Financial statements
Page 1
Excellon Resources Inc. Condensed Consolidated Financial Statements For the three and six months ended June 30, 2026 and 2025 in thousands of U.S. dollars (unaudited) Notice to Reader The accompanying unaudited interim financial statements have been prepared by the Company’s management , and the Company’s independent auditors have not performed a review of these financial statements.
Page 2
Excellon Resources Inc. Condensed Consolidated Statements of Financial Position (unaudited) (in thousands of U.S. dollars) June 30 December 31 2026 2025 Notes $ $ Assets Current assets Cash and cash equivalents 10,558 7,161 VAT recoverable 4,400 3,263 Other assets 1,205 240 Inventory and consumables 571 17 16,734 10,681 Non-current assets Mineral rights 3 19,443 19,557 Property, plant and equipment 4 13,281 5,638 Restricted cash 5,916 5,730 Total assets 55,374 41,606 Liabilities Current liabilities Payables and accruals 5,518 4,890 Other VAT liabilities 1,150 1,117 Promissory note 6 - 1,250 Convertible debentures 5 3,336 3,429 10,004 10,686 Non-current liabilities Provision for rehabilitation and other 5,856 5,734 Total liabilities 15,860 16,420 Shareholders’ equity Share capital 7 191,489 173,794 Contributed surplus 42,055 40,653 Accumulated other comprehensive loss (4,893) (3,669) Deficit (187,609) (184,051) 41,042 26,727 Non-controlling interest (1,528) (1,541) Total equity 39,514 25,186 Total liabilities and equity 55,374 41,606 Basis of presentation and going concern (Note 2) Approved by the Board Director Director “Laurence Curtis” “Craig Lindsay”
Page 3
Excellon Resources Inc. Condensed Consolidated Statements of Comprehensive Loss For the three and six months ended June 30, 2026 and 2025 (unaudited) (in thousands of U.S. dollars, except share and per share data) Three months ended Six months ended June 30 June 30 June 30 June 30 2026 2025 2026 2025 Notes $ $ $ $ Administrative expenses 8 (1,141) (358) (2,095) (713) Share-based payment expenses 7 (575) (78) (854) (303) General and administrative expenses (1,716) (436) (2,949) (1,016) Exploration and holding expenses (833) (35) (946) (52) Other Income (expense) 8 551 (25) 1,155 (38) Finance expenses 9 (422) (480) (862) (829) Loss before income taxes (2,420) (976) (3,602) (1,935) Income tax expense - - - - Net loss (2,420) (976) (3,602) (1,935) Attributable to: Shareholders of the Company (2,417) (1,043) (3,558) (2,008) Non-controlling interest (3) 67 (44) 73 Net loss (2,420) (976) (3,602) (1,935) Other comprehensive loss Items that may be reclassified subsequently to profit or loss: Foreign currency translation differences (2,325) (179) (1,167) (193) Other comprehensive loss (2,325) (179) (1,167) (193) Total comprehensive loss (4,745) (1,155) (4,769) (2,128) Attributable to: Shareholders of the Company (4,772) (1,146) (4,782) (2,117) Non-controlling interest 27 (9) 13 (11) Total comprehensive loss (4,745) (1,155) (4,769) (2,128) Net loss per share Basic and diluted ($0.01) ($0.00) ($0.01) ($0.01)
Page 4
Excellon Resources Inc. Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2026 and 2025 (unaudited) (in thousands of U.S. dollars) Six months ended June 30 June 30 2026 2025 Notes $ $ Cash flow generated by (used in) Operating activities Net loss for the period (3,602) (1,935) Adjustments for non-cash items: Finance expenses 862 828 Share-based payment expense 906 303 Other expenses and foreign exchange gains and losses (193) 70 Fair value gain on marketable securities - (4) Operating cash flows before changes in working capital (2,027) (738) Changes in non-cash working capital VAT recoverable (1,183) (96) Other assets (1,111) 1,265 Payables and accruals 807 (1,506) Inventory and consumables (554) - Net cash used in operating activities (4,068) (1,075) Investing activities Property, plant and equipment 4 (7,670) - Interest received 8 143 29 Upfront funding and transaction costs – Mallay Acquisition - (1,942) Cash acquired on acquisition of Minera CRC - 22 Proceeds from sale of marketable securities - 11 Net cash (used in) generated by investing activities (7,527) (1,880) Financing activities Net proceeds from private placement 7 14,711 5,166 Net proceeds from Saxony Silver Corp. financing 7 1,489 - Net proceeds from warrant exercise 7 1,499 - Repayment of promissory note 6 (1,250) - Convertible debenture interest paid in cash 5 (116) - Net cash generated by financing activities 16,333 5,166 Effect of exchange rate changes on cash and cash equivalents (1,341) 80 Change in cash and cash equivalents 3,397 2,291 Cash and cash equivalents – beginning of period 7,161 1,362 Cash and cash equivalents – end of period 10,558 3,653
Page 5
Excellon Resources Inc. Condensed Consolidated Statements of Changes in Equity For the six months ended June 30, 2026 and 2025 (unaudited) (in thousands of U.S. dollars, except per share data) Accumulated other comprehensive loss Attributable to Shareholders of the Company Non-controlling interest Share capital Contributed surplus Total equity Deficit $ $ $ $ $ $ $ Balance – January 1, 2025 153,602 40,529 (3,466) (179,689) 10,976 (1,528) 9,448 Net (loss) income for the period - - - (2,008) (2,008) 73 (1,935) Total other comprehensive loss - - (109) - (109) (84) (193) Total comprehensive loss - - (109) (2,008) (2,117) (11) (2,128) Share-based compensation - 303 - - 303 - 303 RSU: Shares issued on exercise 130 (130) - - - - - Convertible debentures: Shares issued on conversion 120 - - - 120 - 120 Value of option reversed on conversion 88 (88) - - - - - Private placement: Shares & Warrants issued 3,736 1,430 - - 5,166 - 5,166 Value of shares issued in asset acquisition 2,858 - - - 2,858 - 2,858 Shares issued to settle payables 56 - 56 56 Balance – June 30, 2025 160,590 42,044 (3,575) (181,697) 17,362 (1,539) 15,823 Balance – January 1, 2026 173,794 40,653 (3,669) (184,051) 26,727 (1,541) 25,186 Net loss for the period - - - (3,558) (3,558) (44) (3,602) Total other comprehensive loss - - (1,224) - (1,224) 57 (1,167) Total comprehensive loss - - (1,224) (3,558) (4,782) 13 (4,769) Share-based compensation - 906 - - 906 - 906 RSU: Shares issued on exercise 122 (122) - - - - - Convertible debentures (Note 5): Shares issued on conversion (Note 5) 492 - - - 492 - 492 Value of option reversed on conversion (Note 5) 527 (527) - - - - - Private placement: Shares issued (Note 7) 14,711 - - - 14,711 - 14,711 Warrants: Shares issued on exercise 1,843 (344) - - 1,499 - 1,499 Saxony Silver Corp. Financing (Note 7) - 1,489 - - 1,489 - 1,489 Balance – June 30, 2026 191,489 42,055 (4,893) (187,609) 41,042 (1,528) 39,514
Page 6
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) ( in thousands of U .S. dollars , except share and per share data) 5 1. GENERAL INFORMATION Excellon Resources Inc. (the “Company” or “Excellon”) is engaged in the acquisition, exploration and advancement of mineral properties. The Company is listed on the Toronto Venture Stock Exchange (the “TSX V”) under the symbol EXN, the OTC Market (the "OTC") in the United States under the symbol EXNRF , and the Frankfurt Stock Exchange under the symbol E4X2. The Company is focused on advancing the restart of the Mallay Silver Mine in Peru. The Company also holds a portfolio of exploration -stage projects , including the Tres Cerros Gold/Silver Exploration Property in Peru; Kilgore, an advanced gold exploration project in Idaho; and Silver City, a high-grade epithermal silver district in Saxony, Germany, providing additional growth upside. Excellon is domiciled in Canada and incorporated under the laws of the P rovince of Ontario. The address of its registered office is 3400 First Canadian Place, 100 King Street West, Toronto, Ontario, M5X 1A4. These condensed consolidated financial statements were approved by the Board of Directors on August 27, 2026. 2. BASIS OF PRESENTATION AND GOING CONCERN a) Statement of compliance and going concern The Company prepares its condensed consolidated financial statements in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, certain information and note disclosures normally included in the annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the IASB, have been omitted or condensed. These cond ensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2025. The Company is subject to the risks of an exploration and development stage mining company. These risks include the challenges of securing adequate capital for exploration and development activities, the operational risks inherent in the mining industry, a nd the impact of global economic conditions and metal price volatility. The Company does not currently have a source of operating cash flows and incurred a net loss of $3,602 for the six months ended June 30, 2026 (2025: $1,935). The Company’s ability to continue as a going concern is dependent on its ability to obtain the necessary capital, either through external financing or internal cash flows, in order to fund its working capital requirements, advance its projects and meet its ongoing corporate overhead costs. These conditions indicate that a material uncertainty exists which may cast significant doubt on the Company’s ability to continue as a going concern. Although the Company has been successful in obtaining debt and equity financing in the past, there is no assurance that it will be able to do so in the future or that such arrangements will be on terms advantageous to the Company. These condensed consolidated financial statements are prepared on a going concern basis, which assumes that the Company will continue for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. Accordingly, these condensed consolidated financial statements do not include adjustments to the recoverability and classification of recorded assets and liabilities and related expenses that might be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities in other than the normal course of business at amounts different from those in the accompanying condensed consolidated financial statements. Such adjustments could be material.
Page 7
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) ( in thousands of U .S. dollars , except share and per share data) 6 b) Summary of significant accounting policies, judgments, and estimates These condensed consolidated financial statements have been prepared using the same accounting policies, methods of computation, judgments and estimates as the annual consolidated financial statements of the Company as at and for the year ended December 31, 2025. 3. MINERAL RIGHTS Mallay (Peru) (1) Tres Cerros (Peru) (1) Silver City (Germany) (2) Kilgore (Idaho) (3) Total $ $ $ $ $ Year ended December 31, 2025 Opening net book value - - 1,480 13,750 15,230 Mallay and Tres Cerros acquisition 2,743 877 - - 3,620 Additions - 553 - - 553 Exchange differences 61 19 74 - 154 Closing net book value 2,804 1,449 1,554 13,750 19,557 Period ended June 30, 2026 Opening net book value 2,804 1,449 1,554 13,750 19,557 Exchange differences (38) (21) (55) - (114) Closing net book value 2,766 1,428 1,499 13,750 19,443 (1) On June 23, 2025, the Company completed the acquisition of Minera CRC S.A.C. (“Minera CRC”), a Peruvian company that holds a 100% interest in the Mallay Silver Mine (“Mallay”) and the nearby Tres Cerros Gold/Silver Exploration Property (“Tres Cerros”) located in central Peru. Royalty and stream agreements: Adar Mining Corp. (“Adar”) holds a 3% NSR royalty over Mallay and Tres Cerros, of which 0.5% may be repurchased by Excellon for US$1.5 million within 18 months of commercial production. Adar also holds a Mallay stream providing for delivery of initially 5%, increasing to 8%, of refined lead and zinc until 12 million pounds of each have been delivered. The Company may terminate the remaining stream for US$18 million through the first anniversary of commercial production or for US$15 million after the initial two million pounds of both lead and zinc have been delivered, with the stream buyback expiring before the third anniversary of commercial production. Under the stream agreeme nt, Mallay is required to achieve certain production commitments by December 23, 2026. Tres Cerros back -in rights agreement: Adar and M4G LLC may acquire combined interests of up to 49% in Tres Cerros by paying 1.5 times their respective shares of qualifying exploration expenditures. The rights are exercisable within 120 days after delivery of a qualifying preliminary economic assessment. The Company has committed to incur US$7.5 million of qualifying expenditures on Tres Cerros over three years. Security over Mallay and Tres Cerros : The Company’s obligations to Adar under stream, royalty and back -in agreements are secured by security over Minera CRC’s shares, assets, minerals and the Mallay and Tres Cerros properties. Adar’s security is subject to agreed subordination principles under which Glencore would hold senior security if the Company draws under the Glencore facility.
Page 8
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) ( in thousands of U .S. dollars , except share and per share data) 7 (2) The Company holds the Bräunsdorf, Frauenstein, Mohorn and Oederan exploration licences, a 340 km2 silver district in Saxony, Germany (the “Silver City Project”). On acquisition of the Bräunsdorf license, a gross metals royalty of 3% for precious metals and 2.5% for other metals was issued to the vendor, both of which may be reduced by 1% upon a payment of C$1,500. Additional one -time payments of C$300 and C$700 are to be made by the Company following any future announcement of a maiden mineral resource estimate on the property and upon the achievement of commercial production, respectively. In 2024, as part of the Debenture Restructuring, the Company issued a 25% interest in Saxony Silver Corp. to the Debentureholders (“Saxony Shares”) in partial consideration for the cancellation of C$10.41 million aggregate principal amount of the original convertible debentures. The Company continues to consolidate Saxony Silver Corp. and record a related non-controlling interest. (3) The Kilgore Project consists of approximately 5,489 hectares of mineral concessions located in Clark County, situated in eastern Idaho, USA. In 2024, as part of the Debenture Restructuring, the Company issued contingent value rights providing for payments equivalent to the value of up to 1,500 troy ounces of gold upon the achievement of certain milestones at Kilgore (“Kilgore CVR”), and a 2% NSR royalty on the unpatented claims comprising the Kilgore Project (“Kilgore NSR”), to the Debentureholders in partial consideration for the cancellation of C$10.41 million aggregate principal amount of the original convertible debentures. The Company determined that the Kilgore CVR and Kilgore NSR are contingent on future transactions and hence do not meet the IFRS criteria for recognition at this time. 4. PROPERTY, PLANT AND EQUIPMENT Mining properties Machinery and equipment Development costs (1) Total $ $ $ $ Year ended December 31, 2025 Acquisition of Minera CRC 467 16 - 483 Additions - 132 4,719 4,851 Exchange differences (2) - - 304 304 Closing net book value 467 148 5,023 5,638 Period ended June 30, 2026 Opening net book value 467 148 5,023 5,638 Additions - 1,735 5,935 7,670 Exchange differences (2) (6) 2 (23) (27) Closing net book value 461 1,885 10,935 13,281 (1) Development costs include underground rehabilitation, mine development and other expenditures directly attributable to bringing the mine and related infrastructure to the condition necessary to operate as intended by management. These costs are reclassified to mining properties, and amortization commences, when the mine achieves commercial production. (2) Unrealized foreign exchange gains (losses) on translation of Peruvian S ol-demominated assets at the period -end exchange rate.
Page 9
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) ( in thousands of U .S. dollars , except share and per share data) 8 5. CONVERTIBLE DEBENTURES The debentures are accounted for at amortized cost and can be converted into Common Shares of the Company at C$0.10 per share prior to maturity on August 31, 2026 , they bear interest at 6.50% per annum if paid in cash, while the Company has the option to satisfy interest in shares at an interest rate of 10% per annum. The Company recorded interest expense of C$ 909 ($660) and C$1,079 ($770) for the six months ended June 30, 2026 and 2025, respectively. Subsequent to June 30, 2026 and prior to debenture maturity on August 31, 2026, Debentureholders elected to convert debenture principal of C$4,978 into 49,780,000 shares of the Company, with the remaining debenture principal of C$10 repaid in cash. At the date these financial statements were authorized for issue, no debentures remained outstanding. $ CAD $ USD Year ended December 31, 2025 Opening balance 4,674 3,250 Interest expense 1,907 1,366 Conversion of debentures (1,327) (961) Value of shares issued to settle interest payable (372) (272) Cash paid to settle interest payable (187) (135) Exchange differences - 181 Closing balance 4,695 3,429 Period ended June 30, 2026 Opening balance 4,695 3,429 Interest expense 909 660 Conversion of debentures (1) (704) (505) Cash paid to settle interest payable (2) (162) (116) Exchange differences - (132) Closing balance at June 30, 2026 4,738 3,336 (1) Debentureholders elected to convert debenture principal of C$754 into 7,540,000 shares of the Company in accordance with the debenture indenture. As at June 30, 2026, the remaining principal amount outstanding was C$4,988 ($3,511). (2) The Company satisfied interest payable for the December 31, 2025 to June 29, 2026 period in cash of C$162 ($116). Subsequent to June 30, 2026, the Company paid C$46 ($33) in cash for interest on debentures from June 30, 2026 to the date of conversion or maturity. At the date these financial statements were authorized for issue, no debentures remained outstanding. 6. PROMISSORY NOTE In connection with the agreement to acquire the Mallay Property, the Company issued a $1,250 non-convertible promissory note in November 2024. The promissory note bore interest at 10% per annum and matured on May 1, 2026. On maturity, the Company repaid the principal amount in full, together with accrued interest of $18 7. The Company recorded interest expense of $41 and $59 for the six months ended June 30, 2026 and 2025, respectively.
Page 10
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) (in thousands of U .S. d ollars , except share and per share data) 9 7. SHARE CAPITAL The Company’s authorized share capital consists of an unlimited number of common shares. Number of shares (000's) $ Year ended December 31, 2025 Opening balance 141,641 153,602 Shares issued on exercise of RSUs 956 130 Shares issued to settle interest on debentures – H1 2025 1,741 272 Shares issued on debenture conversion 17,580 2,171 Shares issued in private placements 136,769 11,689 Shares issued on warrant exercise 17,602 2,489 Shares issued in asset acquisition (Note 3) 17,865 2,858 Shares issued to settle payables 3,278 583 Balance at December 31, 2025 337,432 173,794 Period ended June 30, 2026 Opening balance 337,432 173,794 Shares issued on exercise of RSUs 943 122 Shares issued on debenture conversion (Note 5) (1) 7,540 1,019 Shares issued in private placement (2) 36,369 14,711 Shares issued on warrant exercise 8,368 1,843 Balance at June 30, 2026 390,652 191,489 (1) For the six-month period ended June 30, 2026, Debentureholders elected to convert debenture principal of C$754 into 7,540,000 shares of the Company in accordance with the debenture indenture. The share capital of $ 1,019 reflects the amortized cost of the Debentures converted ($ 492) and the corresponding portion of the conversion option ($527) which is reclassified from contributed surplus. Subsequent to June 30, 2026 and prior to maturity on August 31, 2026, Debentureholder s elected to convert debenture principal of C$ 4,978 into 49,780,000 shares of the Company. As at the date of issuance of these financial statements, no debentures remained outstanding. (2) On March 12, 2026, the Company closed a bought deal private placement and a concurrent private placement for aggregate gross proceeds of C$21,822 ($15,919 ) through the issuance of 36.4 million shares at C$0.60 per share. The Company paid agent fees of C$ 1,260 ($919) and transaction costs of C$ 397 ($290). The net proceeds after transaction costs were C$20,164 ($14,711). On May 15, 2026, the Company’s subsidiary Saxony Silver Corp. closed a non-brokered private placement of 4,250 units at C$500 per unit, for aggregate gross proceeds of C$2,125. The proceeds will be used to fund the advancement of exploration activities at the Silver City Project and for general working capital and corporate purposes. Each unit comprised one share and one-half share purchase warrant. Each warrant entitles the holder to acquire one share at a price of C$750 per share for a period of 36 months from the closing date. The Company paid finder’s fees in the amount of C$73 and issued a total of 126 finder’s shares and 146 finder’s warrants. The Company continues to control, and hence consolidate Saxony Silver Corp. Net proceeds of the financing were recorded in the Company’s contributed surplus. The outstanding number and weighted average exercise prices of equity-settled Stock Options, Warrants, DSUs and RSUs are as follows:
Page 11
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) (in thousands of U .S. d ollars , except share and per share data) 10 Options Warrants (1) Options Outstanding Weighted Average Exercise Price (CAD) Warrants Outstanding Weighted Average Exercise Price (CAD) RSUs Outstanding DSUs Outstanding Outstanding at January 1, 2025 3,154,500 0.23 17,343,842 0.20 1,311,834 5,540,884 Granted/issued 7,985,000 0.29 42,456,880 0.15 930,000 1,701,900 Exercised/settled - - (17,601,563) 0.14 (956,334) - Expired (589,500) 0.72 - - (14,500) - Outstanding at December 31, 2025 10,550,000 0.25 42,199,159 0.17 1,271,000 7,242,784 Exercisable at December 31, 2025 5,307,500 0.19 42,199,159 0.17 414,000 7,242,784 Outstanding at January 1, 2026 10,550,000 0.25 42,199,159 0.17 1,271,000 7,242,784 Granted/issued 2,755,000 0.43 - - 2,175,000 952,636 Exercised/settled - - (8,367,621) 0.25 (943,000) - Expired (15,000) 4.14 - - (18,000) - Outstanding at June 30, 2026 13,290,000 0.28 33,831,538 0.15 2,485,000 8,195,420 Exercisable at June 30, 2026 10,762,500 0.25 33,831,538 0.15 - 7,242,784 (1) For the six-month period ended June 30, 2026, a total of 8,367,621 warrants have been exercised, for proceeds of C$2,079 ($1,514). At June 30, 2026, the outstanding Warrant terms are: • 9,714,300 warrants with an exercise price of C$0.15 and an expiry of December 3, 2026; and • 24,117,238 warrants with an exercise price of C$0.15 and an expiry of May 14, 2028. Options outstanding and exercisable are as follows: Exercise Price Range (CAD) Stock Options Outstanding Weighted Avg Remaining Contractual Life (years) Stock Options Exercisable Weighted Average Exercise Price (CAD) $0.00 to $0.19 5,735,000 0.68 5,735,000 0.13 $0.20 to $0.50 7,555,000 2.04 5,027,500 0.39 13,290,000 1.45 10,762,500 0.28 Share-based payment expense is recognized over the vesting period of the grant with the corresponding equity impact recorded in contributed surplus. Share-based payment expense comprises the following: Three months ended Six months ended June 30 June 30 June 30 June 30 2026 2025 2026 2025 $ $ $ $ Stock options 432 59 660 137 RSUs 105 18 115 59 DSUs 38 1 79 107 Share-based payment expense 575 78 854 303
Page 12
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) (in thousands of U .S. d ollars , except share and per share data) 11 8. ADMINISTRATIVE AND OTHER EXPENSES (a) Administrative expenses consist of the following: Three months ended Six months ended June 30 June 30 June 30 June 30 2026 2025 2026 2025 $ $ $ $ Office, insurance and overhead expenses 77 70 139 103 Salaries, consultant, director, professional fees 331 257 662 408 Corporate development and legal expenses 151 - 272 151 Public company costs 82 31 167 51 Peruvian administrative and overhead costs 500 - 855 - Administrative expenses 1,141 358 2,095 713 (b) Other (income) expense consists of the following: Three months ended Six months ended June 30 June 30 June 30 June 30 2026 2025 2026 2025 $ $ $ $ Unrealized foreign exchange (gain) loss (372) 29 (824) 38 Realized foreign exchange gain (13) - (14) - Interest and other income (93) (15) (143) (29) Other (73) 11 (174) 29 Other (income) expense (551) 25 (1,155) 38 9. FINANCE EXPENSES Finance expenses consist of the following: Three months ended Six months ended June 30 June 30 June 30 June 30 2026 2025 2026 2025 $ $ $ $ Interest expense – convertible debentures (Note 5) 332 452 660 770 Interest expense – promissory note (Note 6) 10 28 41 59 Other and accretion on provisions 80 - 161 - Finance expenses 422 480 862 829
Page 13
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) ( in thousands of U .S. dollars , except share and per share data) 12 10. LEGAL PROCEEDINGS The Company is involved in legal proceedings and business disputes from time to time arising from the normal course of business. Management, after consultation with legal counsel, believes that the outcome of these proceedings will not have a material impact on the Company’s consolidated financial position, results of operations or liquidity. 11. FINANCIAL INSTRUMENTS Fair values of non-derivative financial instruments All financial assets and financial liabilities, other than derivatives, are initially recognized at the fair value of consideration paid or received, net of transaction costs, as appropriate, and are subsequently carried at fair value or amortized cost. At June 30, 2026, the carrying amounts of payables and accruals, the restricted cash and other current assets are considered to be reasonable approximations of their respective fair values due to the short - term nature of these instruments. Risk management policies and hedging activities The Company is sensitive to changes in foreign exchange rates. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company addresses its exposures through the use of options, futures, forwards and derivative contracts where appropriate. Credit risk Credit risk is the risk of unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to cash and cash equivalents. Management believes the credit risk on cash and cash equivalents is low since the Company’s cash and cash equivalents are held at large international financial institutions with strong credit ratings. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to determine the funds required to meet its operating and growth objectives. To the extent that the Company may foresee insufficient liquidity to meet these obligations, management will consider securing additional funds through equity or debt transactions. Currency risk The PEN, MXN, USD, EUR and CAD are the functional currencies of subsidiaries of the Company, while the parent company has a CAD functional currency. A s a result, currency exposures arise from transactions and balance s in currencies other than the functional currencies. Translational exposure in respect of non-functional currency monetary items Monetary items, including financial assets and liabilities, denominated in currencies other than the functional currency of an operation are periodically revalued to the functional currency equivalents as at that date, and the
Page 14
Excellon Resources Inc. Notes to the Condensed Consolidated Financial Statements For the three and six months ended June 30 , 202 6 and 202 5 (unaudited) (in thousands of U .S. d ollars , except share and per share data) 13 associated unrealized gain or loss is recorded in the consolidated statements of comprehensive income to reflect this risk. Interest rate risk Cash and cash equivalents earn interest at floating rates dependent upon market conditions. 12. SEGMENT REPORTING PERU CORP & OTHER TOTAL June 30, 2026 Dec 31, 2025 June 30, 2026 Dec 31, 2025 June 30, 2026 Dec 31, 2025 $ $ $ $ $ $ Property, plant and equipment 13,281 5,638 - - 13,281 5,638 Mineral rights 4,195 4,253 15,248 15,304 19,443 19,557 Total assets 28,577 19,027 25,797 22,579 55,374 41,606 Total liabilities 7,995 7,284 7,865 9,136 15,860 16,420 Three months ended Six months ended June 30, June 30, June 30, June 30, 2026 2025 2026 2025 $ $ $ $ PERU General and administrative (407) - (741) - Exploration and holding expenses (707) - (728) - Finance expense (81) - (161) - (1,195) - (1,630) - CORPORATE AND OTHER General and administrative (1,216) (436) (2,094) (1,016) Exploration and holding expenses (219) (35) (332) (52) Other income (expense) 551 (25) 1,155 (38) Finance expenses (341) (480) (701) (829) (1,224) (976) (1,972) (1,935) Net loss (2,420) (976) (3,602) (1,935) 13. SUBSEQUENT EVENTS Subsequent to June 30, 2026 and prior to debenture maturity on August 31, 2026, Debentureholders elected to convert debenture principal of C$4,978 into 49,780,000 shares of the Company, with the remaining debenture principal of C$10 repaid in cash. At the date of issuance of these financial statements, no debentures remained outstanding.