Financial statements
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1 CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars) For the years ended April 30, 2026 and 2025
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1 INDEPENDENT AUDITOR’S REPORT To the Shareholders of Minaurum Silver Inc. (formerly Minaurum Gold Inc.) Opinion We have audited the accompanying consolidated financial statements of Minaurum Silver Inc. (formerly Minaurum Gold Inc.) (the “Company”), which comprise the consolidated statements of financial position as at April 30, 2026 and 2025, and the consolidated statements of loss and comprehensive loss, changes in shareholders’ equity, cash flows, and supplemental schedule of exploration costs for the years then ended, and notes to the consolidated financial statements, including material accounting policy information. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at April 30, 2026 and 2025, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”). Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of o ur report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these re quirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern We draw attention to Note 1 of the consolidated financial statements, which indicates that the Company has a history of losses with no operating revenue, an accumulated deficit of $84,691,133 and a working capital of $19,024,992 as at April 30, 2026. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated fina ncial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matter described below to be the key audit matter to be communicated in our auditor’s report.
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Assessment of Impairment Indicators of Exploration and Evaluation Assets (“E&E Assets”) As described in Note 6 to the consolidated financial statements, the carrying amount of the Company’s E&E Assets was $6,112,158 as of April 30, 2026. As more fully described in Note 2 to the consolidated financial statements, management assesses E&E Assets for indicators of impairment at each reporting period. The principal considerations for our determination that the assessment of impairment indicators of the E&E Assets is a key audit matter is that there was judgment made by management when assessing whether there were indicators of impairment for the E&E Assets, specifically relating to the assets’ carrying amount which is impacted by the Company’s intent and ability to continue to explore and evaluate these assets. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of impairment that could give rise to the requirement to prepare an estimate of the recoverable amount of the E&E Assets. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures included, among others: • Evaluating management’s assessment of impairment indicators. • Evaluating the intent for the E&E Assets through discussion and communication with management. • Reviewing the Company’s recent expenditure activity. • Assessing compliance with agreements and expenditure requirements. • Evaluating on a test basis, title to ensure mineral rights underlying the E&E Assets are in good standing. Other Information Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
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Those charged with governance are responsible for overseeing the Company's financial reporting process. Auditor's Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to p rovide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsi ble for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing s o would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partner on the audit resulting in this independent auditor’s report is Michael MacLaren. Chartered Professional Accountants Vancouver, Canada August 24, 2026
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6 MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars) NATURE AND CONTINUANCE OF OPERATIONS (NOTE 1) SUBSEQUENT EVENTS (NOTE 12) The accompanying notes are an integral part of these consolidated financial statements. SIGNED: “Lawrence Talbot” SIGNED: “Darrell A. Rader” April 30, 2026 April 30, 2025 ASSETS Current assets Cash $ 19,585,363 $ 1,148,787 Receivables (Note 4) 162,317 11,809 Marketable securities (Note 5) 266,919 57,815 Prepaid expenses 195,726 70,460 20,210,325 1,288,871 Exploration and evaluation assets (Note 6) 6,112,158 6,374,132 $ 26,322,483 $ 7,663,003 LIABILITIES Current liabilities Accounts payable and accrued liabilities (Note 7) $ 1,185,333 $ 354,149 1,185,333 354,149 Deferred income tax liability (Note 11) 86,000 216,000 86,000 216,000 1,271,333 570,149 SHAREHOLDERS' EQUITY Share capital (Note 8) 97,471,182 64,260,143 Reserves (Note 8) 12,271,101 10,044,419 Deficit (84,691,133) (67,211,708) 25,051,150 7,092,854 $ 26,322,483 $ 7,663,003
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in Canadian dollars) 7 The accompanying notes are an integral part of these consolidated financial statements. 2026 2025 EXPENSES Consulting fees (Note 7) $ 255,007 $ 246,363 Directors' fees (Note 7) 60,000 65,000 Exploration costs (supplemental schedule) (Note 6, 7) 14,246,499 3,456,151 Filing and registration 122,337 105,909 Foreign exchange 231,497 27,736 Investor relations and marketing 636,748 184,343 Office and administration 176,124 165,144 Professional fees (Note 7) 380,702 240,357 Share-based payments (Note 7, 8(c)) 363,168 48,757 Travel and meals 86,743 43,584 (16,558,825) (4,583,344) Interest income 276,303 102,382 Realized gain on sale of marketable securities (Note 5) - 865 Fair value adjustment of marketable securities (Note 5) 67,825 (57,814) Gain on sale of property (Note 6) 141,279 - Write-off of exploration and evaluation assets (Note 6) (1,536,007) (1,127,494) (1,050,600) (1,082,061) LOSS BEFORE INCOME TAXES $ (17,609,425) $ (5,665,405) Deferred income tax (expense) recovery (Note 11) 130,000 (58,000) TOTAL LOSS AND COMPREHENSIVE LOSS FOR THE YEAR $ (17,479,425) $ (5,723,405) LOSS PER COMMON SHARE, BASIC AND DILUTED $ (0.04) $ (0.01) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED 458,899,213 396,547,565 Years ended April 30,
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Expressed in Canadian dollars) 8 The accompanying notes are an integral part of these consolidated financial statements. Total Number Share-based shareholders' of shares Share capital reserves Deficit equity April 30, 2024 373,927,674 $ 59,514,472 $ 9,568,442 $ (61,488,303) $ 7,594,611 Shares issued for cash 22,785,000 5,696,250 - - 5,696,250 Residual value on warrants issued - (227,850) 227,850 - - Share issuance costs - (722,729) 199,370 - (523,359) Share-based payments - - 48,757 - 48,757 Total comprehensive loss for the year - - - (5,723,405) (5,723,405) April 30, 2025 396,712,674 $ 64,260,143 $ 10,044,419 $ (67,211,708) $ 7,092,854 Shares issued for cash 106,244,443 34,199,999 - - 34,199,999 Residual value on warrants issued - (1,104,000) 1,104,000 - - Share issuance costs - (3,788,783) 1,269,465 - (2,519,318) Shares issued on exercise of options 50,000 12,723 (5,223) - 7,500 Shares issued on exercise of warrants 8,337,650 2,948,611 (504,728) - 2,443,883 Shares issued for acquisition of Lone Mountain 3,846,893 942,489 - - 942,489 Share-based payments - - 363,168 - 363,168 Total comprehensive loss for the year - - - (17,479,425) (17,479,425) April 30, 2026 515,191,660 $ 97,471,182 $ 12,271,101 $ (84,691,133) $ 25,051,150
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian dollars) 9 The accompanying notes are an integral part of these consolidated financial statements. 2026 2025 OPERATING ACTIVITIES Loss for the year $ (17,479,425) $ (5,723,405) Items not affecting cash: Deferred income tax expense (recovery) (130,000) 58,000 Gain on sale of property (141,279) - Realized gain on sale of marketable securities - (865) Fair value adjustment of marketable securities (67,825) 57,814 Interest income (72,658) - Share-based payments 363,168 48,757 Previously capitalized concession fees - 68,320 Write-off of exploration and evaluation assets 1,536,007 1,127,494 Changes in non-cash working capital items: Receivables (77,850) 251,152 Prepaid expenses (125,266) 519 Accounts payable and accrued liabilities 830,345 (125,459) Cash flows used in operating activities (15,364,783) (4,237,673) INVESTING ACTIVITIES Exploration and evaluation acquisition costs (332,251) (408,293) Proceeds on sale of marketable securities - 7,345 Cash flows used in investing activities (332,251) (400,948) FINANCING ACTIVITIES Shares issued for private placements 34,199,999 5,696,250 Shares issued on exercise of options 7,500 - Shares issued on exercise of warrants 2,443,883 - Share issuance costs (2,517,772) (526,142) Cash flows provided by financing activities 34,133,610 5,170,108 NET CHANGE IN CASH DURING THE YEAR 18,436,576 531,487 CASH, BEGINNING OF THE YEAR 1,148,787 617,300 CASH, END OF THE YEAR $ 19,585,363 $ 1,148,787 CASH PAID FOR INTEREST AND TAXES $ - $ - SUPPLEMENTAL SCHEDULE OF NON-CASH TRANSACTIONS Shares issued for exploration and evaluation assets $ 942,489 $ - Residual value of warrants issued $ 1,104,000 $ 227,850 Reclassification from reserves on exercise of options $ 5,223 $ - Reclassification from reserves on exercise of warrants $ 504,728 $ - Broker warrants issued $ 1,269,465 $ 199,370 Exploration and evaluation assets in accounts payable $ - $ 707 Share issuance costs in accounts payable $ 1,546 $ - Years ended April 30,
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) SUPPLEMENTAL SCHEDULE OF EXPLORATION COSTS (Expressed in Canadian dollars) 10 During the year ended April 30, 2026, the Company paid $1,585,097 (MXN$20,990,968) (2025 – $355,510 or MXN$4,944,631) in IVA on expenditures incurred in Mexico. The collectability of these amounts is uncertain, therefore the Company has written off these amounts in exploration costs through profit and loss during the years ended April 30, 2026 and 2025, respectively. During the year ended April 30, 2026, the Company received or accrued $nil (2025 - $237,068 or MXN$3,297,279) in IVA refunds on expenditures incurred in Mexico in prior periods , which have been included as a recovery of exploration costs through profit and loss during the years ended April 30, 2026 and 2025, respectively. Mexico Mexico Mexico Mexico Mexico Mexico Mexico USA USA Adelita Property Aurena Property Santa Marta Project Alamos (Quintera) Aurífero Project Other Projects General Exploration Arizona Lone Mountain, Nevada Total Year ended April 30, 2026 Analysis $ - $ - $ - $ 676,542 $ 51,941 $ - $ - $ - $ - $ 728,483 Claim maintenance - - - - - - - 119,686 288,884 408,570 Community relations - - - 236,905 - - - - - 236,905 Drilling - - - 8,188,098 - - - - - 8,188,098 Field supplies and equipment - - - 151,263 3,690 - - - - 154,953 General - 6,274 6,274 1,200,978 14,439 6,274 33,333 6,925 20,417 1,294,914 Geological consulting - 3,919 3,800 1,535,504 70,558 8,194 - 17,516 23,513 1,663,004 Geophysics and metallurgy - - - 5,813 - - - - - 5,813 Permitting - - - 38,888 - - - - - 38,888 Property taxes - 37,069 218,997 225,371 56,047 5,411 - - - 542,895 Reclamation - - - 55,430 - - - - - 55,430 Rent 21,836 12,455 - 59,528 - 23,620 - - 474 117,913 Resource estimate - - - 92,547 - - - 2,757 - 95,304 Surveying - - - 93,266 - - - - - 93,266 Transportation - - - 611,565 5,223 - - - 5,275 622,063 Total for the year $ 21,836 $ 59,717 $ 229,071 $ 13,171,698 $ 201,898 $ 43,499 $ 33,333 $ 146,884 $ 338,563 $ 14,246,499 Year ended April 30, 2025 Analysis $ - $ - $ - $ 54,902 $ - $ - $ - $ 2,907 $ - $ 57,809 Claim maintenance - - - - - - - 121,506 125,655 247,161 Community relations - - - 218,285 - - - - - 218,285 Drilling - - - 1,097,371 - - - - - 1,097,371 Field supplies and equipment - - - 10,298 - - - - - 10,298 General 1,726 1,171 1,171 397,673 3,215 5,818 73,293 1,200 4,521 489,788 Geological consulting 1,613 7,550 6,956 438,832 14,017 21,038 6,988 90,092 4,651 591,737 Permitting - - - 26,179 - - - - - 26,179 Property taxes - 50,705 200,193 283,039 53,874 31,597 - - - 619,408 Reclamation - - - 3,708 - - - - - 3,708 Rent 17,625 15,814 - 29,021 - 16,277 - - - 78,737 Resource estimate - - - 94,785 - - - - - 94,785 Surveying - - - 18,060 - - - - - 18,060 Transportation - - - 136,752 592 50 1,712 787 - 139,893 Recoveries - - - - - - (237,068) - - (237,068) Total for the year $ 20,964 75,240 208,320 2,808,905 $ 71,698 $ 74,780 $ (155,075) $ 216,492 $ 134,827 $ 3,456,151
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 11 1. Nature and Continuance of Operations: Minaurum Silver Inc. (formerly Minaurum Gold Inc.) (“the Company”) was incorporated under the Business Corporations Act of British Columbia on November 13, 2007. The Company is an exploration stage company and engages principally in the acquisition and exploration of mineral properties. The Company’s head office address is Suite 1570 – 200 Burrard Street, Vancouver, BC, V6C 3L6, Canada. The registered and records office address is 10th Floor, 595 Howe Street, Vancouver, BC, V6C 2T5, Canada. The Company is listed on the TSX Venture Exchange and the OTCQX. On December 22, 2025, the Company changed its name from “Minaurum Gold Inc.” to “Minaurum Silver Inc.” The Company’s trading symbols on the TSX Venture Exchange and the OTCQX remain unchanged. The Company is in the process of exploring its exploration and evaluation assets and has not yet determined whether its exploration and evaluation assets contain economically recoverable mineral reserves. The underlying value and the recoverability of the amounts shown as exploration and evaluation assets are entirely dependent upon the existence of economically recoverable resource reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of the exploration and evaluation assets , and future profitable production or proceeds from the disposition of the exploration and evaluation assets. The Company has a history of losses with no operating revenue, an accumulated deficit of $84,691,133 since inception, and a working capital of $19,024,992 as at April 30, 2026. During the year ended April 30, 2026, the Company closed brokered private placement s with aggregate gross proceeds of $ 34,199,999. Management recognizes that the Company , in the long term, will need to generate additional financial resources to meet its planned business objectives. However, there can be no assurances that the Company will continue to obtain additional financial resources and/or achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, the Company will be required to curtail operations and exploration activities. Furthermore, failure to continue as a going concern would require that the Company’s assets and liabilities be restated on a liquidation basis which would differ significantly from the going concern basis. These material uncertainties may cast significant doubt about the Company’s ability to continue as a going concern within one year from the date of filing of these consolidated financial statements. These consolidated financial statements do not reflect adjustments, which could be material to the carrying values of assets and liabilities, which may be required should the Company be unable to continue as a going concern. Recent global issues, including recent geopolitical conflict, have adversely affected workplaces, economies, supply chains and financial markets globally. It is not possible for the Company to predict the duration or magnitude of the adverse results of these issues and their effects on the Company’s business or results of operations at this time. 2. Material Accounting Policies: a) Basis of presentation: These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards (“IFRS”), as issued by the International Accounting Standards Board ("IASB"). The consolidated financial statements of the Company are presented in Canadian dollars, which is the functional currency of the parent company and its subsidiaries. These consolidated financial statements were authorized for issuance by the Board on August 24, 2026.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 12 2. Material Accounting Policies (continued): b) Basis of consolidation: These consolidated financial statements include the financial statements of the Company and its wholly-owned Mexican subsidiaries, Minera Minaurum Gold S.A. De C.V. and Minera Citation S.A. de C.V., which carry out exploration activities in Mexico, and its wholly-owned USA subsidiary, Minaurum Corp., a Delaware company, which carries out exploration activities in the USA. All material intercompany transactions and balances have been eliminated on consolidation. c) Recent accounting pronouncements Effective May 1, 2027, the Company is required to adopt IFRS 18, Presentation and Disclosure in Financial Statements, with early adoption permitted. IFRS 18 will replace IAS 1; many of the existing principles in IAS 1 are retained, with limited changes. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its operating profi t or loss, in particular additional def ined 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. The Company is assessing the potential impact of the application of these standards. d) Financial instruments: Financial assets The Company classifies its financial assets in the following categories: fair value through profit or loss, amortized cost or fair value through other comprehensive income. The classification depends on the purpose for which the financial assets were acqui red. Management determines the classification of financial assets at initial recognition. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss (“FVTPL”) are initially recognized at fair value with changes in fair value recorded in profit or loss. The Company’s marketable securities are classified as FVTPL. Amortized cost Financial assets are classified at amortized cost if both of the following criteria are met, and the financial assets are not classified or designated as at fair value through profit and loss: 1) the Company’s objective for these financial assets is to collect their contractual cash flows and 2) the asset’s contractual cash flows represent ‘solely payments of principal and interest’. The Company’s cash and receivables are recorded at amortized cost. Fair value through other comprehensive income ("OCI") For financial assets that are not held for trading, the Company can make an irrevocable election at initial recognition to classify the instruments at fair value through other comprehensive income ("FVOCI"), with all subsequent changes in fair value being recognized in other comprehensive income as a component of equity. This election is available for each separate investment. Under this FVOCI category, fair value changes are recognized in OCI while dividends are recognized in profit or loss. On disposal of the investment the cumulative change in fair value is not recycled to profit or loss, rather transferred to deficit. The Company does not have any financial assets designated as FVOCI.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 13 2. Material Accounting Policies (continued): d) Financial instruments (continued): Financial liabilities Financial liabilities are non -derivatives and are recognized initially at fair value, net of transaction costs, and are subsequently stated at amortized cost. Any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in profit or loss over the period to maturity using the effective interest method. Financial liabilities are classified as current or non -current based on their maturity date. Financial liabilities include accounts payable and accrued liabilities. Impairment The Company assesses all information available, including on a forward -looking basis, the expected credit losses associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date, with the risk of default as at the date of initial recognition, based on all information available, and reasonable and supportive forward-looking information. e) Exploration and evaluation assets: The Company is in the process of exploring its exploration and evaluation assets and has not yet determined whether these properties contain ore reserves that are economically recoverable. Exploration costs are recognized in profit or loss. Costs incurred before the Company has obtained the legal rights to explore an area of interest are recognized in profit or loss. All costs related to the acquisition of exploration and evaluation assets are capitalized. Amounts received for the sale of exploration and evaluation assets and for option payments are treated as reductions of the cost of the property, with payments in excess of capitalized costs recognized in profit or loss. Costs for a producing property will be amortized on a unit -of- production method based on the estimated life of the ore reserves. The recoverability of the amounts capitalized for the undeveloped exploration and evaluation assets is dependent upon the determination of economically recoverable ore reserves, confirmation of the Company's interest in the underlying mineral claims, the ability to obtain the necessary financing to complete their development, and future profitable production or proceeds from the disposition thereof. From time to time, the Company may acquire or dispose of properties pursuant to the terms of option agreements. Due to the fact that property options are exercisable entirely at the discretion of the optionee, the amounts payable or receivable are not accrued. Option payments are recorded as exploration and evaluation asset costs or recoveries when the payments are made or received. When the option payments received exceed the carrying value of the related exploration and evaluation asset then the excess is recognized in profit or loss in the period the option receipt is recognized. Option receipts in the form of marketable securities are recorded at the quoted market price on the day the securities are received. f) Impairment: The carrying amounts of the Company’s non -financial assets, other than deferred tax assets if any, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 14 2. Material Accounting Policies (continued): f) Impairment (continued): For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit” or “CGU”). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their prese nt value using a pre -tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. The Company’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs. An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does n ot exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. A reversal of an impairment loss is recognized immediately in profit or loss. g) Provision for closure and reclamation: The Company recognizes statutory, contractual or other legal obligations related to the retirement of its exploration and evaluation assets and its tangible long -lived assets when such obligations are incurred, if a reasonable estimate of fair value can be made. These obligations are measured initially at fair value and the resulting costs are capitalized to the carrying value of the related asset. In subsequent periods, the liability is adjusted for any changes in the amount or timing and for the discounting of the underlying future cash flows. The capitalized asset retirement cost is amortized to operations over the life of the asset. Management has determined that there was no provision required for closure and reclamation for the years presented. h) Income taxes: Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled e ntities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the ta x rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 15 2. Material Accounting Policies (continued): h) Income taxes (continued): Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. i) Basic and diluted loss per share: Basic loss per share is computed by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during the year. The computation of diluted earnings per share assumes the conversion, exercise or contingen t issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on the earnings per share. The dilutive effect of convertible securities is reflected in diluted earnings per share by application of the “if converted” method. The dilutive effect of outstanding options and warrants and their equivalents is reflected in diluted earnings per share. Since the Company has losses the exercise of outstanding options has not been included in this calculation as it would be anti-dilutive. j) Share-based payments: The Company uses the fair value -based method of accounting for stock options granted to employees and directors and agent options issued on private placements. Under this method, the fair value of the stock options at the date of the grant, as determined using the Black-Scholes option pricing model, is recognized to expense over the vesting period. The fair value of agent options at the date of issuance, as determined using the Black- Scholes model, is recognized as share issuance costs, with the offsetting credit to share -based payments reserve. If the stock options or agent options are exercised, the proceeds are credited to share capital and the fair value of the options or agent options exercised is reclassified from share-based payments reserve to share capital. From time to time in connection with private placements, the Company issues compensatory finder warrants or broker warrants to agents as commission for services. Awards of finder warrants and broker warrants are accounted for in accordance with the fair value method of accounting and result in share issue costs and a credit to reserves when finder warrants and broker warrants are issued. The fair value of a warrant on a share is measured using the Black -Scholes option pricing model and the fair value of the warrant on a warrant is measured using the Geske compound option pricing model that both requires the use of certain assumptions regarding the risk-free market interest rate, expected volatility in the price of the underlying stock, and expected life of the instruments. In situations where equity instruments are issued to non -employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payments. Otherwise, share-based payments are measured at fair value of the goods or services received.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 16 2. Material Accounting Policies (continued): k) Valuation of equity units issued in private placements: The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the most easily measured component based on fair value and then the residual value, if any, to the less easily measurable component. The fair value of the common shares issued in a private placement was determined to be the more easily measurable component and were valued at their fair value. The balance, if any, was allocated to the attached warrants. Any fair value attributed to the warrants is recorded as a warrant reserve. l) Foreign currency translation: Transactions in foreign currencies are translated at the exchange rate in effect at the date of the transaction. Foreign denominated monetary assets and liabilities are translated to their Canadian dollar equivalents using foreign exchange rates prevailing at the financial position reporting date. Exchange gains or losses arising on foreign currency translation are reflected in profit or loss for the period. The Company’s reporting currency and the functional currency of all of its subsidiaries is the Canadian dollar as this is the principal currency of the economic environment in which they generate financial resources. m) Use of judgments and estimates: The preparation of the consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The consolidated financial statements include estimates which, by their nature, are uncertain. The impact of such estimates is pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to ac counting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Critical accounting estimates Significant assumptions about the future and other sources of estimation uncertainty that management has made at the financial position reporting date, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the eve nt that actual results differ from assumptions made, relate to, but are not limited to, the following: Recoverability of receivables The Company estimates the recoverability of IVA paid on expenditures incurred in Mexico. Share-based payments The fair value of stock options and warrants issued are subject to the limitations of the Black -Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 17 2. Material Accounting Policies (continued): m) Use of judgments and estimates (continued): Critical accounting estimates (continued) Share-based payments (continued) Because the Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the fair value estimate. Deferred income tax liability The Company estimates the expected manner and timing of the realization or settlement of the carrying value of its assets and liabilities and applies the tax rates that are enacted or substantively enacted on the estimated dates of realization or settlement. Critical accounting judgments Examples of significant judgments, apart from those involving estimation, include: Exploration and evaluation assets Management is required to make judgments on the status of each mineral property and the future plans with respect to finding commercial reserves. The nature of exploration and evaluation activity is such that only a few projects are ultimately successful, and some assets are likely to become impaired in future periods. Functional currency The Company applied judgment in determining its functional currency and the functional currency of its subsidiaries. Functional currency was determined based on an analysis of the consideration factors in IAS 21, The Effects of Changes in Foreign Exchange Rates. Going concern The Company applied judgment in assessing its ability to continue as a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations for the foreseeable future. 3. Capital Management: The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration of exploration and evaluation assets . The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The capital structure of the Company consists of shareholders’ equity. The Company is not exposed to any externally imposed capital requirements. The exploration and evaluation assets in which the Company currently has an interest are in the exploration stage. As such the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 18 3. Capital Management (continued): 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 years ended April 30, 2026 and 2025. 4. Receivables: April 30, 2026 April 30, 2025 GST input tax credits receivable $ 89,659 $ 11,809 Interest receivable 72,658 - $ 162,317 $ 11,809 5. Marketable securities: Marketable securities Cost Balance, April 30, 2024 $ 2,442,175 Disposals (129,600) Balance, April 30, 2025 $ 2,312,575 Additions 141,279 Balance, April 30, 2026 $ 2,453,854 Fair value Balance, April 30, 2024 $ 122,109 Proceeds on disposals (7,345) Realized gain on disposal 865 Fair value adjustment (57,814) Balance, April 30, 2025 $ 57,815 Additions 141,279 Fair value adjustment 67,825 Balance, April 30, 2026 $ 266,919 During the year ended April 30, 2022, the Company received 381,589 post-consolidation shares of Infinitum Copper Corp. (“Infinitum”) pursuant to an option agreement on the Adelita property (Note 6(b)). During the year ended April 30, 2025, the Company sold 20,250 post-consolidation shares of Infinitum for proceeds of $7,345, realizing a gain of $865. Infinitum consolidated its common shares on a 1:8 basis on February 20, 2026. During the year ended April 30, 2026, the Company received 313,953 shares of Algo Grande Copper Corp. (“Algo Grande”) pursuant to a sales agreement on the Adelita property (Note 6(b)).
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 19 6. Exploration and Evaluation Assets: Balance consists of: April 30, 2026 April 30, 2025 Aurena, Mexico $ - $ 1,189,713 Santa Marta, Mexico - 346,294 Alamos (Quintera), Mexico 3,510,775 3,384,462 Taviche, Mexico 64,573 64,573 Aurífero, Mexico 841,522 749,821 Black Mountain, Arizona, United States 402,129 402,129 Lone Mountain, Nevada, United States 1,293,159 237,140 Total $ 6,112,158 $ 6,374,132 Title to exploration and evaluation assets involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many exploration and evaluation assets. The Company has investigated title to its exploration and evaluation assets and to the best of its knowledge title to the assets is in good standing. a) Aurena Property, Oaxaca State, Mexico: On April 30, 2009, the Company acquired an option, subsequently amended, to earn a 100% interest in the Aurena Property for 3,500,000 shares (issued) and $20,000 cash (paid). The property is subject to a net smelter return royalty (“NSR”) of 3%. In Novembe r 2010, a related party of the Mexican company that is the optionor of the underlying agreement became a director of the Company. The Company paid US$140,000, issued 1,100,000 common shares valued at $514,500 and incurred property expenditures of US$2,500,000 to earn its 100% interest in the Aurena property. Upon commencement of commercial production, the Company shall issue 2,000,000 shares to the vendor. The Company may elect to purchase up to 2% of the NSR for payment of the greater of US$4,000,000 or the equivalent amount of 0.9999 fine physical gold measured in troy ounces priced at the New York closing spot price on the closing date. The Company has determined that due to its decision to prioritize exploration expenditures elsewhere within its property portfolio, the property is impaired, and has elected to write off the related acquisition costs of $1,189,713 as at April 30, 2026. b) Adelita Property, Sonora State, Mexico: On April 23, 2010, the Company acquired an option, subsequently amended, to acquire a 100% interest in a mineral property known as the Adelita property , comprised primarily of a land package under option with a Mexican company that is the optionor of the underlying agreement, along with a minor claim under option with a separate landowner. In November 2010, a related party of the Mexican company became a director of the Company. In consideration, the Company paid $1 to acquire the option.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 20 6. Exploration and Evaluation Assets (continued): b) Adelita Property, Sonora State, Mexico (continued): The Company previously paid US$595,000 and issued 925,000 common shares valued at $470,000 pursuant to the option and owns 100% of the Adelita property. The property is subject to an NSR of 2%. On April 8, 2021, the Company issued 200,000 common shares valued at $80,000 to eliminate a commercial production payment of 500,000 common shares. Option Agreement with Infinitum Copper Corp. In the year ended April 30, 2021, the Company granted to Infinitum Copper Corp. (“Infinitum”, formerly ASR Resources Corp.) an option to earn an 80% interest in the Adelita property. In consideration for the granted option, Infinitum paid the Company the following: a) $50,000 on signing (received); b) $43,333 in property taxes on or before 10 business days after signing (received); and c) $25,000 on or before August 26, 2021 (received). In addition, on the first day of listed trading on the TSX Venture Exchange or Canadian Securities Exchange (“Listing Date”), Infinitum must issue 16% of the total issued and outstanding common shares of Infinitum calculated post issuance to the Company (received 381,589 post-consolidation shares valued at $2,442,175 during the year ended April 30, 2022 (Note 5)). Infinitum must incur at least $3,000,000 of expenditures on the Adelita property on or before five years from the Listing Date (completed by September 30, 2023). After completing the option to earn 80%, the Company and Infinitum were in the process of entering into a joint venture agreement. The Company’s 20% retained interest will be carried until Infinitum carries out a total of $4,750,000 in expenditures along with completing both a mineral resource calculation in accordance with National Instrument 43 -101 Standards of Disclosure for Mineral Projects and a Preliminary Economic Assessment. Sale to Algo Grande Copper Corp. On August 12, 2025, the Company entered into an agreement with Algo Grande (formerly Kenadyr Metals Corp.) to sell its 20% interest in the Adelita property for consideration of 313,953 common shares of Algo Grande at a value of $0.45 per share and a 1% NSR, subject to regulatory approval. The sale was completed on December 18, 2025. As the carrying value of the Adelita property was $nil, the Company recognized a gain on sale of property of $141,279 in profit or loss for the year ended April 30, 2026. c) Vuelcos del Destino Property, Guerrero State, Mexico: On April 3, 2010, the Company acquired an option, subsequently amended, to acquire a 100% interest in a mineral property known as the Vuelcos del Destino property, located in Mexico . In November 2010, the president of the Mexican company that is the optionor of the underlying agreement became a director of the Company. The property is subject to a NSR of 3% , of which the Company may purchase up to 2% for US$2,000,000 per percentage point. In consideration, the Company paid $1 to acquire the option. To maintain the option on the propert y, the Company must pay an aggregate of US$355,000 in cash (paid) and issue an aggregate of 3,650,000 common shares (issued at an aggregate value of $1,004,500) and complete US$2,000,000 in exploration expenditures by April 23, 2022 ($1,570,291 incurred as at April 30, 2026).
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 21 6. Exploration and Evaluation Assets (continued): c) Vuelcos del Destino Property, Guerrero State, Mexico (continued): On March 30, 2020, the option agreement was amended to extend the date of required expenditures from April 23, 2020 to April 23, 2022, unless the necessary permits required for drilling on the property are not obtained by April 23, 2021, in which case the time to complete the remaining option payments and expenditures will be extended by the corresponding additional amount of time required to obtain the necessary permits. As at April 30, 2026, the permits have not been obtained. Upon commencement of commercial production, t he Company must also issue an additional 2,000,000 common shares to a maximum aggregate value of US$5,000,000. Civil claim During the year ended April 30, 2025, the Company filed a Notice of Civil Claim in the Supreme Court of British Columbia against the optionors of the Vuelcos del Destino property in Mexico seeking damages, costs, and other relief. The claim is based on the Company's belief that it was in compliance wit h the terms of the agreement. The Company determined that due to the uncertainty of the standing of the option agreement, the property was impaired, and elected to write off the related acquisition costs of $1,411,039 as at April 30, 2024. d) Santa Marta Project, Oaxaca State, Mexico: On October 7, 2010, the Company acquired an option, subsequently amended, from Minera Zalamera S.A. de C.V. (“Minera Zalamera”), to acquire a 100% interest in a mineral property known as the Santa Marta property, located in Oaxaca, Mexico. The property is subject to a n NSR of 3%. In consideration, the Company may purchase up to 2% of the NSR for US$1,000,000 per 0.5%, payable at the Company’s election in either cash or the equivalent of 0.9999 fine physical gold measured in troy ounces, priced at the New York gold closing price on the date of delivery. To maintain the option on the property, the Company must pay an aggregate of US$175,000 in cash (paid US$115,000) and issue an aggregate of 1,875,000 common shares (issued at an aggregate value of $370,500) on or before October 28, 2016, and complete US$2,500,000 in exploration expenditures by October 28, 2017 (incurred as at April 30, 2026). In fiscal 2014 , the option agreement was amended to state that the remaining option payments and expenditures would be deferred if the necessary permits required for drilling on the property were not obtained by May 31, 2014, in which case the time to complete the remaining option payments and expenditures will be extended by the corresponding additional amount of time required to obtain the necessary permits. As at April 30, 2026, the permits have not been obtained. Upon commencement of commercial production, the Company will issue additional shares equal in value to $5,000,000 to a maximum of 1,000,000 common shares, whichever is less. The Company has determined that due to a lack of exploration permits being granted in Oaxaca, Mexico, the property is impaired, and has elected to write off the related acquisition costs of $346,294 as at April 30, 2026.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 22 6. Exploration and Evaluation Assets (continued): e) Alamos (Quintera) Project, Sonora State, Mexico: On September 1, 2016, the Company entered into an option agreement to earn a 100% interest in the Alamos (Quintera) silver project in Sonora, Mexico . To maintain the option on the property, the Company paid an aggregate of $500,000 in cash, issued an aggregate of 6,443,628 common shares at a value of $2,240,000, and incurred the minimum property expenditures ($3,000,000) on or before September 1, 2022 as required under the option agreement. The Company fulfilled all remaining obligations pursuant to the option agreement during the year ended April 30, 2023 and as such, has now vested 100% ownership in the Alamos (Quintera) property. The property vendor retains a 2% NSR, 0.5% of which can be purchased for $1,000,000. The Company must also complete a $2,000,000 payment to the property vendor within 30 days of the commencement of commercial production. From fiscal 2019 to fiscal 2022, the Company also paid an aggregate of $697,276 to acquire additional property concessions in the Alamos district. In fiscal 2026, the Company paid $126,313 to acquire additional property concessions in the Alamos district. Community Agreements The Company has entered into access agreements with various community groups, with aggregate annual commitments ranging from approximately $141,000 to $437,000. f) Taviche Project, Oaxaca State, Mexico: On January 25, 2019, the Company entered into a purchase and sale agreement with Gold79 Mines Ltd. (formerly Aura Resources Inc ) and its wholly owned subsidiary, Aura Resources Mexico, S.A. de C.V. (collectively, “Gold79”) to purchase an 80% interest in Gold79’s Taviche project located in Oaxaca State in Mexico (the “Aura Purchase Agreement”) . In consideration, the Company issue d 100,000 common shares (valued at $40,000) upon closing of the transaction. Gold79 also granted to the Company an exclusive option to acquire the remaining 20% of the Taviche project for a total purchase price of $1,000,000. During the year ended April 30, 2023, the Company exercised its option to acquire the remaining 20% of the Taviche project from Gold79 for a total purchase price of $1,000,000 (paid). Concurrently, the Company entered into a settlement agreement with Gold79 pursuant to which Gold79 will pay $800,000 (received) to the Company for a full and final release regarding any claims associated with the Taviche project. The Taviche project is subject to an aggregate 2.5% NSR. g) Biricu Project, Guerrero State, Mexico: On January 13, 2021, the Company renegotiated the terms of the underlying royalty on the Biricu Project. The Biricu Project is subject to a 2% NSR. The Company has been granted an option to repurchase one-half of the NSR which would result in the NSR being reduced to 1% of net smelter returns (“NSR Repurchase Option”). The NSR Repurchase Option may be exercised by cash payment as follows: a) $500,000 if the NSR Repurchase Option is exercised on or before December 31, 2023; b) $750,000 if the NSR Repurchase Option is exercised after December 31, 2023 and on or before December 31, 2024; and c) $1,000,000 if the NSR Repurchase Option is exercised after December 31, 2024 and on or before December 31, 2025.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 23 6. Exploration and Evaluation Assets (continued): g) Biricu Project, Guerrero State, Mexico (continued): During the year ended April 30, 2025, the Company determined that the Biricu property was impaired, and elected to write off the related acquisition costs of $1,127,494 as at April 30, 2025. h) Aurífero Project, Sonora State, Mexico: On January 17, 2020, the Company entered into an option agreement, subsequently amended, to acquire a 100% interest in the Aurífero gold project in Sonora, Mexico. To maintain the option on the property, the Company must complete cash payments over an eight-year period as follows: a) US$144,000 on signing (paid US$84,120, net of back taxes); b) US$35,000 on July 17, 2020 (paid); c) US$25,000 on January 17 and July 17 in each of calendar years 2021 to 2024 (paid); d) US$22,000 on January 17 and July 17 in each of calendar years 2025 to 2027 (paid US$ 88,000, including US$44,000 during the year ended April 30, 2026 and US$22,000 subsequent to April 30, 2026); and e) $2,175,000 by January 17, 2028. During the year ended April 30, 2026, the Company also paid or accrued $30,403 (2025 - $27,352) to acquire additional property concessions adjacent to the original Aurífero property. Certain claims in the Aurífero property are subject to a 1% NSR. i) Arizona, United States: As at April 30, 2026, the Company has paid a total of $402,129 (2025 - $402,129) to stake certain claims in Arizona, USA. j) Lone Mountain Project, Nevada, United States: During the year ended April 30, 2025, the Company entered into an agreement with Nevada Zinc Corporation (“Nevada Zinc”) and Lone Mountain Zinc Ltd. (“Lone Mountain”) to acquire a 25% interest in certain claims in Nevada, USA (the “Nevada Claims”) and an option to acquire the remaining 75% interest in the Nevada Claims. As consideration for the 25% interest, the Company must pay US$116,908 p rior to July 26, 2024 (paid). The Company was granted a 90-day period in which to exercise its option to acquire the remaining 75% interest; as consideration, once certain shareholder and regulatory approvals are obtained by Nevada Zinc, the Company must issue $1,000,000 in common shares to Nevada Zinc based on the 10 -day volume weighted average trading price (issued 3,846,893 common shares with a fair value of $942,489 ) and pay $100,000 in cash (paid). The Nevada Claims are subject to various NSR’s ranging from 1-3%. As at April 30, 2026, the Company has also capitalized an aggregate of $89,388 (2025 - $75,848) in legal costs incurred relation to the acquisition of the Lone Mountain Project. 7. Related Party Transactions: As at April 30, 2026, $10,043 (2025 - $69,461) (included in accounts payable and accrued liabilities) is due to directors, officers, and companies with a director in common . Amounts due to related parties are non -interest bearing, with no fixed terms of repayments.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 24 7. Related Party Transactions (continued): The remuneration of key management personnel, which includes directors and officers of the Company, including amounts disclosed above, during the years ended April 30, 2026 and 2025 were as follows: 2026 2025 Consulting fees $ 235,800 $ 226,350 Professional fees 78,000 78,000 Exploration costs (geological consulting) 150,697 139,125 Directors’ fees 60,000 65,000 Share-based payments 186,142 29,007 Total $ 710,639 $ 537,482 8. Share Capital: a) Authorized share capital: Unlimited common shares without par value. b) Issued and outstanding common shares: Issued in the year ended April 30, 2026 On June 25, 2025, the Company issued 3,846,893 common shares with a fair value of $942,489 in connection with the acquisition of the Lone Mountain property (Note 6(j)). On July 3, 2025, the Company closed a brokered private placement of 36,800,000 units at a price of $0.25 per unit for gross proceeds of $9,200,000. Each unit consisted of one common share and one half of one common share purchase warrant; each whole warrant is exercisable at a price of $0.37 for a period of two years. The Company recognized a residual value of $1,104,000 for the warrants underlying the units issued. In connection with the private placement, the Company paid total cash commissions of $529,500 and incurred other share issuance costs of $ 248,504. The Company also issued 2,118,000 broker warrants exercisable at a price of $0.25 for a period of two years, with a fair value of $254,194 (Note 8(d)). On December 11, 2025, the Company closed a brokered private placement of 69,444,44 3 units at a price of $0.36 per unit for gross proceeds of $2 4,999,999. Each unit consisted of one common share and one half of one common share purchase warrant; each whole warrant is exercisable at a price of $0.50 for a period of two years. In connection with the private placement, the Company paid total cash commissions of $1,434,605 and incurred other share issuance costs of $301,656. The Company also issued an aggregate of 3,985,009 broker warrants exercisable at a price of $0.36 for a period of two years, with a fair value of $1,015,271 (Note 8(d)). During the year ended April 30, 2026, the Company issued an aggregate of 8,337,650 common shares on the exercise of warrants at a weighted average price of $0.2 9 for gross proceeds of $2,443,883 (Note 8(d)), and issued 50,000 common shares on the exercise of stock options at an exercise price of $0.15 for gross proceeds of $7,500 (Note 8(d)). The Company incurred share issuance costs of $ 2,422 in relation to the exercise of warrants.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 25 8. Share Capital (continued): b) Issued and outstanding common shares (continued): Issued in the year ended April 30, 2025 On May 2, 2024, the Company closed a brokered private placement of 22,785,000 units at a price of $0.25 per unit for gross proceeds of $5,696,250. Each unit consists of one common share and one half of one common share purchase warrant; each whole warrant is exerc isable at a price of $0.34 for a period of two years. The Company recognized a residual value of $227,850 for the warrants underlying the units issued. In connection with the private placement, the Company paid a cash commission of $340,875 and incurred other share issuance costs of $182,484, of which $48,325 had been recorded as deferred financing costs at April 30, 2024. The Company also issued 1,363,500 broker warrants exercisable at a price of $0.25 for a period of two years, with a fair value of $199,370 (Note 8(d)). c) Stock options: The Company has approved a stock option plan (the “Plan”), whereby the number of shares issuable under the Plan is limited to 10% of the issued and outstanding shares of the Company . The exercise price of each option shall not be less than the discounted market price of the Company’s shares as calculated on the date of grant. An option’s maximum term is ten years and shall vest as determined by the Board of Directors. Options granted to investor relations consultants shall vest in stages over 12 months with no more than one-quarter of options vesting in any three-month period. Stock option transactions are as follows: Number of stock options Weighted average exercise price Balance, April 30, 2024 and 2025 15,825,000 0.41 Granted 3,160,000 0.36 Expired (300,000) 0.52 Exercised (50,000) 0.15 Balance outstanding, April 30, 2026 18,635,000 0.40 Balance exercisable, April 30, 2026 15,475,000 0.41 As at April 30, 2026, the Company has stock options outstanding and exercisable as follows: Number of stock options outstanding Number of stock options exercisable Exercise price Expiry Date 2,550,000 2,550,000 $ 0.45 April 15, 2029 200,000 200,000 0.45 June 18, 2029 3,200,000 3,200,000 0.52 March 23, 2031 125,000 125,000 0.45 October 15, 2026 7,700,000 7,700,000 0.40 April 13, 2032 1,700,000 1,700,000 0.15 November 9, 2028 3,160,000 - 0.36 December 5, 2030 18,635,000 15,475,000 $ 0.40
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 26 8. Share Capital (continued): c) Stock Options (continued): The weighted average fair value per option granted during the year ended April 30, 2026 was $0.29 (2025 - $nil). During the year ended April 30, 2026, the Company recognized $363,168 (2025 - $48,757) in share - based payments for the fair value of the vesting portion of the stock options that were granted in prior periods. The weighted average assumptions used in the calculation of fair value are as follows: 2026 2025 Risk-free interest rate 3.00% N/A Expected volatility 103.27% N/A Expected life of options 4.99 years N/A Expected dividend yield Nil N/A Forfeiture rate Nil N/A d) Warrants: Warrant transactions are as follows: Number of warrants Weighted average exercise price Balance, April 30, 2024 3,637,500 $ 0.18 Issued 12,756,000 $ 0.33 Balance, April 30, 2025 16,393,500 $ 0.30 Issued 59,225,230 $ 0.44 Exercised (8,337,650) $ 0.29 Balance, April 30, 2026 67,281,080 $ 0.42 As at April 30, 2026, the Company has warrants outstanding as follows: Number of warrants Exercise price Expiry Date 2,762,500 $ 0.18 November 3, 2026 7,461,500 * $ 0.34 May 2, 2026 17,842,250 $ 0.37 July 3, 2027 507,600 $ 0.25 July 3, 2027 34,722,221 $ 0.50 December 11, 2027 3,985,009 $ 0.36 December 11, 2027 67,281,080 $ 0.42 * Subsequent to April 30, 2026, 1,320,000 warrants were exercised, and the remaining warrants expired unexercised. During the year ended April 30, 2026, the Company granted an aggregate of 6,103,009 (2025 – 1,363,500) broker warrants in connection with the brokered private placement completed during the period (Note 8(b)). The broker warrants had a n aggregate fair value of $ 1,269,465 (2024 - $199,370) based on the following weighted average assumptions:
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 27 8. Share Capital (continued): d) Warrants (continued): 2026 2025 Risk-free interest rate 2.64% 4.24% Expected volatility 109.70% 119.19% Expected life of options 2.00 years 2.00 years Expected dividend yield Nil Nil Forfeiture rate Nil Nil 9. Segmented Information: The Company operates in one segment being the acquisition and exploration of exploration and evaluation assets. The Company operates in Mexico and the United States. Geographic information is described in Note 6. 10. Financial Instruments and Risk Management: Financial instruments The Company measures financial instruments using a fair value hierarchy that prioritizes the inputs to the valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. • Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The carrying values of cash, receivables, and accounts payable and accrued liabilities approximate their fair values because of the short-term nature of these instruments. Marketable securities are measured at level 1 inputs of the fair value hierarchy. Financial risk factors The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below: a) Credit risk: Credit risk is the risk of loss associated with a counter party’s inability to fulfill its payment obligations. The Company’s receivables consist primarily of amounts due from Canadian and Mexican government agencies, and cash is held with large and stable financial institutions. b) Liquidity risk: The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet its liabilities when they come due. As of April 30, 2026, the Company had cash of $19,585,363 and current liabilities of $1,185,333.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 28 10. Financial Instruments and Risk Management (continued): Financial risk factors (continued) c) Market risk: Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. (i) Interest rate risk: The Company has cash balances and no interest-bearing debt. The Company’s current policy is to invest excess cash in investment-grade short-term demand deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks. (ii) Foreign currency risk: The Company is exposed to foreign currency risk on fluctuations related to cash, accounts receivable, and accounts payable and accrued liabilities that are denominated in United States Dollars and Mexican Pesos. The exposure of the Company’s cash and receivables to foreign exchange risk is as follows: April 30, 2026 April 30, 2025 Foreign Amount Foreign Amount currency in CAD currency in CAD amount dollars amount dollars United States dollars: Cash 4,963,780 $ 6,771,092 818,485 $ 1,131,040 Mexican pesos: Cash 8,751,471 $ 681,236 26,601 $ 1,877 Total financial assets $ 7,452,328 $ 1,132,917 The exposure of the Company’s accounts payable to foreign exchange risk is as follows: April 30, 2026 April 30, 2025 Foreign Amount Foreign Amount currency in CAD currency in CAD amount dollars amount dollars United States dollars: Accounts payable 589,361 $ 803,947 91,443 $ 126,362 Mexican pesos: Accounts payable and accrued liabilities 3,488,105 $ 271,523 1,592,325 $ 112,357 Total financial liabilities $ 1,075,470 $ 238,719
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 29 10. Financial Instruments and Risk Management (continued): Financial risk factors (continued) c) Market risk (continued): (ii) Foreign currency risk (continued): As at April 30, 2026, the Company had net monetary assets denominated in United States dollars totaling approximately US$4,374,419. The Company has determined that a 10% increase or decrease in the US dollar against the Canadian dollar on these instruments, as at April 30, 2026, would result in approximately $596,700 change to comprehensive loss for the period. (iii) Price risk: The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the s tock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatility. The Company closely monitors commodity prices of gold and other precious and base metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company. 11. Income Taxes: a) A reconciliation of income taxes at statutory rates with the reported taxes is as follows: 2026 2025 Loss before income taxes $ (17,609,425) $ (5,665,405) Income tax recovery at statutory rates $ (4,755,000) $ (1,530,000) Change in statutory, foreign tax, foreign exchange rates and other (1,151,000) 1,105,000 Permanent difference and share issue costs 136,000 499,000 Change in unrecognized deductible temporary differences 5,640,000 (16,000) Total income tax expense (recovery) (130,000) 58,000 b) Significant components of deferred tax assets are as follows: 2026 2025 Deferred tax assets (liabilities): Exploration and evaluation assets $ 15,205,000 $ 10,329,000 Property and equipment 2,000 2,000 Share issue costs 938,000 161,000 Marketable securities and capital losses 342,000 360,000 Non-capital losses 4,776,000 4,774,000 $ 21,263,000 $ 15,626,000 Unrecognized deferred tax assets (21,263,000) (15,626,000) Net deferred tax assets - - No net deferred tax asset has been recognized in respect of the above because the amount of future taxable profit that will be available to realize such assets is not probable.
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MINAURUM SILVER INC. (formerly Minaurum Gold Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED APRIL 30, 2026 AND 2025 (Expressed in Canadian dollars) 30 11. Income Taxes (continued): c) The Company has non-capital losses for Canadian income tax purposes of approximately $16,112,000 (2025 - $15,477,000), for Mexico income tax purposes of approximately $334,000 (2025 - $1,262,000), and for United States income tax purposes of approximately $ 1,230,000 (2025 - $818,000), which may be carried forward and applied against taxable income in future years. These losses, if unutilized, will expire through to 204 6 in Canada and in Mexico through 2027. The losses in the United States do not expire. d) In December 2013, the Mexican government passed a bill that increased the effective tax rate applicable to the Company’s Mexican operations. The law was effective January 1, 2014, and increased the future corporate income tax rate to 30%, created a 10% wit hholdings tax on dividends paid to non -resident shareholders (subject to any reduction by an Income Tax Treaty), and created a new Extraordinary Mining Duty equal to 0.5% of gross revenues from the sale of gold, silver, and platinum. This resulted in the C ompany recording a deferred tax liability of $201,000 at April 30, 2014. In addition, the law requires taxpayers with mining concessions to pay a new 7.5% Special Mining Duty (increased to 8.5% effective January 1, 2025). The Extraordinary Mining Duty and Special Mining Duty are deductible for income taxes. The Special Mining Duty is applicable to earnings before income tax, depreciation, depletion, amortization and interest. There are no deductions related to development costs but exploration and prospecting costs are deductible when incurred. The deferred tax liability was increased by $58,000 from $158,000 to $216,000 during the year ended April 30, 2025 as a result of the increase in Special Mining Duty effective January 1, 2025, and reduced by $130,000 from $216,000 to $86,000 during the year ended April 30, 2026 as a result of the impairment of the Aurena and Santa Marta properties (Note 6). 12. Subsequent events: Warrant Activity Subsequent to April 30, 2026, the Company issued an aggregate of 1,485,624 common shares on the exercise of warrants for gross proceeds of $ 481,425, and 6,141,500 warrants with an exercise price of $0.34 expired unexercised.