Financial statements
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Cabral Gold Inc. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited) (Expressed in Canadian dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025
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Cabral Gold Inc. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited - Expressed in Canadian Dollars) AS AT June 30, 2026 September 30, 2025 ASSETS Current Cash and cash equivalents $ 22,417,212 $ 8,054,491 Receivables 182,522 107,403 Prepaid expenses 459,483 475,903 23,059,217 8,637,797 Non-current advances (Note 5) 6,432,299 1,034,220 Property and equipment (Note 5) 57,834,800 1,481,329 Gold deposits (Note 9) 6,579,170 - Advance net smelter royalty payments (Note 5) 710,508 - Exploration and evaluation assets (Note 6) 88,707 3,952,548 Total assets $ 94,704,701 $ 15,105,894 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Accounts payable and accrued liabilities (Note 8) $ 7,669,644 $ 1,712,843 Due to related parties (Note 14) 102,016 66,085 Gold loan payable (Note 9) 18,577,432 26,349,092 1,778,928 Decommissioning liability (Note 10) 2,240,655 - Gold loan payable (Note 9) 48,787,841 - Total liabilities 77,377,588 1,778,928 Shareholders’ equity Share capital (Note 11) 83,913,168 59,830,927 Reserves (Note 11) 13,264,053 8,219,729 Accumulated other comprehensive loss (973,565) (480,721) Deficit (78,876,543) (54,242,969) Total shareholders’ equity 17,327,113 13,326,966 Total liabilities and shareholders’ equity $ 94,704,701 $ 15,105,894 Commitments and contingent liabilities (Note 17) Subsequent events (Note 18) The accompanying notes are an integral part of these condensed consolidated interim financial statements. Approved by the Board of Directors on August 26, 2026: “Lawrence Lepard” “Alan Carter” Lawrence Lepard, Director Alan Carter, Director
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Cabral Gold Inc. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited - Expressed in Canadian Dollars) For the three months ended June 30, 2026 For the three months ended June 30, 2025 For the nine months ended June 30, 2026 For the nine months ended June 30, 2025 EXPENSES Exploration and evaluation expenditures (Note 6) $ 5,457,298 $ 2,768,556 $ 15,323,360 $ 5,800,145 Depreciation (Note 5) 72,171 22,386 215,046 176,515 Directors’ fees (Note 14) 28,125 - 56,250 - Management and consulting (Note 14) 203,631 178,181 695,083 523,589 Marketing and shareholder communications 144,434 182,686 461,618 449,317 Office and administrative 25,049 19,413 391,784 49,885 Payroll 241,978 - 241,978 - Professional fees 275,982 106,351 1,423,615 214,254 Share-based payments (Notes 11, 14) 1,119,585 196,075 2,948,105 653,766 Transfer agent, listing and filing fees 40,378 88,968 130,776 131,547 Travel 46,903 29,854 159,049 94,977 (7,655,534) (3,592,470) (22,046,664) (8,093,995) OTHER INCOME AND EXPENSES Foreign exchange (253,275) (45,821) 419,221 (58,171) Allowance against input tax credits (421,604) - (421,604) - Fair value adjustments on gold loan payable (Note 9) 9,350,762 - 1,174,635 - Unrealized gain on gold deposits (Note 9) (922,523) - (496,396) - Unrealized foreign exchange gain on gold loan payable (Note 9) 389,265 - 2,507,481 - Unrealized foreign exchange loss on gold deposits (Note 9) (39,453) - (449,196) - Finance expense (Note 9) (1,756,937) - (7,162,985) - Interest income 450,185 54,719 1,841,934 70,350 Write-off of exploration and evaluation asset - - - (33,192) 6,796,420 8,898 (2,586,910) (21,013) Net loss for the period (859,114) (3,583,572) (24,633,574) (8,115,008) Other comprehensive loss Items that may be reclassified to net loss Cumulative translation adjustment 275,740 (24,434) (492,844) (40,564) Comprehensive loss for the period $ (583,374) $ (3,608,006) $ (25,126,418) $ (8,155,572) Basic and diluted loss per share $ (0.00) $ (0.01) $ (0.09) $ (0.04) Weighted average number of common shares outstanding – basic and diluted 305,041,301 258,142,426 286,675,992 228,734,118 The accompanying notes are an integral part of these condensed consolidated interim financial statements.
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Cabral Gold Inc. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY) (Unaudited - Expressed in Canadian Dollars except number of shares) Share Capital Number Amount Reserves, warrants Reserves, stock options Reserves, RSUs Accumulated other comprehensive loss Accumulated deficit Total shareholders’ equity Balance at September 30, 2024 205,575,805 $ 40,000,994 $ 2,965,232 $ 3,711,782 $ 164,469 $ (549,891) $ (41,143,946) $ 5,148,640 Common shares issued for private placements 48,041,311 16,337,632 693,043 - - - - 17,030,675 Share issuance costs - (1,688,294) 382,825 - - - - (1,305,469) Warrants exercised 19,595,200 3,945,851 (111) - - - - 3,945,740 Restricted share units exercised 400,000 48,000 - - (48,000) - - - Stock options exercised 1,800,000 805,567 - (364,567) - - - 441,000 Share-based payments - - - 612,906 40,860 - - 653,766 Comprehensive loss for the period - - - - - (40,564) (8,115,008) (8,155,572) Balance at June 30, 2025 275,412,316 $ 59,449,750 $ 4,040,989 $ 3,960,121 $ 157,329 $ (590,455) $ (49,258,954) $ 17,758,780 Warrants exercised 60,000 14,400 - - - - - 14,400 Stock options exercised 740,000 366,777 - (166,977) - - - 199,800 Share-based payments - - - 221,210 7,057 - - 228,267 Comprehensive loss for the period - - - - - 109,734 (4,984,015) (4,874,281) Balance at September 30, 2025 276,212,316 $ 59,830,927 $ 4,040,989 $ 4,014,354 $ 164,386 $ (480,721) $ (54,242,969) $ 13,326,966 Common shares issued for private placements 21,055,000 20,002,250 - - - - - 20,002,250 Share issuance costs - (1,588,040) - - - - - (1,588,040) Warrants to Gold loan lender - - 2,836,377 - - - - 2,836,377 Warrants exercised 10,683,300 4,132,055 (135,681) - - - - 3,996,374 Stock options exercised 2,600,000 1,535,976 - (604,477) - - - 931,499 Share-based payments - - - 2,347,131 600,974 - - 2,948,105 Comprehensive loss for the period - - - - - (492,844) (24,633,574) (25,126,418) Balance at June 30, 2026 310,550,616 $ 83,913,168 $ 6,741,685 $ 5,757,008 $ 765,360 $ (973,565) $ (78,876,543) $ 17,327,113 The accompanying notes are an integral part of these condensed consolidated interim financial statements.
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Cabral Gold Inc. CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited -Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 2025 CASH FROM OPERATING ACTIVITIES Net loss for the period $ (24,633,574) $ (8,115,008) Items not affecting cash: Share-based payments 2,948,105 653,766 Depreciation 215,046 176,515 Finance expense 7,162,985 - Fair value adjustment, Gold loan (1,174,635) - Fair value adjustment, Gold deposits 496,396 - Disposal of equipment - 4,454 Write-off of mineral property - 33,192 Unrealized foreign exchange (2,058,285) - Changes in non-cash working capital items: Receivables (72,620) 223,361 Prepaid expenses 20,139 (315,470) Accounts payable and accrued liabilities (151,100) 799,914 Advance net smelter royalty payments (674,138) - Due to related parties 35,931 57,380 Net cash used in operating activities (17,885,750) (6,481,896) CASH FROM INVESTING ACTIVITIES Additions to mineral properties (90,238) (398,334) Additions to Cuiú Cuiú project (1,057,557) - Purchases of property and equipment (240,302) (276,994) Assets under construction (41,087,747) - Gold deposits (6,876,512) - Non-current advances (5,282,464) - Net cash used in investing activities (54,634,820) (675,328) CASH FROM FINANCING ACTIVITIES Proceeds received from gold loan 63,639,691 - Proceeds on issuance of common shares 20,002,250 17,030,675 Share issuance costs (1,588,040) (1,305,469) Exercise of warrants 3,996,374 3,945,740 Exercise of stock options 931,499 441,000 Net cash provided by financing activities 86,981,774 20,111,946 Effects of foreign exchange on cash (98,483) (62,435) Change in cash and cash equivalents during the period 14,362,721 12,892,287 Cash and cash equivalents, beginning of the period 8,054,491 1,400,818 Cash and cash equivalents, end of the period $ 22,417,212 $ 14,293,105 Supplemental cash flow information (Note 12) The accompanying notes are an integral part of these condensed consolidated interim financial statements.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 8 1. NATURE OF OPERATIONS Cabral Gold Inc. (“ Cabral Gold ” or the “ Company”) was incorporated on February 11, 2014 under the British Columbia Business Corporations Act. The Company’s registered office is located at 1200 – 750 West Pender Street, Vancouver, British Columbia, Canada, V6C 2T8. The Company’s main property is the Cuiú Cuiú property in the State of Para, Brazil (Note 5). Concurrently with the execution of the gold loan during the nine months ended June 30, 2026, the Company approved a decision to construct the Cuiú Cuiú Heap Leach gold starter project (the “Project”) (Note 5). Going concern The nature of the Company’s operations results in significant expenditures for the acquisition, exploration and development of mineral properties. To date, the Company has not generated any revenue from mining or other operations. These condensed consolidated interim financial statements have been prepared on a going concern basis, which assumes the Company will be able to realise its assets and settle its liabilities in the normal course of business. For the nine months ended June 30, 2026, the Company reported a net loss of $ 24,633,574 (2025 – $8,115,008) and as at that date had a deficiency of current assets over current liabilities of $3,289,875 (September 30, 2025 – excess current assets over current liabilities of $ 6,858,869). These events and conditions indicate that a material uncertainty exists that may cast substantial doubt on the Company’s ability to continue as a going concern. Subsequent to June 30, 2026, the Company completed a private placement for gross proceeds of $44,957,580 (Note 18). The Company anticipates that it has sufficient funds for its capital requirements up to the commencement of commercial production at the Project. In the event that the funds are insufficient to complete construction and commissioning of the mine, the Company will need to complete further financing. Further, the Company intends to continue exploring the Cuiú Cuiú property which has multiple exploration targets. The Company’s ability to continue as a going concern is dependent on its ability to obtain funding until such time it is able to operate profitably. The timing and certainty of profitable operations is subject to risk. These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material. In the event the Company is unable to arrange appropriate financing, the carrying value of its assets and liabilities could be subject to material adjustment, and the Company could be unable to meet its obligations as they become due in the normal course of business. Change of reporting period During fiscal 2025 , the Company changed its year end from December 31 to September 30. Accordingly, the comparative statement of financial position and associated disclosure throughout the condensed consolidated interim financial statements present results for the nine-month period ended September 30, 2025.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 9 2. BASIS OF PRESENTATION These condensed consolidated interim financial statements include the accounts of Cabral Gold Inc. and its subsidiaries as follows: Company Place of Incorporation Effective Interest Principal Activity Functional currency Cabral Gold B.C. Inc. (“CGBC”) Canada 100% Exploration management Canadian dollar Magellan Minerais Prospecção Geológica Ltda. (“Magellan Brazil”) Brazil 100% Mineral exploration Brazilian real Magellan Brazil holds 100% of the Cuiú Cuiú property. Comparative figures Comparative figures of property and equipment have been reclassified to conform to the current year’s presentation. 3. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION These condensed interim consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard 34, ‘Interim Financial Reporting’. The accounting policies followed in these condensed interim consolidated financial statements are the same as tho se applied in the Company’s consolidated financial statements for the period ended September 30, 2025 with the exception of newly adopted accounting policies as below. The condensed interim consolidated financial statements do not contain all disclosures required under IFRS and should be read in conjunction with Company’s consolidated financial statements and the notes thereto for the period ended September 30, 2025. Financial instruments A financial asset is classified as measured at: amortized cost, fair value through other comprehensive income (FVOCI), or fair value through profit or loss (FVTPL). The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification. The Company's financial assets consist primarily of cash and cash equivalents, and gold deposits . Cash and cash equivalents are classified at amortized cost . Gold deposits is classified as FVTPL. Financial liabilities comprise the Company’s accounts payable, amounts due to related parties and g old loan payable. Financial liabilities are initially recognized on the date they are originated and are derecognized when the contractual obligations are discharged or cancelled or expire. Accounts payable are recognized initially at fair value and subsequent are measured at amortized costs using the effective interest method, when materially different from the initial amount. The gold loan payable is classified as FVTPL. Fair value is determined based on the market price of gold plus accrued interest.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 10 4. CRITICAL JUDGEMENTS AND SIGNIFICANT ESTIMATES The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires the use of judgements and estimates that affect the amounts reported and disclosed in the condensed consolidated interim financial statements and related notes. These judgements and estimates are based on management’s knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the condensed consolidated interim financial statements. Information about such judgements and estimation is contained in the accounting policies and notes to the condensed consolidated financial statements for the period ended September 30, 2025, and the key areas are summarised below. Going concern The assumption that the Company will be able to continue as a going concern is subject to critical judgments by management with respect to assumptions surrounding short and long-term financing, investing and operating activities, and management’s strategic planning. Management has applied judgement in the assessment of the Company continuing as a going concern by taking into account all available information. Should those judgments prove to be inaccurate, management’s continued use of the going concern assumption could be inappropriate, as discussed in Note 1. Functional currency Management is required to assess the functional currency of each entity of the Company. In concluding the functional currencies of the parent and its subsidiary companies, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates. The Company also considered secondary indicators including the currency in which funds from financing activities are denominated and the currency in which funds are retained. Decommissioning liabilities The Company has obligations for decommissioning, restoring and other similar activities related to its mining properties. The future obligations for mine closure activities are estimated by the Company using mine closure plans or other similar studies which outline the requirements that will be carried out to meet the obligations. Because the obligations are dependent on the laws and regulations of the countries in which the mines operate, the requirements could change as a result of amendments in the laws and regulations relating to environmental protection and other legislation affecting resource companies. As the estimate of the obligations is based on future expectations, a number of estimates and assumptions are made by management in the determination of closure provisions, including the future costs, the period over which they will be incurred, and the appropriate discount rate to be used. Title to mineral properties Although the Company takes steps to verify title to exploration and evaluation assets in which it has an interest, these procedures do not fully guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title could be affected by undetected defects. Development phase Judgement is applied in determining whether a property has moved from exploration to development. The Company considers key development milestones such as obtaining sufficient financial resources, permits, and licences to develop the mineral property. The Company considers the Project to have reached the development phase as of November 30, 2025 (Note 5). The Company exercises judgement in allocating and capitalizing costs to development while exploration is ongoing.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 11 4. CRITICAL JUDGEMENTS AND SIGNIFICANT ESTIMATES (cont’d…) Valuation of equity instruments Share-based payments and equity-based finance expenses (warrants) are subject to estimation of the value of the award at the date of grant using pricing models such as the Black-Scholes option valuation model. The option valuation model requires the input of highly subjective assumptions including the expected stock pri ce volatility. Because the Company’s equity instruments have characteristics significantly different from those of traded equity instruments and because the subjective input assumptions can materially affect the calculated fair value, such value is subject to measurement uncertainty. 5. PROPERTY AND EQUIPMENT Land Buildings and equipment Assets under construction Cuiú Cuiú Project Total Cost Balance, December 31, 2024 $ 517,757 $ 619,991 $ - $ - $ 1,137,748 Additions 45,055 761,906 - - 806,961 Disposals and derecognition of fully depreciated assets - (274,779) - - (274,779) Foreign exchange 66,859 68,612 - - 135,471 Balance, September 30, 2025 $ 629,671 $ 1,175,730 $ - $ - $ 1,805,401 Transfer from exploration and evaluation assets - - - 3,964,545 3,964,545 Additions - 240,302 46,891,024 1,057,557 48,188,883 Decommissioning liability - - - 2,101,073 2,101,073 Foreign exchange 31,291 66,100 1,887,050 349,100 2,333,541 Balance, June 30, 2026 $ 660,962 $ 1,482,132 $ 48,778,074 $ 7,472,275 $ 58,393,443 Accumulated Depreciation Balance, December 31, 2024 $ - $ 480,650 $ - $ - $ 480,650 Additions - 96,698 - - 96,698 Disposals and derecognition of fully depreciated assets - (274,779) - - (274,779) Foreign exchange - 21,503 - - 21,503 Balance, September 30, 2025 $ - $ 324,072 $ - $ - $ 324,072 Additions - 215,046 - - 215,046 Foreign exchange - 19,525 - - 19,525 Balance, June 30, 2026 $ - $ 558,643 $ - $ - $ 558,643 Net Book Value September 30, 2025 $ 629,671 $ 851,658 $ - $ - $ 1,481,329 June 30, 2026 $ 660,962 $ 923,489 $ 48,778,074 $ 7,472,275 $ 57,834,800 Non-current advances As at June 30, 2026, the Company had advanced $ 6,432,299 (September 30, 2025 - $1,034,220) to suppliers toward the purchase of services, materials and fixed assets required to advance development of the Cuiú Cuiú Project.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 12 5. PROPERTY AND EQUIPMENT (cont’d…) Cuiú Cuiú property The Company recognized, pursuant to a decision to construct on completion of the Gold Loan, that the Cuiú Cuiú Project as having achieved the development milestone. Accordingly, the Company began capitalizing the development costs incurred on November 30, 2025. Depreciation will be recognized once the Company begins commercial production. Cuiú Cuiú surface access agreement, garimpeiro condominium On February 19, 2006, Magellan Brazil entered into a surface access agreement with the holders of the traditional surface rights over the Cuiú Cuiú property. The owners are organised into a ‘condominium’ (which is similar to a cooperative) comprising minority stakeholders and majority stakeholders. The February 19, 2006 agreement has since been amended and extended several times the most recent of which was on March 29, 2017. Annually, the Company works with the condominium to negotiate annual payments. In the period ended June 30, 2026, the Company paid an annual rate of R$7,000 (2025 – R$6,300) to the majority stakeholders and R$3,500 (2025 - R$3,150) to the minority stakeholders in respect of the year ended March 2027. The agreement specifies that in the event that an economically viable gold resource is identified, Magellan Brazil will make an additional payment to the holders of the traditional surface rights based on the amount of gold defined (as measured in accordance with Australasian Joint Ore Reserves Committee definitions) as follows: • Less than 1.0 million ounces: US$ 2,000,000 • 1.0 million ounces to 2.0 million ounces: US$ 3,000,000 • 2.0 million ounces to 3.0 million ounces: US$ 4,000,000 • 3.0 million ounces to 4.0 million ounces: US$ 6,000,000 • More than 4.0 million ounces: an additional US$ 3,000,000 for every additional million ounces identified in excess of 4.0 million ounces of contained gold. Upon delivery and approval of the final research reports on the areas under consideration to the Brazilian National Department of Mineral Production now called the Brazilian Mining Agency (“ANM”) or at any time if the size of the gold reserve is found to be economically viable (pursuant to a formal feasibility study), Magellan Brazil is to provide written notice to the condominium following which the aforementioned payment is to be made within 90 days. The Company is not currently pursuing a feasibility study. Acquisition of garimpeiro interests The surface access agreement with the garimpeiro condominium provides the Company with the right to acquire any stakeholder’s interest at any time for a specified price as defined in the agreement. Such purchases are made for the purpose of consolidating land tenure of strategic ground. As at June 30, 2026, Magellan Brazil has purchased nine majority interests and eight minority interests in the Cuiú Cuiú condominium.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 13 5. PROPERTY AND EQUIPMENT (cont’d…) Surface access and purchase agreements within the Cuiú Cuiú district During 2020, the Company entered into three surface access and purchase agreements relating to a total of 9,285 hectares located northeast and east of the main Cuiú Cuiú property. Each of the three agreements include an option pursuant to which Magellan Brazil may purchase the subject property by making a payment to the owner based on the amount of gold defined on the applicable property at the time of activation and payment (as measured in accordance with provisions defined by the ANM as follows: • Less than 1.0 million ounces: US$ 1,000,000 • 1.0 million ounces to 2.0 million ounces: US$ 2,000,000 • 2.0 million ounces to 3.0 million ounces: US$ 3,000,000 • 3.0 million ounces to 4.0 million ounces: US$ 4,000,000 • More than 4.0 million ounces: an additional US$ 1,000,000 for every additional million ounces identified in excess of 1.0 million ounces of contained gold to a maximum of US$ 2,000,000. Monthly rental fees are adjusted on an annual basis. The total monthly fee for the three properties was R$49,284 ($12,065) as at June 2026. Transfer of peripheral tenements to a cooperative In March 2023, the Company transferred 17,546 hectares of ground to a local cooperative (the “ Cooperative”) established by members of the Cuiú Cuiú condominium. The transferred tenements comprise two exploration licenses that had final reports due in March and April 2023. The exploration work undertaken was insufficient in both nature and extent to produce a final report, and in the absenc e of any action, the Company risked losing its title to the transferred ground on the final report due dates. A transfer agreement was entered into between Magellan Brazil and the Cooperative in March 2023 in respect of each of the two tenements which provides for the following: • Transfer of title of the tenements to the Cooperative • Right for Magellan Brazil to continue exploration on the transferred tenements • Change in status of the ground from exploration licenses to permisao da lavra garimpeira, permission of prospector mining (“PLGs”) • Transfer of title to each of the two transferred tenements back to Magellan Brazil at the Company’s option in the future for a predefined payment amount • The agreement respects the four surface access agreements that were established in 2020 and 2021. Each of the two agreements include a purchase option pursuant to which Magellan Brazil may acquire the subject property by making a payment to the Cooperative based on the amount of gold defined on the applicable tenement at the time of activation and paym ent (as measured in accordance with provisions defined by the ANM and based on other surface access agreements that the Company has in the area). With the two environmental licenses issued by the Municipal Environmental Agency (SEMMA) on May 17, 2023 and the subsequent publication of the two PLGs by the ANM on July 20, 2023, both agreements between Magellan Brazil and the Cooperative became active and legally binding. In September 2023, a further nine exploration licenses comprising 548 hectares of ground at Cuiú Cuiú were transferred to the Cooperative following the same process. All documents have been submitted with final execution of the transfer pending environmental licenses and PLGs. The size of the Cuiú Cuiú property following the transfers to the Cooperative is 19,045 hectares.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 14 5. PROPERTY AND EQUIPMENT (cont’d…) Versamet NSR Versamet Royalties Corporation (“Versamet”) has a 1 .5% net smelter return (“ NSR”) royalty. In the nine months ended June 30, 2026, the Company paid an advance royalty of US$250,000 and is required to make a further advance royalty payment of US$250,000 on each one -year anniversary of this date thereafter until the property enters commercial production. These advance payments will be credited against future royalty payments due under the royalty agreement. As of September 30, 2025, Versamet’s interest was secured by a pledge over production and mineral rights and as primary security holder over certain fixed assets. Versamet has a right of first refusal on any future royalty or gold stream financing for the Cuiú Cuiú property. Osisko NSR OR Royalties Inc. (formerly, Osisko Gold Royalties Ltd, “ Osisko”) has a 1% NSR royalty. The Osisko NSR royalty applies to the area containing the existing resources at Cuiú Cuiú as well as the surrounding land package. The Company paid Osisko an advance royalty of US$250,000 in the nine months ended June 30, 2026, and is required to make a further advance royalty payment of US$250,000 on each one -year anniversary of this date thereafter until the property enters commercial production. These advance payments will be credited against future royalty payments due under the royalty agreement. Versamet maintains a second ranking pledge over production and mineral rights of the Cuiú Cuiú property with Osisko having a third ranking over the same . Osisko’s security also include s a second ranking pledge over the shares and quotas, respectively, of both CGBC and Magellan Brazil. Also, there are in place promises to pledge certain material fixed assets of Magellan Brazil in favor of both Versamet, and Osisko (Note 9 ). Osisko retains certain additional rights regarding future royalty and stream financings. 6. EXPLORATION AND EVALUATION ASSETS Cuiú Cuiú (Brazil) Bom Jardim (Brazil) Total Balance, December 31, 2024 $ 3,166,346 $ 75,172 $ 3,241,518 Additions 350,656 - 350,656 Foreign exchange 351,038 9,336 360,374 Balance, September 30, 2025 $ 3,868,040 $ 84,508 $ 3,952,548 Additions 90,238 - 90,238 Foreign exchange 6,267 4,199 10,466 Transfer to property and equipment (3,964,545) - (3,964,545) Balance, June 30, 2026 $ - $ 88,707 $ 88,707 It is possible that economically recoverable reserves may not be discovered and accordingly a material portion of the carrying value of mineral properties could be impaired in the future. The Company is required to make statutory claim maintenance expenditures to the Brazilian authorities each year to maintain its properties in good standing.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 15 6. EXPLORATION AND EVALUATION ASSETS (cont’d…) Exploration and evaluation expenditures The Company recognized the start of the development phase of the Cuiú Cuiú Project as of November 30, 2025 when it began to capitalize development costs. The Company continues to explore the Cuiú Cuiú property and expenses all costs not directly related to the development of the gold operations site. Nine months ended June 30, 2026 Cuiú Cuiú Assaying $ 360,886 Camp facilities and catering 625,925 Community relations 732,981 Consumables 357,284 Development, early works 2,161,246 Drilling 2,934,268 Engineering, early works 435,535 Environmental, health and safety 953,132 Equipment rental and maintenance 919,263 Field costs 245,315 Freight and travel and logistics 1,410,975 Fuel and electricity 776,246 Geology, geophysics 404,290 Information technology 262,299 Maintenance and camp services 349,435 Payroll and consulting – exploration, drilling 1,609,790 Security services 311,475 Third party consultants 473,015 $ 15,323,360 Nine months ended June 30, 2025 Cuiú Cuiú Other Site costs and logistics Total Assaying $ 122,846 $ - $ - $ 122,846 Community relations 151,780 - - 151,780 Drilling 796,851 - - 796,851 Engineering 128,455 - - 128,455 Field costs 1,567,138 8,868 116,534 1,692,540 Freight and travel 435,704 - 22,248 457,952 Payroll 954,084 - 60,906 1,014,990 Third party consultants 1,434,731 - - 1,434,731 $ 5,591,589 $ 8,868 $ 199,688 $ 5,800,145
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 16 7. POCONÉ The Company was a party to two sets of agreements with third parties pursuant to which mineral properties in the Poconé region of the state of Mato Grosso were to be identified, explored and developed. The first agreement was entered into between Magellan Minerals and ECI Exploration & Mining Inc. (“ ECI”) on October 17, 2011, effective December 2009 pursuant to which ECI and Magellan would share equally in the rights and responsibilities associated with the identification, exploration and development of mineral properties (the “ ECI Venture”). The second set of agreements was between Magellan, ECI and Brasil Central Engenharia Ltda. (“Brasil Central ”) pursuant to which Magellan, ECI, and Brasil Central would seek to identify, explore and develop mineral properties through a newly incorporated entity, Poconé Gold Mineração Ltda. (“PGM ”). Magellan Brazil held a 35% interest in PGM through September 26, 2018. Magellan’s rights and responsibilities associated with both the ECI Venture and PGM were transferred to CGBC effective April 15, 2016. Virtually no exploration activity was undertaken on any of the Poconé properties since 2012. The Company has historically incurred various claim maintenance and other charges and realised proceeds on the liquidation of certain assets relating to both the ECI Venture and PGM. In August 2015, ECI received notification that a former optionor of one of the property interests acquired by ECI on behalf of the ECI Venture had filed a claim against ECI and PGM in connection with an option agreement that had been entered into with the ECI Venture in December 2009. No claim has been filed against the Company, however, the Company is responsible for 50% of costs of ECI pursuant to the ECI Venture agreement. On September 26, 2018, an agreement was entered into pursuant to which the shares of PGM held by both Magellan Brazil and the Brazilian subsidiary of ECI were transferred to Brasil Central in exchange for Brasil Central taking over the debts of PGM and making nominal cash payments. The disposal of PGM does not reduce the Company’s exposure relating to the aforementioned legal claim against ECI and PGM. Furthermore, as part of the sale of PGM, Magellan Brazil and the Brazilian subsidiary of ECI provided an indemnification to PGM relating to any losses resulting from the legal claim. Recent decisions of the applicable courts have gone against the defendants in this case. The plaintiff has started the execution phase against the defendants. The plaintiff has been awarded a claim of approximately BRL5,900,000. The Company’s exposure under this award is limited to 50% of any damages suffered by ECI and Brasil Central under this execution phase which is limited by any assets available in those entities for settlement under the claim . The significant uncertainty present in the execution phase and related issues regarding the case are such that at this time, management is unable to estimate the likelihood of a loss ultimately being realised by the Company or the quantum and timing of any such loss should it occur. No provision has been made in the accounts for any amount associated with the claim (see Note 17).
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 17 8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES June 30, 2026 September 30, 2025 Canada Accounts payable and accrued liabilities $ 178,382 $ 280,121 Brazil Accounts payable and accrued liabilities 5,953,554 1,099,435 Consumption taxes 679,695 - Payroll and related costs 684,898 248,130 Claim costs 97,384 13,011 Poconé 75,731 72,146 $ 7,669,644 $ 1,712,843 9. GOLD LOAN PAYABLE AND GOLD DEPOSITS Gold Loan On November 2 6, 2025, the Company closed an arm’s length gold loan agreement and the receipt of the US$45.1 million principal amount (“Gold Loan”). The Gold Loan has a term ending 39 months from the drawdown date with principal payments of 39 kgs of gold per quarter com mencing March 31, 2027. The Gold Loan has an annual interest rate of 10% (in gold terms) with interest costs capitalized to loan principal until December 2026. The Company entered into binding transaction agreements, including all necessary finance agreements and the intercreditor agreements and issued a draw down notice to the lender and received the principal amount under the Gold Loan equal to 345 kilograms of gold at a value of US$45,121,732. No finder’s fees were payable in connection with the Gold Loan and the terms of such Gold Loan. The Company’s obligations under the Gold Loan are secured by, among other things, corporate guarantees and first - ranking security from each of the Company and its subsidiaries. The borrower under the Gold Loan is Magellan Brazil. Pursuant to the terms of intercreditor agreements entered into with each of Osisko and Versamet, the priority of security interests previously granted to each of Osisko and Versamet were adjusted accordingly to grant the lender a senior security interest. Concurrent with the receipt of the principal amount under the Gold Loan, the Company issued 10,000,000 non - transferrable common share purchase warrants of the Company to the lender. Each warrant entitles the lender to acquire one common share of the Company at a price of $0.71 until November 26, 2027 (see Note 11). These warrants were valued at $2,836,377 using the Black-Scholes option-pricing model with the following assumptions: expected life of two years, risk-free interest rate of 2.4%, expected dividend yield of 0% and expected volatility of 7 7.39%. The Gold Loan was recorded at fair value at inception and is subsequently measured at fair value through profit or loss plus accrued interest at 10% per annum (in gold terms). Fair value is based on market price of gold at the end of each reporting period.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 18 9. GOLD LOAN PAYABLE AND GOLD DEPOSITS (cont’d…) A summary of the movements of the Gold Loan is as follows: Gold Loan June 30, 2026 September 30, 2025 Balance, beginning of the period $ - $ - Loan advanced 63,639,691 - Interest accrued 4,326,608 - Change in fair value through profit and loss (1,174,635) - Foreign exchange and translation 573,609 - Balance, end of period $ 67,365,273 $ - Current $ 18,577,432 $ - Non-current $ 48,787,841 $ - Finance expense Nine months ended June 30, 2026 Nine months ended June 30, 2025 Warrants on Gold Loan $ 2,836,377 $ - Interest on Gold Loan 4,326,608 - $ 7,162,985 $ - Gold deposits On December 19, 2025, Magellan Brazil purchased 1,150 oz of gold credit for a total of US$4,989,850. A summary of the movements of gold deposits is as follows Gold deposits Ounces June 30, 2026 September 30, 2025 Balance, beginning of the period $ - $ - Purchase 1,150 6,876,512 - Change in fair value through profit and loss (496,396) - Foreign exchange and translation 199,054 - Balance, end of period 1,150 $ 6,579,170 $ -
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 19 10. DECOMMISSIONING LIABILITY The Company has recognized a decommissioning liability in connection with certain possible environmental and reclamation liabilities resulting from work done at the Cuiú Cuiú Project. Decommissioning liability Balance, September 30, 2025 $ - Additions 2,101,073 Foreign exchange 139,582 Balance, June 30, 2026 $ 2,240,655 The total amount of estimated undiscounted cash flows required to settle the Company’s estimated obligation is $4,481,244 (2025 - $nil) which has been discounted using a pre-tax risk-free rate of 14.5% (2025 – nil) with discount period of 7 years and inflation rate of 4.00% (2025 – nil). The present value of the decommissioning liabilities may be subject to change based on management’s current estimates, changes in remediation technology, or changes to the applicable laws and regulations. Such changes will be recorded in the accounts of the Company as they occur. 11. SHAREHOLDERS’ EQUITY Share capital The Company has authorised capital of an unlimited number of common shares with no par value. April 2026 bought deal financing On April 2, 2026, the Company closed a bought deal financing consisting of a 21,055,000 common shares at a price of $0.95 per common share for gross proceeds of $20,002,250. The Company paid cash finder’s fees of $1,200,135 and incurred other share issuance costs of $387,905 in relation to the bought deal financing. May 2025 brokered private placement On May 6, 2025, the Company closed a best-efforts public offering of units (the "Offering"). Pursuant to the Offering, the Company issued 39,291,146 units (the “Units”) at a price of $0.38 per Unit for gross proceeds of $14,930,635, which included 5,079,146 Units issued pursuant to the exercise of the Agent’s over-allotment option. Paradigm Capital Inc. acted as sole agent in the Offering (the “Agent”). Each Unit is comprised of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to acquire one common share at a price of $0.56 until May 6, 2027. The warrants were assigned a residual value of $589,367. In connection with the Offering, the Company paid the Agent a cash commission of $895,838 and issued the Agent 2,357,468 compensation warrants (“Compensation Warrants”). Each Compensation Warrant entitles the Agent to acquire one common share of the Company at $0.38 until May 6, 2027. The Compensation Warrants were valued at $382,825 using the following Black Scholes inputs: risk- free rate of 2.53%, expected volatility of 82.87%, expected life of 2 years and dividend rate of 0%. The Company incurred other share issuance costs of $339,6 02.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 20 11. SHAREHOLDERS’ EQUITY (cont’d…) Share capital (cont’d…) December 2024 non-brokered private placement In December 2024, the Company closed a non-brokered private placement financing consisting of a total of 8,750,165 units at a price of $0.24 per unit for gross proceeds of $2,100,040. Each unit is comprised of one common share of the Company and one half of one common share purchase warrant of the Company. Each whole warrant entitles the holder to acquire one common share at an exercise price of $0. 36 per share for two years following closing of the offering. The Company paid cash finder’s fees of $29,460. Share purchase warrants A continuity of the Company’s share purchase warrants is as follows: Number Weighted Average Exercise Price Outstanding, December 31, 2024 38,648,211 $ 0.23 Issued 22,003,038 0.54 Exercised (19,392,500) 0.20 Expired (8,500,000) 0.20 Outstanding, September 30, 2025 32,758,749 $ 0.46 Issued 10,000,000 0.71 Exercised (10,683,300) 0.37 Expired (257,500) 0.24 Outstanding and exercisable, June 30, 2026 31,817,949 $ 0.57 The Company had the following share purchase warrants outstanding as at June 30, 2026: Share purchase warrants Expiry date Exercise price Number of warrants Warrants (December 2024 private placement) December 2, 2026 $ 0.36 3,073,460 Warrants (December 2024 private placement) (1) December 20, 2026 0.36 1,167,251 Warrants (May 2025 private placement) (2) May 6, 2027 0.56 15,219,770 Warrants (May 2025 compensation warrants) May 6, 2027 0.38 2,357,468 Warrants (November 2025 Gold Loan warrants) November 26, 2027 0.71 10,000,000 $ 0.57 31,817,949 (1) Subsequent to June 30, 2026, 20,833 exercised. (2) Subsequent to June 30, 2026, 589,500 exercised.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 21 11. SHAREHOLDERS’ EQUITY (cont’d…) Compensation plan Under the terms of the Company’s 2023 Omnibus Equity Incentive Plan (the “Plan”) the Board of Directors may, from time to time, grant to employees, officers and consultants, stock options, restricted share units (“RSUs”), performance share units and deferred share units in such numbers and for such terms as may be determined by the Board of Directors. The Plan has a rolling 10% maximum which is confirmed annually by the shareholders. Any equity instruments granted under the Plan are subject to vesting terms as approved by the board of directors. No performance share units or deferred share units have been issued. Stock options A continuity of the Company’s stock options is as follows: Number Weighted Average Exercise Price Outstanding, December 31, 2024 10,890,000 $ 0.29 Granted 7,200,000 0.27 Exercised (2,520,000) 0.25 Expired / forfeit (1,220,000) 0.40 Outstanding, September 30, 2025 14,350,000 $ 0.27 Granted 7,910,000 0.76 Exercised (2,600,000) 0.36 Expired / forfeit (1,290,000) 0.46 Outstanding, June 30, 2026 18,370,000 $ 0.46 Exercisable, June 30, 2026 9,210,000 $ 0.32 The Company had the following stock options outstanding as at June 30, 2026: Stock options (by expiry date) Exercise price Number of Options August 30, 2026 (1) $ 0.51 800,000 October 20, 2028 (2) 0.12 2,770,000 July 6, 2029 0.28 750,000 January 6, 2030 0.22 5,100,000 September 9, 2030 0.45 1,475,000 January 23, 2031 (3) 0.75 7,250,000 May 22, 2031 1.00 225,000 $ 0.46 18,370,000 (1) Subsequent to June 30, 2026, 800,000 exercised. (2) Subsequent to June 30, 2026, 400,000 exercised. (3) Subsequent to June 30, 2026, 90,000 exercised.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 22 11. SHAREHOLDERS’ EQUITY (cont’d…) Restricted share units A continuity of the Company’s RSUs is as follows: Restricted share units Number Outstanding, December 31, 2024 1,100,000 Exercised (400,000) Outstanding, September 30, 2025 700,000 Granted 1,786,593 Outstanding, June 30, 2026 2,486,593 The vesting profile of the RSUs outstanding as at June 30, 2026 is as follows: Vesting date Number of RSUs October 20, 2026 700,000 January 23, 2027 1,786,593 Share-based payments Restricted Share Units As the performance conditions of the RSU granted were not market -related, the fair value per RSU used to calculate compensation expense for the RSU granted is determined to be equal to the market price on the date of grant. The value is then expensed over the vesting term. During the period ended June 30, 2026, the Company recognized share-based payments expense of $600,974 (2025 - $40,870) with respect to RSUs. Stock options In the period ended June 30, 2026, the Company recognized share -based payments expense of $2, 347,131 (2025 - $612,906) for options vesting, net of forfeitures, in the period. 11. SUPPLEMENTAL CASH FLOW INFORMATION For the nine months ended June 30, 2026 2025 Change in property and equipment included in accounts payable $ 5,805,458 $ 14,974 Reclassification of Exploration and evaluation asset to Cuiú Cuiú Project 3,964,545 - Recognition of decommissioning liability to property asset 2,101,073 -
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 23 12. SEGMENTED INFORMATION The Company operates in one reportable operating segment, being the acquisition, exploration and development of mineral properties. The Company’s long-term assets are located in Brazil. 13. RELATED PARTY TRANSACTIONS Related party compensation For the nine months ended June 30, 2026 2025 Management: Employment remuneration Alan Carter, CEO and President $ 265,625 $ 187,500 Consulting fees Samantha Shorter, CFO Red Fern Consulting Ltd. 159,169 108,000 Brian Arkell, VP Exploration 174,280 157,797 John Sestan, VP Development Salamander Business Services Pty Ltd. 140,194 136,013 Payroll related costs (employer taxes, health benefits) Alan Carter 6,219 5,939 Brian Arkell 19,536 17,548 Share-based payments, stock options 453,644 478,956 Share-based payments, RSUs 485,343 40,887 1,704,010 1,132,640 Non-executive directors: Cash compensation 56,250 - Share-based payments, stock options 395,741 240,340 Share-based payments, RSUs 88,868 93,163 540,859 333,503 $ 2,244,869 $ 1,466,143 Management comprises the President and Chief Executive Officer , Chief Financial Officer, Vice President of Exploration and Vice President of Development . In addition, the Company paid $36,000 (2025 - $nil) to a company beneficially owned by the CFO for accounting services. All transactions with related parties have occurred in the normal course of operations and have been measured at the exchange amount, which is the amount agreed to by the related parties.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 24 14. CAPITAL MANAGEMENT The Company’s objectives in managing its capital are as follows: • To safeguard its ability to continue as a going concern • To have sufficient capital to be able to meet its strategic objectives including the continued exploration and development of its existing mineral projects. The Company has no externally imposed capital requirements and manages its capital structure in accordance with its strategic objectives and changes in economic conditions. The Company attempts to set the amount of capital in proportion to the risks. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. 15. FINANCIAL INSTRUMENTS Carrying value and fair value The Company’s financial instruments comprise cash and cash equivalents, gold deposits, accounts payable and accrued liabilities, amounts due to related parties, and Gold Loan. Cash and cash equivalents are classified as subsequently measured at amortised cost. Amortis ed cost approximates fair market value due to the short-term nature of the balances. Accounts payable and accrued liabilities and amounts due to related parties are classified as subsequently measured at amortised cost and are recorded in the financial statements at amort ised cost. The fair value of accounts payable and accrued liabilities may be less than the carrying value as a result of the Company’s credit and liquidity risk. The Gold Loan and gold deposits is measured at FVTPL, initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the Gold Loan and gold deposits held at FVTPL are recognized in profit or loss. Financial instruments recognised at fair value on the condensed consolidated interim statements of financial position are classified in fair value hierarchy levels as follows: • Level 1: Valuation based on unadjusted quoted prices in active markets for identical assets or liabilities • Level 2: Valuation techniques based on inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices) • Level 3: Valuation techniques with unobservable market inputs (involves assumptions and estimates by management). The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy. Level 1 Level 2 Level 3 Total $ $ $ $ Gold Deposits - 6,579,170 - 6,579,170 Gold Loan - 67,365,273 - 67,365,273 Financial risks The Company’s activities expose it to a variety of financial risks, including foreign exchange risk, liquidity risk, credit risk and interest rate risk.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 25 16. FINANCIAL INSTRUMENTS (cont’d…) Foreign exchange risk The Company operates primarily in Brazil and is therefore exposed to foreign exchange risk arising from transactions denominated in Brazilian reais (“R$”). Other than Canadian dollar balances, the Company’s cash and cash equivalents, receivables and accounts payable and accrued liabilities are denominated in R$ and US$. Accordingly, the Company is subject to foreign exchange risk relating to such balances in connection with fluctuations against the Canadian dollar. The Company has no program in place for hedging foreign currency risk. The Company held the following foreign currency denominated balances as at June 30, 2026 and September 30, 2025: June 30, 2026 September 30, 2025 R$ US$ R$ US$ Cash and cash equivalents $ 5,342,931 $ 4,611,023 $ 1,040,751 $ 863,140 Gold deposits - 4,629,958 Accounts payable (27,280,634) (33,793) (5,476,765) (38,846) Gold Loan - (47,406,948) - - (21,937,703) (38,199,760) (4,436,014) 824,294 Equivalent in Canadian dollars (6,026,274) (54,281,859) (1,160,461) 1,147,500 A fluctuation of 10% of the R$ against the Canadian dollar would impact comprehensive loss by approximately $602,000. A fluctuation of 10% of the US$ against the Canadian dollar would impact net loss and comprehensive loss by approximately $650,000 and $6.1 million respectively. Liquidity risk Liquidity risk encompasses the risk that an entity cannot meet its financial obligations in full as they become due. The Company manages liquidity risk through the management of its capital structure, as outlined in Note 15. For the nine months ended June 30, 2026, the Company reported a net loss of $24,633,574 (2025 – $8,115,008), and as at that date had a deficiency of current assets over current liabilities of $ 3,289,875 (September 30, 2025 – excess current assets over current liabilities of $6,858,869). The Company has not achieved profitable operations as described in Note 1. Credit risk Credit risk is the risk of economic loss arising from a counterparty ’s failure to repay or service debt according to the contractual terms. Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents. The carrying value of the Company’ s financial assets recorded in the condensed consolidated interim financial statements represents its maximum exposure to credit risk. Interest rate risk Interest rate risk is the risk that cash flows will fluctuate due to changes in market interest rates. While the Company’s financial assets are generally not exposed to significant interest rate risk because of their short-term nature, changes in interest rates will have a corresponding impact on interest income realised on such assets. The Gold Loan is not exposed to interest rate risk because it is at a fixed interest rate. As at June 30, 2026, the Company has not entered into any contracts to manage interest rate risk.
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Cabral Gold Inc. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Unaudited - Expressed in Canadian Dollars) FOR THE NINE MONTHS ENDED JUNE 30, 2026 AND 2025 Page 26 16. FINANCIAL INSTRUMENTS (cont’d…) Commodity price risk The ability of the Company to execute on its business objectives and the future profitability of the Company are directly related to the market price of gold. The Company monitors gold prices to determine the appropriate course of action to be taken by the Company. Equity price risk is defined as the potential adverse i mpact on the Company’s performance due to movements in individual equity prices or general movements in the level of the stock market. The Company is exposed to commodity risk with respect to the Gold Loan and gold deposits which significantly impact the value of those instruments. A 1 0% change in the commodity price would change the Company’s comprehensive loss by approximately $6.1 million. 17. CONTINGENT LIABILITY Litigation Various legal, tax and regulatory matters are outstanding from time to time due to the nature of the Company’s operations and the Company is therefore subject to litigation in the countries in which it operates. As at June 30, 2026, there was one legal case outstanding which had not been settled. The Company is not a defendant in the litigation, however, it does have a potential exposure pursuant to the terms of a historic joint venture agreement and a related indemnification provi ded to a third party in connection with the sale of its 35% interest in a company in 2018. Management is monitoring the progress of this case in the Brazilian courts and is continuing to support the defendants in their vigorous defence against this claim. Recent decisions of the applicable courts have gone against the defendants which increases the risk that the Company may ultimately incur a loss. T he significant uncertainty present regarding the outcome of the case and related issues are such that at this time, management is unable to estimate the likelihood of a loss ultimately being realised by the Company or the quantum and timing of any such los s should it occur. No provision has been made in the financial statements for any amount associated with the claim. 18. SUBSEQUENT EVENTS Subsequent to June 30, 2026, the Company: a) Closed a non-brokered private placement of 34,582,754 units of the Company (the “Units”) at a price of $1.30 per Unit for gross proceeds of $44,957,580. Alpayana S.A.C. (“ Alpayana”) purchased all of the Units as a strategic investment. Each Unit consists of one common share of the Company and half of one common share purchase warrant. Each whole warrant entitles the holder thereof to acquire one common share at a price of $1.70 until February 24, 2028. b) Granted 3,078,000 stock options exercisable at a price of $1.35 per common share for a period of five years.