issues, the deferred Year 1 and Year 2 payments will be due. During the year ended March 31, 2021, the Company issued 65% of the Year 1 share payment. In October 2025, the Company issued 1,300,000 shares and paid $65,000 to Tusk in December 2025 to satisfy 65% of the year 2 option payments. Subsequent to the quarter ended June 30, 2026, the Company paid $227,500 to Tusk and issued 4,550,000 shares to earn a 100% interest in the San Javier Project per the definitive option agreement (see Note 14). Upon exercise of the option, the Company will be subject to a NSR on the San Javier project of 1.0% when copper prices are US$3.50 or less per pound and 2.0% when copper prices are US$3.51 or higher per pound. The NSR is subject to a right of first refusal in favour of the Company. 5. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES Right-of-Use Assets Office Leases Cost: $ At March 31, 2024, 2025 155,843 Change for the year - addition 36,504 At March 31, 2026 and June 30, 2026 192,347 Depreciation: At March 31, 2024 108,811 Charge for the year 26,875 At March 31, 2025 135,686 Charge for the year - addition 31,222 At March 31, 2026 166,908 Charge for the period - addition 6,832 At June 30, 2026 173,740
Page 16
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 16 5. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTINUED) Net book value: At March 31, 2026 25,439 At June 30, 2026 18,607 Depreciation of right-of-use assets is calculated using the straight-line method over the remaining lease term. Lease Liabilities $ At March 31, 2025 25,892 New lease liability 36,504 Lease payments made (34,747) Interest expense on lease liabilities 1,319 Foreign exchange adjustment (1,353) At March 31, 2026 27,615 Lease payments made (9,660) Interest expense on lease liabilities 439 Foreign exchange adjustment 538 At June 30, 2026 18,932 Less: current portion (18,932) At June 30, 2026 - The lease liabilities were discounted at a discount rate of 7%. 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES June 30, 2026 March 31, 2026 $ $ Accounts payable 288,862 302,595 Accrued liabilities 271,831 321,644 560,693 624,239
Page 17
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 17 7. CONVERTIBLE DEBENTURES Convertible debentures $ Balance, March 31, 2024 1,417,618 Accretion 121,012 Accrued interest 113,014 Balance, December 31, 2024 1,651,644 Allocation of proceeds to equity component 1,517 Share issued for repayment of interest (151,643) Accretion 39,633 Accrued interest 36,986 Gain on settlement of debt (161,815) Balance, March 31, 2025 1,416,322 Proceeds 2,784,924 Allocation of proceeds to equity component (557,840) Allocation of warrants (874,957) Share issued for repayment of interest (351,370) Accretion 502,670 Accrued interest 110,959 Deferred tax liability (240,837) Loss on extinguishment 271,997 Gain on modification of debentures (111,631) Balance, March 31, 2026 2,950,237 Accretion 138,808 Accrued interest 112,192 Balance, June 30, 2026 3,201,237 Original Debentures In January 2022, the Company closed and issued convertible debentures for aggregate total proceeds of $1,750,000 (“2022 Debentures”) which bear interest at 10% per annum and matured on December 31, 2022. In June 2022, the Company issued 588,426 common shares with a fair value of $264,792 in connection with the conversion of a portion of the 2022 Debentures at a conversion price of $0.45 per share and paid $8,125 interest in cash. As a result, the Company reclassified $18,334 from the equity component of the convertible debentures to share capital. In October 2022 and January 2024, the Company extended the maturity of the 2022 Debentures, with a remaining principal amount of $1,500,000 each by one year until December 31, 2023 (“2023 Debentures”) and subsequently until December 31, 2024 (“2024 Debentures”). As a result, at each extension date, the Debentures were extinguished and the Company accounted for the new convertible debt recognizing losses on the modifications of the components. The remaining terms of the 2022 Debentures remained unchanged, except for the increase of the conversion price from $0.45 to $0.55 per share. The Company issued extension fees consisting of share purchase warrants and settled accrued interest through the issuance of units on each modification date.
Page 18
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 18 7. CONVERTIBLE DEBENTURES (CONTINUED) The Debentures that were extended, are secured by a general security agreement over all the present and after-acquired personal property of the Company and a share pledge agreement over all of the issued and outstanding shares of the Company’s wholly-owned subsidiary IC Exploration Ltd. which owns, indirectly through IC Exploration (US) Ltd., the San Antonio Property. February 2025 Extension of Original Debentures In February 2025, the Company received approval to further extend the maturity of the 2024 Debentures, with a remaining principal amount of $1,500,000, by a further one year until December 31, 2025 (“2025 Debentures”) and the conversion price was reduced from $0.55 to $0.12 per common share. As a result, the 2024 Debentures were extinguished, and the 2025 Debentures were recognized. A gain of $161,815 on settlement of debt was recognized related to the modification to the debt component, a loss of $251,515 was recognized on the settlement of debt related to an extension fee. The remaining terms remained unchanged. Pursuant to the 2025 Debentures, the Company issued 1,684,931 units of the Company in settlement of $151,634 of accrued interest payable on the 2024 Debentures. Each unit consists of one common share of the Company and one-half share purchase warrant. Each warrant shall entitle the holder to purchase an additional common share of the Company at a price of $0.12 for a period of three years. In exchange for extending the 2024 Debentures, the Company issued an extension fee of 8,000,000 share purchase warrants, exercisable into 8,000,000 common shares of the Company at a price of $0.12 exercisable until December 31, 2025 (“2025 Extension Warrants”).The 8,000,000 warrants were valued at $251,515 using the Black-Scholes pricing model with the following assumptions: estimated life of 1 year, risk-free rate of 2.75%, and volatility of 94% and were expensed as a loss on settlement of debt. The 2022 Debentures were compound instruments, and the proceeds were bifurcated to record the fair value of the separate debt and equity components. The fair value of the debt was determined using a discounted cash flow model using an estimated market interest rate for equivalent debt of 12%. Pursuant to the 2025 Debenture extension, the fair value of debt was calculated to be $1,339,702 with the residual portion of $117,018 allocated to equity. April 2025 Extension of Original Debentures In April 2025, the Company received approval to extend the maturity of the 2025 Debentures, with a remaining principal amount of $1,500,000 from December 31, 2025 to December 31, 2027 (“2025 Amended Debentures”). As a result, the 2025 Debentures were extinguished, and the 2025 Amended Debentures were recognized as a new financial liability. $271,997 loss on extinguishment of the debenture was recognized. The remaining terms of the 2025 Debentures remained unchanged. In exchange for extending the 2025 Debentures, the Company also extended the maturity date of 8,000,000 extension warrants, exercisable into 8,000,000 common shares of the Company (“2025 Amended Warrants”) from December 31, 2025 to December 31, 2027. The incremental fair value of 8,000,000 warrants was calculated as $207,073 using the Black-Scholes pricing model with the following assumptions: estimated life of 3 years, risk-free rate of 2.79%, and volatility of 96% and were expensed as a loss on settlement of debt. Incremental changes in fair value of the warrants were recognized as a part of the loss on extinguishment of the debenture.
Page 19
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 19 7. CONVERTIBLE DEBENTURES (CONTINUED) 2025 New Convertible Debentures In April 2025, the Company issued additional convertible debentures for aggregate total proceeds of $3,000,000 (“2025 New Debentures”) which bear interest at 10% per annum and mature on December 31, 2027. The holder can convert outstanding principal amount into common shares at any time after the issuance date at conversion price of $0.12 per common share. In connection with the issuance of the 2025 New Debentures, the Company also issued 7,500,000 detachable share purchase warrants (“2025 New Warrants”), exercisable into 7,500,000 common shares of the Company at a price of $0.12 exercisable until December 31, 2027. The component parts of the convertible debt, which represent a compound instrument, are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument. The conversion option is classified as an equity component because it will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company's common shares. The warrants have also been classified as equity. At initial recognition, the proceeds of $3,000,000 were allocated between the debt and equity components. The fair value of the debt portion was estimated using a discounted cash flow model method with an expected life of 2.67 years and an estimated market interest rate for equivalent debt of 12%. The residual amount of the proceeds after allocating the liability component was allocated between the conversion option and warrant components based on their relative fair values determined using the Black-Scholes option pricing model with the following assumptions: Warrants Conversion Option Grant date share price $ 0.10 $ 0.10 Exercise price $ 0.12 $ 0.12 Risk-free interest rate 2.79% 2.79% Expected life (years) 2.67 2.67 Expected annualized volatility 98% 98% Expected dividend yield 0.0% 0.0% Fair value $ 0.056 $ 0.056 The equity components are not subsequently remeasured and will remain in equity until the related conversion options or warrants are exercised or expire. Upon exercise, the related balances in equity are transferred to share capital. Total transaction costs of $375,906 directly attributable to the issuance of the 2025 New Debentures were allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and are amortized over the life of the convertible debentures using the effective interest method. During the year, holders exercised 4,000,000 of the 2025 New Warrants for gross cash proceeds of $480,000. Upon exercise, the related warrant reserve of $62,255 was transferred to share capital.
Page 20
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 20 7. CONVERTIBLE DEBENTURES (CONTINUED) January 2026 Extension In January 2026, the Company extended the maturity date of all convertible debentures outstanding from December 31, 2027 to December 31, 2028 and reduced the conversion price from $0.12 to $0.10 per share (collectively the “2026 Debentures”). This change resulted in a modification of the convertible debentures. The expiry date of all detachable and extension warrants was also extended from December 31, 2027 to December 31, 2028 and the exercise price of extension warrants was reduced from $0.12 to $0.10. In connection with the January 2026 extension the Company issued an aggregate of 7,000,000 extension common share purchase warrants. Each warrant entitles the holder to acquire one common share at a price of $0.09 for a period of three years from the date of issuance. The 7,000,000 warrants were valued at $471,753 using the Black-Scholes pricing model with the following assumptions: estimated life of three years, risk-free rate of 2.50%, and volatility of 97%. The fair value of the extension warrants was allocated to the related convertible debentures based on the original principal amounts outstanding. The amount was capitalized as a transaction cost of the modified convertible debentures and will be amortized using the effective interest method over the remaining term of the debentures. The incremental fair value of the amended 8,000,000 extension warrants was calculated as $63,305 using the Black-Scholes pricing model with the following assumptions: estimated life of three years, risk-free rate of 2.50%, and volatility of 97%. The incremental fair value was capitalized as a transaction cost of the modified convertible debentures and will be amortized using the effective interest method over the remaining term. During the year, 4,000,000 of the 7,500,000 detachable warrants issued in connection with the 2025 New Debentures were exercised. The incremental fair value of the remaining 3,500,000 amended warrants was calculated as $16,098 using the Black-Scholes option pricing model with the following assumptions: estimated life of three years, risk-free interest rate of 2.50%, and expected volatility of 97%. The incremental fair value was capitalized as a transaction cost of the modified convertible debentures and will be amortized using the effective interest method over the remaining term. In March 2026, the Company issued 3,904,110 common shares of the Company in settlement of $351,370 of accrued interest in relation to the convertible debentures at $0.09 per share.
Page 21
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 21 8. SHARE CAPITAL AND RESERVES Authorized Share Capital The authorized share capital is comprised of an unlimited number of common shares without par value. As at June 30, 2026, the Company had issued and outstanding common shares of 225,417,510 (March 31, 2026 – 218,479,236). Issued Share Capital During the three months ended June 30, 2026: In May and June 2026, the Company issued 6,938,274 common shares in connection with the exercise of 6,938,274 warrants with exercise prices of $0.15, $0.23, and $0.40, for total proceeds of $1,663,704. During the Year ended March 31, 2026: In April 2025, the Company issued 1,200,000 common shares in relation to a finder’s fee in connection with the issuing of the 2025 new convertible debentures. In August 2025, the Company issued 250,000 common shares in connection with the exercise of 250,000 options with an exercise price of $0.12 for total proceeds of $30,000. In September 2025, the Company issued 5,000,000 common shares in connection with the Sunnyside agreement to maintain 51% interest in the Sunnyside property (Note 4). In October 2025, the Company issued 4,000,000 common shares in connection with the exercise of 4,000,000 warrants with an exercise price of $0.12 for total proceeds of $480,000. In October 2025, the Company issued 1,300,000 common shares pursuant to the definitive option agreement with Tusk. (Note 4). In December 2025, the Company issued 250,000 common shares in connection with the exercise of 250,000 options with an exercise price of $0.12 for total proceeds of $30,000. In February 2026, the Company closed a private placement financing of 55,545,744 units, at a price of $0.09 per unit for gross proceeds of $4,999,117. Each unit consists of one common share of the Company and one-half of one common share purchase warrant. Each warrant shall entitle the holder to purchase an additional common share of the Company at a price of $0.15 for a period of two years. Using the residual valuation method, no value was attributed to these warrants as the private placement share price was lower than the share price at the closing date. The Company paid a commission of 1,434,780 finder’s units and advisory fees of 1,560,000 valued at $129,130 and $140,400, respectively. Each unit consists of one common share of the Company and one-half of one common share purchase warrant. Each finder’s and advisor’s warrant shall entitle the holder to purchase an additional common share of the Company at a price of $0.15 for a period of two years. The 1,497,390 finder’s and advisory warrants were valued at $172,137 using the Black-Scholes pricing model with the following assumptions: estimated life of three years, risk-free rate of 2.46%, volatility of 105%, and nil forecasted dividend yield.
Page 22
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 22 8. SHARE CAPITAL AND RESERVES (CONTINUED) Issued Share Capital (Continued) In March 2026, the Company issued 3,904,110 common shares in relation to the accrued interest on the convertible debenture settlement for $351,370 (Note 7). In March 2026, the Company closed a private placement financing of 8,478,049 units, at a price of $0.09 per unit for gross proceeds of $763,024. Each unit consists of one common share of the Company and one-half of one common share purchase warrant. Each warrant shall entitle the holder to purchase an additional common share of the Company at a price of $0.15 for a period of two years. Using the residual valuation method, no value was attributed to these warrants as the private placement share price was lower than the share price at the closing date. Stock Options The Company’s stock option plan provides for the issuance of stock options to its officers, directors, employees and consultants. Stock options are non-transferable and the aggregate number of shares that may be reserved for issuance pursuant to stock options may not exceed 10% of the issued shares of the Company at the time of granting. The exercise price and vesting terms of stock options is determined by the Board of Directors of the Company at the time of grant. The Company’s stock option plan permits the holder of stock options to exercise cashless (net exercise) by surrendering a portion of the underlying stock option shares to pay for the exercise cost. In August 2024, the Company granted 5,000,000 stock options to employees and consultants of the Company at an exercise price of $0.15 per share for a period of three years. 5,000,000 stock options will vest as follows: 1/3 on the date of grant, 1/3 six months from the date of grant, and 1/3 twelve months from the date of grant. The 5,000,000 options were valued at $472,987 using the Black-Scholes pricing model with the following assumptions: estimated life of three years, risk-free rate of 3.17%, volatility of 94%, and nil forecasted dividend yield. During the year ended Mach 31, 2025, 78,339 stock options were forfeited and as a result, $29,370 was reclassified from reserves to deficit. During the year ended Mach 31, 2025, 585,000 stock options expired and as a result, $295,468 was reclassified from reserves to deficit. In May 2025, the Company granted 2,450,000 stock options to certain directors, officers, employees and consultants at an exercise price of $0.12 for a period of three years. The stock options will vest as follows: 1/3 on the date of grant, 1/3 six months from date of grant, and 1/3 twelve months from date of grant. The 2,450,000 options were valued at $105,701 using the Black- Scholes pricing model with the following assumptions: estimated life of three years, risk-free rate of 2.79%, volatility of 98%, and nil forecasted dividend yield. In August 2025, the Company issued 250,000 common shares in connection with the exercise of 250,000 options with an exercise price of $0.12 for total proceeds of $30,000. In December 2025, the Company issued 250,000 common shares in connection with the exercise of 250,000 options with an exercise price of $0.12 for total proceeds of $30,000.
Page 23
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 23 8. SHARE CAPITAL AND RESERVES (CONTINUED) Stock Options (Continued) In January 2026, the Company granted 4,840,655 stock options to certain directors, officers, employees and consultants at an exercise price of $0.12 for a period of three years. The stock options will vest as follows: 1/3 on the date of grant, 1/3 six months from date of grant, and 1/3 twelve months from date of grant. The 4,840,655 options were valued at $503,388 using the Black-Scholes pricing model with the following assumptions: estimated life of three years, risk-free rate of 2.50%, volatility of 99%, and nil forecasted dividend yield. During the year ended March 31, 2026, 3,173,661 stock options expired and as a result, $1,292,348 was reclassified from reserves to deficit. During the three months ended June 30, 2026, 260,000 stock options expired unexercised and as a result, $106,385 was reclassified from reserves to deficit. During the three months ended June 30, 2026, the Company recorded share-based compensation of $129,960 (June 30, 2025 - $89,518). A summary of stock option activities is as follows: Number of options Weighted average exercise price # $ Balance, March 31, 2025 9,713,661 0.39 Granted 7,290,655 0.12 Exercised (500,000) 0.12 Expired (3,173,661) 0.67 Balance, March 31, 2026 13,330,655 0.19 Expired (260,000) 0.73 Balance, June 30, 2026 13,070,655 0.18 A summary of the stock options outstanding and exercisable at June 30, 2026 is as follows: Exercise Price Number Outstanding Number Exercisable Expiry Date $ 0.59 1,280,000 1,129,999 August 14, 2026 0.15 5,000,000 5,000,000 August 19, 2027 0.12 1,950,000 1,950,000 May 9, 2028 0.12 4,840,655 1,613,552 January 22, 2029 13,070,655 9,693,551 The weighted average life of options outstanding and exercisable at June 30, 2026 was 1.92 years and 1.18 years respectively.
Page 24
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 24 8. SHARE CAPITAL AND RESERVES (CONTINUED) Warrants A summary of warrant activities is as follows: Number of warrants Weighted average exercise price # $ Balance, March 31, 2025 60,933,277 0.27 Issued 59,509,288 0.12 Exercised (4,000,000) 0.12 Expired/cancelled (14,286,494) 0.54 Balance, March 31, 2026 102,156,071 0.19 Exercised (6,938,274) 0.24 Balance, June 30, 2026 95,217,797 0.20 A summary of the warrants outstanding and exercisable at June 30, 2026 is as follows: Exercise Price Number Outstanding and Exercisable Expiry Date $ 0.60 68,638 January 9, 2027 0.60 4,887,985 January 9, 2027 0.60 233,854 January 12, 2027 0.23 21,893,317 June 27, 2027 0.23 743,757 June 27, 2027 0.23 14,341,683 July 27, 2027 0.23 324,309 July 27, 2027 0.12 842,466 February 14, 2028 0.10 8,000,000 December 31, 2028 0.12 3,500,000 December 31, 2028 0.09 7,000,000 December 31, 2028 0.15 27,645,373 February 19, 2028 0.15 1,497,390 February 19, 2028 0.15 4,239,025 March 13, 2028 95,217,797 The weighted average life of warrants outstanding at June 30, 2026 was 1.51 years. 9. RELATED PARTY TRANSACTIONS AND BALANCES Key management personnel are the persons responsible for the planning, directing, and controlling of the activities of the Company and include both executives and non-executive directors, and entities controlled by such persons. The Company considers all directors and officers of the Company to be key management personnel. During the quarter ended June 30, 2026, the Company entered into the following transactions with key management personnel:
Page 25
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 25 9. RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED) For the three months ended June 30, 2026 2025 $ $ Management fees 44,341 81,357 Exploration and evaluation assets 266,913 203,539 Professional fees 32,030 27,030 Share-based compensation 64,876 78,035 408,160 389,961 As at June 30, 2026, the Company had $89,424 (March 31, 2026 - $90,049) included in accounts payable and accrued liabilities due to officers, directors, and companies controlled by officers and directors for management fees, professional fees, and reimbursement of expenses. 10. SEGMENTED INFORMATION The Company has one operating segment, being the acquisition and exploration of exploration and evaluation assets. Geographic information is as follows: June 30, 2026 Canada USA Mexico Total $ $ $ $ Exploration and evaluation assets - 24,344,403 6,766,844 31,111,247 Reclamation bond - 294,289 - 294,289 Right-of-use assets - 18,607 - 18,607 Other assets 3,266,926 514,320 62,768 3,844,014 Total assets 3,266,926 25,171,619 6,829,612 35,268,157 March 31, 2026 Canada USA Mexico Total $ $ $ $ Exploration and evaluation assets - 22,372,314 6,747,483 29,119,797 Reclamation bond - 288,677 - 288,677 Right-of-use assets - 25,439 - 25,439 Other assets 4,087,876 603,248 61,437 4,752,561 Total assets 4,087,876 23,289,678 6,808,920 34,186,474
Page 26
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 26 11. SUPPLEMENTAL CASH FLOW INFORMATION For the three months ended June 30, 2026 2025 Non-cash transactions Exploration and evaluation assets in accounts payable and accrued liabilities 166,552 30,903 Debt modification change in terms - 740,269 Reclassification of expired options 106,385 - 12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are: 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 Company’s financial instruments consist of cash, receivables, reclamation bond, accounts payable and accrued liabilities, lease liabilities and convertible debentures. The carrying values of cash, receivables, accounts payable and accrued liabilities approximate their fair values due to the short term nature of these instruments. The carrying values of convertible debentures and lease liabilities approximate fair values, as there has not been any significant changes in interest rates since initial recognition. The Company is exposed to a variety of financial risks by virtue of its activities including currency, credit, interest rate, liquidity and commodity price risk. a) Currency risk The Company conducts the majority of exploration and evaluation activities in the United States and Mexico. As such, it is subject to risk due to fluctuations in the exchange rates of the Canadian dollars, US dollars, and Mexican peso. As at June 30, 2026, the Company had a US foreign currency net monetary asset position of approximately US$992,555 and a MXN Peso net monetary liability position of approximately MXN Peso 101,652. Each 10% change in the US dollar and Mexican peso relative to the Canadian dollar will result in a foreign exchange gain/loss of approximately $99,300 and $10,200, respectively. b) Credit risk Credit risk is risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company’s cash is held in large Canadian financial institutions and its receivables are due from the Government of Canada. As such, the Company determined that it is not exposed to significant credit risk.
Page 27
BARKSDALE RESOURCES CORP. NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Three Months Ended June 30, 2026 and 2025 (Expressed in Canadian Dollars - Unaudited) Page 27 12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED c) Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to limited interest rate risk as it only holds cash and highly liquid short-term investments. The Company is not exposed to interest rate risk with its lease liabilities or convertible debentures as they are not subject to floating interest rates. d) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its obligations as they come due. The Company’s ability to continue as a going concern is dependent on management’s ability to raise the required capital through future equity or debt issuances. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning, and approval of significant expenditures and commitments. Liquidity risk has been assessed as high. The table below summarizes the maturity profile of the Company’s financial liabilities; June 30, 2026 Current within 1 year Non-current 1 – 5 years Financial liabilities $ $ Accounts payable and accrued liabilities 560,693 - Lease liabilities 18,932 - Convertible debentures - 3,201,237 e) Commodity price risk The ability of the Company to explore and develop its exploration and evaluation assets and the future profitability of the Company are directly related to the price of copper, zinc and other base metals. The Company monitors these metal prices to determine the appropriate course of action to be taken. 13. CAPITAL MANAGEMENT The Company considers its capital structure to consist of all components of shareholders’ equity. The Company manages its capital structure and makes adjustments to it, in order to have the funds available to support the exploration of its mineral properties. The Company is an exploration stage company, as such the Company is dependent on external equity financing to fund its activities. In order to pay for administrative costs and exploration expenditures, the Company plans to raise additional amounts as needed. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the quarter ended June 30, 2026. The Company is not subject to externally imposed capital requirements. 14. SUBSEQUENT EVENTS In July 2026, the Company paid $227,500 and issued 4,550,000 shares related to its San Javier property to earn a 100% interest in the San Javier Project. In August 2026, the Company paid $550,000 and issued 4,900,000 shares of the Company to earn a 67.50% interest in the Sunnyside Property, as per the Sunnyside Agreement. In August 2026, 1,280,000 stock options expired unexercised.