BHLL 8-K
Bunker Hill Mining Corp. (BHLL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Charter)
| (State or Other Jurisdiction | (Commission | (IRS Employer | ||
| of Incorporation) | File Number) | Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| none |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory Note
On August 20, 2026, Bunker Hill Mining Corp., a Nevada corporation (“Bunker Hill” or the “Company”), entered into an Arrangement Agreement with Silver47 Exploration Corp., a British Columbia corporation (“Silver47”), pursuant to which, among other things, Bunker Hill will acquire all of the issued and outstanding common shares of Silver47 (the “Arrangement”), as previously reported in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 2026.
The Company is voluntarily filing this Current Report to make available the historical consolidated financial statements of Silver47, the historical consolidated financial statements of Summa Silver Corp. (“Summa Silver”), which Silver47 acquired pursuant to a plan of arrangement completed on August 1, 2025, and unaudited pro forma condensed combined financial information giving effect to Silver47’s prior acquisition of Summa Silver and to the Arrangement, for incorporation by reference into registration statements filed by the Company. The Arrangement has not been completed as of the dated of this Current Report, and the filing of this Current Report should not be construed as an indication that the Arrangement has been or will be completed.
Item 8.01 Other Information
The audited financial statements of Silver47 which comprise the consolidated statements of financial position as at July 31, 2025 and July 31, 2024, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, have been audited by MNP LLP, independent registered public accounting firm, as set forth in their report thereon, which is included therein, and are included in this Current Report on Form 8-K in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The audited financial statements of Summa Silver which comprise the consolidated statements of financial position as at August 31, 2024 and August 31, 2023, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, have been audited by Dale Matheson Carr-Hilton Labonte LLP, independent registered public accounting firm, as set forth in their report thereon, which is included therein, and are included in this Current Report on Form 8-K in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses or Funds Acquired.
The audited financial statements of Silver47 which comprise the consolidated statements of financial position as at July 31, 2025 and July 31, 2024, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, are filed as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated herein by reference.
The unaudited condensed interim consolidated financial statements of Silver47 which comprise the condensed interim consolidated statements of financial position as at April 30, 2026 and the condensed interim consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the three and nine month periods ended April 30, 2026 and 2025, and notes to the condensed consolidated financial statements, are filed as Exhibit 99.2 to this Current Report on Form 8-K and are incorporated herein by reference.
The audited financial statements of Summa Silver which comprise the consolidated statements of financial position as at August 31, 2024 and August 31, 2023, and the consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, are filed as Exhibit 99.3 to this Current Report on Form 8-K and are incorporated herein by reference.
The unaudited condensed interim consolidated financial statements of Summa Silver which comprise the condensed interim consolidated statements of financial position as at May 31, 2025 and the condensed interim consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the three and nine month periods ended May 31, 2025 and 2024, and notes to the condensed consolidated financial statements, are filed as Exhibit 99.4 to this Current Report on Form 8-K and are incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information of the Company, together with the notes thereto, is filed as Exhibit 99.5 to this Current Report on Form 8-K and is incorporated herein by reference. The pro forma financial information gives effect to Silver47’s acquisition of Summa Silver pursuant to a plan of arrangement completed on August 1, 2025 and also gives effect to the proposed acquisition of Silver47 by the Company pursuant to the Arrangement Agreement, dated August 20, 2026, between the Company and Silver47 as described in the Company’s Current Report on Form 8-K as filed with the Commission on August 24, 2026.
No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| BUNKER HILL MINING CORP. | ||
| DATE: September 21, 2026 | By: | /s/ Sam Ash |
| Sam Ash | ||
| President and Chief Executive Officer | ||
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference into the Registration Statements on Form S-8 of Bunker Hill Mining Corp. (the “Company”) (File Nos. 333-275339 and 333-275340) and Registration Statement on Form S-3 of the Company, as amended (File No. 333-296996) of our auditor’s report dated September 9, 2026, with respect to the consolidated financial statements of Silver47 Exploration Corp. and its subsidiaries as at July 31, 2025 and 2024, and for each of the years in the two-year period then ended, as filed with the United States Securities and Exchange Commission in this Current Report on Form 8-K of the Company.
We also consent to the reference to our firm under the heading “Experts” in Item 8.01 of this Current Report on Form 8-K and under the heading “Experts” in the Company’s Registration Statement on Form S-3, as amended (File No. 333-296996).
/s/ MNP LLP
Chartered Professional Accountants
September 21, 2026
Vancouver, Canada
Exhibit 23.2
 |
 |
AUDITOR’S CONSENT
We consent to the incorporation by reference into the Registration Statements on Form S-8 of Bunker Hill Mining Corp. (the “Company”) (File Nos. 333-275339 and 333-275340) and Registration Statement on Form S-3 of the Company, as amended (File No. 333-296996), of our auditor’s report dated September 9, 2026, with respect to the consolidated statements of financial position of Summa Silver Corp. (the “Company”) as of August 31, 2024 and 2023, the related consolidated statements of loss and comprehensive loss, cash flows and changes in shareholders’ equity for each of the two years in the period ended August 31, 2024, and the related notes, as filed with the United States Securities and Exchange Commission in this Current Report on Form 8-K of the Company.
We also consent to the reference to our firm under the heading “Experts” in Item 8.01 of this Current Report on Form 8-K and under the heading “Experts” in the Company’s Registration Statement on Form S-3, as amended (File No. 333-296996).
/s/ DMCL LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, Canada
September 21, 2026
Exhibit 99.1
SILVER47 EXPLORATION CORP.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
JULY 31, 2025 AND 2024
(EXPRESSED IN CANADIAN DOLLARS)
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Shareholders of Silver47 Exploration Corp.:
Opinion
We have audited the accompanying consolidated financial statements of Silver47 Exploration Corp. and its subsidiaries (the “Company”) (a Canadian corporation), which comprise the consolidated statements of financial position as at July 31, 2025 and July 31, 2024, and the related consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of July 31, 2025 and July 31, 2024, and the results of its consolidated operations and its consolidated cash flows for the years then ended in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company incurred a net loss during the year ended July 31, 2025 and, as of that date, the Company had a working capital deficiency and an accumulated deficit. These events or conditions, along with other matters as set forth in Note 2, indicate that a substantial doubt exists on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Responsibilities of Management 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 the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
| 1 |
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 absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. 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. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
| ● | Exercise professional judgment and maintain professional skepticism throughout the audit. | |
| ● | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. | |
| ● | 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. Accordingly, no such opinion is expressed. | |
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements. | |
| ● | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
/s/ MNP LLP
Vancouver, BC, Canada
September 9, 2026
| 2 |
Silver47 Exploration Corp.
Consolidated Statements of Financial Position
(Expressed in Canadian dollars)
| As at | Note | July 31, 2025 | July 31, 2024 | |||||||
| $ | $ | |||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | 5 | 4,843,916 | 4,041,322 | |||||||
| Tax and other receivables | 107,724 | 41,457 | ||||||||
| Prepaid expenses | 6 | 506,908 | 423,425 | |||||||
| 5,458,548 | 4,506,204 | |||||||||
| Non-current assets | ||||||||||
| Property and equipment | 8,150 | - | ||||||||
| Exploration and evaluation assets | 7 | 11,196,676 | 11,176,094 | |||||||
| 11,204,826 | 11,176,094 | |||||||||
| TOTAL ASSETS | 16,663,374 | 15,682,298 | ||||||||
| LIABILITIES | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable and accrued liabilities | 1,799,518 | 1,739,446 | ||||||||
| Share based payment liabilities - current | 8 | 1,075,329 | 470,229 | |||||||
| 2,874,847 | 2,209,675 | |||||||||
| Non-current liabilities | ||||||||||
| Share-based payment liabilities - long term | 8 | - | 240,266 | |||||||
| TOTAL LIABILITIES | 2,874,847 | 2,449,941 | ||||||||
| EQUITY | ||||||||||
| Share capital | 9b | 27,424,699 | 13,743,031 | |||||||
| Special warrants | 9f | - | 4,846,430 | |||||||
| Contributed surplus | 9e,g,h | 4,984,512 | 3,137,609 | |||||||
| Accumulated deficit | (18,670,227 | ) | (8,539,561 | ) | ||||||
| Foreign currency translation reserve | 49,543 | 44,848 | ||||||||
| TOTAL EQUITY | 13,788,527 | 13,232,357 | ||||||||
| TOTAL LIABILITIES AND EQUITY | 16,663,374 | 15,682,298 | ||||||||
Going Concern (Note 2)
Commitments (Note 7)
Subsequent Events (Note 15)
Approved by the Board of Directors:
| /s/ “Gary Thompson” | /s/ “Ryan Goodman” | |
| Gary Thompson | Ryan Goodman | |
| Director | Director |
The accompanying notes are an integral part of these consolidated financial statements
| 3 |
Silver47 Exploration Corp.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian dollars)
| For the years ended | Note | July 31, 2025 | July 31, 2024 | |||||||
| $ | $ | |||||||||
| Operating expenses | ||||||||||
| Exploration expenses | 7 | 4,695,295 | 2,587,721 | |||||||
| General and administrative expenses | 10 | 3,790,986 | 1,253,100 | |||||||
| Share-based compensation | 8,9e | 1,781,480 | 746,281 | |||||||
| Depreciation expenses | 7 | 2,574 | - | |||||||
| 10,270,335 | 4,587,102 | |||||||||
| Other items | ||||||||||
| Interest income | (92,454 | ) | (60,274 | ) | ||||||
| Flow through share premium | 9c | (65,043 | ) | - | ||||||
| Change in fair value of share-based payment liabilities | 8 | 13,853 | - | |||||||
| Foreign exchange (gain)/loss | 3,975 | (6,863 | ) | |||||||
| (139,669 | ) | (67,137 | ) | |||||||
| Net loss | 10,130,666 | 4,519,965 | ||||||||
| Other comprehensive income | ||||||||||
| Translation gain on foreign operations | (4,695 | ) | (44,848 | ) | ||||||
| Comprehensive loss | 10,125,971 | 4,475,117 | ||||||||
| Weighted average number of shares – basic and diluted | 56,077,978 | 41,965,645 | ||||||||
| Loss per share – basic and diluted | $ | 0.18 | $ | 0.11 | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| 4 |
Silver47 Exploration Corp.
Consolidated Statements of Changes in Equity
(Expressed in Canadian dollars)
| Contributed Surplus | ||||||||||||||||||||||||||||||||||||
| Number of Common Shares | Number of Special Warrants | Share Capital | Special Warrants | Share-based payment reserve | Warrant Reserve | Foreign Currency Translation Reserve | Accumulated Deficit | Total | ||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Balance at July 31, 2023 | 33,746,467 | - | 6,243,031 | - | 1,140,585 | 1,919,967 | - | (4,019,596 | ) | 5,283,987 | ||||||||||||||||||||||||||
| Issued capital for acquisition | 10,000,000 | - | 7,500,000 | - | - | - | - | - | 7,500,000 | |||||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | 35,786 | - | - | - | 35,786 | |||||||||||||||||||||||||||
| Special warrants issuance | - | 6,297,393 | - | 4,846,430 | - | 41,271 | - | - | 4,887,701 | |||||||||||||||||||||||||||
| Net loss and comprehensive loss for the year | - | - | - | - | - | - | 44,848 | (4,519,965 | ) | (4,475,117 | ) | |||||||||||||||||||||||||
| Balance at July 31, 2024 | 43,746,467 | 6,297,393 | 13,743,031 | 4,846,430 | 1,176,371 | 1,961,238 | 44,848 | (8,539,561 | ) | 13,232,357 | ||||||||||||||||||||||||||
| Issued capital for special warrants conversion | 6,297,393 | (6,297,393 | ) | 4,216,691 | (4,846,430 | ) | - | 629,739 | - | - | - | |||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | 940,250 | - | - | - | 940,250 | |||||||||||||||||||||||||||
| Equity-settled share-based payment | - | - | - | - | 67,994 | - | - | - | 67,994 | |||||||||||||||||||||||||||
| Issued capital for RSU settlement | 925,000 | - | 490,250 | - | - | - | - | - | 490,250 | |||||||||||||||||||||||||||
| Issued capital for private placement | 19,467,592 | - | 8,974,727 | - | - | 208,920 | - | - | 9,183,647 | |||||||||||||||||||||||||||
| Net loss and comprehensive loss for the year | - | - | - | - | - | - | 4,695 | (10,130,666 | ) | (10,125,971 | ) | |||||||||||||||||||||||||
| Balance at July 31, 2025 | 70,436,452 | - | 27,424,699 | - | 2,184,615 | 2,799,897 | 49,543 | (18,670,227 | ) | 13,788,527 | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
| 5 |
Silver47 Exploration Corp.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
| For the years ended | July 31, 2025 | July 31, 2024 | ||||||
| $ | $ | |||||||
| Cash flows used in operating activities | ||||||||
| Net loss | (10,130,666 | ) | (4,519,965 | ) | ||||
| Adjusted for | ||||||||
| Interest income | (92,454 | ) | (60,274 | ) | ||||
| Items not involving cash | ||||||||
| Depreciation expense | 2,574 | - | ||||||
| Stock-based compensation expense | 1,781,480 | 746,281 | ||||||
| Equity settled share-based payment | 67,994 | - | ||||||
| Flow through share premium | (65,043 | ) | - | |||||
| Change in fair value of share-based payment liabilities | 13,853 | - | ||||||
| Foreign exchange gain | (13,003 | ) | (6,863 | ) | ||||
| Net change in non-cash working capital items: | ||||||||
| Tax and other receivables | (77,122 | ) | (16,287 | ) | ||||
| Prepaid expenses | (83,483 | ) | (126,405 | ) | ||||
| Accounts payable and accrued liabilities | 60,072 | 1,611,556 | ||||||
| Net cash flows used in operating activities | (8,535,798 | ) | (2,371,957 | ) | ||||
| Cash flows used in investing activities | ||||||||
| Interest income received | 103,309 | 48,424 | ||||||
| Investment in property and equipment | (10,724 | ) | - | |||||
| Investment in acquisition of exploration and evaluation assets1 | - | (543,040 | ) | |||||
| Net cash flow provided by (used in) investing activities | 92,585 | (494,616 | ) | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from private placement | 9,798,839 | - | ||||||
| Proceeds from private placement of special warrants | - | 4,887,700 | ||||||
| Share issuance costs | (550,149 | ) | - | |||||
| Net cash flow provided by financing activities | 9,248,690 | 4,887,700 | ||||||
| Decrease in cash and cash equivalents during the year | 805,477 | 2,021,127 | ||||||
| Effect of exchange rate changes on cash | (2,883 | ) | (26,808 | ) | ||||
| Cash and cash equivalents, beginning of year | 4,041,322 | 2,047,003 | ||||||
| Cash and cash equivalents, end of year | 4,843,916 | 4,041,322 | ||||||
1 The Company issued 10,000,000 common shares at a price of $0.75 for total value of $7,500,000 for acquisition of the exploration and evaluation assets.
The accompanying notes are an integral part of these consolidated financial statements
| 6 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
1. Nature of Operations
Silver47 Exploration Corp. (“Silver47” or “the Company”) is a company amalgamated in Canada on January 29, 2021. On September 11, 2023, the Company incorporated a 100% owned subsidiary, Silver47 USA Inc. (“S47 US” or “the Sub Company”) under the law of the State of Delaware.
The Company currently trades on the TSX-V and the OTCQB Venture Market under the trading symbols “AGA” and “AAGAF” respectively.
The Company is engaged in mineral exploration of precious metal in Canada and USA. The Company’s head office is located at Suite 551, 409 Granville Street, Vancouver, British Columbia, V6C 1T2, Canada.
2. Going Concern
The consolidated financial statements are prepared on a going concern basis, which assumes that the Company will continue its operations in the normal course of business. At present, the Company’s operations do not generate cash flows. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due.
The Company incurred a net loss of $10,130,666 (2024 - $4,519,965) and had negative cash flows relating to operating activities of $8,535,798 (2024 - $2,371,957) for the year ended July 31, 2025. These conditions indicate the existence of a material uncertainty which may cast significant doubt related to the Company’s ability to continue as a going concern. The continuation of the Company as a going concern is dependent on the ability of the Company to achieve positive cash flow from operations and/or obtain necessary equity or other financing to continue exploration on its exploration and evaluation assets. These consolidated financial statements do not reflect any adjustments to the carrying values of assets and liabilities, reported expenses, and balance sheet classifications that would be necessary should the Company be unable to continue as a going concern, and these adjustments could be material. The Company intends to raise the required funds through the issuance of equity, by securing strategic partners or issuing debt.
3. Basis of Preparation
3.1 Statement of compliance
These consolidated financial statements for the years ended July 31, 2025 and 2024 have been prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (“IFRS”). In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. These consolidated financial statements were authorized for issue by the Company’s board of directors (the “Board”) on September 9, 2026.
3.2 Basis of presentation
The Company’s consolidated financial statements have been prepared on an accrual basis and are based on historical cost basis, except for financial instruments which are classified as fair value through profit or loss, or fair value through other comprehensive income. The Company’s consolidated financial statements are presented in Canadian dollars (“CAD”) which is the Company’s functional currency. The Sub Company has US Dollar (“USD”) as functional currency.
3.3 Use of estimates and judgements
The preparation of consolidated financial statements in accordance with IFRS requires management to make estimates, judgements and assumptions
that affect the measurements of assets, liabilities, revenues, expenses and certain disclosures reported in these financial statements.
Actual results may vary from these estimates.
| 7 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
3. Basis of Preparation (continued)
3.3 Use of estimates and judgements (continued)
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected.
Significant estimates made by management include the following:
i. Valuation of options and warrants
Management uses the Black-Scholes option pricing model to determine the fair value of options and warrants issued. This model requires assumptions of the expected future volatility of the Company’s common shares, expected life of warrants, future risk-free interest rates and the dividend yield of the Company’s common shares.
ii. Income taxes
Provisions for income and other taxes are based on management’s interpretation of taxation laws, which may differ from the interpretation by taxation authorities. Such difference may result in eventual tax payments differing from amounts accrued. Reporting amounts for deferred tax assets and liabilities are based on management’s expectation for the timing and amounts of future taxable income or loss, as well as future taxation rates. Changes to these underlying estimates may result in changes to the carrying value, if any, of deferred income tax assets and liabilities.
Significant areas requiring the use of management’s judgments include:
i. Going concern
Management has applied judgements in the assessment of the Company’s ability to continue as a going concern when preparing its financial statements for the year ended July 31, 2025. Management prepares the financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading or has no realistic alternative but to do so. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Please refer to note 1 for additional information.
ii. Impairment of exploration and evaluation assets (“E&E assets”)
Management reviews and assesses the carrying amount of exploration and evaluation assets for indicators of impairment when facts or circumstances suggest that the carrying amount is not recoverable. If impairment indicators are identified, an impairment test is performed and the amount by which the carrying value of the assets exceeds the estimated fair value is charged to profit of loss as an impairment loss.
4. Material Accounting Policies
Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, S47 US, from the date of incorporation of September 11, 2023. Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated on consolidation.
Foreign currency translation and transactions
Transactions in foreign currency
The Company and the Sub Company record transactions using its functional currency, being the currency of the primary economic environment in which it operates. Foreign currency transactions are translated into the respective functional currency of each entity using the foreign currency rates prevailing at the date of the transaction. Period-end balances of monetary assets and liabilities in foreign currency are translated to the respective functional currencies using period-end foreign currency rates. Foreign currency gains and losses arising from the settlement of foreign currency transactions are recognized in profit or loss.
| 8 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
4. Material Accounting Policies (continued)
Foreign currency translation and transactions (continued)
Foreign operations translation
The assets and liabilities of foreign operations are translated into CAD at period-end foreign currency rates. Revenues and expenses of foreign operations are translated into CAD at average rates for the period. Foreign currency translation gains and losses are recognized in other comprehensive gain/loss.
Cash and cash equivalents
Cash and cash equivalents comprise of cash, cashable guaranteed investment certificate (“GIC”) and short-term GIC in bank.
Financial Instruments
The Company classifies its financial instruments in the following categories: as fair value through profit or loss (“FVTPL”), fair value through other comprehensive income (“FVTOCI”), financial assets at amortized cost, and financial liabilities at amortized cost. The classification depends on the purpose for which the financial asset or liabilities were acquired. Management determines the classification of financial assets and liabilities at initial recognition.
Recognition
Financial instruments are recognized in the statements of financial position on the trade date, being the date in which the Company becomes a party to the contractual provisions of the financial instrument.
Classification
The Company classifies its financial assets and financial liabilities using the following measurement categories:
(a) Those to be measured subsequently at fair value (either through other comprehensive loss or through profit or loss); and (b) Those to be measured at amortized cost.
The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as those to be measured at amortized cost unless they are designed as those to be measured subsequently at fair value through profit or loss (an irrevocable election at the time or recognition). For assets and liabilities measured at the fair value, gains and losses are either recorded in profit or loss or other comprehensive loss.
The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.
Cash and cash equivalents is classified as amortized cost. Accounts payable and accrued liabilities are classified as other financial liabilities and measured at amortized cost. Such financial liabilities are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest rate method. Interest expense is recorded in profit and loss.
Share based payment liabilities are classified as other financial liabilities and measured at fair value through profit and loss. Such financial liabilities are recognized initially at fair value. Subsequent to initial recognition, these financial liabilities are measured at fair value on reporting date. Change of fair value is recorded in profit and loss.
| 9 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
4. Material Accounting Policies (continued)
Financial Instruments (continued)
Derecognition
A financial asset or, where applicable, a part of a financial asset or part of a group of similar financial assets is derecognized when:
| ● | the contractual rights to receive cash flows from the asset have expired; or | |
| ● | the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ |
Arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset; or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
On derecognition, the difference between the carrying amount (measured at the date or derecognition) and the consideration received (including any new asset obtained less any new liability obtained) is recognized in statement of loss and comprehensive loss.
Financial liabilities are derecognized when its contractual obligations are discharged, cancelled or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
Fair value hierarchy
Fair value measurements of financial instruments are required to be classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The levels of the fair value hierarchy are defined as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 - Inputs for assets or liabilities that are not based on observable market data.
The Company’s financial instruments classified as Level 1 in the fair value hierarchy is cash and cash equivalents. The fair value of all other financial instruments which include accounts payable and accrued liabilities and due to related parties approximate their carrying values due to their short-term nature.
Related party transactions
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
| 10 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
4. Material Accounting Policies (continued)
Property and equipment
Property and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced asset is derecognized. All other repairs and maintenance are charged to the consolidated statements of comprehensive loss during the financial period in which they are incurred.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the consolidated statements of comprehensive loss.
Amortization is calculated on a declining balance method to write off the cost of the assets to their residual values over their estimated useful lives. The amortization rates applicable as below:
| Computers | 55 | % | ||
| Equipment | 30 | % |
Exploration and evaluation expenditures
The Company capitalizes the cost of acquiring exploration and evaluation assets. Expenses related to exploration and development of exploration and evaluation assets are expensed through the consolidated statement of loss and comprehensive loss. Such costs, include, but are not limited to, geological and geophysical studies, exploratory drilling and sampling.
Impairment of E&E assets
In accordance with the Company’s accounting policy, the Company’s E&E assets are evaluated every reporting period to determine whether there are any indications of impairment. If any such indication exists, which is often judgmental, a formal estimate of recoverable amount is performed, and an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. The recoverable amount of an asset or cash generating group of assets is measured at the higher of fair value less costs to sell and value in use. The evaluation of asset carrying values for indications of impairment includes consideration of both external and internal sources of information, including such factors as market and economic conditions, metal prices, future plans for the Company’s mineral properties and mineral resources and/or reserve estimates. Management has assessed for impairment indicators for the Company’s E&E assets and has concluded that no indicators of impairment were identified, and the Company plans to continue with its objective of developing the E&E Assets.
Share based payment liabilities
Share based payment liabilities are the liabilities arising from the cash-settled share-based payment transactions.
Restricted Stock Units (“RSU”s) are stock-based awards that may be granted by the Company to certain eligible participants pursuant to its Share Compensation Plan (the “Plan”). RSUs are accounted for as a liability which have cash-settled share-based payment feature as the settlement is at the option of the holder, is measured at fair value on the grant date and is subsequently adjusted at each financial position reporting date for changes in fair value. Participants have the choice to settle the RSU by cash, common shares, or combination of cash and common shares.
The liability is recognized over the vesting period with a corresponding charge as a share-based compensation expense.
| 11 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
4. Material Accounting Policies (continued)
Equity-settled share-based payments
Equity-settled share-based payments are RSU granted by the Company to outside service providers to compensate service provided. The fair value of the services is measured with reference to the fair value of RSU granted during the period of service. The service cost is recognized as expenses and RSU granted for the service is recognized as contributed surplus during the period of service.
Share capital
Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. Common shares issued for consideration other than cash, are valued based on their fair value at the date the shares are issued.
Flow-through shares
Expenditure deductions for income tax purposes related to exploratory activities funded by flow-through equity instruments are renounced to investors in accordance with income tax legislation. The proceeds from issuance are allocated between the offering of shares and the transfer of tax deductions. The allocation is made based on the difference between the quoted price of the existing shares and the amount the investor pays for the shares. A liability is recognized for this difference. The liability is reversed as eligible exploration expenditures are incurred and a flow through share premium is recognized at that time.
Special warrants
Special warrants are classified separately in equity. Once special warrants are converted to common share, relative fair value methods will be used to allocate total proceeds of the special warrant units to the common share and warrant in proportion to their relative fair values. Any fair value attributed to the warrants is recorded as contributed surplus.
Warrants
The Company has adopted a relative fair value method with respect to the measurement of shares and warrants issued as private placement units before listed on TSX Venture Exchange (the “Listing”). The relative fair value method allocates total proceeds of the private placement units to the shares and warrants in proportion to their relative fair values. Any fair value attributed to the warrants is recorded as contributed surplus.
The Company has elected not to remeasure fair value of warrants issued when modify the terms and conditions of the warrants.
The Company has adopted residual method with respect to the measurement of shares and warrants issued for conversion of Special Warrants and private placement after the Listing. Under the residual method, one component is measured first, and the residual amount is allocated to the remaining component. Any residual value attributed to the warrants is recorded as contributed surplus.
Income taxes
Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.
| 12 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
4. Material Accounting Policies (continued)
Income taxes (continued)
Deferred tax is recorded using the statement of financial position liability method, providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that is not a business combination, affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities on an undiscounted basis, using tax rates enacted or substantively enacted at the statement of financial position date.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Earnings/Loss per share
Basic earnings/loss per share is computed by dividing the net income or loss attributable to the owners of the Company by the weighted average number of common shares outstanding for the relevant period.
Diluted earnings/loss per share is determined by adjusting the earnings or loss attributable to the owners of the Company and the weighted average number of common shares outstanding for the effects of dilutive instruments, which includes stock options and common share purchase warrants, as if their dilutive effect was at the beginning of the period. The calculation of the diluted number of common shares assumes that proceeds received from the exercise of “in-the-money” stock options and common share purchase warrants are used to purchase common shares of the Company at their average market price for the period. In periods that the Company reports a net loss, per share amounts are not presented on a diluted basis as the result would be anti-dilutive.
New Accounting Standards Pronouncements
Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments
In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7). These amendments updated classification and measurement requirements in IFRS 9 Financial Instruments and related disclosure requirements in IFRS 7 Financial Instruments: Disclosures. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance (ESG)-linked features and other similar contingent features. The IASB added disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs and amended disclosures relating to equity instruments designated at fair value through other comprehensive income.
The amendments are effective for annual periods beginning on or after January 1, 2026, with early application permitted. Management is currently assessing the effect of these amendments on our financial statements.
| 13 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
4. Material Accounting Policies (continued)
IFRS 18 – Presentation and Disclosure in Financial Statements (continued)
In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements, which replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by requiring income and expenses to be presented into the three defined categories of operating, investing and financing, and by specifying certain defined totals and subtotals. Where company-specific measures related to the income statement are provided, IFRS 18 requires companies to disclose explanations around these measures, which are referred to as management-defined performance measures. IFRS 18 also provides additional guidance on principles of aggregation and disaggregation which apply to the primary financial statements and the notes. IFRS 18 will not affect the recognition and measurement of items in the financial statements, nor will it affect which items are classified in other comprehensive income and how these items are classified. The standard is effective for reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective application is required, and early application is permitted. Management is currently assessing the effect of this new standard on our financial statements.
As of July 31, 2025, there are no other IFRS or IFRIC interpretations with future effective dates that are expected to have a material impact on the Company.
5. Cash and cash equivalents
Cash and cash equivalents include cash in the bank, cashable GIC and short term GICs. As at July 31, 2025, the short term GICs carried interest rates ranging from 1.45% to 2.90% per annum (2024: 4.58% to 5.25%). A summary of cash and cash equivalents is as follow:
| July 31, 2025 | July 31, 2024 | |||||||
| Cash | $ | 4,413,626 | $ | 1,785,102 | ||||
| Short term GICs | 430,290 | 2,256,220 | ||||||
| Total | $ | 4,843,916 | $ | 4,041,322 | ||||
6. Prepaid expenses
As at July 31, 2025, the Company had $314,141 (July 31, 2024 - $312,715) prepaid general and administrative expenses and $192,767 prepaid exploration expenses (July 31, 2024 - $110,710).
7. Exploration and Evaluation Assets
Exploration and Evaluation (“E&E”) assets consist of costs to acquire the Company’s projects which are pending determination of technical feasibility and commercial viability in Canada and USA.
Michelle Project
On November 2, 2021, the Company finalized a purchase agreement with Silver Range Resources Ltd. (“Silver Range”) to acquire 100% interest in the Silver-Lead Zinc-Antimony-Gallium Project (“Michelle Property”) located in central Yukon.
On November 15, 2021, the Company issued 5,650,000 common shares to Silver Range at a price of $0.50 per share with total cost of $2,825,000 to close the purchase and sale transaction as below:
| ● | The Company owns 100% interest in the Michelle Property | |
| ● | Granting Silver Range a 1% Net Smelter Return. The Company will have a right of first refusal on the sale of the royalty. |
| 14 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
7. Exploration and Evaluation Assets (continued)
Adams Plateau Project
From August 30, 2022 to May 18, 2023, the Company signed 4 Mineral Claims Purchase Sales Agreements (the “AP Agreements”) with 6 beneficiary owners of Adams Plateau Property (the “AP Property”) located in Kamloops, British Columbia to acquire the AP property.
Pursuant to the AP Agreements, the Company obtained 100% interest in the AP Property with total cost of $230,500 and commitments as below:
| ● | From August 30, 2022 to May 18, 2023, the Company paid 6 beneficiary owners total of $78,000 in cash; | |
| ● | On March 24, 2023, the Company issued 200,000 common shares to 3 beneficiary owners at a price of $0.75 to $0.80 with total value of $152,500. | |
| ● | Granting 1 beneficiary owner a 1% Net Smelter Return (the “Royalty”) on all minerals produced from the AP property; and | |
| ● | Silver47 holds the option to purchase the 1% Royalty from the beneficiary owner at any time prior to commercial production for $500,000 payable in cash or shares or any combination thereof. |
Red Mountain Project
On October 6, 2023, the Company closed purchase transactions under the Mineral Property Purchase and Sales Agreement with White Rock and its subsidiary companies, Atlas Resources Pty Ltd., and White Rock (RM) Inc. (collectively, the “Sellers”) to acquire 100% of Red Mountain VMS Project (the “RM Property”) located in central Alaska, USA with cost of $8,048,400 including below:
| ● | USD $400,000 in cash. | |
| ● | 10,000,000 common shares of the Company issued at a price of $0.75 (the “Deemed Issue Price”) for total value of $7,500,000. |
The Company and Sellers also agreed to the following responsibility which arise post-closing:
| ● | Carry forward work credits for the Property of USD $385,100 each year from September 1, 2023 through September 26, 2026 will be available to apply for the Company. |
As at July 31, 2025, the Company has invested as below to acquire various projects as a result of the above transactions:
| Michelle Project | Adams Plateau Project | Red Mountain Project | Total | |||||||||||||
| Balance as of July 31, 2023 | $ | 2,825,000 | $ | 230,500 | $ | - | 3,055,500 | |||||||||
| Acquisition cost | - | - | 8,048,400 | 8,048,400 | ||||||||||||
| Foreign currency translation adjustment | - | - | 72,194 | 72,194 | ||||||||||||
| Balance as of July 31, 2024 | 2,825,000 | 230,500 | 8,120,594 | 11,176,094 | ||||||||||||
| Foreign currency translation adjustment | - | - | 20,582 | 20,582 | ||||||||||||
| Balance as of July 31, 2025 | 2,825,000 | 230,500 | 8,141,176 | 11,196,676 | ||||||||||||
| 15 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
7. Exploration and Evaluation Assets (continued)
During the years ended July 31, 2025 and 2024, the Company incurred the following exploration expenditures:
| July 31, 2025 | July 31, 2024 | |||||||
| $ | $ | |||||||
| Geology data and software | 35,243 | 22,113 | ||||||
| Insurance | 13,778 | - | ||||||
| Mapping | - | 7,030 | ||||||
| Outsource drilling and exploration expenses | 3,703,622 | 1,865,594 | ||||||
| Permitting | 491,905 | 370,196 | ||||||
| Salary expense | 352,709 | 169,309 | ||||||
| Tools and consumable supplies | - | 136,960 | ||||||
| Travel | 98,038 | 16,519 | ||||||
| Total | 4,695,295 | 2,587,721 | ||||||
8. Share based payment liabilities
Under the Company’s Share Compensation Plan (the “Plan”), the RSUs granted shall become vested in accordance with schedules set up in the RSU agreements. At the option of the participant, the participant may choose to receive (i) a lump sum payment in cash equal to the number of vested RSUs multiplied by the market value of a common share on the payout date; (ii) the number of underlying common shares or; (iii) any combination of the foregoing.
The Company measures the cost of cash-settled share-based transactions by reference to the fair value of the equity instruments at the date at which they are granted.
Until the liabilities are settled, the Company remeasure the fair value of the liabilities at the end of each reporting period and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.
On April 9, 2025, the Company issued 925,000 shares to settle RSUs vested and recognized $46,250 gain on changes of fair value for share-based payments liabilities from the settlement. (Note 9b)
During the year ended July 31, 2025, the Company recognized loss of $13,853 (2024 - $Nil) on changes of fair value for share-based payment liabilities.
The changes in RSUs during the year ended July 31, 2025 are as follows:
| Number of RSUs | ||||
| RSUs outstanding, as at July 31, 2023 | - | |||
| Granted | 2,600,000 | |||
| Cancelled | (250,000 | ) | ||
| RSUs outstanding, as at July 31, 2024 | 2,350,000 | |||
| Granted | 800,0001 | |||
| Exercised | (925,000 | ) | ||
| RSUs outstanding, as at July 31, 2025 | 2,225,000 | |||
1 RSU granted to outside service provider for service provided (Note 9h)
Total share-based compensation expenses of $841,230 (2024 – $710,495) for the year ended July 31, 2025 were recognized.
| 16 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
8. Share based payment liabilities (continued)
As at July 31, 2025, share based payment liabilities were $1,075,329 (July 31, 2024 - $710,495) based on the estimated fair value of $0.94 (July 31, 2024 - $0.75). The RSUs vest and are payable based on vesting schedules set up in the RSU agreements. $1,075,329 (July 31, 2024 - $470,229) were included in share-based payment liabilities – current and $Nil (July 31, 2024 - $240,266) were included in share-based payment – long term based on RSUs vest and payable date.
9. Share Capital
a) Authorized
Unlimited number of common shares with no par value.
b) Issued and Outstanding
As at July 31, 2025, the Company has the following common shares issued:
| Number of Common Shares | Share Capital $ | |||||||
| Balance at July 31, 2023 | 33,746,467 | 6,243,031 | ||||||
| Issued capital for acquisition | 10,000,000 | 7,500,000 | ||||||
| Balance at July 31, 2024 | 43,746,467 | 13,743,031 | ||||||
| Issued capital for special warrants conversion | 6,297,393 | 4,216,691 | ||||||
| Issued capital for special RSU settlement | 925,000 | 490,250 | ||||||
| Issued capital for private placement | 19,467,592 | 8,974,727 | ||||||
| Balance at July 31, 2025 | 70,436,452 | 27,424,699 | ||||||
On October 6, 2023, the Company issued 10,000,000 common shares to the beneficiary owners of RM Property for acquisition. Total value of the share insurance is $7,500,000 with 10,000,000 common shares at $0.75 (Note 7).
On November 6, 2024, the Company issued 6,297,393 common shares to exercise Special Warrants issued in the private placement during year ended July 31, 2024 (Note 9f).
From March 5 to April 4, 2025, the Company completed non-broker private placement. The Company issued 18,538,400 units of common share at $0.50 each (the ‘Unit”) for gross proceeds of $9,269,200, and 929,192 flow-through unit at $0.57 each (the “FT Unit”) for gross proceeds of $529,639. (the “Non-Broker Offering”). $65,044 flow through share liabilities recognized for the FT Units issued.
Each Unit will consist of one common share of the Company (the “Common Share”) and one-half of one common share purchase warrant (a “Half-Warrant”, with two Half-Warrants being referred to as a “Warrant”). Each Warrant shall entitle the holder thereof to acquire one Common Share at a price of $0.75 within 36 months following issuance.
Each FT Unit will consist of one Common Share and a Half-Warrant (subject to the same terms as indicated above), each issued as a “flow-through share” pursuant to the Income Tax Act (Canada).
The Company paid the finder’s fee of $336,233 and the legal and transfer agent fees of $213,916 for the Non-Broker Offering.
On April 9, 2025, the Company issued 925,000 common shares to settle RSUs vested for a total value of $490,250. (Note 8)
| 17 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
9. Share Capital (continued)
c) Flow-through shares
During the year ended July 31, 2025, the Company raised $529,639 on a CEE flow-through share basis and was required to incur a net total of $529,639 of qualifying expenditures to renounce the tax deductions to investors.
As at July 31, 2025, the Company has $Nil (2024 - $Nil) flow-through share premium liability. The Company incurred $529,639 of qualifying expenditure during the year to offset the liability.
The flow-through share premium of $65,043 (2024 - $Nil) was recognized for the year ended July 31, 2025.
d) Escrow shares
As at July 31, 2025, there were 5,393,027 shares in escrow (2024 – Nil).
e) Share options
On September 30, 2021, the Company has implemented a Share Compensation Plan (“the Plan”) in which 10% of the total number of common shares that are issued and outstanding can be granted.
All stock options expire in ten years and vest based on terms and conditions set out in the stock option agreements. A summary of the Company’s stock option plan activities is as follows:
| Number of Options | Weighted Average Exercise Price | |||||||
| Options outstanding, as at July 31, 2023 | 1,850,000 | $ | 0.50 | |||||
| Granted | 100,000 | $ | 0.75 | |||||
| Options outstanding, as at July 31, 2024 | 1,950,000 | $ | 0.51 | |||||
| Granted | 2,600,000 | $ | 0.60 | |||||
| Options outstanding, as at July 31, 2025 | 4,550,000 | $ | 0.56 | |||||
As July 31, 2025, the weighted-average life of the options outstanding was 8.22 years (2024 – 7.28 years). Details of stock options outstanding as at July 31, 2025 were as follows:
| Exercise price | Weighted average contractual life | Number of options outstanding | Number of options exercisable | ||||||||||
| $0.50 | 6.17 | 1,850,000 | 1,850,000 | ||||||||||
| $0.60 | 9.68 | 2,600,000 | 1,150,000 | ||||||||||
| $0.75 | 8.34 | 100,000 | 50,000 | ||||||||||
| Total | 8.22 | 4,550,000 | 3,050,000 | ||||||||||
Total share-based compensation expenses of $940,250 (2024 – $35,786) for the year ended July 31, 2025 were recognized based on the estimated fair value of the options on the grant date using the Black-Scholes option pricing model with the following assumptions:
| 2025 | 2024 | |||||||
| Risk-free rate | 2.89 | % | 3.56 | % | ||||
| Dividend yield | nil | nil | ||||||
| Annualized volatility | 121.44 | % | 121.50 | % | ||||
| Fair value at grant date | $ | 0.60 | $ | 0.75 | ||||
| Expected life | 10 years | 10 years | ||||||
| 18 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
9. Share Capital (continued)
f) Special Warrants
The following was a summary of special warrant outstanding as at July 31, 2025:
Number of Special Warrants | Special Warrants Capital | |||||||
| # | $ | |||||||
| Special warrants outstanding and exercisable, as at July 31, 2023 | - | - | ||||||
| Special warrants issued | 6,297,393 | 5,037,914 | ||||||
| Special warrants issuance cost | - | (191,484 | ) | |||||
| Special warrants outstanding and exercisable, as at July 31, 2024 | 6,297,393 | 4,846,430 | ||||||
| Special warrants converted | (6,297,393 | ) | (4,846,430 | ) | ||||
| Special warrants outstanding and exercisable, as at July 31, 2025 | - | - | ||||||
On April 2, 2024, the board of the Company approved to complete a private placement of up to 6,250,000 Special Warrants of the Company, in one or more tranches, at a price of $0.80 per Special Warrant for aggregate proceeds of up to $5,000,000 (the “Private Placement”). Each Special Warrant entitles the holder to receive one unit of Common Share of the Company and one half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant entitles the holder to purchase one Common Share at price of $1.00 per share until the expire date.
During the year ended July 31, 2024, the Company issued 6,297,393 Special Warrants for proceeds of $5,037,915 under the terms of the Private Placement. Finder’s fee consists of $82,403 in cash and 103,005 Warrants valued at $41,271 using Black-Scholes pricing model (Note 9g). The Company also incurred $67,810 in cash related to share issuance costs.
On November 6, 2024, the Company issued 6,297,393 common shares and 3,148,695 warrants to exercise 6,297,393 Special Warrants issued in the private placement during the year ended July 31, 2024.
A fair value of $4,408,175 was attributed to share capital based on $0.70 per common share on the first day the Company listed on TSX Venture Exchange (“TSXV”). The residual value of $629,739 was attributed to the warrants. Upon conversion of Special Warrants to Common Shares and Warrants, the Company recognized $191,484 Special Warrants issuance cost as share issuance cost.
As at July 31, 2025, the Company has Nil (2024 – 6,297,393) Special Warrants outstanding.
g) Warrants
In March 2023, the Company extended the exercise period of all of its common share purchase warrants (the “Warrants”) by two (2) years from the effective date of listing of the Company’s common shares on the TSX Venture Exchange or other stock exchange in Canada (the “Extended Expiry Date”).
The Extended Expiry Date supersedes and replaces the expiry date set forth in the original warrant certificate. All other terms of the Warrants remain the same and unamended.
The Company listed its common share on TSXV on November 14, 2024 and replaced the expiry date of 7,108,043 Warrants by November 14, 2026 accordingly.
| 19 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
9. Share Capital (continued)
g) Warrants (continued)
The following is a summary of warrant transactions for the year ended July 31, 2025:
| Number of Warrants | ||||
| Warrants outstanding, as at July 31, 2023 | 7,108,043 | |||
| Granted | 103,005 | |||
| Warrants outstanding, as at July 31, 2024 | 7,211,048 | |||
| Granted | 13,551,649 | |||
| Warrants outstanding, as at July 31, 2025 | 20,762,697 | |||
The following warrants were outstanding and exercisable as at July 31, 2025:
| Expire Date | Exercise Price $ | Number of Warrants Outstanding | Weighted Average Contractual Life (years) | |||||||||
| June 06, 2026 | 0.80 - 1.00 | 16,625 | 0.85 | |||||||||
| November 14, 2026 | 0.50 - 1.00 | 10,343,118 | 1.29 | |||||||||
| March 05, 2028 | 0.75 | 4,319,684 | 2.60 | |||||||||
| March 12, 2028 | 0.75 | 2,097,940 | 2.62 | |||||||||
| March 21, 2028 | 0.75 | 2,081,450 | 2.64 | |||||||||
| April 04, 2028 | 0.75 | 1,903,880 | 2.68 | |||||||||
| 20,762,697 | 1.96 | |||||||||||
During the year ended July 31, 2024, 103,005 common shares purchase warrants were granted for Finder’s fee of the Special Warrants Private Placement. The Company recorded fair value of $47,271 for the warrants granted.
The fair value of the share warrants granted was estimated to be $0.35 - $0.41 per warrant at the date of grant using Black-Scholes option pricing model with following assumptions:
| Risk-free rate | 2.39% - 2.59% | |||
| Warrants exercise price | $ | 0.75 | ||
| Dividend yield | nil | |||
| Annualized volatility | 92.49% - 92.98% | |||
| Expected life | 3 years | |||
On November 6, 2024, the Company issued 3,148,695 warrants to exercise Special Warrants, $629,739 was attributed to the warrants issued under the residual value method (Note 9f).
From March 5 to April 4, 2025, the Company issued 9,733,796 warrants and 669,158 finder’s warrants for the Non-Broker Offering (Note 9b).
h) Equity-settled share -based payments
On May 15, 2025, the Company issued 800,000 RSU to a service provider for 2-year services. During the year ended July 31, 2025, $67,994 service cost and equity-settled share-based payments are recognized based on 83,333 shares of RSU earned at average share price of $0.82.
| 20 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
10. General and administrative expenses
General and administrative expenses for the years ended July 31, 2025, and 2024:
| 2025 | 2024 | |||||||
| $ | $ | |||||||
| Audit and accounting fees | 128,260 | 79,109 | ||||||
| Consulting fees | 1,124,632 | 391,795 | ||||||
| Office and administrative | 138,880 | 50,349 | ||||||
| Legal fees | 842,073 | 281,552 | ||||||
| Management and directors’ fee | 817,500 | 317,664 | ||||||
| Marketing and investor relation fees | 677,925 | 128,410 | ||||||
| Transfer agent and filing fees | 61,716 | 4,221 | ||||||
| Total | $ | 3,790,986 | $ | 1,253,100 | ||||
11. Income Taxes
The following table reconciles the expected income tax expense (recovery) at the Canadian statutory income tax rates to the amounts recognized in the statement of operations and comprehensive loss for the years ended July 31, 2025 and 2024:
| July 31, 2025 | July 31, 2024 | |||||||
| $ | $ | |||||||
| Net loss before tax | (10,130,666 | ) | (4,519,965 | ) | ||||
| Statutory tax rate | 27 | % | 27 | % | ||||
| Expected income tax (recovery) | (2,735,280 | ) | (1,220,391 | ) | ||||
| Change in estimates | - | - | ||||||
| Share issuance costs | (148,540 | ) | (51,701 | ) | ||||
| Change in deferred tax asset not recognized | 2,195,639 | 930,956 | ||||||
| Flow Through Share Premium | (17,562 | ) | - | |||||
| Non-deductible items | 483,627 | 202,105 | ||||||
| Tax rate differences in foreign jurisdiction | 222,116 | 139,031 | ||||||
| Total tax expense (recovery) | - | - | ||||||
The unrecognized deductible temporary differences as at July 31, 2025 and 2024 are comprised of the following:
| July 31, 2025 | July 31, 2024 | |||||||
| $ | $ | |||||||
| Non-capital loss carry forwards | 6,515,832 | 2,609,891 | ||||||
| Share issuance costs | 681,591 | 362,233 | ||||||
| Exploration and evaluation assets | 8,186,325 | 3,435,644 | ||||||
| Undepreciated capital costs | 76,904 | 74,330 | ||||||
| Total unrecognized deductible temporary differences | 15,460,652 | 6,482,098 | ||||||
The Company has not recognized non-capital loss carry forwards of approximately $6,279,167 (2024: $2,273,764) which may be carried forward to apply against future income for Canadian income tax purposes, subject to the final determination by taxation authorities.
The Company has not recognized net operating losses of approximately $236,665 (2024 - $336,127) which may be carried forward to apply against future income for US income tax purposes, subject to the final determination by taxation authorities. The non-capital loss and net operating losses expire in the following years:
| 21 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
11. Income taxes (continued)
Expiry | Non-capital losses $ | ||||
| 2041 | 233,562 | ||||
| 2042 | 316,515 | ||||
| 2043 | 618,427 | ||||
| 2044 | 1,105,260 | ||||
| 2045 | 4,005,403 | ||||
| Indefinitely | 236,665 | ||||
| 6,515,832 |
12. Capital Risk Management
The Company’s objectives are to safeguard the Company’s ability to continue as a going concern in order to support the Company’s normal operating requirements and future acquisitions of mineral properties, and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares, debt, acquire or dispose of assets or adjust the amount of cash.
At July 31, 2025, the Company’s capital structure consists of the equity of the Company. The Company is not subject to any externally imposed capital requirements. In order to maximize ongoing development efforts, the Company does not pay dividends.
13. Financial Instruments
13.1 Financial risk management objectives and policies
The financial risk arising from the Company’s operations are credit risk and liquidity risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how the Company mitigates these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.
13.2 Fair value of financial instruments
The fair value hierarchy established by IFRS 13 Fair Value Measurement has three levels to classify the inputs to valuation techniques used to measure fair value as described below:
Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted market prices that are observable for the assets or liabilities either directly or indirectly; and
Level 3 – inputs that are not based on observable market data.
| Financial Instruments | Classification | |
| Cash and cash equivalents | Amortized cost | |
| Accounts payable and accrued liabilities | Amortized cost | |
| Share based payment liabilities | Fair value through profit and loss |
| 22 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
13. Financial Instruments (continued)
The fair value of the Company’s financial instruments carried at amortized cost approximate their carrying values due to their short-term nature.
13.3 Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Credit risk for the Company is primarily associated with the Company’s bank balances. The Company mitigates credit risk associated with its bank balance by holding cash with large, reputable financial institutions.
13.4 Liquidity risk
Liquidity risk is the risk that the Company will not be able to settle or manage its obligations associated with financial liabilities. To manage liquidity risk, the Company closely monitors its liquidity position and ensures it has adequate sources of funding to finance its projects and operations. The Company’s working capital as at July 31, 2025 was $2,583,701 (2024 – $2,296,529). The Company’s accounts payable and accrued liabilities are expected to be realized or settled, respectively, within a one-year period.
14. Related Party Transactions
Transaction with Key Management Personnel
Key management personnel are persons responsible for planning, directing and controlling the activities of an entity. The remuneration of directors and key management personnel during the years ended July 31, 2025, and 2024 were as follows:
| July 31, 2025 | July 31, 2024 | |||||||
| Management consulting fees | $ | 677,500 | $ | 277,664 | ||||
| Director’s fees | 140,000 | 40,000 | ||||||
| Share-based compensation | 713,307 | 393,750 | ||||||
| Total | $ | 1,530,807 | $ | 711,414 | ||||
As at July 31, 2025, there was $323 (2024 - $Nil) due to related parties included in accounts payables and accrued liabilities.
15. Subsequent Events
On August 1, 2025, the Company completed the previously announced acquisition of Summa Silver Corp. (“Summa”) whereby the Company issued 55,269,408 common shares of the Company to acquire 100% of the issued and outstanding shares of Summa. Concurrent with the closing, the Company completed the subscription receipt financing and issued 12,475,400 common shares for gross proceeds of $6,900,000 and 6,237,600 warrants exercisable at $0.796 per warrant. As part of the transaction, the Company issued 1,446,650 advisory units of Company which include 1,446,650 common shares 723,324 advisory warrants exercisable at $0.796 and expire on August 1, 2027. In addition, the Company issued 667,421 broker warrants and 66,895 advisory warrants exercisable at $0.796 and expire on August 1, 2027.
On August 12, 2025, the Company issued 25,000 common shares for proceeds of $15,000 pursuant to the exercise of stock options.
| 23 |
Silver47 Exploration Corp.
Notes to the Consolidated Financial Statements
For the years ended July 31, 2025 and 2024
(Expressed in Canadian dollars)
15. Subsequent Events (continued)
On September 16, 2025, the Company closed a brokered financing whereby the Company issued 32,857,800 units for gross proceeds of $23,000,460. Each unit consists of one common share and one-half warrant, with each full warrant being exercisable into a common share of the Company at $1.00. In addition, the Company paid cash commissions of $1,193,175 and issued an aggregate of 1,704,536 broker warrants of the Company. Each broker warrant is exercisable to acquire one common share at a price of $0.70 until Sept. 16, 2028. In addition, the Company paid an advisory fee of $179,342 and issued 256,204 advisory warrants of the Company on the same terms as the broker warrants.
On September 19, 2025, the Company granted 5,300,000 stock options with an exercise price of $0.78. The stock options have a term of 5 years and vest immediately.
On September 19, 2025, the Company granted 180,000 RSUs of which, 90,000 vest on September 19, 2026 and 90,000 vest on September 19, 2027.
On October 13, 2025, 918,820 stock options with an exercise price of $3.12 expired unexercised.
On October 17, 2025, the Company issued 100,000 common shares for proceeds of $50,000 pursuant to the exercise of stock options.
On October 21, 2025, the Company issued 300,000 common shares for proceeds of $150,000 pursuant to the exercise of stock options.
On January 8, 2026, the Company issued 100,000 common shares for proceeds of $60,000 pursuant to the exercise of stock options.
On January 14, 2026, the Company issued 1,058,334 common shares to settle certain RSUs which had a fair value of $1,037,167 on the date of settlement.
On January 14, 2026, the Company completed a bought deal public offering of 32,857,800 units at $1.05 per unit for gross proceeds of $34,500,690, with each unit consisting of one common share and one-half of a common share purchase warrant exercisable at $1.40 per share until January 14, 2029. The Company allocated $1,150,023 to the warrant component under the residual method. In connection with the financing, the Company paid cash commissions of $1,965,433 and issued an aggregate of 1,970,887 broker warrants of the Company. Each broker warrant is exercisable to acquire one common share at a price of $1.05 until January 14, 2029. The fair value of the broker warrants was determined to be $858,518 using the Black-Scholes Option Pricing Model. In addition, the Company incurred other share issuance costs of $605,308.
On February 2, 2026, the Company issued 25,000 common shares for proceeds of $15,000 pursuant to the exercise of stock options.
On April 24, 2026, the Company issued 56,902 common shares to pursuant to certain mining lease agreements respecting the Mogollon Property (Note 7). The common shares had a fair value of $36,986 based on the Company’s share price on the date of issuance.
On June 30, 2026, the Company issued 800,000 common shares pursuant to vested RSUs.
On July 30, 2026, the Company issued 166,666 common shares pursuant to vested RSUs.
On August 25, 2026, the Company issued 300,000 common shares for proceeds of $160,000 pursuant to the exercise of stock options.
On August 26, 2026, the Company issued 100,000 common shares for proceeds of $60,000 pursuant to the exercise of stock options.
On September 1, 2026, the Company issued 200,000 common shares for proceeds of $100,000 pursuant to the exercise of stock options.
Subsequent to the year-ended July 31, 2025, the Company issued 1,649,609 common shares for proceeds of $1,463,102 pursuant to the exercise of warrants.
| 24 |
Exhibit 99.2
SILVER47 EXPLORATION CORP.
Condensed Interim CONSOLIDATED Financial Statements
For the THREE AND NINE months ended
APRIL 30, 2026 and 2025
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)
Silver47 Exploration Corp.
Condensed Interim Consolidated Statements of Financial Position (Unaudited)
(Expressed in Canadian dollars)
| As at | Note | April 30, 2026 | July 31, 2025 | |||||||||
| $ | $ | |||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 5 | 49,000,014 | 4,843,916 | |||||||||
| Tax and other receivables | 184,842 | 107,724 | ||||||||||
| Prepaid expenses | 6 | 3,060,981 | 506,908 | |||||||||
| 52,245,837 | 5,458,548 | |||||||||||
| Non-current assets | ||||||||||||
| Restricted cash | 216,213 | - | ||||||||||
| Property and equipment | 164,348 | 8,150 | ||||||||||
| Exploration and evaluation assets | 7 | 74,794,340 | 11,196,676 | |||||||||
| 75,174,901 | 11,204,826 | |||||||||||
| TOTAL ASSETS | 127,420,738 | 16,663,374 | ||||||||||
LIABILITIES | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable and accrued liabilities | 1,646,800 | 1,799,518 | ||||||||||
| Share based payment liabilities | 8 | 108,334 | 1,075,329 | |||||||||
| TOTAL LIABILITIES | 1,755,134 | 2,874,847 | ||||||||||
EQUITY | ||||||||||||
| Share capital | 9b | 145,086,538 | 27,424,699 | |||||||||
| Contributed surplus | 9e,g,h | 19,710,035 | 4,984,512 | |||||||||
| Accumulated deficit | (38,471,449 | ) | (18,670,227 | ) | ||||||||
| Foreign currency translation reserve | (659,520 | ) | 49,543 | |||||||||
| TOTAL EQUITY | 125,665,604 | 13,788,527 | ||||||||||
| TOTAL LIABILITIES AND EQUITY | 127,420,738 | 16,663,374 | ||||||||||
Commitments (Note 7)
Approved by the Board of Directors:
| /s/ “Gary Thompson” | /s/ “Ryan Goodman” | |
| Gary Thompson | Ryan Goodman | |
| Director | Director |
The accompanying notes are an integral part of these condensed interim consolidated financial statements
| 2 |
Silver47 Exploration Corp.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited)
(Expressed in Canadian dollars)
| Three months ended | Nine months ended | |||||||||||||||||||
| Note | April 30, 2026 | April 30, 2025 | April 30, 2026 | April 30, 2025 | ||||||||||||||||
| $ | $ | |||||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Exploration expenses | 7 | 4,240,330 | 766,166 | 8,566,413 | 1,884,486 | |||||||||||||||
| General and administrative expenses | 10 | 1,259,703 | 1,016,891 | 5,265,539 | 2,127,847 | |||||||||||||||
| Share-based compensation | 8,9e | 1,645,805 | 814,400 | 6,628,486 | 1,358,634 | |||||||||||||||
| Depreciation expenses | 25,158 | 687 | 39,171 | 687 | ||||||||||||||||
| 7,170,996 | 2,598,144 | 20,499,609 | 5,371,654 | |||||||||||||||||
| Other items | ||||||||||||||||||||
| Interest income | (303,267 | ) | (30,233 | ) | (532,473 | ) | (46,074 | ) | ||||||||||||
| Flow through share premium | - | (21,909 | ) | - | (21,909 | ) | ||||||||||||||
| Change in fair value of share-based payment liabilities | 8 | (57,291 | ) | (7,170 | ) | 63,022 | (286,844 | ) | ||||||||||||
| Foreign exchange loss (gain) | (13,569 | ) | 224,506 | 17,771 | 8,077 | |||||||||||||||
| (374,127 | ) | 165,194 | (451,680 | ) | (346,750 | ) | ||||||||||||||
| Net loss | 6,796,869 | 2,763,338 | 20,047,929 | 5,024,904 | ||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||
| Translation gain on foreign operations | (73,966 | ) | 191,765 | 709,063 | (12,438 | ) | ||||||||||||||
| Comprehensive loss | 6,722,903 | 2,955,103 | 20,756,992 | 5,012,466 | ||||||||||||||||
| Weighted average number of shares – basic and diluted | 208,600,756 | 60,625,958 | 180,759,621 | 51,256,166 | ||||||||||||||||
| Loss per share – basic and diluted | $ | 0.03 | $ | 0.05 | $ | 0.11 | $ | 0.10 | ||||||||||||
The accompanying notes are an integral part of these condensed interim consolidated financial statements
| 3 |
Silver47 Exploration Corp.
Condensed Interim Consolidated Statements of Changes in Equity (Unaudited)
(Expressed in Canadian dollars)
| Contributed Surplus | ||||||||||||||||||||||||||||||||||||
| Number of Common Shares | Number of Special Warrants | Share Capital | Special Warrants | Share-based payment reserve | Warrant Reserve | Foreign Currency Translation Reserve | Accumulated Deficit | Total | ||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Balance at July 31, 2024 | 43,746,467 | 6,297,393 | 13,743,031 | 4,846,430 | 1,176,371 | 1,961,238 | 44,848 | (8,539,561 | ) | 13,232,357 | ||||||||||||||||||||||||||
| Issued capital for special warrants conversion | 6,297,393 | (6,297,393 | ) | 4,216,691 | (4,846,430 | ) | - | 629,739 | - | - | - | |||||||||||||||||||||||||
| Stock based compensation | - | - | - | - | 680,847 | - | - | - | 680,847 | |||||||||||||||||||||||||||
| Issued capital for RSU settlement | 925,000 | - | 490,250 | - | - | - | - | - | 490,250 | |||||||||||||||||||||||||||
| Issued capital for private placement | 19,467,592 | - | 9,184,980 | - | - | - | - | - | 9,184,980 | |||||||||||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | - | - | 12,438 | (5,024,904 | ) | (5,012,466 | ) | |||||||||||||||||||||||||
| Balance at April 30, 2025 | 70,436,452 | - | 27,634,952 | - | 1,857,218 | 2,590,977 | 57,286 | (13,564,465 | ) | 18,575,968 | ||||||||||||||||||||||||||
| Balance at July 31, 2025 | 70,436,452 | - | 27,424,699 | - | 2,184,615 | 2,799,897 | 49,543 | (18,670,227 | ) | 13,788,527 | ||||||||||||||||||||||||||
| Issued capital for Summa acquisition | 69,191,458 | - | 63,656,141 | - | 1,302,232 | 4,843,897 | - | - | 69,802,270 | |||||||||||||||||||||||||||
| Issued capital for financings | 65,715,600 | - | 56,351,127 | - | - | 1,150,023 | - | - | 57,501,150 | |||||||||||||||||||||||||||
| Share issuance costs | - | - | (5,694,995 | ) | - | - | 1,577,295 | - | - | (4,117,700 | ) | |||||||||||||||||||||||||
| Issued capital for options exercised | 550,000 | - | 579,235 | - | (289,250 | ) | - | - | - | 289,985 | ||||||||||||||||||||||||||
| Issued capital for warrants exercised | 1,649,609 | - | 1,696,178 | - | - | (233,076 | ) | - | - | 1,463,102 | ||||||||||||||||||||||||||
| Issued capital for exercised RSUs | 1,058,334 | - | 1,037,167 | - | - | - | - | - | 1,037,167 | |||||||||||||||||||||||||||
| Forfeited RSUs | - | - | - | - | - | (58,707 | ) | - | 246,707 | 188,000 | ||||||||||||||||||||||||||
| Issue capital for exploration and evaluation asset | 56,902 | - | 36,986 | - | - | - | - | - | 36,986 | |||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | 6,433,109 | - | - | - | 6,433,109 | |||||||||||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | - | - | (709,063 | ) | (20,047,929 | ) | (20,756,992 | ) | ||||||||||||||||||||||||
| Balance at April 30, 2026 | 208,658,355 | - | 145,086,538 | - | 9,630,706 | 10,079,329 | (659,520 | ) | (38,471,449 | ) | 125,665,604 | |||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed interim consolidated financial statements
| 4 |
Silver47 Exploration Corp.
Condensed Interim Consolidated Statements of Cash Flows (Unaudited)
(Expressed in Canadian dollars)
| Nine months ended | ||||||||
| April 30, 2026 | April 30, 2025 | |||||||
| $ | $ | |||||||
| Cash flows used in operating activities | ||||||||
| Net loss | (20,047,929 | ) | (5,024,904 | ) | ||||
| Adjusted for | ||||||||
| Interest income | (532,473 | ) | (46,074 | ) | ||||
| Items not involving cash | ||||||||
| Depreciation expense | 39,171 | 687 | ||||||
| Share-based compensation | 6,628,486 | 1,358,634 | ||||||
| Flow through share premium | - | (21,909 | ) | |||||
| Change in fair value of share-based payment liabilities | 63,022 | (286,844 | ) | |||||
| Foreign exchange gain | - | 10,402 | ||||||
| Net change in non-cash working capital items: | ||||||||
| Tax and other receivables | 48,568 | (48,858 | ) | |||||
| Prepaid expenses | (2,346,432 | ) | (357,907 | ) | ||||
| Accounts payable and accrued liabilities | (1,304,428 | ) | (1,513,880 | ) | ||||
| Net cash flows used in operating activities | (17,452,015 | ) | (5,930,653 | ) | ||||
Cash flows used in investing activities | ||||||||
| Interest income received | 532,473 | 52,492 | ||||||
| Investment in property and equipment | (195,368 | ) | (7,725 | ) | ||||
| Investment in exploration and evaluation assets | (361,485 | ) | - | |||||
| Cash acquired from acquisition of Summa | 6,494,309 | - | ||||||
| Net cash flow provided by investing activities | 6,469,929 | 44,767 | ||||||
Cash flows from financing activities | ||||||||
| Proceeds from financings | 57,501,150 | 9,798,839 | ||||||
| Share issuance costs | (4,117,700 | ) | (548,816 | ) | ||||
| Proceeds from exercise of options and warrants | 1,753,087 | - | ||||||
| Net cash flow provided by financing activities | 55,136,537 | 9,250,023 | ||||||
| Movement in cash and cash equivalents during the period | 44,154,451 | 3,364,137 | ||||||
| Effect of exchange rate changes on cash | 1,647 | 273 | ||||||
| Cash and cash equivalents, beginning of period | 4,843,916 | 4,041,322 | ||||||
| Cash and cash equivalents, end of period | 49,000,014 | 7,405,732 | ||||||
The accompanying notes are an integral part of these condensed interim consolidated financial statements
| 5 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 1. | Nature of Operations |
Silver47 Exploration Corp. (“Silver47” or “the Company”) is a company amalgamated in Canada on January 29, 2021. On September 11, 2023, the Company incorporated a 100% owned subsidiary, Silver47 USA Inc. (“S47 US”) under the law of the State of Delaware. On August 1, 2025, the Company acquired Summa Silver Corp. (“Summa” and its subsidiaries by way of a share exchange.
The Company currently trades on the TSX-V and the OTCQX Venture Market under the trading symbols “AGA” and “AAGAF” respectively.
The Company is engaged in mineral exploration of precious metal in Canada and USA. The Company’s head office is located at Suite 918 – 1030 West Georgia Street, Vancouver, British Columbia, V6E 2Y3, Canada.
| 2. | Basis of Preparation |
2.1 Statement of compliance
These unaudited condensed interim consolidated financial statements as at and for the three and nine months ended April 30, 2026 and 2025 have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting under IFRS® Accounting Standards, as issued by the International Accounting Standards Board (“IASB”) (“IFRS”). In addition, these condensed interim consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.
These condensed interim consolidated financial statements should be read in conjunction with the Company’s audited annual consolidated financial statements for the years ended July 31, 2025 and 2024.
These condensed interim consolidated financial statements were authorized for issue by the Company’s board of directors (the “Board”) on June 29, 2026.
2.2 Basis of presentation
The Company’s condensed interim consolidated financial statements have been prepared on an accrual basis and are based on historical cost basis, except for financial instruments which are classified as fair value through profit or loss, or fair value through other comprehensive income. The Company’s consolidated financial statements are presented in Canadian dollars (“CAD”) which is the functional currency of the Company and its Canadian subsidiaries, Summa Silver Corp and 1237025 BC Ltd. The functional currency of its US subsidiaries, S47 US, Summa Silver (US) Corp., Summa Silver Nevada Inc., and 1237025 Nevada Inc. is the US dollar.
| 3. | Material Accounting Policies |
The accounting policies and methods of computation applied by the Company in these condensed interim consolidated financial statements are the same as those applied in the Company’s audited annual consolidated financial statements for the years ended July 31, 2025 and 2024.
| 4. | Acquisition of Summa Silver Corp. |
On August 1, 2025, the Company acquired 100% of the issued and outstanding shares of Summa Silver Corp. (“Summa”) and its subsidiaries whereby the Company issued a total of 68,468,133 common shares. Additionally, the Company issued 723,325 advisory shares to certain advisors. The fair value of the share consideration issued was $63,656,141, based on the Company’s share price on the acquisition date. The fair value was determined using a level 1 input on August 1, 2025, the date of issuance. In addition, all outstanding stock options of Summa were exchanged for stock options of Silver47 (the “Replacement Options”) and all outstanding warrants of Summa became exercisable to acquire Silver47 common shares (the “Replacement Warrants”). The Company also issued 723,325 advisory warrants to certain advisors who consulted on the transaction (the “Advisory Warrants”).
| 6 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 4. | Acquisition of Summa Silver Corp. (continued) |
The Company accounted for the acquisition of Summa as an asset acquisition, as it did not meet the definition of a business under IFRS 3 Business Combinations. Accordingly, the transaction has been measured at the fair value of the equity consideration paid as determined based on IFRS 2, Share Based Payments. The following table summarizes the total consideration, the fair value of the acquired identifiable assets and liabilities assumed as of the date of acquisition:
| Fair value of common shares issued (Note 9) | $ | 63,656,141 | ||
| Fair value of Replacement Options (Note 9) | 1,302,232 | |||
| Fair value of Replacement Warrants (Note 9) | 4,511,196 | |||
| Fair value of Advisory Warrants (Note 9) | 332,701 | |||
| Total consideration | $ | 69,802,270 | ||
| Assets acquired: | ||||
| Cash | $ | 6,494,309 | ||
| Receivables | 125,686 | |||
| Prepaid expenses | 237,665 | |||
| Restricted cash | 218,339 | |||
| Prepaid expenses – non-current | 44,150 | |||
| Exploration and evaluation assets | 63,833,689 | |||
| Accounts payable and accrued liabilities | (1,151,568 | ) | ||
| Net assets acquired | $ | 69,802,270 |
The excess of purchase consideration over the net assets acquired was allocated across the exploration and evaluation assets acquired on a pro-rata basis (Note 7).
| 5. | Cash and cash equivalents |
Cash and cash equivalents include cash in the bank, and short term GICs. As at April 30, 2026, the short term GICs carried interest rates of 1.45% per annum (July 31, 2025: 1.45% to 2.90%). A summary of cash and cash equivalents is as follow:
| April 30, 2026 | July 31, 2025 | |||||||
| Cash | $ | 48,919,724 | $ | 4,413,626 | ||||
| Short term GICs | 80,290 | 430,290 | ||||||
| Total | $ | 49,000,014 | $ | 4,843,916 | ||||
| 6. | Prepaid expenses |
As at April 30, 2026, the Company had $2,261,885 (July 31, 2025 - $314,141) prepaid general and administrative expenses and $799,096 prepaid exploration expenses (July 31, 2025 - $192,767).
| 7. | Exploration and Evaluation Assets |
Exploration and Evaluation (“E&E”) assets consist of costs to acquire the Company’s projects which are pending determination of technical feasibility and commercial viability in Canada and USA.
Michelle Project
On November 2, 2021, the Company finalized a purchase agreement with Silver Range Resources Ltd. (“Silver Range”) to acquire 100% interest in the Silver-Lead Zinc-Antimony-Gallium Project (“Michelle Property”) located in central Yukon.
| 7 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 7. | Exploration and Evaluation Assets (continued) |
On November 15, 2021, the Company issued 5,650,000 common shares to Silver Range at a price of $0.50 per share with total cost of $2,825,000 to close the purchase and sale transaction as below:
| ● | The Company owns 100% interest in the Michelle Property | |
| ● | Granting Silver Range a 1% Net Smelter Return. The Company will have a right of first refusal on the sale of the royalty. |
Adams Plateau Project
From August 30, 2022 to May 18, 2023, the Company signed 4 Mineral Claims Purchase Sales Agreements (the “AP Agreements”) with 6 beneficiary owners of Adams Plateau Property (the “AP Property”) located in Kamloops, British Columbia to acquire the AP Property. Pursuant to the AP Agreements, the Company obtained 100% interest in the AP Property with total cost of $230,500 and commitments as below:
| ● | From August 30, 2022 to May 18, 2023, the Company paid 6 beneficiary owners total of $78,000 in cash; | |
| ● | On March 24, 2023, the Company issued 200,000 common shares to 3 beneficiary owners at a price of $0.75 to $0.80 with total value of $152,500. | |
| ● | Granting 1 beneficiary owner a 1% Net Smelter Return (the “Royalty”) on all minerals produced from the AP property; and | |
| ● | Silver47 holds the option to purchase the 1% Royalty from the beneficiary owner at any time prior to commercial production for $500,000 payable in cash or shares or any combination thereof. |
Red Mountain Project
On October 6, 2023, the Company closed purchase transactions under the Mineral Property Purchase and Sales Agreement with White Rock and its subsidiary companies, Atlas Resources Pty Ltd., and White Rock (RM) Inc. (collectively, the “Sellers”) to acquire 100% of Red Mountain VMS Project (the “RM Property”) located in central Alaska, USA with cost of $8,048,400 including below:
| ● | US$400,000 in cash. | |
| ● | 10,000,000 common shares of the Company issued at a price of $0.75 (the “Deemed Issue Price”) for total value of $7,500,000. |
The Company and Sellers also agreed to the following responsibility which arise post-closing:
| ● | Carry forward work credits for the Property of USD $385,100 each year from September 1, 2023 through September 26, 2026 will be available to apply for the Company. |
Hughes Project
On August 1, 2025, the Company acquired the Hughes Project in connection with its acquisition of Summa (Note 4). The Hughes Project is wholly owned by the Company as all option payment requirements were completed by Summa in 2022. The project is subject to a 1% net smelter royalty which may be reduced to 0.5% for additional payments of US$4,000,000.
Mogollon Project
On August 1, 2025, the Company acquired the Mogollon Project in connection with its acquisition of Summa (Note 4). The Mogollon Project was subject to an option agreement for which the requirements were fulfilled in 2023 by Summa, however, the project remains subject to certain mining lease agreements. The payment terms of the mining lease agreements are as follows:
| 8 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 7. | Exploration and Evaluation Assets (continued) |
| ● | $82,240 (US$63,042) on signing of the amended agreement (paid); | |
| ● | An additional US$99,067 on or before the 12-month anniversary, and each successive anniversary thereafter. Of the annual payments, as much as 75% may be paid in shares at least six months prior to the anniversary date, at the option of the Company. During the three and nine months ended April 30, 2026, the Company made cash payments to these lessors of $100,205 (US$67,771) and issued 56,902 common shares with a fair value of $36,986 as advance lease payment to the lessors. |
The Company has an additional lease agreement on the Mogollon property which was initially negotiated on April 9, 2019. Pursuant to this lease, the Company owes an annual base payment of US$10,000, which is adjusted to an amount equal to the change in the Production Price Index for industrial commodities as published by the United States Bureau of Labor Statistics on each anniversary.
The Company will also be subject to a production royalty on certain portions of the property of 4%. Portions of this royalty area may be brought down to 2% for staged payments of US$3,000,000.
On November 22, 2021, the Company signed an additional option agreement to earn a 100% interest in two patented mining claims (the “Patents”) covering the Eberle Mine immediately adjacent to the Mogollon property. The Company may earn a 100% interest in the Patents by making cash payments totaling US$700,000 over four years as follows:
| ● | $128,884 (US$100,000) on signing of the option agreement (paid); | |
| ● | An additional $199,320 (US$150,000) on or before the 12-month anniversary (paid); | |
| ● | An additional $207,285 (US$150,000) on or before the 24-month anniversary (paid); | |
| ● | An additional $209,160 (US$150,000) on or before the 36-month anniversary (paid); and | |
| ● | An additional US$150,000 on or before the 48-month anniversary (paid $209,457 during the nine months ended April 30, 2026). |
As of April 30, 2026, the payments with respect to the Eberle Mine has been completed. As a result, the Company will not be subject to any underlying royalties or other encumbrances.
Kennedy Project
On August 1, 2025, the Company acquired the Kennedy Project in connection with its acquisition of Summa (Note 4). The Kennedy Project was initially staked by Summa in 2025.
As at April 30, 2026, the Company has invested as below to acquire various projects as a result of the above transactions:
| Michelle Project | Adams Plateau Project | Red Mountain Project | Hughes Project | Mogollon Project | Kennedy Project | Total | ||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Balance as of July 31, 2024 | 2,825,000 | 230,500 | 8,120,594 | - | - | - | 11,176,094 | |||||||||||||||||||||
| Currency translation adjustment | - | - | 20,582 | - | - | - | 20,582 | |||||||||||||||||||||
| Balance as of July 31, 2025 | 2,825,000 | 230,500 | 8,141,176 | - | - | - | 11,196,676 | |||||||||||||||||||||
| Acquired from Summa (Note 4) | - | - | - | 36,619,354 | 27,050,712 | 163,623 | 63,833,689 | |||||||||||||||||||||
| Additions | - | 5,000 | - | - | 356,485 | - | 361,485 | |||||||||||||||||||||
| Currency translation adjustment | - | - | (126,357 | ) | (312,382 | ) | (157,236 | ) | (1,535 | ) | (597,510 | ) | ||||||||||||||||
| Balance as of April 30, 2026 | 2,825,000 | 235,500 | 8,014,819 | 36,306,972 | 27,249,961 | 162,088 | 74,794,340 | |||||||||||||||||||||
During the three and nine months ended April 30, 2026 and 2025, the Company incurred the following exploration expenditures:
| 9 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 7. | Exploration and Evaluation Assets (continued) |
| For the three months ended | For the nine months ended | |||||||||||||||
April 30, 2026 | April 30, 2025 | April 30, 2026 | April 30, 2025 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Geology data and software | - | 8,882 | - | 23,294 | ||||||||||||
| Insurance | - | 3,510 | - | 10,951 | ||||||||||||
| Outsource drilling and exploration expenses | 3,653,815 | 449,135 | 5,813,694 | 1,213,765 | ||||||||||||
| Permitting | 140,253 | 114,011 | 1,030,112 | 348,060 | ||||||||||||
| Salary expense | 243,710 | 183,841 | 1,520,055 | 264,416 | ||||||||||||
| Sampling and studies | 202,552 | - | 202,552 | - | ||||||||||||
| Travel | - | 6,787 | - | 24,000 | ||||||||||||
| Total | 4,240,330 | 766,166 | 8,566,413 | 1,884,486 | ||||||||||||
| 8. | Share Based Payment Liabilities |
Under the Company’s Share Compensation Plan (the “Plan”), the RSUs granted shall become vested in accordance with schedules set up in the RSU agreements. At the option of the participant, the participant may choose to receive (i) a lump sum payment in cash equal to the number of vested RSUs multiplied by the market value of a common share on the payout date; (ii) the number of underlying common shares or; (iii) any combination of the foregoing.
The Company measures the cost of cash-settled share-based transactions by reference to the fair value of the equity instruments at the date at which they are granted.
Until the liabilities are settled, the Company remeasure the fair value of the liabilities at the end of each reporting period and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.
During the three and nine months ended April 30, 2026, the Company recognized a gain of $57,291 and a loss of $63,022, respectively, (2025 – gain of $7,170 and $286,844) on changes of fair value for share-based payment liabilities.
The changes in RSUs during the nine months ended April 30, 2026 and year ended July 31, 2025 are as follows:
| Number of RSUs | ||||
| RSUs outstanding, as at July 31, 2024 | 2,350,000 | |||
| Granted | 800,0001 | |||
| Exercised | (925,000 | ) | ||
| RSUs outstanding, as at July 31, 2025 | 2,225,000 | |||
| Granted | 180,0001 | |||
| Settlement | (1,058,334 | ) | ||
| Forfeited | (200,000 | ) | ||
| RSUs outstanding, as at April 30, 2026 | 1,146,666 | |||
1 RSU granted to outside service provider for service provided (Note 9g).
Total share-based compensation expenses of $15,625 and $195,150 (2025 - $154,427 and $677,786) for the three and nine months ended April 30, 2026 was recognized.
As at April 30, 2026, share based payment liabilities were $108,334 (July 31, 2025 - $1,075,329) based on the estimated fair value of $0.65 (July 31, 2025 - $0.94). The RSUs vest and are payable based on vesting schedules set up in the RSU agreements.
| 10 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 8. | Share Based Payment Liabilities (Continued) |
On January 14, 2026, the Company issued 1,058,334 common shares pursuant to the settlement of certain RSUs. The RSU’s had a fair value of $1,037,167 on the date of settlement which was reclassified to share capital.
On the same date, 200,000 RSUs were forfeited. The fair value of the forfeited RSUs was $188,000 and was reclassified to deficit on forfeiture.
| 9. | Share Capital |
| a) | Authorized |
Unlimited number of common shares with no par value.
| b) | Issued and Outstanding |
As at April 30, 2026, the Company has the following common shares issued:
| Number of Common Shares | Share Capital $ | |||||||
| Balance at July 31, 2024 | 43,746,467 | 13,743,031 | ||||||
| Issued capital for special warrants conversion | 6,297,393 | 4,216,691 | ||||||
| Issued capital for special RSU settlement | 925,000 | 490,250 | ||||||
| Issued capital for private placement | 19,467,592 | 8,974,727 | ||||||
| Balance at July 31, 2025 | 70,436,452 | 27,424,699 | ||||||
| Issued capital for Summa acquisition | 69,191,458 | 63,656,141 | ||||||
| Issued capital for financings | 65,715,600 | 50,656,132 | ||||||
| Issued capital for restricted share units | 1,058,334 | 1,037,167 | ||||||
| Issued capital for option and warrant exercise | 2,199,609 | 2,275,413 | ||||||
| Issued capital for Mogollon lease payments | 56,902 | 36,986 | ||||||
| Balance at April 30, 2026 | 208,658,355 | 145,086,538 | ||||||
On November 6, 2024, the Company issued 6,297,393 common shares to exercise Special Warrants issued in the private placement during year ended July 31, 2024 (Note 9f).
From March 5 to April 4, 2025, the Company completed non-broker private placements. The Company issued 18,538,400 units of common share at $0.50 each (the ‘Unit”) for gross proceeds of $9,269,200, and 929,192 flow-through unit at $0.57 each (the “FT Unit”) for gross proceeds of $529,639 (the “Non-Broker Offering”). $65,044 flow through share liabilities recognized for the FT Units issued.
Each Unit consists of one common share of the Company (the “Common Share”) and one-half of one common share purchase warrant (a “Half-Warrant”, with two Half-Warrants being referred to as a “Warrant”). Each Warrant shall entitle the holder thereof to acquire one Common Share at a price of $0.75 within 36 months following issuance.
Each FT Unit consists of one Common Share and a Half-Warrant (subject to the same terms as indicated above), each issued as a “flow-through share” pursuant to the Income Tax Act (Canada).
The Company paid the finder’s fee of $336,233 and the legal and transfer agent fees of $213,916 for the Non-Broker Offering.
On April 9, 2025, the Company issued 925,000 common shares to settle RSUs vested for a total value of $490,250 (Note 8).
| 11 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 9. | Share Capital (Continued) |
On August 1, 2025, the Company issued 69,191,458 common shares in connection with its acquisition of Summa (Note 4).
On August 12, 2025, the Company issued 25,000 common shares for proceeds of $15,000 pursuant to the exercise of stock options.
On September 16, 2025, the Company closed a brokered financing whereby the Company issued 32,857,800 units for gross proceeds of $23,000,460. Each unit consists of one common share and one-half warrant, with each full warrant being exercisable into a common share of the Company at $1.00. No value was ascribed to the warrants under the residual method.
In connection with the financing, the Company paid cash commissions of $1,193,175 and issued an aggregate of 1,960,740 broker warrants of the Company. Each broker warrant is exercisable to acquire one common share at a price of $0.70 until September 16, 2028. The fair value of the broker warrants was determined to be $718,777 using the Black-Scholes Option Pricing Model. In addition, the Company incurred other share issuance costs of $353,784.
On October 17, 2025, the Company issued 100,000 common shares for proceeds of $50,000 pursuant to the exercise of stock options.
On October 21, 2025, the Company issued 300,000 common shares for proceeds of $150,000 pursuant to the exercise of stock options.
On January 8, 2026, the Company issued 100,000 common shares for proceeds of $60,000 pursuant to the exercise of stock options
On January 14, 2026, the Company issued 1,058,334 common shares to settle certain RSUs which had a fair value of $1,037,167 on the date of settlement.
On January 14, 2026, the Company completed a bought deal public offering of 32,857,800 units at $1.05 per unit for gross proceeds of $34,500,690, with each unit consisting of one common share and one-half of a common share purchase warrant exercisable at $1.40 per share until January 14, 2029. The Company allocated $1,150,023 to the warrant component under the residual method.
In connection with the financing, the Company paid cash commissions of $1,965,433 and issued an aggregate of 1,970,887 broker warrants of the Company. Each broker warrant is exercisable to acquire one common share at a price of $1.05 until January 14, 2029. The fair value of the broker warrants was determined to be $858,518 using the Black-Scholes Option Pricing Model. In addition, the Company incurred other share issuance costs of $605,308.
On April 24, 2026, the Company issued 56,902 common shares to pursuant to certain mining lease agreements respecting the Mogollon Property (Note 7). The common shares had a fair value of $36,986 based on the Company’s share price on the date of issuance.
During the nine months ended April 30, 2026, the Company issued 1,649,609 common shares for proceeds of $1,463,102 pursuant to the exercise of warrants.
| c) | Escrow shares |
As at April 30, 2026, there were 5,295,636 shares in escrow (July 31, 2025 – 5,393,027).
| 12 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 9. | Share Capital (Continued) |
| d) | Share options |
On September 30, 2021, the Company has implemented a Share Compensation Plan (“the Plan”) in which 10% of the total number of common shares that are issued and outstanding can be granted. All stock options expire in ten years and vest based on terms and conditions set out in the stock option agreements. A summary of the Company’s stock option plan activities is as follows:
| Number of Options | Weighted Average Exercise Price | |||||||
| Options outstanding, as at July 31, 2024 | 1,950,000 | $ | 0.51 | |||||
| Granted | 2,600,000 | $ | 0.60 | |||||
| Options outstanding, as at July 31, 2025 | 4,550,000 | $ | 0.56 | |||||
| Replacement Options issued (Note 4) | 4,451,070 | $ | 1.81 | |||||
| Granted | 10,980,000 | $ | 1.15 | |||||
| Exercised | (550,000 | ) | $ | 0.53 | ||||
| Expired | (1,214,740 | ) | $ | 2.65 | ||||
| Options outstanding, as at April 30, 2026 | 18,216,330 | $ | 0.92 | |||||
As April 30, 2026, the weighted-average life of the options outstanding was 4.77 years (July 31, 2025 – 8.22 years).
Details of stock options outstanding as at April 30, 2026 were as follows:
| Exercise price | Remaining contractual life | Number of options outstanding | Number of options exercisable | Expiry date | ||||||||||||
| $ | 2.08 | 0.69 | 611,330 | 611,330 | January 7, 2027 | |||||||||||
| $ | 1.64 | 1.12 | 90,400 | 90,400 | June 14, 2027 | |||||||||||
| $ | 1.77 | 1.76 | 720,940 | 720,940 | February 1, 2028 | |||||||||||
| $ | 0.83 | 2.35 | 80,000 | 80,000 | September 3, 2028 | |||||||||||
| $ | 1.38 | 2.61 | 928,860 | 928,860 | December 6, 2028 | |||||||||||
| $ | 0.89 | 3.74 | 1,084,800 | 1,084,800 | January 24, 2030 | |||||||||||
| $ | 0.78 | 4.39 | 5,300,000 | 5,300,000 | September 19, 2030 | |||||||||||
| $ | 0.99 | 4.73 | 5,600,000 | 1,400,000 | January 21, 2031 | |||||||||||
| $ | 0.50 | 5.42 | 1,450,000 | 1,450,000 | September 20, 2031 | |||||||||||
| $ | 0.75 | 7.59 | 100,000 | 50,000 | November 30, 2033 | |||||||||||
| $ | 0.60 | 8.93 | 2,250,000 | 2,250,000 | April 4, 2035 | |||||||||||
| Total | 4.77 | 18,216,330 | 16,837,585 | |||||||||||||
During the nine months ended April 30, 2026, the Company issued a total of 4,451,070 stock options to the former Summa option holders, pursuant to its acquisition of Summa (Note 4). The weighted average assumptions used in the Black-Scholes option pricing model for the Replacement Options is as follows:
| Risk-free rate | 2.75 | % | ||
| Dividend yield | nil | |||
| Annualized volatility | 87.28 | % | ||
| Exercise price | $ | 1.81 | ||
| Stock price at grant date | $ | 0.92 | ||
| Expected life | 2.49 years |
| 13 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 9. | Share Capital (continued) |
Total share-based compensation expenses of $1,521,855 and $6,122,514 (2025 – $659,973 and $680,848) for the three and nine months ended April 30, 2026 were recognized based on the estimated fair value of the options on the grant date. The weighted average assumptions used in the Black-Scholes option pricing model for the options issued during the period are as follows:
| 2026 | 2025 | |||||||
| Risk-free rate | 2.85 | % | 2.89 | % | ||||
| Dividend yield | nil | nil | ||||||
| Annualized volatility | 91 | % | 121.44 | % | ||||
| Fair value at grant date | $ | 0.88 | $ | 0.60 | ||||
| Expected life | 5 years | 10 years | ||||||
| e) | Special Warrants |
The following was a summary of special warrant outstanding as at April 30, 2026:
Number of Special Warrants | Special Warrants Capital | |||||||
| # | $ | |||||||
| Special warrants outstanding and exercisable, as at July 31, 2024 | 6,297,393 | 4,846,430 | ||||||
| Special warrants converted | (6,297,393 | ) | (4,846,430 | ) | ||||
| Special warrants outstanding and exercisable, as at July 31, 2025 and April 30, 2026 | - | - | ||||||
On April 2, 2024, the board of the Company approved to complete a private placement of up to 6,250,000 Special Warrants of the Company, in one or more tranches, at a price of $0.80 per Special Warrant for aggregate proceeds of up to $5,000,000 (the “Private Placement”). Each Special Warrant entitles the holder to receive one unit of Common Share of the Company and one half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant entitles the holder to purchase one Common Share at price of $1.00 per share until the expire date.
During the year ended July 31, 2024, the Company issued 6,297,393 Special Warrants for proceeds of $5,037,915 under the terms of the Private Placement. Finder’s fee consists of $82,403 in cash and 103,005 Warrants valued at $41,271 using Black-Scholes pricing model (Note 9g). The Company also incurred $67,810 in cash related to share issuance costs.
On November 6, 2024, the Company issued 6,297,393 common shares and 3,148,695 warrants to exercise 6,297,393 Special Warrants issued in the private placement during the year ended July 31, 2024.
A fair value of $4,408,175 was attributed to share capital based on $0.70 per common share on the first day the Company listed on TSX Venture Exchange (“TSXV”). The residual value of $629,739 was attributed to the warrants.
Upon conversion of Special Warrants to Common Shares and Warrants, the Company recognized $191,484 Special Warrants issuance cost as share issuance cost.
As at April 30, 2026, the Company has Nil (July 31, 2025 – Nil) Special Warrants outstanding.
| f) | Warrants |
The following is a summary of warrant transactions for the nine months ended April 30, 2026:
| 14 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 9. | Share Capital (continued) |
| Number of Warrants | ||||
| Warrants outstanding, as at July 31, 2024 | 7,211,048 | |||
| Granted | 13,551,649 | |||
| Warrants outstanding, as at July 31, 2025 | 20,762,697 | |||
| Replacement Warrants issued (Note 4) | 15,155,308 | |||
| Granted | 36,789,427 | |||
| Expired | (3,262,805 | ) | ||
| Exercised | (1,649,609 | ) | ||
| Warrants outstanding, as at April 30, 2026 | 67,795,018 | |||
The following warrants were outstanding and exercisable as at April 30, 2026:
| Expire Date | Exercise Price $ | Number of Warrants Outstanding | Remaining Contractual Life (years) | |||||||||
| November 1, 2026 | 0.89 – 1.22 | 4,027,763 | 0.51 | |||||||||
| November 14, 2026 | 0.75 - 1.00 | 10,354,930 | 0.54 | |||||||||
| August 1, 2027 | 0.56 – 0.80 | 7,316,300 | 1.25 | |||||||||
| March 05, 2028 | 0.75 | 3,643,296 | 1.85 | |||||||||
| March 12, 2028 | 0.75 | 2,513,722 | 1.87 | |||||||||
| March 21, 2028 | 0.75 | 1,928,425 | 1.89 | |||||||||
| April 02, 2028 | 0.75 | 1,847,205 | 1.93 | |||||||||
| September 19, 2028 | 0.70 – 1.00 | 17,763,590 | 2.39 | |||||||||
| January 14, 2029 | 1.05-1.40 | 18,399,787 | 2.71 | |||||||||
| 67,795,018 | 2.01 | |||||||||||
During the nine months ended April 30, 2026, the Company assumed a total of 15,155,308 warrants which are exercisable into Silver47 common shares, pursuant to its acquisition of Summa (Note 4). The weighted average assumptions used in the Black-Scholes option pricing model for the Replacement Warrants is as follows:
| Risk-free rate | 2.69 | % | ||
| Dividend yield | nil | |||
| Annualized volatility | 86.34 | % | ||
| Exercise price | $ | 1.27 | ||
| Stock price at grant date | $ | 0.92 | ||
| Expected life | 1.45 years |
During the nine months ended April 30, 2026, the Company issued certain common share purchase warrants as broker warrants in connection with its financings. The Company recorded their respective fair values as a share issuance cost. The fair value of the warrants granted was determined on the date of grant using Black-Scholes option pricing model with following assumptions:
| 15 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 9. | Share Capital (continued) |
| Grant date | September 19, 2025 | January 14, 2026 | ||||||
| Risk-free rate | 2.46 | % | 2.53 | % | ||||
| Warrants exercise price | $ | 0.70 | $ | 1.05 | ||||
| Dividend yield | Nil | Nil | ||||||
| Annualized volatility | 83.70 | % | 84.45 | % | ||||
| Expected life | 2 years | 2 years | ||||||
| Fair value | $ | 718,777 | $ | 858,518 | ||||
| g) | Equity-settled share -based payments |
On May 15, 2025, the Company issued 800,000 RSUs to a service provider for 2-year services. On September 19, 2025, the Company issued 180,000 RSUs to a service provider for 2-year services. During the three and nine months ended April 30, 2026, $108,325 and $310,822, respectively in service cost and equity-settled share-based payments was recognized based on an average share price of $0.81.
| 10. | General and administrative expenses |
General and administrative expenses for the three and nine months ended April 30, 2026, and 2025:
| For the three months ended | For the nine months ended | |||||||||||||||
| April 30, 2026 | April 30, 2025 | April 30, 2026 | April 30, 2025 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Consulting fees | 263,482 | 287,260 | 1,389,843 | 509,137 | ||||||||||||
| Management and directors’ fee | 268,998 | 520,000 | 1,347,354 | 677,500 | ||||||||||||
| Marketing and investor relation fees | 458,782 | 123,286 | 1,420,789 | 451,848 | ||||||||||||
| Office and administrative | 171,327 | 32,581 | 588,828 | 71,026 | ||||||||||||
| Professional fees | 82,151 | 43,098 | 327,569 | 377,974 | ||||||||||||
| Transfer agent and filing fees | 14,963 | 10,666 | 191,156 | 40,362 | ||||||||||||
| Total | 1,259,703 | 1,016,891 | 5,265,539 | 2,127,847 | ||||||||||||
| 11. | Financial Instruments |
11.1 Financial risk management objectives and policies
The financial risk arising from the Company’s operations are credit risk and liquidity risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how the Company mitigates these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.
11.2 Fair value of financial instruments
The fair value hierarchy established by IFRS 13 Fair Value Measurement has three levels to classify the inputs to valuation techniques used to measure fair value as described below:
Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted market prices that are observable for the assets or liabilities either directly or indirectly; and
Level 3 – inputs that are not based on observable market data.
| 16 |
Silver47 Exploration Corp.
Notes to the Condensed Interim Consolidated Financial Statements (Unaudited)
For the three and nine months ended April 30, 2026 and 2025
(Expressed in Canadian dollars)
| 11. | Financial Instruments (continued) |
| Financial Instruments | Classification | |
| Cash and cash equivalents | Amortized cost | |
| Accounts payable and accrued liabilities | Amortized cost | |
| Share based payment liabilities | Fair value through profit and loss |
The fair value of the Company’s financial instruments carried at amortized cost approximate their carrying values due to their short-term nature.
11.3 Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Credit risk for the Company is primarily associated with the Company’s bank balances. The Company mitigates credit risk associated with its bank balance by holding cash with large, reputable financial institutions.
11.4 Liquidity risk
Liquidity risk is the risk that the Company will not be able to settle or manage its obligations associated with financial liabilities. To manage liquidity risk, the Company closely monitors its liquidity position and ensures it has adequate sources of funding to finance its projects and operations. The Company’s working capital as at April 30, 2026 was $50,490,703 (July 31, 2025 – $2,583,701). The Company’s accounts payable and accrued liabilities are expected to be realized or settled, respectively, within a one-year period.
| 12. | Related Party Transactions |
Transaction with Key Management Personnel
Key management personnel are persons responsible for planning, directing and controlling the activities of an entity. The remuneration of directors and key management personnel during the three and nine months ended April 30, 2026, and 2025 were as follows:
| For the three months ended | For the nine months ended | |||||||||||||||
| April 30, 2026 | April 30, 2025 | April 30, 2026 | April 30, 2025 | |||||||||||||
| Management consulting fees | $ | 150,000 | $ | 420,000 | $ | 739,200 | $ | 557,500 | ||||||||
| Director’s fees | 118,998 | 100,000 | 608,154 | 120,000 | ||||||||||||
| Share-based compensation | 1,050,526 | 326,546 | 4,071,083 | 556,233 | ||||||||||||
| Total | $ | 1,319,524 | $ | 846,546 | $ | 5,418,437 | $ | 1,233,733 | ||||||||
As at April 30, 2026, there was $nil (July 31, 2025 - $323) due to related parties included in accounts payables and accrued liabilities.
| 17 |
Exhibit 99.3
SUMMA SILVER CORP.
Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Summa Silver Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Summa Silver Corp. (the “Company”) as of August 31, 2024 and 2023, the related consolidated statements of loss and comprehensive loss, cash flows and changes in shareholders’ equity for each of the two years in the period ended August 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2024 and 2023, and its financial performance and its cash flows for each of the two years in the period ended August 31, 2024, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, the Company has disclosed certain conditions that raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting in accordance with the standards of the PCAOB. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion in accordance with the standards of the PCAOB.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ DMCL LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
We have served as the Company’s auditor since 2019
Vancouver, Canada
September 9, 2026
SUMMA SILVER CORP.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
| August 31, 2024 | August 31, 2023 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 587,106 | $ | 6,997,894 | ||||
| Receivables | 13,203 | 57,555 | ||||||
| Interest receivable | - | 56,445 | ||||||
| Loan receivable (Note 5) | 341,596 | - | ||||||
| Prepaid expenses | 426,554 | 261,027 | ||||||
| 1,368,459 | 7,372,921 | |||||||
| Non-current assets | ||||||||
| Restricted cash | 214,102 | 202,965 | ||||||
| Prepaid expenses (Note 6) | 43,172 | 112,281 | ||||||
| Exploration and evaluation assets (Note 6) | 42,223,792 | 34,438,187 | ||||||
| TOTAL ASSETS | $ | 43,849,525 | $ | 42,126,354 | ||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (Notes 7 and 10) | $ | 103,909 | $ | 279,132 | ||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Share capital (Note 8) | 49,937,928 | 45,798,433 | ||||||
| Reserve (Note 9) | 6,126,873 | 5,547,953 | ||||||
| Accumulated deficit | (13,401,279 | ) | (10,674,860 | ) | ||||
| Accumulated other comprehensive loss | 1,082,094 | 1,175,696 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY | 43,745,616 | 41,847,222 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 43,849,525 | $ | 42,126,354 | ||||
Nature of operations and going concern (Note 1)
Subsequent events (Note 15)
These consolidated financial statements were authorized for issue by the Board of Directors on September 9, 2026. They are signed on behalf of the Board of Directors by:
| “Brian Goss” | “Martin Bajic” | |
| Director | Director |
The accompanying notes form an integral part of these consolidated financial statements
| 2 |
SUMMA SILVER CORP.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
| For the Year Ended | ||||||||
August 31, 2024 | August 31, 2023 | |||||||
| EXPENSES | ||||||||
| General and administrative costs | $ | 227,389 | $ | 368,587 | ||||
| Consulting fees (Note 10) | 706,512 | 721,991 | ||||||
| Professional fees | 286,295 | 124,018 | ||||||
| Shareholder information and marketing | 391,451 | 316,991 | ||||||
| Investor relations and conferences | 408,706 | 390,389 | ||||||
| Stock-based compensation (Notes 9 and 10) | 746,449 | 860,652 | ||||||
| Travel | 124,966 | 132,345 | ||||||
| Transfer agent, regulatory and listing fees | 102,499 | 73,970 | ||||||
OTHER ITEMS | 2,994,267 | 2,988,943 | ||||||
| Foreign exchange loss (gain) | 49,581 | (38,178 | ) | |||||
| Interest income | (162,900 | ) | (109,871 | ) | ||||
NET LOSS FOR THE YEAR | 2,880,948 | 2,840,894 | ||||||
| ITEMS THAT MAY BE SUBSEQUENTLY RECLASSIFIED TO PROFIT OR LOSS: | ||||||||
| Foreign exchange differences on translation of foreign operations | 93,602 | (695,997 | ) | |||||
NET LOSS AND COMPREHENSIVE LOSS FOR THE YEAR | $ | 2,974,550 | $ | 2,144,897 | ||||
Basic and diluted loss per share for the year | $ | (0.03 | ) | $ | (0.03 | ) | ||
| Weighted average number of common shares outstanding | 103,439,826 | 87,233,415 | ||||||
The accompanying notes form an integral part of these consolidated financial statements
| 3 |
SUMMA SILVER CORP.
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
| For the Year Ended | ||||||||
August 31, 2024 | August 31, 2023 | |||||||
| Cash flows provided from (used in): | ||||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss for the year | $ | (2,880,948 | ) | $ | (2,840,894 | ) | ||
| Adjustments for item not affecting cash: | ||||||||
| Stock-based compensation | 746,449 | 860,652 | ||||||
| Interest income | (162,900 | ) | (109,871 | ) | ||||
| Net changes in non-cash working capital items: | ||||||||
| Receivables | 44,352 | 16,043 | ||||||
| Loan receivable | (341,596 | ) | ||||||
| Prepaid expenses | (96,418 | ) | 27,937 | |||||
| Accounts payable and accrued liabilities | (20,796 | ) | (14,499 | ) | ||||
| Net cash flows used in operating activities | (2,711,857 | ) | (2,060,632 | ) | ||||
INVESTING ACTIVITY | ||||||||
| Exploration and evaluation assets | (4,002,026 | ) | (7,427,792 | ) | ||||
| Net cash flows used in investing activity | (4,002,026 | ) | (7,427,792 | ) | ||||
FINANCING ACTIVITY | ||||||||
| Proceeds from issuance of shares | - | 9,488,747 | ||||||
| Proceeds from options exercise | 83,750 | 148,499 | ||||||
| Interest received | 219,345 | 53,426 | ||||||
| Net cash flows provided from financing activity | 303,095 | 9,690,672 | ||||||
Net change in cash and cash equivalents | (6,410,788 | ) | 202,248 | |||||
| Cash and cash equivalents, beginning | 6,997,894 | 6,795,646 | ||||||
Cash and cash equivalents, ending | $ | 587,106 | $ | 6,997,894 | ||||
Non-cash transactions: | ||||||||
| Common shares issued for exploration and evaluation property | $ | 4,113,850 | $ | 2,244,370 | ||||
| Exploration and evaluation expenditures included in accounts payable | $ | 3,782 | $ | 230,431 | ||||
| Cash and cash equivalents is comprised of: | ||||||||
| Cash held in bank accounts | $ | 70,084 | $ | 2,497,894 | ||||
| Cashable guaranteed investment certificates | $ | 517,022 | $ | 4,500,000 | ||||
The accompanying notes form an integral part of these consolidated financial statements
| 4 |
SUMMA SILVER CORP.
Consolidated Statements of Changes in Shareholders’ Equity
(Expressed in Canadian Dollars)
Number of shares | Amount | Reserve | Accumulated other comprehensive income | Accumulated deficit | Total | |||||||||||||||||||
| Balance, August 31, 2022 | 78,227,445 | $ | 34,452,267 | $ | 6,586,586 | $ | 479,699 | $ | (10,268,701 | ) | $ | 31,249,851 | ||||||||||||
| Common shares issued for cash (Note 8) | 12,890,375 | 10,054,493 | 257,807 | - | - | 10,312,300 | ||||||||||||||||||
| Common shares issued on the exercise of options (Note 8) | 150,000 | 204,307 | (55,808 | ) | - | - | 148,499 | |||||||||||||||||
| Common shares issued for exploration and evaluation assets (Notes 6 and 8) | 4,455,880 | 2,244,370 | - | - | - | 2,244,370 | ||||||||||||||||||
| Fair value of expired options and warrants (Note 9) | - | - | (2,434,735 | ) | - | 2,434,735 | - | |||||||||||||||||
| Share issuance costs (Note 8) | - | (1,157,004 | ) | 333,451 | - | - | (823,553 | ) | ||||||||||||||||
| Stock-based compensation (Note 9) | - | - | 860,652 | - | - | 860,652 | ||||||||||||||||||
| Net loss | - | - | - | - | (2,840,894 | ) | (2,840,894 | ) | ||||||||||||||||
| Other comprehensive income | - | - | - | 695,997 | - | 695,997 | ||||||||||||||||||
| Balance, August 31, 2023 | 95,723,700 | $ | 45,798,433 | $ | 5,547,953 | $ | 1,175,696 | $ | (10,674,860 | ) | $ | 41,847,222 | ||||||||||||
| Balance, August 31, 2023 | 95,723,700 | $ | 45,798,433 | $ | 5,547,953 | $ | 1,175,696 | $ | (10,674,860 | ) | $ | 41,847,222 | ||||||||||||
| Common shares issued on the exercise of stock options (Note 8) | 125,000 | 96,750 | (13,000 | ) | - | - | 83,750 | |||||||||||||||||
| Common shares issued for exploration and evaluation assets (Notes 6 and 8) | 9,018,875 | 4,113,850 | - | - | - | 4,113,850 | ||||||||||||||||||
| Fair value of expired options (Note 9) | - | - | (154,529 | ) | - | 154,529 | - | |||||||||||||||||
| Share issuance costs (Note 8) | - | (71,105 | ) | - | - | - | (71,105 | ) | ||||||||||||||||
| Stock-based compensation (Note 9) | - | - | 746,449 | - | - | 746,449 | ||||||||||||||||||
| Net loss | - | - | - | - | (2,880,948 | ) | (2,880,948 | ) | ||||||||||||||||
| Other comprehensive loss | - | - | - | (93,602 | ) | - | (93,602 | ) | ||||||||||||||||
| Balance, August 31, 2024 | 104,867,575 | $ | 49,937,928 | $ | 6,126,873 | $ | 1,082,094 | $ | (13,401,279 | ) | $ | 43,745,616 | ||||||||||||
The accompanying notes form an integral part of these consolidated financial statements
| 5 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 1. | NATURE OF OPERATIONS AND GOING CONCERN |
Summa Silver Corp. (the “Company” or “Summa Silver”) was incorporated pursuant to the provisions of the British Columbia Business Corporations Act on March 7, 2018. The Company is in the business of mineral exploration. The Company’s registered office is located at Suite 918 – 1030 West Georgia Street, Vancouver, BC, V6E 2Y3. Summa Silver’s common shares are traded on the TSX Venture Exchange (the “Exchange”) under the symbol “SSVR”, the OTCQX under the symbol “SSVRF” and on the Frankfurt Stock Exchange under the symbol “48X”.
These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and settle its liabilities in the normal course of business. At August 31, 2024, the Company had cash of $587,106 (August 31, 2023 - $6,997,894) and its current assets exceed its current liabilities by $1,264,550 (August 31, 2023 - $7,093,789). The Company currently is not generating any revenues. It has incurred losses and negative cash flows from operations since inception and had an accumulated deficit of $13,401,279 as at August 31, 2024 (August 31, 2023 - $10,674,860). Whether and when the Company can obtain profitability and positive cash flows from operations is uncertain. These factors indicate the existence of a material uncertainty which may cast significant doubt on the ability of the Company to continue as a going concern.
The Company’s ability to continue its operations is dependent on its success in raising equity through share issuances, suitable debt financing and/or other financing arrangements. While the Company has been successful in raising equity in the past, there can be no guarantee that it will be able to raise sufficient funds to fund its exploration activities and general and administrative costs in the next twelve months and in the future. These consolidated financial statements do not give effect to the required adjustments to the carrying amounts and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.
| 2. | BASIS OF PREPARATION |
| (a) | Statement of compliance |
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board.
| (b) | Basis of presentation |
These consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit or loss (“FVTPL”), which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The material accounting policies, as disclosed, have been applied consistently to all periods presented in these consolidated financial statements.
| (c) | Presentation and functional currency |
Items included in the consolidated financial statements of the Company and its wholly owned subsidiaries are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The functional currency of the Company and its subsidiary 1237025 BC Ltd. is the Canadian dollar. The functional currency of Summa Silver (US) Corp., Summa Silver Nevada Inc., and 1237025 Nevada Inc. is the US Dollar.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of transaction. Foreign currency gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are included in profit and loss. The results and financial position of a subsidiary that has a functional currency different from the presentation currency are translated into the presentation currency as follows:
| ● | Assets and liabilities are translated using exchange rates prevailing at the end of each reporting period; | |
| ● | Income and expenses for each line item in the consolidated statement of loss and comprehensive loss are translated at average exchange rates for the period; and | |
| ● | All resulting exchange differences are recognized in other comprehensive income as cumulative translation adjustments. |
| 6 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 2. | BASIS OF PREPARATION (continued) |
On consolidation, exchange differences arising from the translation of the net investment in foreign entity is taken to accumulated other comprehensive loss. When a foreign operation is sold, such exchange differences are recognized in profit or loss as part of the gain or loss on sale.
| (d) | Material accounting judgments and estimates |
The preparation of financial statements in accordance with IFRS requires management to make certain critical accounting estimates and assumptions about the future and to exercise judgment in applying the Company’s accounting policies. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. The impacts of changes to estimates are recognized in the period estimates are revised and in future periods affected. The critical judgments and assumptions made by management and other major sources of measurement uncertainty are discussed in Note 4.
| 3. | MATERIAL ACCOUNTING POLICIES |
The material accounting policies used in the preparation of these consolidated financial statements are as follows:
| (a) | Basis of consolidation |
The Company’s consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Summa Silver (US) Corp., Summa Silver Nevada Inc., 1237025 BC Ltd., and 1237025 Nevada Inc. Subsidiaries are entities controlled by the Company, where control is achieved by the Company being exposed to, or having rights to, variable returns from its involvement with the entity and having the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is obtained by the Company and are deconsolidated from the date that control ceases.
All inter-company transactions, balances, income and expenses are eliminated on consolidation.
| (b) | Foreign currency transactions |
Transactions in currencies other than the Canadian dollar (“foreign currencies”), the Company’s functional currency, are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the consolidated statement of financial position. Non-monetary items that are denominated in foreign currencies and measured at other than fair value are translated using the rates of exchange at the transaction dates. Foreign exchange gains and losses are included in net loss for the period.
| (c) | Financial instruments |
| i) | Classification and measurement |
Financial asset
The classification and measurement of financial assets is based on the Company’s business models for managing its financial assets and whether the contractual cash flows represent solely payments of principal and interest (“SPPI”). Financial assets are initially measured at fair value less, for an item not at fair value through profit or loss, transaction costs directly attributable to its acquisition or issue, and are subsequently measured at either (i) amortized cost; (ii) fair value through other comprehensive income, or (iii) at fair value through profit or loss.
Amortized cost
Financial assets at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment. Interest receivable and loan receivable are included in this category.
Fair value through other comprehensive income (“FVTOCI”)
Elected investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses recognized in other comprehensive income (loss).
| 7 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 3. | MATERIAL ACCOUNTING POLICIES (continued) |
| (c) | Financial instruments (continued) |
Fair value through profit or loss (“FVTPL”)
Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit and loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are included in profit and loss in the period in which they arise. Cash is included in this category.
Financial liabilities
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it expires. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities subsequently measured at amortized cost. All interest-related charges are reported in profit or loss within interest expense, if applicable.
Financial liabilities measured at amortized cost are non-derivatives and are initially recognized at fair value net of any transaction costs directly attributable to the issuance of the instrument and subsequently carried at amortized cost using the effective interest rate method. This ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statements of financial position. Interest expense in this context includes initial transaction costs and premiums payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Accounts payable are included in this category.
| ii) | Derecognition of financial assets |
The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in profit or loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).
| iii) | Impairment of financial assets |
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk of the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses. The Company recognizes in the consolidated statements of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.
| (d) | Restoration, rehabilitation, and environmental obligations |
The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-term assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to exploration and evaluation assets along with a corresponding increase in the restoration provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The restoration asset will be depreciated on the same basis as other assets.
The increase in the restoration provision due to the passage of time is recognized as interest expense.
The costs of restoration projects that were included in the provision are recorded against the provision as incurred. The costs to prevent and control environmental impacts at specific properties are capitalized in accordance with the Company’s accounting policy for exploration and evaluation assets.
| 8 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 3. | MATERIAL ACCOUNTING POLICIES (continued) |
| (e) | Exploration and evaluation expenditures |
Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures are capitalized. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in profit or loss. Government tax credits are recorded as a reduction to the cumulative costs incurred and capitalized on the related property in the period it is received.
Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
Once the technical feasibility and commercial viability of the extraction of resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.
Recoverability of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.
| (f) | Share capital |
Common shares
Common shares issued are classified as share capital, a component of shareholders’ equity. Transaction costs directly attributable to the issuance of common shares are recognized as a deduction from share capital.
Equity units
Proceeds received on the issuance of units, comprised of common shares and warrants, are allocated using the residual value method. Under the residual value method, proceeds are allocated to the common shares up to their fair value, determined by reference to the quoted market price of the common shares on the issuance date, and the remaining balance, if any, to the reserve for warrants.
| (g) | Share options and warrants |
All share options and warrants are included in the reserve, a component of shareholders’ equity, until exercised. Upon exercise, the consideration received plus the amounts in reserves attributable to the options and/or warrants being exercised are credited to share capital. When share options and warrants expire unexercised or are cancelled, other than cancellations resulting from forfeitures when vesting conditions are not satisfied, the amounts recognized in reserve are reclassified to accumulated deficit.
Stock-based compensation to employees are measured at the fair value of the instruments granted. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services received cannot be reliably measured, and are recorded at the date the goods or services are received. Stock-based compensation is measured at the fair value of the goods or services received or the fair value of the equity instruments issued as calculated using the Black-Scholes Option Pricing Model. The offset to the recorded expense is to the reserve. The fair value of awards is calculated using the Black-Scholes Option Pricing Model which considers the following factors: exercise price; current market price of the underlying shares; expected life of the award; risk-free interest rate; forfeiture rate; and expected volatility.
| (h) | Leases |
At the inception of a lease contract, the Company assesses whether the contract is or contains a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assess whether: (i) the contract involves the use of an identified asset; (ii) the Company has the right to obtain substantially all the economic benefits from the use of the asset throughout the period, and; (iii) the Company has the right to direct the use of the asset. The Company did not have any leases as at or for the year ended August 31, 2024 and 2023.
| 9 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 3. | MATERIAL ACCOUNTING POLICIES (continued) |
| (h) | Leases (continued) |
Payments associated with short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis in general and administration expense in the consolidated statement of loss and comprehensive loss. Short term leases are defined as leases with a lease term of 12 months or less.
| (i) | Income taxes |
Income tax on profit or loss comprises current and deferred tax.
Current income taxes are the expected taxes payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to taxes payable in respect of previous periods. Current income tax is recognized in profit or loss, except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
Deferred tax is provided for using the asset and liability method of accounting, whereby deferred tax assets and liabilities are recognized for the future tax effects of differences between the carrying amounts of assets and liabilities in the consolidated statement of financial position and the tax bases of the assets and liabilities (temporary differences), unused tax losses and other income tax deductions. Temporary differences on the initial recognition of assets or liabilities that affect neither accounting nor taxable profit or loss are not provided for. Deferred tax assets and liabilities are measured based on the expected manner of realization or settlement of the carrying amounts of the related assets and liabilities, using tax rates enacted or substantively enacted at the consolidated statement of financial position date. Deferred tax assets are recognized for deductible temporary differences, unused tax losses and other income tax deductions only to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unused tax losses and other income tax deductions can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
| (j) | Loss per share |
Loss per share is calculated by dividing loss attributable to common shareholders of the Company by the weighted average number of shares outstanding during the period. Diluted loss per share is determined by adjusting loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares. The calculation of diluted loss per share excludes the effects of various conversions and exercises of options and warrants that would be anti-dilutive.
| (k) | Impairment of non-financial assets |
Impairment tests on non-financial assets, including exploration and evaluation assets are undertaken whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written down accordingly. The Company assesses exploration and evaluation assets for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and value in use.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset’s cash-generating unit, which is the lowest group of assets in which the asset belongs for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets.
An impairment loss is charged to profit or loss, except to the extent it reverses gains previously recognized in profit or loss. An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.
| 10 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 3. | MATERIAL ACCOUNTING POLICIES (continued) |
| (l) | New accounting standards and interpretations |
IFRS 18 – Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements (IFRS 18), which replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by requiring income and expenses to be presented into the three defined categories of operating, investing and financing, and by specifying certain defined totals and subtotals. Where company-specific measures related to the income statement are provided, IFRS 18 requires companies to disclose explanations around these measures, which are referred to as management defined performance measures. IFRS 18 also provides additional guidance on principles of aggregation and disaggregation which apply to the primary financial statements and the notes.
IFRS 18 will not affect the recognition and measurement of items in the financial statements, nor will it affect which items are classified in other comprehensive income and how these items are classified. The standard is effective for reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective application is required, and early application is permitted. The Company is currently assessing the effect of this standard on its financial statements.
| 4. | SIGNIFICANT ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
Significant accounting judgments
The critical judgments, apart from those involving estimations, that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:
Going concern
The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay for its ongoing operating expenditures and meet its liabilities for the ensuing year involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.
Impairment of long-lived assets
The carrying value and the recoverability of long-lived assets, including exploration and evaluation assets, are evaluated at each reporting date. Management assesses for indicators of impairment, which includes assessing whether facts or circumstances exist that suggest the carrying amount exceeds the recoverable amount.
Key sources of estimation uncertainty
The key assumptions management has made about the future and other major sources of estimation uncertainty at the date of the consolidated statement of financial position that have significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:
Income taxes
The Company recognizes deferred tax assets for deductible temporary differences, unused tax losses and other income tax deductions only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and other income tax deductions can be utilized. In assessing the probability of realizing the income tax benefits of deductible temporary differences, unused tax losses and other income tax deductions, management makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence.
As at August 31, 2024 and 2023, the Company has not recognized any deferred tax assets for deductible temporary differences. Changes in any of the above-mentioned estimates can materially affect the amount of income tax assets recognized. In addition, where applicable tax laws and regulations are either unclear or subject to varying interpretations, changes in these estimates can occur that materially affect the amounts of income tax assets recognized. The Company reassesses unrecognized income tax assets at the end of each reporting period.
| 11 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 4. | SIGNIFICANT ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued) |
Valuation of stock-based compensation
The Company uses the Black-Scholes Option Pricing Model for valuation of stock-based compensation. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company’s earnings and equity reserves.
| 5. | LOAN RECEIVABLE |
The Company loaned $273,274 (US$200,000) on March 22, 2024, and a further $68,322 (US$50,000) on March 27, 2024, to an arms-length third party. The loan is unsecured, interest free, and was repaid on October 9, 2024 (Note 15).
| 6. | EXPLORATION AND EVALUATION ASSETS |
Costs incurred with respect to the properties are summarized below:
| Hughes Property | Mogollon Property | Total | ||||||||||
| Acquisition Costs | ||||||||||||
| Balance, August 31, 2022 | $ | 2,011,941 | $ | 2,034,771 | $ | 4,046,712 | ||||||
| Additions | - | 2,791,947 | 2,791,947 | |||||||||
| Balance, August 31, 2023 | 2,011,941 | 4,826,718 | 6,838,659 | |||||||||
| Additions | - | 4,433,354 | 4,433,354 | |||||||||
| Balance, August 31, 2024 | $ | 2,011,941 | $ | 9,260,072 | $ | 11,272,013 | ||||||
| Deferred Exploration Costs | ||||||||||||
| Balance, August 31, 2022 | $ | 17,044,387 | $ | 3,038,087 | $ | 20,082,474 | ||||||
| Drilling | 1,351,259 | 3,019,578 | 4,370,837 | |||||||||
| Consulting (Note 10) | 691,569 | 841,820 | 1,533,389 | |||||||||
| Fuel | 102,581 | - | 102,581 | |||||||||
| Materials | 140,578 | 210,767 | 351,345 | |||||||||
| Assays | 138,202 | 74,295 | 212,497 | |||||||||
| Permitting | - | 90,065 | 90,065 | |||||||||
| Data purchase | 58,862 | 166,858 | 225,720 | |||||||||
| Currency translation adjustment | 533,790 | 96,830 | 630,620 | |||||||||
| Balance, August 31, 2023 | 20,061,228 | 7,538,300 | 27,599,528 | |||||||||
| Drilling | 450,607 | 1,309,387 | 1,759,994 | |||||||||
| Consulting (Note 10) | 680,644 | 886,198 | 1,566,842 | |||||||||
| Assays | 32,637 | 17,662 | 50,299 | |||||||||
| Permitting | - | 55,522 | 55,522 | |||||||||
| Currency translation adjustment | (59,664 | ) | (20,742 | ) | (80,406 | ) | ||||||
| Balance, August 31, 2024 | $ | 21,165,452 | $ | 9,786,327 | $ | 30,951,779 | ||||||
| Total | ||||||||||||
| Balance, August 31, 2023 | $ | 22,073,169 | $ | 12,365,018 | $ | 34,438,187 | ||||||
| Balance, August 31, 2024 | $ | 23,177,393 | $ | 19,046,399 | $ | 42,223,792 | ||||||
Hughes Property
The Company had an option agreement to acquire 100% of the Hughes property in exchange for US$400,000 in cash and US$400,000 in share payments payable in semi-annual instalments over a five-year period. There is an additional obligation to incur $1,500,000 of expenditures over the same five-year period ending March 8, 2025, which has been fulfilled. The property is subject to a 1% net smelter royalty which may be reduced to 0.5% for additional payments of US$4,000,000.
During the year ended August 31, 2022, the Company completed all remaining option payments to the vendor to earn a 100% interest in the project, subject to the 1% net smelter royalty.
| 12 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 6. | EXPLORATION AND EVALUATION ASSETS (continued) |
Mogollon Property
On August 24, 2020 the Company signed a definitive agreement with Allegiant Gold Ltd. (“Allegiant”) to earn up to a 100% interest in the Mogollon silver-gold mining district. The Company may earn up to a 100% interest in two phases:
| ● | Phase I is an option to earn a 75% interest over three years for staged payments totaling US$350,000 in cash, US$1,450,000 of value in shares, and a final payment of US$1,000,000 which may be paid in cash or shares, at the election of the Company. Phase I also includes a US$3,000,000 work commitment on the property. During the year ended August 31, 2023, the Company paid $136,486 (US$100,000) and issued 4,398,831 shares with a fair value of $2,220,240 (US$1,650,000) to Allegiant (Note 8). | |
| ● | After the 75% earn in, the Company can elect to either form a 75/25 joint venture with Allegiant or purchase the remaining 25% interest for US$3,000,000 in cash or shares. On November 1, 2023, the Company issued 8,912,884 shares with a fair value of $4,077,300 (US$3,000,000) to Allegiant (Note 8). |
As of August 31, 2024, the Company had completed all remaining option payments to the vendor to earn a 100% interest in the project.
Additionally, the Company has mining lease agreements on the Mogollon property with certain lessors, which were renegotiated on September 20, 2021. The payment terms of the mining lease agreements are as follows:
| ● | $82,240 (US$63,042) on signing of the amended agreement (paid); | |
| ● | An additional USD$99,067 on or before the 12-month anniversary, and each successive anniversary thereafter. Of the annual payments, as much as 75% may be paid in shares at least six months prior to the anniversary date, at the option of the Company. During the year ended August 31, 2023, the Company made a cash payment to these lessors for the balance of the annual payment of $94,041 (US$72,051) and issued 57,049 common shares with a fair value of $36,785 (Note 8). During the year ended August 31, 2024, the Company made cash payments to these lessors of $91,650 (US$67,771). |
The Company has an additional lease agreement on the Mogollon property which was initially negotiated on April 9, 2019. Pursuant to this lease, the Company owes an annual base payment of USD$10,000, which is adjusted to an amount equal to the change in the Production Price Index for industrial commodities as published by the United State Bureau of Labour Statistics on each anniversary. The Company paid $20,734 (US$15,215) pursuant to this lease during the year ended August 31, 2023. During the year ended August 31, 2024, the Company paid $20,569 (US$15,093) and issued 105,991 common shares with a fair value of $36,550 (Note 8).
The Company will also be subject to a production royalty on certain portions of the property of 4%. Portions of this royalty area may be bought down to 2% for staged payments of USD$3,000,000.
On November 22, 2021, the Company signed an additional option agreement to earn a 100% interest in two patented mining claims (the “Patents”) covering the Eberle Mine immediately adjacent to the Mogollon property. The Company may earn a 100% interest in the Patents by making cash payments totaling US$700,000 over four years as follows:
| ● | $128,884 (US$100,000) on signing of the option agreement (paid); | |
| ● | An additional $199,320 (US$150,000) on or before the 12-month anniversary (paid during the year ended August 31, 2023); | |
| ● | An additional $207,285 (US$150,000) on or before the 24-month anniversary (paid during the year ended August 31, 2024); | |
| ● | An additional USD$150,000 on or before the 36-month anniversary (paid subsequent to August 31, 2024 (Note 15)); and | |
| ● | An additional USD$150,000 on or before the 48-month anniversary. |
After completion of the payments with respect to the Eberle Mine, the Company will not be subject to any underlying royalties or other encumbrances.
During the year ended August 31, 2023, the Company staked additional claims surrounding the Mogollon property for a total cost of $84,341. The Company did not stake any additional claims during the year ended August 31, 2024.
As at August 31, 2024, the Company had long-term prepaid expenses of $43,172 (August 31, 2023 - $112,281) which relate to a bond payment and deposits for drilling services.
| 13 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 7. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
At August 31, 2024 and 2023, the Company’s accounts payable and accrued liabilities are comprised of the following:
| August 31, 2024 | August 31, 2023 | |||||||
| Accounts payable (Note 10) | $ | 26,892 | $ | 263,535 | ||||
| Accrued liabilities (Note 10) | 77,107 | 15,597 | ||||||
| Total | $ | 103,909 | $ | 279,132 | ||||
| 8. | SHARE CAPITAL |
| a) | Authorized |
Unlimited number of common shares without par value.
| b) | Issued |
For the year ended August 31, 2024:
As at August 31, 2024, the Company had 104,867,575 (August 31, 2023 – 95,723,700) common shares issued and outstanding.
During the year ended August 31, 2024, the Company issued 125,000 common shares in connection with the exercise of stock options, for gross proceeds of $83,750.
On November 1, 2023, the Company issued 8,912,884 common shares with a fair value of $4,077,300 in connection with the mining lease agreements on the Mogollon property (Note 6). Share issuance costs of $1,500 were incurred in relation to the issuance.
On March 20, 2024, the Company issued 105,991 common shares with a fair value of $36,550 pursuant to the amended mining lease agreements on the Mogollon Property (Note 6).
During the year ended August 31, 2024, the Company incurred share issuance costs of $71,105 related to a brokered private placement which closed subsequent to year end (Note 15).
For the year ended August 31, 2023:
During the year ended August 31, 2023, the Company issued 150,000 common shares in connection with the exercise of stock options, for gross proceeds of $148,499.
On December 29, 2022, the Company completed a brokered private placement for gross proceeds of $10,312,300 consisting of 12,890,375 units of the Company at a price of $0.80 per unit. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each purchase warrant is exercisable to acquire one common share at a price of $1.20 per common share, for a period of 36 months. The warrants were ascribed a fair value of $257,807 under the residual method. In connection with the offering, the Company paid the agents a cash commission equal to 6% of the gross proceeds and issued 773,423 broker warrants, with a fair value of $333,451 (Note 9). The broker warrants are exercisable for a period of 36 months to acquire a common share at an exercise price of $0.80. The agents received a commission of $610,938 and $103,515 in agent expenses. The Company also incurred other share issuance costs of $109,100.
On March 20, 2023, the Company issued 57,049 common shares with a fair value of $36,785 in connection with the mining lease agreements on the Mogollon property (Note 6).
On August 15, 2023, the Company issued 4,398,831 common shares with a fair value of $2,220,240 in connection with the mining lease agreements on the Mogollon property (Note 6). Share issuance costs of $12,655 were incurred in relation to the issuance.
| c) | Escrow shares |
At August 31, 2024, there were nil shares in escrow (August 31, 2023 – 307,531).
| 14 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 9. | OPTIONS AND WARRANTS |
| a) | Options |
The Black-Scholes Option Pricing Model inputs for options granted during the year ended August 31, 2024, are as follows:
| Grant Date | Expiry Date | Exercise Price | Risk-Free Interest Rate | Expected Life | Volatility Factor | Dividend Yield | Fair Value | |||||||||||||||||
| December 6, 2023 | December 6, 2028 | $ | 0.62 | 3.40 | % | 5 years | 97 | % | 0 | $ | 0.41 | |||||||||||||
Total expenses arising from stock-based compensation recognized during the year ended August 31, 2024 was $746,449 (2023 - $860,652).
The Company has a stock option plan whereby a maximum of 10% of the issued and outstanding common shares of the Company may be reserved for issuance pursuant to the exercise of stock options. The terms of the granted options are fixed by the Board of Directors and are not to exceed ten years. The exercise price of options are determined by the Board of Directors, but shall not be less than the closing price of the Company’s common shares on the day preceding the option grant date, less any discount permitted by the Exchange. Options granted under the plan may vest immediately on grant, or over a period as determined by the Board of Directors or, in respect of options granted for investor relations services, as prescribed by Exchange policy.
A continuity schedule of the Company’s outstanding stock options for the years ended August 31, 2024 and 2023 are as follows:
| August 31, 2024 | August 31, 2023 | |||||||||||||||
Number outstanding | Weighted average exercise price |
Number outstanding | Weighted average exercise price | |||||||||||||
| Outstanding, beginning of year | 7,957,500 | $ | 0.86 | 6,375,000 | $ | 0.89 | ||||||||||
| Granted | 2,305,000 | 0.62 | 1,885,000 | 0.78 | ||||||||||||
| Exercised | (125,000 | ) | 0.67 | (150,000 | ) | 0.99 | ||||||||||
| Expired and forfeited | (290,000 | ) | 1.00 | (152,500 | ) | 0.99 | ||||||||||
| Outstanding, end of year | 9,847,500 | $ | 0.80 | 7,957,500 | $ | 0.86 | ||||||||||
| Exercisable, end of year | 8,118,750 | $ | 0.84 | 6,892,250 | $ | 0.87 | ||||||||||
The expired options in the year ended August 31, 2024 had a fair value of $154,529 (August 31, 2023 - $93,569) which was reclassified to deficit during the year.
At August 31, 2024, the Company had outstanding stock options exercisable to acquire common shares of the Company as follows:
| Expiry date | Options outstanding | Exercise Price | Remaining contractual life (in years) | |||||||||
| May 7, 2025 | 1,750,000 | $ | 0.25 | 0.68 | ||||||||
| June 9, 2025 | 300,000 | $ | 0.50 | 0.77 | ||||||||
| June 30, 2025 | 100,000 | $ | 0.92 | 0.83 | ||||||||
| October 13, 2025 | 2,035,000 | $ | 1.41 | 1.12 | ||||||||
| March 25, 2026 | 200,000 | $ | 1.09 | 1.56 | ||||||||
| January 7, 2027 | 1,352,500 | $ | 0.94 | 2.35 | ||||||||
| June 14, 2027 | 200,000 | $ | 0.74 | 2.79 | ||||||||
| February 1, 2028 | 1,605,000 | $ | 0.80 | 3.42 | ||||||||
| December 6, 2028 | 2,305,000 | $ | 0.62 | 4.27 | ||||||||
| 15 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 9. | OPTIONS AND WARRANTS (continued) |
| b) | Warrants |
A continuity schedule of the Company’s outstanding common share purchase warrants for the years ended August 31, 2024 and 2023 are as follows:
| August 31, 2024 | August 31, 2023 | |||||||||||||||
Number outstanding | Weighted average exercise price |
Number outstanding | Weighted average exercise price | |||||||||||||
| Outstanding, beginning of year | 19,434,158 | $ | 1.32 | 16,768,565 | $ | 1.48 | ||||||||||
| Granted | - | - | 7,218,610 | 1.16 | ||||||||||||
| Expired | (5,084,000 | ) | 1.75 | (4,553,017 | ) | 1.66 | ||||||||||
| Outstanding, end of year | 14,350,158 | $ | 1.16 | 19,434,158 | $ | 1.32 | ||||||||||
At August 31, 2024, the Company had outstanding common share purchase warrants exercisable to acquire common shares of the Company as follows:
Expiry Date |
Warrants outstanding |
Exercise Price | Remaining contractual life (in years) | |||||||||
| February 10, 2025 | 6,388,882 | $ | 1.20 | 0.45 | ||||||||
| February 10, 2025 | 742,666 | $ | 0.90 | 0.45 | ||||||||
| December 29, 2025 | 6,445,187 | $ | 1.20 | 1.33 | ||||||||
| December 29, 2025 | 773,423 | $ | 0.80 | 1.33 | ||||||||
The expired warrants in the year ended August 31, 2024 had a fair value of $nil (2023 - $2,341,166) which was reclassified to deficit during the year.
| 10. | RELATED PARTY TRANSACTIONS |
The Company’s related parties consist of its key management personnel, including its directors and officers.
During the normal course of business, the Company enters into transactions with its related parties that are considered to be arm’s length transactions and made at normal market prices and on normal commercial terms.
| (a) | Key management compensation included in consulting fees for the years ended August 31, 2024 and 2023 were as follows: |
| August 31, 2024 | August 31, 2023 | |||||||
| Consulting fees | $ | 410,726 | $ | 398,052 | ||||
| Stock-based compensation | $ | 451,001 | $ | 539,094 | ||||
| Fees capitalized in evaluation and exploration assets (Note 6) | $ | 524,246 | $ | 1,051,182 | ||||
| (b) | As at August 31, 2024, the Company had $5,319 (August 31, 2023 - $97,312) owing to related parties, which is included in accounts payable and accrued liabilities (Note 7). |
| 16 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 11. | FINANCIAL INSTRUMENTS |
| a) | Categories of financial instruments and fair value measurements |
The Company’s financial assets and liabilities are classified as follows:
| August 31, 2024 | August 31, 2023 | |||||||
| Financial assets: | ||||||||
| Fair value through profit or loss | ||||||||
| Cash and cash equivalents | $ | 587,106 | $ | 6,997,894 | ||||
| At amortized cost | ||||||||
| Accounts receivable | $ | 13,203 | $ | 57,555 | ||||
| Loan receivable | $ | 341,596 | $ | - | ||||
| Interest receivable | $ | - | $ | 56,445 | ||||
Financial liabilities: | ||||||||
| At amortized cost | ||||||||
| Accounts payable | $ | 26,892 | $ | 263,535 | ||||
The amount of accounts payable includes amounts due to related parties (Note 10).
The fair values of the Company’s cash, receivables, loan receivable, interest receivable and accounts payable approximate their carrying amounts due to the short-term nature of these instruments.
| b) | Management of financial risks |
The Company’s financial instruments expose the Company to certain financial risks, including credit risk, liquidity risk, interest rate risk and foreign currency risk.
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. At August 31, 2024, the Company was exposed to credit risk on its cash, receivables, loan receivable and interest receivable.
The Company’s cash is held with a high credit quality financial institution in Canada and as at August 31, 2024, management considers its exposure to credit risk on its cash to be low. The Company’s interest receivable is due from the same financial institution and the credit risk is also assessed as low. The Company’s loan receivable is due from an arms-length third party and was repaid subsequent to August 31, 2024 (Note 5). The Company’s receivables consist of GST receivable from the Government of Canada and as such the risk is assessed as low.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities. The Company manages liquidity risk by maintaining adequate cash and managing its capital and expenditures.
At August 31, 2024, the Company had cash of $587,106 (August 31, 2023 - $6,997,894) and accounts payable and accrued liabilities of $103,909 (August 31, 2023 - $279,132) with contractual maturities of less than one year. The Company assessed its liquidity risk as high as at August 31, 2024.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company’s financial assets and financial liabilities are not exposed to interest rate risk due to their short-term nature and maturity. The Company is not exposed to interest rate risk at August 31, 2024.
| 17 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 11. | FINANCIAL INSTRUMENTS (continued) |
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that it has monetary assets and liabilities denominated in foreign currencies.
As at August 31, 2024, the Company is exposed to foreign currency risk as it has cash, prepaid expenses, loan receivable, and accounts payable denominated in US Dollars, as follows:
| August 31, 2024 | August 31, 2023 | |||||||
| Cash | $ | 170,113 | $ | 201,943 | ||||
| Prepaid expenses | 32,000 | 82,000 | ||||||
| Loan receivable | 250,000 | - | ||||||
| Accounts payable | (2,306 | ) | (151,489 | ) | ||||
| Net exposure | 449,807 | 132,454 | ||||||
| Canadian dollar equivalent | $ | 606,835 | $ | 179,223 | ||||
As of August 31, 2024, a 5% change in the exchange rate between US dollars and Canadian dollars would impact the Company’s net assets by $30,342 (August 31, 2023 - $8,961). The Company assessed its foreign currency risk as moderate as of August 31, 2024.
| 12. | INCOME TAXES |
A reconciliation of income taxes at statutory rates with reported taxes is as follows:
| August 31, 2024 | August 31, 2023 | |||||||
| Net loss for the year | $ | (2,880,948 | ) | $ | (2,840,894 | ) | ||
| Canadian federal and provincial statutory income tax rate | 27 | % | 27 | % | ||||
| Income tax benefit based on Canadian statutory income tax rates | (777,856 | ) | (767,041 | ) | ||||
| Effects of the following: | ||||||||
| Other differences | 27,820 | 161,071 | ||||||
| Changes in valuation allowance | 750,036 | 605,970 | ||||||
| Income tax benefit | $ | - | $ | - | ||||
| 18 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 12. | INCOME TAXES (continued) |
The significant components of deferred income tax assets and liabilities are as follows:
| August 31, 2024 | August 31, 2023 | |||||||
| Non-capital loss | $ | 3,324,175 | $ | 2,415,715 | ||||
| Share issuance costs | 277,598 | 436,023 | ||||||
| Exploration and evaluation assets | 57,359 | 57,359 | ||||||
| Valuation allowance | (3,659,132 | ) | (2,909,096 | ) | ||||
| Tax recovery | $ | - | $ | - | ||||
The Canadian non-capital losses at August 31, 2024 expire as follows:
| Expiry date | Amount | |||
| 2038 | $ | 50,893 | ||
| 2039 | 24,028 | |||
| 2040 | 693,881 | |||
| 2041 | 3,135,229 | |||
| 2042 | 3,006,632 | |||
| 2043 | 2,620,489 | |||
| 2044 | 2,780,609 | |||
| $ | 12,311,761 | |||
At August 31, 2024, the Company has share issuance costs of $1,028,141 that can be deducted over a five year period and tax pools related to exploration and evaluation assets of $42,436,232 which may be carried forward indefinitely.
| 13. | SEGMENTED INFORMATION |
The Company is organized into business units based on exploration and evaluation assets and has three reportable operating segments, being that of acquisition and exploration and evaluation activities at the Hughes property in Nevada, the Mogollon property in New Mexico and its corporate headquarters located in Canada. The Company is in the exploration stage and has no reportable segment revenues or operating results.
The Company’s total assets are segmented geographically as follows:
| Hughes Property | Mogollon Property | Corporate | Total | |||||||||||||
| As at August 31, 2023 | ||||||||||||||||
| Current assets | $ | 37,482 | $ | - | $ | 7,335,439 | $ | 7,372,921 | ||||||||
| Restricted cash | - | - | 202,965 | 202,965 | ||||||||||||
| Prepaid expenses – long term | 112,281 | - | - | 112,281 | ||||||||||||
| Exploration and evaluation assets | 22,073,169 | 12,365,018 | - | 34,438,187 | ||||||||||||
| $ | 22,222,932 | $ | 12,365,018 | $ | 7,538,404 | $ | 42,126,354 | |||||||||
| As at August 31, 2024 | ||||||||||||||||
| Current assets | $ | 27,678 | $ | - | $ | 1,340,781 | $ | 1,368,459 | ||||||||
| Restricted cash | - | - | 214,102 | 214,102 | ||||||||||||
| Prepaid expenses – long term | - | 43,172 | - | 43,172 | ||||||||||||
| Exploration and evaluation assets | 23,177,393 | 19,046,399 | - | 42,223,792 | ||||||||||||
| $ | 23,205,071 | $ | 19,089,571 | $ | 1,554,883 | $ | 43,849,525 | |||||||||
| 19 |
SUMMA SILVER CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2024 and 2023
(Expressed in Canadian Dollars)
| 14. | MANAGEMENT OF CAPITAL |
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to continue its business and maintain a flexible capital structure, which optimizes the costs of capital at an acceptable risk. The Company’s capital includes the components of its shareholders’ equity.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of its underlying assets. To maintain or adjust its capital structure, the Company may issue new shares, issue new debt, acquire or dispose of assets, or adjust the amount of cash. In order to preserve cash, the Company does not pay any dividends.
The Company is not subject to any externally imposed capital requirements. The Company did not change their capital management approach during the year ended August 31, 2024. The Company’s ability to continue its operations is dependent on its success in raising equity through share issuances, suitable debt and/or other financing arrangements.
| 15. | SUBSEQUENT EVENTS |
On October 9, 2024, the loan receivable was repaid (Note 5).
On November 1, 2024, the Company completed a brokered private placement of 16,207,500 units at a price of $0.40 per unit for aggregate gross proceeds of $6,483,000. Each unit is comprised of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant shall be exercisable to acquire one common share at a price of $0.55 per Common Share until November 1, 2026. In connection with the private placement, the Company paid the agents a cash commission of $399,525 and issued 998,813 broker warrants. In addition, the agents received an advisory fee of $18,000 and 45,000 advisory broker warrants. The broker warrants are exercisable to acquire one common share at a price of $0.40 per common share at any time on or before November 1, 2026. The Company additionally paid a cash fee of $69,062 and granted 172,655 finders warrants to an eligible arm’s length finder.
On November 15, 2024, the Company paid $209,160 (US$150,000) pursuant to the option agreement covering the Eberle mine (Note 6).
Subsequent to the year-end, the Company sold 890,500 common shares at a weighted average sale price of $0.40 for gross proceeds of $357,171 pursuant to its at-the-market equity distribution program. Share issuance costs of $32,476 were incurred in relation to the issuance.
On December 31, 2024, 250,000 stock options with an exercise price of $0.62 were cancelled.
On January 25, 2025, 2,400,000 options with a exercise price of $0.40, expiring in 5 years, were granted
On February 12, 2025, 200,000 options were exercised into common shares for gross proceeds of $47,981.
On March 20, 2025, the Company issued 112,324 common shares with a fair value of $39,493 pursuant to the amended mining lease agreements on the Mogollon Property (Note 6).
On May 7, 2025, 1,550,000 stock options with an exercise price of $0.25 expired unexercised.
On June 9, 2025, 300,000 stock options with an exercise price of $0.50 expired unexercised.
On June 30, 2026, 100,000 stock options with an exercise price of $0.92 expired unexercised.
On October 13, 2025, 2,035,000 stock options with an exercise price of $1.41 expired unexercised.
On March 25, 2025, 200,000 stock options with an exercise price of $1.09 expired unexercised.
On August 1, 2025, the Company completed the previously announced acquisition of the Company by Silver47 Exploration Corp. (“Silver47”) whereby Silver47 issued 55,269,408 common shares of Silver47 to acquire 100% of the issued and outstanding shares of the Company. Concurrent with the closing, Silver47completed the subscription receipt financing and issued 12,475,400 common shares of Silver47 for gross proceeds of $6,900,000 and 6,237,600 warrants exercisable at $0.796 per warrant. As part of the transaction, Silver47issued 1,446,650 advisory units of Company which include 1,446,650 common shares 723,324 advisory warrants exercisable at $0.796 and expire on August 1, 2027. In addition, the Silver47issued 667,421 broker warrants and 66,895 advisory warrants exercisable at $0.796 and expire on August 1, 2027.
| 20 |
Exhibit 99.4
SUMMA SILVER CORP.
Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025 and 2024
(Expressed in Canadian Dollars - unaudited)
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.
The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.
SUMMA SILVER CORP.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in Canadian Dollars)
May 31, 2025 (unaudited) | August 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 818,010 | $ | 587,106 | ||||
| Receivables | 23,251 | 13,203 | ||||||
| Loan receivable (Note 3) | - | 341,596 | ||||||
| Prepaid expenses | 137,855 | 426,554 | ||||||
| 979,116 | 1,368,459 | |||||||
| Non-current assets | ||||||||
| Restricted cash | 218,339 | 214,102 | ||||||
| Prepaid expenses (Note 4) | 44,026 | 43,172 | ||||||
| Exploration and evaluation assets (Note 4) | 47,153,583 | 42,223,792 | ||||||
| TOTAL ASSETS | $ | 48,395,064 | $ | 43,849,525 | ||||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (Notes 5 and 8) | $ | 323,207 | $ | 103,909 | ||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Share capital (Note 6) | 55,538,965 | 49,937,928 | ||||||
| Reserve (Note 7) | 6,629,139 | 6,126,873 | ||||||
| Accumulated other comprehensive loss | 1,543,087 | 1,082,094 | ||||||
| Accumulated deficit | (15,639,334 | ) | (13,401,279 | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | 48,071,857 | 43,745,616 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 48,395,064 | $ | 43,849,525 | ||||
Nature of operations and going concern (Note 1)
Subsequent events (Note 12)
These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on July 28, 2025. They are signed on behalf of the Board of Directors by:
| “Brian Goss” | “Martin Bajic” | |
| Director | Director |
The accompanying notes form an integral part of these condensed consolidated interim financial statements
| 2 |
SUMMA SILVER CORP.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Income)
(Expressed in Canadian Dollars - unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
May 31, 2025 | May 31, 2024 | May 31, 2025 | May 31, 2024 | |||||||||||||
| EXPENSES | ||||||||||||||||
| General and administrative costs | $ | 73,259 | $ | 72,309 | $ | 174,723 | $ | 206,838 | ||||||||
| Consulting fees (Note 8) | 163,690 | 163,465 | 611,439 | 529,665 | ||||||||||||
| Professional fees | 191,314 | 152,789 | 326,763 | 231,534 | ||||||||||||
| Shareholder information and marketing | 203,470 | 75,011 | 594,493 | 193,992 | ||||||||||||
| Investor relations and conferences | 97,099 | 64,088 | 320,875 | 370,174 | ||||||||||||
| Stock-based compensation (Notes 7 and 8) | 326,244 | 17,979 | 613,406 | 609,866 | ||||||||||||
| Travel | 30,251 | 11,689 | 49,994 | 88,648 | ||||||||||||
| Transfer agent, regulatory and listing fees | 21,297 | 20,987 | 118,397 | 89,883 | ||||||||||||
OTHER ITEMS | 1,106,624 | 578,317 | 2,810,090 | 2,320,600 | ||||||||||||
| Foreign exchange loss | (68,232 | ) | (7,870 | ) | (50,618 | ) | (28,486 | ) | ||||||||
| Interest income | 8,304 | 30,917 | 33,180 | 148,983 | ||||||||||||
NET LOSS FOR THE PERIOD | 1,166,552 | 555,270 | 2,827,528 | 2,200,103 | ||||||||||||
| Items that may be subsequently reclassified to profit or loss: | ||||||||||||||||
Foreign exchange (loss) gain on translation of foreign operations | (1,683,544 | ) | 146,450 | 460,993 | 207,820 | |||||||||||
COMPREHENSIVE LOSS FOR THE PERIOD | $ | 2,850,096 | $ | 408,820 | $ | 2,366,535 | $ | 1,992,283 | ||||||||
Basic and diluted loss per share for the period | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | ||||
| Weighted average number of common shares outstanding | 122,157,175 | 104,844,533 | 118,017,893 | 102,960,435 | ||||||||||||
The accompanying notes form an integral part of these condensed consolidated interim financial statements
| 3 |
SUMMA SILVER CORP.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in Canadian Dollars - unaudited)
For the Nine Months Ended | ||||||||
| May 31, 2025 | May 31, 2024 | |||||||
| Cash flows provided from (used in): | ||||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss for the period | $ | (2,827,528 | ) | $ | (2,200,103 | ) | ||
| Adjustments for item not affecting cash: | ||||||||
| Stock-based compensation | 613,406 | 609,866 | ||||||
| Interest income | (33,180 | ) | (148,983 | ) | ||||
| Net changes in non-cash working capital items: | ||||||||
| Receivables | 331,548 | (315,501 | ) | |||||
| Prepaid expenses | 287,845 | 212,805 | ||||||
| Accounts payable and accrued liabilities | 185,426 | 103,222 | ||||||
| Net cash flows used in operating activities | (1,442,483 | ) | (1,738,694 | ) | ||||
INVESTING ACTIVITY | ||||||||
| Exploration and evaluation assets | (4,399,670 | ) | (3,595,800 | ) | ||||
| Net cash flows used in investing activity | (4,399,670 | ) | (3,595,800 | ) | ||||
FINANCING ACTIVITY | ||||||||
| Proceeds from issuance of shares, net of costs | 5,634,725 | - | ||||||
| Proceeds through at-the-market equity program | 357,171 | - | ||||||
| Proceeds from options exercise | 47,981 | 83,750 | ||||||
| Interest received | 33,180 | 205,428 | ||||||
| Net cash flows provided from financing activity | 6,073,057 | 289,178 | ||||||
Net changed in cash and cash equivalents | 230,904 | (5,045,316 | ) | |||||
| Cash and cash equivalents, beginning | 587,106 | 6,997,894 | ||||||
Cash and cash equivalents, ending | $ | 818,010 | $ | 1,952,578 | ||||
Non-cash transactions: | ||||||||
| Common shares issued for exploration and evaluation property | $ | 39,493 | $ | 4,112,350 | ||||
| Exploration and evaluation expenditures included in accounts payable | $ | 33,417 | $ | 4,189 | ||||
| Cash and cash equivalents is comprised of: | ||||||||
| Cash held in bank accounts | $ | 818,010 | $ | 1,952,578 | ||||
The accompanying notes form an integral part of these condensed consolidated interim financial statements
| 4 |
SUMMA SILVER CORP.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(Expressed in Canadian Dollars - unaudited)
| Number of shares | Amount | Reserve | Accumulated other comprehensive income | Accumulated deficit | Total | |||||||||||||||||||
| Balance, August 31, 2023 | 95,723,700 | $ | 45,798,433 | $ | 5,547,953 | $ | 1,175,696 | $ | (10,674,860 | ) | $ | 41,847,222 | ||||||||||||
| Common shares issued on the exercise of stock options (Note 6) | 125,000 | 96,750 | (13,000 | ) | - | - | 83,750 | |||||||||||||||||
| Common shares issued for exploration and evaluation assets (Notes 4 and 6) | 9,018,875 | 4,113,850 | - | - | - | 4,113,850 | ||||||||||||||||||
| Fair value of expired options (Note 7) | - | - | (154,529 | ) | - | 154,529 | - | |||||||||||||||||
| Share issuance costs (Note 6) | - | (1,500 | ) | - | - | - | (1,500 | ) | ||||||||||||||||
| Stock-based compensation (Note 7) | - | - | 609,866 | - | - | 609,866 | ||||||||||||||||||
| Net loss | - | - | - | - | (2,200,103 | ) | (2,200,103 | ) | ||||||||||||||||
| Other comprehensive income | - | - | - | 207,820 | - | 207,820 | ||||||||||||||||||
| Balance, May 31, 2024 | 104,867,575 | $ | 50,007,533 | $ | 5,990,290 | $ | 1,383,516 | $ | (12,720,434 | ) | $ | 44,660,905 | ||||||||||||
| Balance, August 31, 2024 | 104,867,575 | $ | 49,937,928 | $ | 6,126,873 | $ | 1,082,094 | $ | (13,401,279 | ) | $ | 43,745,616 | ||||||||||||
| Common shares issued pursuant to financing (Note 6) | 16,207,500 | 6,158,850 | 324,150 | - | - | 6,483,000 | ||||||||||||||||||
| Common shares issued pursuant to at-the-market equity program (Note 6) | 890,500 | 357,171 | - | - | - | 357,171 | ||||||||||||||||||
| Common shares issued for exploration and evaluation assets (Notes 4 and 6) | 112,324 | 39,493 | - | - | - | 39,493 | ||||||||||||||||||
| Common shares issued on the exercise of options (Note 6) | 200,000 | 58,891 | (10,910 | ) | - | - | 47,981 | |||||||||||||||||
| Share issuance costs (Note 6) | - | (1,013,368 | ) | 165,093 | - | - | (848,275 | ) | ||||||||||||||||
| Fair value of expired options and warrants (Note 7) | - | - | (589,473 | ) | - | 589,473 | - | |||||||||||||||||
| Stock-based compensation (Note 7) | - | - | 613,406 | - | - | 613,406 | ||||||||||||||||||
| Net loss | - | - | - | - | (2,827,528 | ) | (2,827,528 | ) | ||||||||||||||||
| Other comprehensive income | - | - | - | 460,993 | - | 460,993 | ||||||||||||||||||
| Balance, May 31, 2025 | 122,277,899 | $ | 55,538,965 | $ | 6,692,139 | $ | 1,543,087 | $ | (15,639,334 | ) | $ | 48,071,857 | ||||||||||||
The accompanying notes form an integral part of these condensed consolidated interim financial statements
| 5 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 1. | NATURE OF OPERATIONS AND GOING CONCERN |
Summa Silver Corp. (the “Company” or “Summa Silver”) was incorporated pursuant to the provisions of the British Columbia Business Corporations Act on March 7, 2018. The Company is in the business of mineral exploration. The Company’s registered office is located at Suite 918 – 1030 West Georgia Street, Vancouver, BC, V6E 2Y3. Summa Silver’s common shares are traded on the TSX Venture Exchange (the “Exchange”) under the symbol “SSVR”, the OTCQX under the symbol “SSVRF” and on the Frankfurt Stock Exchange under the symbol “48X”.
These condensed consolidated interim financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and settle its liabilities in the normal course of business. At May 31, 2025, the Company had cash of $818,010 (August 31, 2024 - $587,106) and its current assets exceed its current liabilities by $655,909 (August 31, 2024 - $1,264,550). The Company currently is not generating any revenues. It has incurred losses and negative cash flows from operations since inception and had an accumulated deficit of $15,639,334 as at May 31, 2025 (August 31, 2024 - $13,401,279). Whether and when the Company can obtain profitability and positive cash flows from operations is uncertain. These factors indicate the existence of a material uncertainty which may cast significant doubt on the ability of the Company to continue as a going concern.
The Company’s ability to continue its operations is dependent on its success in raising equity through share issuances, suitable debt financing and/or other financing arrangements. While the Company has been successful in raising equity in the past, there can be no guarantee that it will be able to raise sufficient funds to fund its exploration activities and general and administrative costs in the next twelve months and in the future. These condensed consolidated interim financial statements do not give effect to the required adjustments to the carrying amounts and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.
| 2. | MATERIAL ACCOUNTING POLICIES |
The accounting policies followed by the Company are set out in Note 3 to the audited consolidated financial statements for the year ended August 31, 2024 and have been consistently followed in the preparation of these condensed consolidated interim financial statements. In the current year, the Company has applied the amendment to IFRS Standards and Interpretations issued by the IASB that were effective for annual periods that begin on or after January 1, 2023.
These condensed consolidated interim financial statements were authorized for issuance by the Company’s Board of Directors and follow the same accounting policies and methods of computation as the most recent annual financial statements.
New accounting pronouncements
IFRS 18 – Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements (IFRS 18), which replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by requiring income and expenses to be presented into the three defined categories of operating, investing and financing, and by specifying certain defined totals and subtotals. Where company-specific measures related to the income statement are provided, IFRS 18 requires companies to disclose explanations around these measures, which are referred to as management defined performance measures. IFRS 18 also provides additional guidance on principles of aggregation and disaggregation which apply to the primary financial statements and the notes.
IFRS 18 will not affect the recognition and measurement of items in the financial statements, nor will it affect which items are classified in other comprehensive income and how these items are classified. The standard is effective for reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective application is required, and early application is permitted. The Company is currently assessing the effect of this new standard on its financial statements.
| 6 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 3. | LOAN RECEIVABLE |
The Company loaned $273,274 (US$200,000) on March 22, 2024, and a further $68,322 (US$50,000) on March 27, 2024, to an arms-length third party. The loan was unsecured, interest free, and was repaid on October 9, 2024.
| 4. | EXPLORATION AND EVALUATION ASSETS |
Costs incurred with respect to the properties are summarized below:
| Hughes Property | Mogollon Property | Staked Properties | Total | |||||||||||||
| Acquisition Costs | ||||||||||||||||
| Balance, August 31, 2023 | $ | 2,011,941 | $ | 4,826,718 | $ | - | $ | 6,838,659 | ||||||||
| Additions | - | 4,433,354 | - | 4,433,354 | ||||||||||||
| Balance, August 31, 2024 | 2,011,941 | 9,260,072 | - | 11,272,013 | ||||||||||||
| Additions | - | 378,712 | 77,101 | 455,813 | ||||||||||||
| Balance, May 31, 2025 | $ | 2,011,941 | $ | 9,638,784 | $ | 77,101 | $ | 11,727,826 | ||||||||
| Deferred Exploration Costs | ||||||||||||||||
| Balance, August 31, 2023 | 20,061,228 | 7,538,300 | - | 27,599,528 | ||||||||||||
| Drilling | 450,607 | 1,309,387 | - | 1,759,994 | ||||||||||||
| Consulting (Note 8) | 680,644 | 886,198 | - | 1,566,842 | ||||||||||||
| Assays | 32,637 | 17,662 | - | 50,299 | ||||||||||||
| Permitting | - | 55,522 | - | 55,522 | ||||||||||||
| Currency translation adjustment | (59,664 | ) | (20,742 | ) | - | (80,406 | ) | |||||||||
| Balance, August 31, 2024 | $ | 21,165,452 | $ | 9,786,327 | $ | - | $ | 30,951,779 | ||||||||
| Drilling | 2,262,414 | - | - | 2,262,414 | ||||||||||||
| Consulting (Note 8) | 843,519 | 260,705 | 6,000 | 1,110,224 | ||||||||||||
| Fuel | 95,946 | - | - | 95,946 | ||||||||||||
| Materials | 172,520 | - | - | 172,520 | ||||||||||||
| Resource estimate | 112,966 | 115,608 | - | 228,574 | ||||||||||||
| Currency translation adjustment | 431,223 | 173,077 | - | 604,300 | ||||||||||||
| Balance, May 31, 2025 | $ | 25,084,040 | $ | 10,335,717 | $ | 6,000 | $ | 35,425,757 | ||||||||
| Total | ||||||||||||||||
| Balance, August 31, 2024 | $ | 23,177,393 | $ | 19,046,399 | $ | - | $ | 42,223,792 | ||||||||
| Balance, May 31, 2025 | $ | 27,095,981 | $ | 19,974,501 | $ | 83,101 | $ | 47,153,583 | ||||||||
Hughes Property
The Company had an option agreement to acquire 100% of the Hughes property in exchange for US$400,000 in cash and US$400,000 in share payments payable in semi-annual instalments over a five-year period. There is an additional obligation to incur $1,500,000 of expenditures over the same five-year period ending March 8, 2025, which has been fulfilled. The property is subject to a 1% net smelter royalty which may be reduced to 0.5% for additional payments of US$4,000,000.
During the year ended August 31, 2022, the Company completed all remaining option payments to the vendor to earn a 100% interest in the property, subject to the 1% net smelter royalty.
Mogollon Property
On August 24, 2020 the Company signed a definitive agreement with Allegiant Gold Ltd. (“Allegiant”) to earn up to a 100% interest in the Mogollon silver-gold property. The Company may earn up to a 100% interest in two phases:
| ● | Phase I is an option to earn a 75% interest over three years for staged payments totaling US$350,000 in cash, US$1,450,000 of value in shares, and a final payment of US$1,000,000 which may be paid in cash or shares, at the election of the Company. Phase I also includes a US$3,000,000 work commitment on the property. During the year ended August 31, 2023, the Company completed the obligations of Phase I of the earn-in agreement. | |
| ● | After the 75% earn in, the Company can elect to either form a 75/25 joint venture with Allegiant or purchase the remaining 25% interest for US$3,000,000 in cash or shares. On November 1, 2023, the Company issued 8,912,884 shares with a fair value of $4,077,300 (US$3,000,000) to Allegiant (Note 6). |
As of May 31, 2025, the Company had completed all remaining option payments to the vendor to earn a 100% interest in the property.
| 7 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 4. | EXPLORATION AND EVALUATION ASSETS (continued) |
Additionally, the Company has mining lease agreements on the Mogollon property with certain lessors, which were renegotiated on September 20, 2021. The payment terms of the mining lease agreements are as follows:
| ● | $82,240 (US$63,042) on signing of the amended agreement (paid); | |
| ● | An additional USD$99,067 on or before the 12-month anniversary, and each successive anniversary thereafter. Of the annual payments, as much as 75% may be paid in shares at least six months prior to the anniversary date, at the option of the Company. During the year ended August 31, 2024, the Company made cash payments to these lessors of $91,650 (US$67,771). During the nine months ended May 31, 2025, the Company had made cash payments to these lessors of $130,059 (US$88,565). |
The Company has an additional lease agreement on the Mogollon property which was initially negotiated on April 9, 2019. Pursuant to this lease, the Company owes an annual base payment of USD$10,000, which is adjusted to an amount equal to the change in the Production Price Index for industrial commodities as published by the United State Bureau of Labour Statistics on each anniversary. During the year ended August 31, 2024, the Company paid $20,569 (US$15,093) and issued 105,991 common shares with a fair value of $36,550. During the nine months ended May 31, 2025, the Company issued 112,324 common shares with a fair value of $39,493 (Note 6).
The Company will also be subject to a production royalty on certain portions of the property of 4%. Portions of this royalty area may be bought down to 2% for staged payments of USD$3,000,000.
On November 22, 2021, the Company signed an additional option agreement to earn a 100% interest in two patented mining claims (the “Patents”) covering the Eberle Mine immediately adjacent to the Mogollon property. The Company may earn a 100% interest in the Patents by making cash payments totaling US$700,000 over four years as follows:
| ● | $128,884 (US$100,000) on signing of the option agreement (paid); | |
| ● | An additional $199,320 (US$150,000) on or before the 12-month anniversary (paid during the year ended August 31, 2023); | |
| ● | An additional $207,285 (US$150,000) on or before the 24-month anniversary (paid during the year ended August 31, 2024); | |
| ● | An additional $209,160 (USD$150,000) on or before the 36-month anniversary (paid during the nine months ended May 31, 2025); and | |
| ● | An additional USD$150,000 on or before the 48-month anniversary. |
After completion of the payments with respect to the Eberle Mine, the Company will not be subject to any underlying royalties or other encumbrances.
Staked Properties
During the nine months ended May 31, 2025, the Company staked new properties in Nevada for a total cost of $77,101.
As at May 31, 2025, the Company had long-term prepaid expenses of $44,026 (August 31, 2024 - $43,172) which relate to a bond payment.
| 5. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
At May 31, 2025 and August 31, 2024, the Company’s accounts payable and accrued liabilities are comprised of the following:
| May 31, 2025 | August 31, 2024 | |||||||
| Accounts payable (Note 8) | $ | 137,056 | $ | 26,892 | ||||
| Accrued liabilities (Note 8) | 186,151 | 77,107 | ||||||
| Total | $ | 323,207 | $ | 103,909 | ||||
| 8 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 6. | SHARE CAPITAL |
| a) | Authorized |
Unlimited number of common shares without par value.
| b) | Issued |
For the nine months ended May 31, 2025:
As at May 31, 2025, the Company had 122,277,899 (August 31, 2024 – 104,867,575) common shares issued and outstanding.
During the nine months ended May 31, 2025, the Company sold 890,500 common shares at a weighted average sale price of $0.40 for gross proceeds of $357,171 pursuant to its at-the-market equity distribution program. Share issuance costs of $32,476 were incurred in relation to the issuance.
On November 1, 2024, the Company completed a brokered private placement of 16,207,500 units at a price of $0.40 per unit for aggregate gross proceeds of $6,483,000. Each unit is comprised of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant shall be exercisable to acquire one common share at a price of $0.55 per common share until November 1, 2026. The warrants were ascribed a fair value of $324,150 under the residual method.
In connection with the private placement, the Company paid the agents a cash commission of $399,525 and issued 998,813 broker warrants with a fair value of $135,554. In addition, the agents received an advisory fee of $20,340, 45,000 advisory broker warrants with a fair value of $6,107 and incurred other share issuance costs of $81,054. The Company additionally paid a cash fee of $69,062 and granted and additional 172,655 broker warrants with a fair value of $23,432 to an eligible arm’s length finder. The broker warrants are exercisable to acquire one common share at a price of $0.40 per common share at any time on or before November 1, 2026. The Company also incurred other share issuance costs of $205,288.
On February 12, 2025, 200,000 options were exercised into common shares for gross proceeds of $47,981.
On March 20, 2025, the Company issued 112,324 common shares with a fair value of $39,493 pursuant to the amended mining lease agreements on the Mogollon Property (Note 4).
Subsequent to May 31, 2025, the Company completed a brokered offering of subscription receipts for aggregate gross proceeds of $6,900,00 (Note 12). The Company incurred share issuance costs of $40,530 during the quarter ended May 31, 2025, in connection with this offering.
For the nine months ended May 31, 2024:
During the nine months ended May 31, 2024, the Company issued 125,000 common shares in connection with the exercise of stock options, for gross proceeds of $83,750.
On November 1, 2023, the Company issued 8,912,884 common shares with a fair value of $4,077,300 in connection with the mining lease agreements on the Mogollon property (Note 4). Share issuance costs of $1,500 were incurred in relation to the issuance.
On March 20, 2024, the Company issued 105,991 common shares with a fair value of $36,550 pursuant to the amended mining lease agreements on the Mogollon Property (Note 4).
| 7. | OPTIONS AND WARRANTS |
| a) | Options |
The Black-Scholes Option Pricing Model inputs for options granted during the nine months ended May 31, 2025 and 2024, are as follows:
| Grant Date | Expiry Date | Exercise Price | Risk-Free Interest Rate | Expected Life | Volatility Factor | Dividend Yield | Fair Value | |||||||||||||||||
| January 24, 2025 | January 24, 2030 | $ | 0.40 | 2.98 | % | 5 years | 92 | % | 0 | $ | 0.26 | |||||||||||||
| December 6, 2023 | December 6, 2028 | $ | 0.62 | 3.40 | % | 5 years | 97 | % | 0 | $ | 0.41 | |||||||||||||
| 9 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 7. | OPTIONS AND WARRANTS (continued) |
Total stock-based compensation recognized during the three and nine months ended May 31, 2025 was $326,244 and $613,406, respectively (2024 - $17,979 and $609,866, respectively) for options that vested.
The Company has a stock option plan whereby a maximum of 10% of the issued and outstanding common shares of the Company may be reserved for issuance pursuant to the exercise of stock options. The terms of the options granted are fixed by the Board of Directors and are not to exceed ten years. The exercise price of options are determined by the Board of Directors but shall not be less than the closing price of the Company’s common shares on the day preceding the option grant date, less any discount permitted by the Exchange. Options granted under the plan may vest immediately on grant, or over a period as determined by the Board of Directors or, in respect of options granted for investor relations services, as prescribed by Exchange policy.
A continuity schedule of the Company’s outstanding stock options for the nine months ended May 31, 2025 and 2024 are as follows:
| May 31, 2025 | May 31, 2024 | |||||||||||||||
Number outstanding | Weighted average exercise price |
Number outstanding | Weighted average exercise price | |||||||||||||
| Outstanding, beginning of period | 9,847,500 | $ | 0.80 | 7,957,500 | $ | 0.86 | ||||||||||
| Granted | 2,400,000 | 0.40 | 2,305,000 | 0.62 | ||||||||||||
| Exercised | (200,000 | ) | 0.25 | (125,000 | ) | 0.67 | ||||||||||
| Forfeited and expired | (1,800,000 | ) | 0.30 | (290,000 | ) | 1.00 | ||||||||||
| Outstanding, end of period | 10,247,500 | $ | 0.81 | 9,847,500 | $ | 0.80 | ||||||||||
| Exercisable, end of period | 7,420,000 | $ | 0.93 | 8,118,750 | $ | 0.66 | ||||||||||
During the nine months ended May 31, 2025, 125,000 stock options were forfeited and 1,675,000 stock options expired. The forfeited options had a fair value of $36,830 which was reversed through stock-based compensation expense, while the expired options had a fair value of $135,825 which was reclassified to deficit (2024 - $154,529).
At May 31, 2025, the Company had outstanding stock options exercisable to acquire common shares of the Company as follows:
| Expiry date | Options outstanding | Exercise Price | Remaining contractual life (in years) | |||||||||
| June 9, 2025 | 300,000 | $ | 0.50 | 0.02 | ||||||||
| June 30, 2025 | 100,000 | $ | 0.92 | 0.08 | ||||||||
| October 13, 2025 | 2,035,000 | $ | 1.41 | 0.37 | ||||||||
| March 25, 2026 | 200,000 | $ | 1.09 | 0.82 | ||||||||
| January 7, 2027 | 1,352,500 | $ | 0.94 | 1.61 | ||||||||
| June 14, 2027 | 200,000 | $ | 0.74 | 2.04 | ||||||||
| February 1, 2028 | 1,605,000 | $ | 0.80 | 2.67 | ||||||||
| December 6, 2028 | 2,055,000 | $ | 0.62 | 3.52 | ||||||||
| January 24, 2025 | 2,400,000 | $ | 0.40 | 4.65 | ||||||||
| b) | Warrants |
As of May 31, 2025, the Company had 16,504,598 (August 31, 2024 – 14,350,158) warrants outstanding.
The fair value of the broker warrants issued during the nine months ended May 31, 2025 was estimated at the date of issuance using the Black-Scholes Option Pricing Model using the following assumptions:
| Grant Date | Expiry Date | Exercise Price |
Risk-Free Interest Rate | Expected Life | Volatility Factor | Dividend Yield | Fair Value | |||||||||||||||||
| November 1, 2024 | November 1, 2026 | $ | 0.40 | 3.09 | % | 2 years | 72 | % | 0 | $ | 0.14 | |||||||||||||
| 10 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 7. | OPTIONS AND WARRANTS (continued) |
A continuity schedule of the Company’s outstanding common share purchase warrants for the nine months ended May 31, 2025 and 2024 are as follows:
| May 31, 2025 | May 31, 2024 | |||||||||||||||
Number outstanding | Weighted average exercise price |
Number outstanding | Weighted average exercise price | |||||||||||||
| Outstanding, beginning of period | 14,350,158 | $ | 1.16 | 19,434,158 | $ | 1.32 | ||||||||||
| Issued | 9,320,218 | 0.53 | - | - | ||||||||||||
| Expired | (7,165,778 | ) | 1.17 | (5,084,000 | ) | 1.75 | ||||||||||
| Outstanding, end of period | 16,504,598 | $ | 0.80 | 14,350,158 | $ | 1.16 | ||||||||||
The expired warrants during the nine months ended May 31, 2025, had a fair value of $453,648 which was reclassified to deficit during the period (2024 - $Nil).
At May 31, 2025, the Company had outstanding common share purchase warrants exercisable to acquire common shares of the Company as follows:
Expiry Date |
Warrants outstanding |
Exercise Price | Remaining contractual life (in years) | |||||||||
| December 29, 2025 | 6,445,187 | $ | 1.20 | 0.58 | ||||||||
| December 29, 2025 | 773,423 | $ | 0.80 | 0.58 | ||||||||
| November 1, 2026 | 8,103,750 | $ | 0.55 | 1.48 | ||||||||
| November 1, 2026 | 1,182,238 | $ | 0.40 | 1.48 | ||||||||
| 8. | RELATED PARTY TRANSACTIONS |
The Company’s related parties consist of its key management personnel, including its directors and officers.
During the normal course of business, the Company enters into transactions with its related parties that are considered to be arm’s length transactions and made at normal market prices and on normal commercial terms.
| (a) | Key management compensation for the three and nine months ended May 31, 2025 and 2024 was as follows: |
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
May 31, 2025 | May 31, 2024 | May 31, 2025 | May 31, 2024 | |||||||||||||
| Consulting fees | $ | 73,931 | $ | 73,931 | $ | 321,794 | $ | 336,794 | ||||||||
| Stock-based compensation | $ | 189,357 | $ | 145,047 | $ | 390,416 | $ | 371,006 | ||||||||
| Fees capitalized in E&E assets | $ | 49,565 | $ | 74,208 | $ | 252,813 | $ | 293,565 | ||||||||
| (b) | As at May 31, 2025, the Company had $10,687 (August 31, 2024 - $5,319) owing to related parties, which is included in accounts payable and accrued liabilities (Note 5). |
| 11 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 9. | FINANCIAL INSTRUMENTS |
| a) | Categories of financial instruments and fair value measurements |
The Company’s financial assets and liabilities are classified as follows:
| May 31, 2025 | August 31, 2024 | |||||||
| Financial assets: | ||||||||
| Fair value through profit or loss | ||||||||
| Cash and cash equivalents | $ | 818,010 | $ | 587,106 | ||||
| At amortized cost | ||||||||
| Receivables | $ | 23,251 | $ | 13,203 | ||||
| Loan receivable | $ | - | $ | 341,596 | ||||
Financial liabilities: | ||||||||
| At amortized cost | ||||||||
| Accounts payable | $ | 137,056 | $ | 26,892 | ||||
The amount of accounts payable includes amounts due to related parties (Note 8).
The fair values of the Company’s cash and cash equivalents, receivable, loan receivable and accounts payable approximate their carrying amounts due to the short-term nature of these instruments.
| b) | Management of financial risks |
The Company’s financial instruments expose the Company to certain financial risks, including credit risk, liquidity risk, interest rate risk and foreign currency risk.
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. At May 31, 2025, the Company was exposed to credit risk on its cash and receivables.
The Company’s cash is held with a high credit quality financial institution in Canada and as at May 31, 2025, management considers its exposure to credit risk on its cash to be low. The Company’s receivables consists of GST receivable from the Government of Canada and as such the risk is assessed as low.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities. The Company manages liquidity risk by maintaining adequate cash and managing its capital and expenditures. At May 31, 2025, the Company had cash and cash equivalents of $818,010 (August 31, 2024 - $587,106) and accounts payable and accrued liabilities of $323,207 (August 31, 2024 - $103,909) with contractual maturities of less than one year. The Company assessed its liquidity risk as moderate as at May 31, 2025.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company’s financial assets and financial liabilities are not exposed to interest rate risk due to their short-term nature and maturity. The Company is not exposed to interest rate risk at May 31, 2025.
| 12 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 9. | FINANCIAL INSTRUMENTS (continued) |
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that it has monetary assets and liabilities denominated in foreign currencies. As at May 31, 2025, the Company is exposed to foreign currency risk as it has cash, prepaid expenses, and accounts payable denominated in US Dollars, as follows:
| May 31, 2025 | August 31, 2024 | |||||||
| Cash | $ | 543,883 | $ | 170,113 | ||||
| Prepaid expenses | 32,000 | 32,000 | ||||||
| Loan receivable | - | 250,000 | ||||||
| Accounts payable | (70,195 | ) | (2,306 | ) | ||||
| Net exposure | $ | 505,688 | $ | 449,807 | ||||
| Canadian dollar equivalent | $ | 695,725 | $ | 606,835 | ||||
As of May 31, 2025, a 5% change in the exchange rate between US dollars and Canadian dollars would impact the Company’s net assets by $34,786 (August 31, 2024 - $30,342). The Company assessed its foreign currency risk as moderate as of May 31, 2025.
| 10. | SEGMENTED INFORMATION |
The Company is organized into business units based on exploration and evaluation assets and has four reportable operating segments, being that of acquisition and exploration and evaluation activities at the Hughes property in Nevada, the Mogollon property in New Mexico, other staked properties, and its corporate headquarters located in Canada. The Company is in the exploration stage and has no reportable segment revenues or operating results. The Company’s total assets are segmented geographically as follows:
| Hughes Property | Mogollan Property | Staked Properties | Corporate | Total | ||||||||||||||||
| As at August 31, 2024 | ||||||||||||||||||||
| Current assets | $ | 27,678 | $ | - | $ | - | $ | 1,340,781 | $ | 1,368,459 | ||||||||||
| Restricted cash | - | - | - | 214,102 | 214,102 | |||||||||||||||
| Prepaid expenses – long term | - | 43,172 | - | - | 43,172 | |||||||||||||||
| Exploration and evaluation assets | 23,177,393 | 19,046,399 | - | - | 42,223,792 | |||||||||||||||
| $ | 23,205,071 | $ | 19,089,571 | $ | - | $ | 1,554,883 | $ | 43,849,525 | |||||||||||
| As at May 31, 2025 | ||||||||||||||||||||
| Current assets | $ | 46,639 | $ | - | $ | - | $ | 932,477 | $ | 979,116 | ||||||||||
| Restricted cash | - | - | - | 218,339 | 218,339 | |||||||||||||||
| Prepaid expenses – long term | - | 44,026 | - | - | 44,026 | |||||||||||||||
| Exploration and evaluation assets | 27,095,981 | 19,974,501 | 83,101 | - | 47,153,583 | |||||||||||||||
| $ | 27,142,620 | $ | 20,018,527 | $ | 83,101 | $ | 1,150,816 | $ | 48,395,064 | |||||||||||
| 11. | MANAGEMENT OF CAPITAL |
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to continue its business and maintain a flexible capital structure, which optimizes the costs of capital at an acceptable risk. The Company’s capital includes the components of its shareholders’ equity.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of its underlying assets. To maintain or adjust its capital structure, the Company may issue new shares, issue new debt, acquire or dispose of assets, or adjust the amount of cash. In order to preserve cash, the Company does not pay any dividends.
| 13 |
SUMMA SILVER CORP.
Notes to the Condensed Consolidated Interim Financial Statements
For the nine months ended May 31, 2025
(Expressed in Canadian Dollars - unaudited)
| 11. | MANAGEMENT OF CAPITAL (continued) |
The Company is not subject to any externally imposed capital requirements. The Company did not change their capital management approach during the nine months ended May 31, 2025. The Company’s ability to continue its operations is dependent on its success in raising equity through share issuances, suitable debt and/or other financing arrangements.
| 12. | SUBSEQUENT EVENTS |
On May 13, 2025, the Company announced that it had entered into a definitive arrangement agreement with Silver47 Exploration Corp. (“Silver47”) for a merger, pursuant to which Silver47 and the Company will combine (the “Transaction”) by way of a court-approved plan of arrangement.
Under the terms of the Transaction, Summa shareholders will receive 0.452 common shares of Silver47 in exchange for each Summa common share (the “Exchange Ratio”).
The Transaction is subject to approval of the TSX Venture Exchange and the satisfaction of certain other customary closing conditions.
On June 17, 2025, the Company and Silver47 announced the closing of a brokered offering of subscription receipts of Summa at a price of $0.25 per subscription receipt for aggregate gross proceeds of $6,900,000. The offering was completed in connection with Silver47 and the Company completing the Transaction, as discussed above. Each subscription receipt will entitle the holder, without payment of any additional consideration and without further action on the part of the holder, upon the satisfaction of certain escrow release conditions to receive one unit of Summa (a “Unit”). Each Unit will consist of one common share of Summa and one-half of one common share purchase warrant (each whole warrant, a “Summa Warrant”). Following the completion of the Transaction, each Summa Warrant will entitle the holder to purchase one common share of Silver47 Share (a “Warrant Share”) at a post-Exchange Ratio adjustment exercise price of $0.7964 per Warrant Share until the date that is 24 months following the satisfaction or waiver of the escrow release conditions.
In connection with the offering, Summa paid to the agents a cash commission of $369,150 and issued to the agents 1,476,000 broker warrants. In addition, the agents received an advisory fee of $37,000 plus tax and 148,000 advisory broker warrants on the same terms as the broker warrants. Each broker warrant entitles the holder to acquire following closing of the Transaction one Silver47 Share at a post-Exchange ratio adjustment exercise price of $0.5531 per Silver47 Share for a period of 24 months following the waiver of the Escrow Release Conditions.
| 14 |
Exhibit 99.5
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information (“Unaudited Pro Forma Financial Information”) has been prepared based on the historical audited and unaudited consolidated financial statements of Bunker Hill Mining Corp. (“Bunker Hill” or the “Company”), the historical audited and unaudited consolidated financial statements of Silver47 Exploration Corp. (“Silver47”), and the historical unaudited pro forma condensed combined statements of loss of Silver47 adjusted for the acquisition by Silver47 of Summa Silver Corp. (“Summa”) (as described in Note 7), in each case, as indicated below, and is intended to provide information about how the Transaction (as defined and described in Note 1) might have affected Bunker Hill’s historical financial statements.
The unaudited pro forma condensed combined statements of loss for the year ended December 31, 2025 combines the historical audited consolidated statements of loss of Bunker Hill for the year ended December 31, 2025, with the historical unaudited consolidated statements of loss of Silver47 adjusted for Summa (as described in Note 7) for the corresponding period as if the Transaction had occurred on the first day of Bunker Hill’s fiscal year 2025, being January 1, 2025.
The unaudited pro forma condensed combined statements of income (loss) for the six months ended June 30, 2026 combines the historical unaudited condensed interim consolidated statements of income of Bunker Hill for the six months ended June 30, 2026 with the historical unaudited condensed interim consolidated statements of loss of Silver47 for the six months ended April 30, 2026 as if the Transaction had occurred on the first day of Bunker Hill’s fiscal year 2026, being January 1, 2026.
The unaudited pro forma condensed combined balance sheet as of June 30, 2026 combines the historical unaudited condensed interim consolidated balance sheets of Bunker Hill as of June 30, 2026 and the historical unaudited condensed interim consolidated statements of financial position of Silver47 as of April 30, 2026, as if the Transaction had occurred on June 30, 2026.
The Unaudited Pro Forma Financial Information has been prepared based on and should be read in conjunction with the following:
| ● | the accompanying notes to the Unaudited Pro Forma Financial Information; | |
| ● | the historical audited consolidated financial statements of Bunker Hill for the year ended December 31, 2025, included in Bunker Hill’s annual report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 6, 2026 and on SEDAR+ on March 16, 2026; | |
| ● | the historical unaudited condensed consolidated financial statements of Bunker Hill for the three and six months ended June 30, 2026, included in Bunker Hill’s quarterly report on Form 10-Q for the quarter ended June 30, 2026, filed with the SEC and on SEDAR+ on July 31, 2026; | |
| ● | the historical audited consolidated financial statements of Silver47 for the year ended July 31, 2025, included in Bunker Hill’s current report on Form 8-K filed with the SEC and on Silver47’s SEDAR+ on November 28, 2025; | |
| ● | the historical unaudited consolidated financial statements of Silver47 for the three and nine months period ended April 30, 2026, included in Bunker Hill’s current report on Form 8-K filed with the SEC and on Silver47’s SEDAR+ on June 29, 2026; | |
| ● | the historical audited consolidated financial statements of Summa for the year ended August 31, 2024, included in Bunker Hill’s current report on Form 8-K filed with the SEC and on Summa’s SEDAR+ on December 20, 2024; | |
| ● | the historical unaudited consolidated financial statements of Summa for the three and nine months ended May 31, 2025, included in Bunker Hill’s current report on Form 8-K filed with the SEC and on Summa’s SEDAR+ on July 30, 2025; and | |
| ● | other information relating to Bunker Hill and Silver47 contained in or incorporated by reference into this document. |
The Unaudited Pro Forma Financial Information is presented using the asset acquisition method of accounting, as further described in Note 1, with Bunker Hill as the acquirer of Silver47. Under the asset acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed of Silver47 based on their respective fair market values on the acquisition date.
The Unaudited Pro Forma Financial Information is presented for informational purposes only. The information has been prepared in accordance with Article 11 of Regulation S-X of the SEC as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses,” using the assumptions set forth in the notes to the Unaudited Pro Forma Financial Information. The information has been adjusted to include estimated Transaction accounting adjustments, which reflect the application of the accounting required by accounting principles generally accepted in the U.S. (“U.S. GAAP”).
The Unaudited Pro Forma Financial Information is not necessarily indicative of the financial position and results of operations that actually would have been achieved had the Transaction occurred as of the dates indicated herein, nor does it purport to project the future financial position and operating results of the Combined Company, defined herein. The Unaudited Pro Forma Financial Information also does not reflect the costs of any integration activities or cost savings or synergies expected to be achieved as a result of the Transaction and, accordingly, does not attempt to predict or suggest future results.
Bunker Hill Mining Corp.
Unaudited Pro Forma Condensed Combined Balance Sheet
(Expressed in U.S. Dollars)
As at June 30, 2026
Historical Bunker Hill
As of June 30, 2026 | Reclassified Historical Silver47
As of April 30, 2026
(Note 5) | Transaction Accounting Adjustments
(Note 6) | Note | Pro Forma Combined | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Current assets | ||||||||||||||||||||
| Cash | $ | 6,657,131 | $ | 35,966,010 | $ | - | $ | 42,623,141 | ||||||||||||
| Restricted cash | 2,975,000 | - | - | 2,975,000 | ||||||||||||||||
| Accounts receivable and prepaid expenses | 629,351 | 2,382,434 | - | 3,011,785 | ||||||||||||||||
| Inventory | 939,688 | - | - | 939,688 | ||||||||||||||||
| Total current assets | 11,201,170 | 38,348,444 | - | 49,549,614 | ||||||||||||||||
| Non-current assets | ||||||||||||||||||||
| Long term restricted cash | - | 158,700 | - | 158,700 | ||||||||||||||||
| Long term deposit | 1,406,480 | - | - | 1,406,480 | ||||||||||||||||
| Right-of-use asset | 3,098,501 | - | - | 3,098,501 | ||||||||||||||||
| Land | 3,249,488 | - | - | 3,249,488 | ||||||||||||||||
| Plant and equipment | 124,881,165 | 120,631 | - | 125,001,796 | ||||||||||||||||
| Mineral properties and rights | 30,681,446 | - | - | 30,681,446 | ||||||||||||||||
| Exploration and evaluation assets | - | 54,899,046 | 80,206,740 | 6(a), 6(b) | 135,105,786 | |||||||||||||||
| Total assets | $ | 174,518,250 | $ | 93,526,821 | $ | 80,206,740 | $ | 348,251,811 | ||||||||||||
| DEFICIENCY AND LIABILITIES | ||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Accounts payable | $ | 7,990,188 | $ | 1,208,751 | $ | - | $ | 9,198,939 | ||||||||||||
| Accrued liabilities | 2,848,329 | - | 5,500,000 | 6(b) | 8,348,329 | |||||||||||||||
| Current portion of lease liability | 601,924 | - | - | 601,924 | ||||||||||||||||
| Deferred share units liability | 811,377 | - | - | 811,377 | ||||||||||||||||
| Share-based payment liabilities | - | 79,517 | (79,517 | ) | 6(c) | - | ||||||||||||||
| Environment protection agency cost recovery payable | 6,000,000 | - | - | 6,000,000 | ||||||||||||||||
| Current portion of Silver Loan | 1,624,625 | - | - | 1,624,625 | ||||||||||||||||
| Interest payable | 1,780,416 | - | - | 1,780,416 | ||||||||||||||||
| Current income tax payable | 1,330,143 | - | - | 1,330,143 | ||||||||||||||||
| Total current liabilities | 22,987,002 | 1,288,268 | 5,420,483 | 29,695,753 | ||||||||||||||||
| Non-current liabilities | ||||||||||||||||||||
| Lease liability | 1,430,684 | - | - | 1,430,684 | ||||||||||||||||
| Series 1 convertible debenture | 4,560,273 | - | - | 4,560,273 | ||||||||||||||||
| Series 2 convertible debenture | 9,522,815 | - | - | 9,522,815 | ||||||||||||||||
| Series 3 convertible debenture | 2,518,765 | - | - | 2,518,765 | ||||||||||||||||
| Silver Loan | 69,989,396 | - | - | 69,989,396 | ||||||||||||||||
| Sprott Debt Facility | 14,840,344 | - | - | 14,840,344 | ||||||||||||||||
| Environment protection agency cost recovery liability, net of discount | 5,023,426 | - | - | 5,023,426 | ||||||||||||||||
| Derivative warrant liability | 32,622,414 | - | 17,701,085 | 6(d) | 50,323,499 | |||||||||||||||
| Total liabilities | 163,495,119 | 1,288,268 | 23,121,568 | 187,904,955 | ||||||||||||||||
| Shareholders’ equity | ||||||||||||||||||||
| Preferred shares(1) | - | - | - | - | ||||||||||||||||
| Common stock(2) | 1,551 | - | 141 | 6(e) | 1,692 | |||||||||||||||
| Additional paid-in-capital | 175,636,872 | 120,960,685 | 27,862,899 | 6(e) | 324,460,456 | |||||||||||||||
| Accumulated other comprehensive income (loss) | 569,488 | (484,088 | ) | 484,088 | 6(e) | 569,488 | ||||||||||||||
| Accumulated deficit | (165,184,780 | ) | (28,238,044 | ) | 28,738,044 | 6(e) | (164,684,780 | ) | ||||||||||||
| Total shareholders’ equity | 11,023,131 | 92,238,553 | 57,085,172 | 160,346,856 | ||||||||||||||||
| Total shareholders’ equity and liabilities | $ | 174,518,250 | $ | 93,526,821 | $ | 80,206,740 | $ | 348,251,811 | ||||||||||||
| (1) | Bunker Hill’s shares of preferred stock have $0.000001 par value, 285,715 shares of preferred stock authorized; nil shares of preferred stock issued and outstanding as of June 30, 2026. Silver47 has nil preferred shares authorized.
|
| (2) | Bunker Hill’s shares of common stock have $0.000001 par value, 100,000,000 shares of common stock authorized; 46,685,293 shares of common stock issued and outstanding as of June 30, 2026. Silver47’s common shares have no par value, unlimited number of common shares authorized; 208,658,355 common shares issued and outstanding as of April 30, 2026. |
See accompanying notes to Unaudited Pro Forma Combined Financial Information.
Bunker Hill Mining Corp.
Unaudited Pro Forma Condensed Combined Statements of Income (Loss)
(Expressed in U.S. Dollars, except for shares and per share amounts)
For the Six Months Ended June 30, 2026
Historical
Bunker Hill
For the Six Months Ended June 30, 2026 | Reclassified Historical Silver47 for the Six Months Ended
April 30, 2026
(Note 5) | Transaction Accounting Adjustments
(Note 6) | Note | Pro Forma
Combined | ||||||||||||||
| Operating expenses | $ | (8,403,331 | ) | $ | (8,950,448 | ) | $ | 500,000 | 6(b) | $ | (16,853,779 | ) | ||||||
| Other items | ||||||||||||||||||
| Interest income | 265,257 | 333,720 | - | 598,977 | ||||||||||||||
| Change in derivative liability | 43,580,366 | - | - | 43,580,366 | ||||||||||||||
| Gain on fair value of silver loan | 6,213,354 | - | - | 6,213,354 | ||||||||||||||
| Interest expense | (2,125,144 | ) | - | - | (2,125,144 | ) | ||||||||||||
| Financing costs | (725,795 | ) | - | - | (725,795 | ) | ||||||||||||
| Gain on debt settlement | 9,800 | - | - | 9,800 | ||||||||||||||
| Loss on debt settlement | (29,149 | ) | - | - | (29,149 | ) | ||||||||||||
| Loss on foreign exchange | (91,259 | ) | (9,674 | ) | - | (100,933 | ) | |||||||||||
| Income (loss) for the period pre tax | $ | 38,694,099 | $ | (8,626,402 | ) | $ | 500,000 | $ | 30,567,697 | |||||||||
| Current tax expense | (380,143 | ) | - | - | (380,143 | ) | ||||||||||||
| Income (loss) for the period | $ | 38,313,956 | $ | (8,626,402 | ) | $ | 500,000 | $ | 30,187,554 | |||||||||
| Net income per common share – basic | $ | 0.87 | 6(f) | $ | 0.38 | |||||||||||||
| Net income per common share – fully diluted | $ | 0.81 | 6(f) | $ | 0.37 | |||||||||||||
| Weighted average common shares – basic | 44,228,069 | 6(f) | 80,398,454 | |||||||||||||||
| Weighted average common shares – fully diluted | 49,456,551 | 6(f) | 85,225,947 | |||||||||||||||
See accompanying notes to Unaudited Pro Forma Combined Financial Information.
Bunker Hill Mining Corp.
Unaudited Pro Forma Condensed Combined Statements of Loss
(Expressed in U.S. Dollars, except for shares and per share amounts)
For the Year Ended December 31, 2025
| Historical | Reclassified Historical Silver47 Adjusted for Summa | Transaction Accounting Adjustments | Pro Forma | |||||||||||||||
| Bunker Hill | (Note 5) | (Note 6) | Note | Combined | ||||||||||||||
| Operating expenses | $ | (13,595,412 | ) | $ | (22,063,229 | ) | $ | - | $ | (35,658,641 | ) | |||||||
| Other items | ||||||||||||||||||
| Interest income | 363,818 | 252,773 | - | 616,591 | ||||||||||||||
| Change in derivative liability | (42,593,254 | ) | - | - | (42,593,254 | ) | ||||||||||||
| Gain on fair value of debentures | 1,002,763 | - | - | 1,002,763 | ||||||||||||||
| Loss on fair value of silver loan | (49,386,219 | ) | - | - | (49,386,219 | ) | ||||||||||||
| Interest expense | (7,383,987 | ) | - | - | (7,383,987 | ) | ||||||||||||
| Financing costs | (3,414,423 | ) | - | - | (3,414,423 | ) | ||||||||||||
| Gain on revaluation of stream debenture | 4,149,606 | - | - | 4,149,606 | ||||||||||||||
| Gain on debt modification | 468,878 | - | - | 468,878 | ||||||||||||||
| Gain on debt settlement | 29,791,130 | - | - | 29,791,130 | ||||||||||||||
| Loss on debt modification | (2,155,718 | ) | - | - | (2,155,718 | ) | ||||||||||||
| Loss on debt settlement | (3,449,557 | ) | - | - | (3,449,557 | ) | ||||||||||||
| Loss on issuance of warrants | (6,469,023 | ) | - | - | (6,469,023 | ) | ||||||||||||
| Loss on sale of equipment | (40,000 | ) | - | - | (40,000 | ) | ||||||||||||
| Loss on foreign exchange | (171,862 | ) | (82,188 | ) | - | (254,050 | ) | |||||||||||
| Other income | - | 46,354 | - | 46,354 | ||||||||||||||
| Bad debt expense | (248,755 | ) | - | - | (248,755 | ) | ||||||||||||
| Loss for the year pre tax | $ | (93,132,015 | ) | $ | (21,846,290 | ) | $ | - | $ | (114,978,305 | ) | |||||||
| Current tax expense | - | - | - | - | ||||||||||||||
| Loss for the year | $ | (93,132,015 | ) | $ | (21,846,290 | ) | $ | - | $ | (114,978,305 | ) | |||||||
| Net loss per common share – basic | $ | (4.09 | ) | 6(f) | $ | (1.95 | ) | |||||||||||
| Net loss per common share – fully diluted | $ | (4.09 | ) | 6(f) | $ | (1.95 | ) | |||||||||||
| Weighted average common shares – basic | 22,747,234 | 6(f) | 58,917,619 | |||||||||||||||
| Weighted average common shares – fully diluted | 22,747,234 | 6(f) | 58,917,619 | |||||||||||||||
See accompanying notes to Unaudited Pro Forma Combined Financial Information.
Notes to Unaudited Pro Forma Combined Financial Information
(Expressed in U.S. Dollars)
1. Description of the Transaction
On August 20, 2026, the Company entered into an arrangement agreement (the “Arrangement Agreement”), whereby the Company agreed to acquire all of the issued and outstanding shares of Silver47 by way of a plan of arrangement under the Business Corporations Act (British Columbia) (the “Transaction”). Under the terms of the Arrangement Agreement, Silver47 shareholders will receive 0.1724 shares of Bunker Hill common stock for each Silver47 common share (the “Exchange Ratio”) held immediately prior to the effective time of the Transaction. Following the closing of the Transaction, it is anticipated that the combined company (the “Combined Company”) will seek a name change to “Bunker Hill Silver Corp.” and remain listed on the Toronto Stock Exchange. It is also expected that Bunker Hill will apply to delist the Silver47 shares from the TSX Venture Exchange, the Frankfurt Stock Exchange and the OTCQX promptly following completion of the Transaction.
2. Basis of Presentation
The Unaudited Pro Forma Combined Financial Information has been prepared in accordance with Article 11 of Regulation S-X, as amended by Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses,” using the assumptions set forth in these notes.
The accompanying Unaudited Pro Forma Combined Financial Information presents the unaudited pro forma condensed combined statements of loss for the year ended December 31, 2025 of Bunker Hill giving effect to the acquisition of Silver47 as if it occurred on January 1, 2025, the unaudited pro forma condensed combined statements of income (loss) for the six months ended June 30, 2026 of Bunker Hill giving effect to the acquisition of Silver47 as if it occurred on January 1, 2026 and the unaudited pro forma combined balance sheet as at June 30, 2026 of Bunker Hill giving effect to the acquisition of Silver47 as if it occurred on June 30, 2026.
Bunker Hill and Silver47 prepare their consolidated financial statements with a fiscal year end of December 31 and July 31, respectively. In accordance with applicable SEC rules, if the fiscal year end of an acquired entity differs from the acquirer’s fiscal year end by more than 93 days, the acquired entity’s income statement must be brought up within 93 days of the acquirer’s fiscal year end. The Unaudited Pro Forma Combined Financial Information was prepared in accordance with the 93 day interval threshold as explained below, with adjustments made to the historical financial information of Silver47 to align the reporting periods with Bunker Hill’s fiscal year end, where applicable.
The unaudited pro forma condensed combined balance sheet as at June 30, 2026 was prepared using:
| ● | the historical unaudited condensed interim consolidated balance sheets of Bunker Hill for the period ended June 30, 2026, as included in Bunker Hill’s quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2026 filed with the SEC and SEDAR+ on July 31, 2026; and | |
| ● | the historical unaudited condensed interim consolidated statements of financial position of Silver47 for the period ended April 30, 2026. The two month difference between respective period ends is within the 93 day permitted interval. |
The unaudited pro forma condensed combined statements of income (loss) for the six months ended June 30, 2026 was prepared using:
| ● | the historical unaudited condensed interim consolidated statements of income of Bunker Hill for the six months ended June 30, 2026, as included in Bunker Hill’s quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2026 filed with the SEC and SEDAR+ on July 31, 2026; and | |
| ● | the historical financial information of Silver47 for the six month period ended April 30, 2026, derived from Silver47’s unaudited consolidated financial statements for the nine months ended April 30, 2026, less the unaudited consolidated financial statements for the three months ended October 31, 2025. The two month difference between respective period ends is within the 93 day permitted interval. |
The unaudited pro forma condensed combined statements of loss for the year ended December 31, 2025 was prepared using:
| ● | the historical audited consolidated statements of loss of Bunker Hill for the year ended December 31, 2025, as included in Bunker Hill’s annual report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 6, 2026 and SEDAR+ on March 16, 2026; and | |
| ● | the historical financial information of Silver47 adjusted for Summa (as described in Note 7) for the twelve-month period ended December 31, 2025, derived from Silver47’s audited consolidated financial statements for the year ended July 31, 2025 and subsequent unaudited interim financial information, with adjustments to conform the reporting period to Bunker Hill’s December 31 fiscal year end. |
The above constructed unaudited pro forma condensed combined statements of loss for the year ended December 31, 2025 of Silver47 was prepared for the purpose of preparing the Unaudited Pro Forma Combined Financial Information and does not conform with the audited consolidated financial statements for the year ended July 31, 2025 of Silver47.
The historical unaudited consolidated financial statements of Bunker Hill are prepared in accordance with U.S. GAAP and are reported in U.S. dollars (“$” or “USD”). The historical unaudited consolidated financial statements of Silver47 and Summa are prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS”) and are reported in Canadian dollars (“C$” or “CAD”).
The Transaction will be accounted for using the asset acquisition method of accounting, as prescribed in Accounting Standards Codification (“ASC”) 805, Business Combinations, (“ASC 805”), under U.S. GAAP, which requires an allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values as of the date of the Transaction. As of the date of this filing, Bunker Hill has not completed the detailed valuation study necessary to arrive at the required final estimates of the fair value of Silver47’s assets acquired and liabilities assumed and the related allocations of purchase price.
Silver47’s historical financial information has been translated into USD for the purposes of the Unaudited Pro Forma Financial Information to align Silver47’s presentation currency to Bunker Hill’s presentation currency. Assets and liabilities have been translated into USD using the applicable exchange rate as of the balance sheet date. Revenues and expenses have been translated using the average exchange rates for the periods presented.
At the date of this filing, management is not aware of any material differences and therefore no adjustments have been made to reflect Silver47’s historical audited consolidated financial statements on a U.S. GAAP basis for purposes of the Unaudited Pro Forma Financial Information and to align Silver47’s historical significant accounting policies under IFRS to Bunker Hill’s significant accounting policies under U.S. GAAP. As of the date of this filing, Bunker Hill has not identified all adjustments necessary to convert Silver47’s historical audited financial statements prepared in accordance with IFRS to U.S. GAAP and to conform Silver47’s accounting policies to Bunker Hill’s accounting policies.
A final determination of the fair value of Silver47’s assets and liabilities, including property and equipment, and exploration and evaluation assets, will be based on the actual property and equipment, and exploration and evaluation assets of Silver47 that exist as of the closing date of the Transaction and therefore cannot be made prior to the consummation of the Transaction. Bunker Hill has estimated the fair value of Silver47 assets and liabilities based on discussions with Silver47’s management, preliminary valuation studies, due diligence and information presented in Silver47’s filings with the Canadian securities authorities. A final determination of fair value of Silver47’s assets and liabilities has not been finalized as of the date of filing. Any increases or decreases in the fair value of assets acquired and liabilities assumed upon completion of the final valuations will result in adjustments to the unaudited pro forma combined balance sheet and unaudited pro forma statements of income (loss). In addition, the value of the purchase consideration to be paid by Bunker Hill upon the consummation of the Transaction will be determined based on the closing price of Bunker Hill’s common stock on the Transaction date. The final purchase price allocation may be materially different than that reflected in the pro forma purchase price allocation presented herein.
The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and do not necessarily reflect what the Combined Company’s financial condition would have been had the Transaction occurred on the date indicated. They also may not be useful in predicting the future financial condition and results of the operations of the Combined Company. The actual financial position and results of operations of Bunker Hill may differ significantly from the pro forma amounts reflected in the unaudited pro forma consolidated financial statements due to a variety of factors.
The unaudited pro forma information and adjustments are based upon current available information and certain assumptions that Bunker Hill believes are reasonable in the circumstances, as described in the notes to the unaudited pro forma consolidated financial statements. The actual adjustments to the consolidated financial statements of Bunker Hill in connection with the closing of the Transaction will depend on a number of factors, including, among others, the actual expenses of the Transaction and other additional information that becomes available after the date of this report. As a result, it is expected that actual adjustments will differ from the pro forma adjustments presented herein, and the differences may be material. The Unaudited Pro Forma Financial Information also does not reflect the costs of any integration activities or cost savings or synergies expected to be achieved as a result of the Agreement and, accordingly, do not attempt to predict or suggest future results.
Estimated Purchase Price
The total preliminary estimated purchase price consists of the following:
| Share consideration | ||||||||
| Bunker Hill common stock to be issued to Silver47 shareholders(1) | 36,139,353 | |||||||
| Bunker Hill common stock to be issued for outstanding RSUs(2) | 31,032 | |||||||
| Total Bunker Hill common stock to be issued | 36,170,385 | |||||||
| Bunker Hill share price(3) | $ | 3.90 | ||||||
| Preliminary share consideration | $ | 141,165,521 | ||||||
| Fair value of Replacement Options(4) | 7,658,204 | |||||||
| Fair value of Replacement Warrants(5) | 17,701,085 | |||||||
| Transaction costs (6) | 6,000,000 | |||||||
| Total Preliminary Purchase Consideration | $ | 172,524,810 |
| (1) | Common shares of Silver47 in the amount of 209,625,021 issued and outstanding as of August 20, 2026, multiplied by the Exchange Ratio. |
| (2) | Restricted share units (“RSUs”) of Silver47 in the amount of 180,000 outstanding as of August 20, 2026, multiplied by the Exchange Ratio. |
| (3) | The Company’s share price of C$5.38 and foreign exchange rate of CAD/USD 0.7254 at the close of business on August 20, 2026 was used to estimate the preliminary share consideration. The final share consideration will be based on the actual closing price per share of the Company’s stock on the closing date of the Transaction, which could differ materially from the assumed common stock price used to estimate share consideration for the purpose of the Unaudited Pro Forma Financial Information. A hypothetical 20% change in the Company’s closing share price as of August 20, 2026, would have an approximate $37 million impact on the purchase price, which would result in $37 million additional or reduction in Exploration and evaluation assets. |
| (4) | Each Silver47 option outstanding immediately prior to the closing of the Transaction, whether vested or unvested, will be exchanged for an option (each a “Replacement Option”) to acquire shares of Bunker Hill common stock. The number of Bunker Hill shares of which each Replacement Option is exercisable was determined by multiplying the number of Silver47 shares subject to the Silver47 option immediately prior to the Transaction by the Exchange Ratio. The exercise price of the Replacement Options was determined by dividing the original exercise price of Silver47 options by the Exchange Ratio. The fair value of the Replacement Options was determined using the Black-Scholes option pricing model which used the assumptions of Bunker Hill share price of C$5.38, foreign exchange rate of CAD/USD 0.7254 at the close of business on August 20, 2026, a dividend yield of 0.0%, risk-free interest rate of 3.02%, expected life of 0.5 years to 8.8 years, and expected price volatility of 85.0%. The weighted average fair value of the Replacement Options was determined to be $2.44. |
| (5) | Each Silver47 warrant outstanding immediately prior to the closing of the Transaction, whether vested or unvested, will be exchanged for a warrant (each a “Replacement Warrant”) to acquire shares of Bunker Hill common stock. The number of Bunker Hill shares for which each Replacement Warrant is exercisable was determined by multiplying the number of Silver47 shares subject to the Silver47 warrant immediately prior to the Transaction by the Exchange Ratio. The exercise price of the Replacement Warrants was determined by dividing the original exercise price of Silver47 warrants by the Exchange Ratio. The fair value of the Replacement Warrants was determined using the Binomial model which used the assumptions of dividend yield of 0.0%, risk-free interest rate of 3.02%, expected life of 0.3 years to 2.5 years, and expected price volatility of 85%. The weighted average fair value of the Replacement Warrants was determined to be $1.51. |
| (6) | Represents expected costs to be incurred as part of the Transaction. |
Preliminary Purchase Price Allocation
For the purposes of the Unaudited Pro Forma Financial Information, the table below summarizes the preliminary allocation of purchase price to the estimated fair value assets acquired and liabilities assumed of Silver47 as if the Transaction had occurred on June 30, 2026. The estimated fair value of the assets acquired and liabilities assumed of Silver47 are substantially the same as their respective carrying amounts as at April 30, 2026:
| Cash and cash equivalents | $ | 35,966,010 | ||
| Tax and other receivables | 135,674 | |||
| Prepaid expenses | 2,246,760 | |||
| Restricted cash | 158,700 | |||
| Property and equipment | 120,631 | |||
| Exploration and evaluation assets | 135,105,786 | |||
| Total assets | $ | 173,733,561 | ||
| Accounts payable and accrued liabilities | 1,208,751 | |||
| Total liabilities | $ | 1,208,751 | ||
| Total assets acquired and liabilities assumed, net | $ | 172,524,810 |
3. IFRS to U.S. GAAP Conversion and Accounting Policy Alignment Adjustments
IFRS differs in certain material respects from U.S. GAAP. Bunker Hill’s management performed a preliminary analysis of Silver47’s historical financial information to identify differences between IFRS and U.S. GAAP. There were no material differences identified on Silver47’s consolidated statements of financial position or Silver47’s consolidated statements of loss as presented in the Unaudited Pro Forma Financial Information. Therefore, no corresponding IFRS to U.S. GAAP adjustments are made to the Unaudited Pro Forma Financial Information as of June 30, 2026. In addition, no material adjustments have been made to align Silver47’s significant accounting policies under IFRS to Bunker Hill’s significant accounting policies under U.S. GAAP when there is no specific difference between IFRS and U.S. GAAP.
4. Foreign Currency Translation
Silver47’s historical financial information and pro forma adjustments have been translated from its reporting currency of CAD to be presented in Bunker Hill’s reporting currency of USD using the following exchange rates:
| CAD/USD | ||||
| Unaudited pro forma condensed combined balance sheet – spot rate at April 30, 2026 | 0.7340 | |||
| Unaudited pro forma condensed combined statements of income (loss) – average exchange rate for the six months ended April 30, 2026 | 0.7250 | |||
| Unaudited pro forma condensed combined statements of loss – average exchange rate for the year ended December 31, 2025 | 0.7154 | |||
5. Silver47 Historical Financial Statements
Silver47’s historical audited consolidated financial statements, as described above, are presented under IFRS in CAD. No material adjustments have been made to align Silver47’s historical significant accounting policies under IFRS to Bunker Hill’s significant accounting policies under U.S. GAAP as discussed in Note 3. Further review may identify additional reclassifications that could have a material impact on the unaudited pro forma financial information of the combined group. In addition, Silver47’s historical financial information has been translated into USD to align Silver47’s presentation currency to Bunker Hill’s presentation currency as discussed in Note 4. The reclassified historical balances reflect certain reclassifications of Silver47’s consolidated statements of loss and consolidated statements of financial position categories to conform to Bunker Hill’s presentation in its consolidated balance sheets and consolidated statements of income. The reclassifications identified and presented in the unaudited pro forma financial information are based on discussions with Silver47’s management, due diligence and information presented in Silver47’s filings with Canadian securities authorities. As of the date of this filing, Bunker Hill is not aware of any additional reclassifications that would have a material impact on the Unaudited Pro Forma Financial Information that are not reflected in the pro forma adjustments.
Condensed Consolidated Statement of Financial Position
For the Period Ended as at April 30, 2026
Historical
Silver47
April 30, 2026
CAD | CAD/USD | Historical
Silver47
April 30, 2026
USD | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | C$ | 49,000,014 | 0.7340 | $ | 35,966,010 | |||||||
| Tax and other receivables | 184,842 | 0.7340 | 135,674 | |||||||||
| Prepaid expenses | 3,060,981 | 0.7340 | 2,246,760 | |||||||||
| Total current assets | 52,245,837 | 38,348,444 | ||||||||||
| Non-current assets | ||||||||||||
| Restricted cash | 216,213 | 0.7340 | 158,700 | |||||||||
| Plant and equipment | 164,348 | 0.7340 | 120,631 | |||||||||
| Exploration and evaluation assets | 74,794,340 | 0.7340 | 54,899,046 | |||||||||
| Total assets | C$ | 127,420,738 | $ | 93,526,821 | ||||||||
| Current liabilities | ||||||||||||
| Accounts payable and accrued liabilities | C$ | 1,646,800 | 0.7340 | $ | 1,208,751 | |||||||
| Share-based payment liabilities | 108,334 | 0.7340 | 79,517 | |||||||||
| Total liabilities | 1,755,134 | 1,288,268 | ||||||||||
| Equity | ||||||||||||
| Share capital | 145,086,538 | 0.7340 | 106,493,519 | |||||||||
| Contributed surplus | 19,710,035 | 0.7340 | 14,467,166 | |||||||||
| Accumulated deficit | (38,471,449 | ) | 0.7340 | (28,238,044 | ) | |||||||
| Foreign currency translation reserve | (659,520 | ) | 0.7340 | (484,088 | ) | |||||||
| Total shareholders’ equity | 125,665,604 | 92,238,553 | ||||||||||
| Total shareholders’ equity and liabilities | C$ | 127,420,738 | $ | 93,526,821 | ||||||||
The reclassifications are summarized below:
Condensed Consolidated Statements of Financial Position
For the Period Ended as at April 30, 2026
(Expressed in U.S. Dollars)
| Silver47 Financial Statement Line | Historical Silver47 | Reclassification Adjustments | Note | Reclassified Historical Silver47 | Bunker Hill Financial Statement Line | |||||||||||
| ASSETS | ASSETS | |||||||||||||||
| Current assets | Current assets | |||||||||||||||
| Cash and cash equivalents | $ | 35,966,010 | $ | - | $ | 35,966,010 | Cash | |||||||||
| Tax and other receivables | 135,674 | (135,674 | ) | (1) | - | |||||||||||
| Prepaid expenses | 2,246,760 | 135,674 | (1) | 2,382,434 | Accounts receivable and prepaid expenses | |||||||||||
| 38,348,444 | - | 38,348,444 | Total current assets | |||||||||||||
| Non-current assets | ||||||||||||||||
| Restricted cash | 158,700 | - | 158,700 | Long term restricted cash | ||||||||||||
| Property and equipment | 120,631 | - | 120,631 | Plant and equipment | ||||||||||||
| Exploration and evaluation assets | 54,899,046 | - | (2) | 54,899,046 | Exploration and evaluation assets | |||||||||||
| TOTAL ASSETS | $ | 93,526,821 | $ | - | $ | 93,526,821 | Total assets | |||||||||
| LIABILITIES | EQUITY AND LIABILITIES | |||||||||||||||
| Current liabilities | Current liabilities | |||||||||||||||
| Accounts payable and accrued liabilities | $ | 1,208,751 | $ | - | $ | 1,208,751 | Accounts payable | |||||||||
| - | - | Accrued liabilities | ||||||||||||||
| Share-based payment liabilities | 79,517 | - | (3) | 79,517 | Share-based payment liabilities | |||||||||||
| TOTAL LIABILITIES | 1,288,268 | - | 1,288,268 | Total liabilities | ||||||||||||
| EQUITY | Shareholders’ equity | |||||||||||||||
| Share capital | 106,493,519 | (106,493,519 | ) | (4) | - | Common stock | ||||||||||
| Contributed surplus | 14,467,166 | 106,493,519 | (4) | 120,960,685 | Additional paid-in capital | |||||||||||
| Accumulated deficit | (28,238,044 | ) | - | (28,238,044 | ) | Accumulated deficit | ||||||||||
| Foreign currency translation reserve | (484,088 | ) | - | (484,088 | ) | Accumulated other comprehensive income | ||||||||||
| TOTAL EQUITY | 92,238,553 | - | 92,238,553 | Total shareholders’ equity | ||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 93,526,821 | $ | - | $ | 93,526,821 | Total shareholders’ equity and liabilities | |||||||||
| (1) | Represents a reclassification of Silver47’s sales tax receivables, historically included in tax and other receivables, to accounts receivable and prepaid expenses at Bunker Hill. |
| (2) | Represents Silver47’s exploration and evaluation assets consisting of costs to acquire Silver47’s projects which are pending determination of technical feasibility and commercial viability. A new financial statement line item named “exploration and evaluation assets” was added to the unaudited pro forma combined balance sheet. |
| (3) | Represents Silver47’s RSUs with the option of the participant to choose to receive the RSUs in (i) a lump sum payment in cash equal to the number of vested RSUs multiplied by the market value of a common share on the payout date; (ii) the number of underlying common shares or; (iii) any combination of the foregoing. A new financial statement line item named “share-based payment liabilities” was added to the unaudited pro forma combined balance sheet. |
| (4) | Represents Silver47’s share capital reclassed to additional paid in capital as the par value of Silver47’s shares are nil. |
Condensed Consolidated Statements of Loss
For the Six Months Ended April 30, 2026
| (A) | (B) | (A – B) | ||||||||||||||||||
Historical Silver47
nine months ended
April 30, 2026
CAD | Historical Silver47
three months ended
October 31, 2025
CAD | Historical Silver47
six months ended
April 30, 2026
CAD | CAD/USD | Historical Silver47
six months ended
April 30, 2026
USD | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Exploration expenses | C$ | (8,566,413 | ) | C$ | (2,977,631 | ) | C$ | (5,588,782 | ) | 0.7250 | $ | (4,051,867 | ) | |||||||
| General and administrative expenses | (5,265,539 | ) | (2,125,416 | ) | (3,140,123 | ) | 0.7250 | (2,276,589 | ) | |||||||||||
| Share-based compensation | (6,628,486 | ) | (3,382,379 | ) | (3,246,107 | ) | 0.7250 | (2,353,428 | ) | |||||||||||
| Depreciation expenses | (39,171 | ) | (961 | ) | (38,210 | ) | 0.7250 | (27,702 | ) | |||||||||||
| (20,499,609 | ) | (8,486,387 | ) | (12,013,222 | ) | (8,709,586 | ) | |||||||||||||
| Other items | ||||||||||||||||||||
| Interest income | 532,473 | 72,169 | 460,304 | 0.7250 | 333,720 | |||||||||||||||
| Change in fair value of share-based payment liabilities | (63,022 | ) | 269,201 | (332,223 | ) | 0.7250 | (240,862 | ) | ||||||||||||
| Foreign exchange loss | (17,771 | ) | (4,428 | ) | (13,343 | ) | 0.7250 | (9,674 | ) | |||||||||||
| 451,680 | 336,942 | 114,738 | 83,184 | |||||||||||||||||
| Net loss | C$ | (20,047,929 | ) | C$ | (8,149,445 | ) | C$ | (11,898,484 | ) | $ | (8,626,402 | ) | ||||||||
Condensed Consolidated Statements of Loss
For the Six Months Ended April 30, 2026
(Expressed in U.S. Dollars)
| Silver47 Financial Statement Line | Historical Silver47 | Reclassification Adjustments | Note | Reclassified Historical Silver47 | Bunker Hill Financial Statement Line | |||||||||||
| Operating expenses | $ | $ | (8,950,448 | ) | $ | (8,950,448 | ) | Operating expenses | ||||||||
| Exploration expenses | (4,051,867 | ) | 4,051,867 | (1) | - | |||||||||||
| General and administrative expenses | (2,276,589 | ) | 2,276,589 | (2) | - | |||||||||||
| Share-based compensation | (2,353,428 | ) | 2,353,428 | (3) | - | |||||||||||
| Depreciation expenses | (27,702 | ) | 27,702 | (4) | - | |||||||||||
| (8,709,586 | ) | (240,862 | ) | (8,950,448 | ) | |||||||||||
| Other items | Other income or gain (expense or loss) | |||||||||||||||
| Interest income | 333,720 | - | 333,720 | Interest income | ||||||||||||
| Change in fair value of share-based payment liabilities | (240,862 | ) | 240,862 | (5) | - | |||||||||||
| Foreign exchange loss | (9,674 | ) | - | (9,674 | ) | Loss on foreign exchange | ||||||||||
| 83,184 | 240,862 | 324,046 | ||||||||||||||
| Net loss | $ | (8,626,402 | ) | $ | - | $ | (8,626,402 | ) | Loss for the period pre tax | |||||||
| (1) | Represents a reclassification of Silver47’s exploration expenditures to operating expenses at Bunker Hill. |
| (2) | Represents a reclassification of Silver47’s general and administrative expenses to operating expenses at Bunker Hill. |
| (3) | Represents a reclassification of Silver47’s share-based compensation to operating expenses at Bunker Hill. |
| (4) | Represents a reclassification of Silver47’s depreciation expenses to operating expenses at Bunker Hill. |
| (5) | Represents a reclassification of Silver47’s change in fair value of share-based payment liabilities to operating expenses at Bunker Hill. |
Condensed Consolidated Statements of Loss
For the Year Ended December 31, 2025
(Expressed in U.S. Dollars)
| Silver47 Financial Statement Line | Historical Silver47 Adjusted for Summa
(Note 7) | Reclassification Adjustments | Note | Reclassified Historical Silver47 | Bunker Hill Financial Statement Line | |||||||||||
| Operating expenses | $ | $ | (22,063,229 | ) | $ | (22,063,229 | ) | Operating expenses | ||||||||
| Exploration expenses | (7,812,591 | ) | 7,812,591 | (1) | - | |||||||||||
| General and administrative expenses | (8,467,068 | ) | 8,467,068 | (2) | - | |||||||||||
| Share-based compensation | (5,739,174 | ) | 5,739,174 | (3) | - | |||||||||||
| Depreciation expenses | (7,532 | ) | 7,532 | (4) | - | |||||||||||
| (22,026,365 | ) | (36,864 | ) | (22,063,229 | ) | |||||||||||
| Other items | Other income or gain (expense or loss) | |||||||||||||||
| Interest income | 252,773 | - | 252,773 | Interest income | ||||||||||||
| Flow through share premium | 46,354 | - | 46,354 | Other income | ||||||||||||
| Change in fair value of share-based payment liabilities | (36,864 | ) | 36,864 | (5) | - | |||||||||||
| Foreign exchange loss | (82,188 | ) | - | (82,188 | ) | Loss on foreign exchange | ||||||||||
| 180,075 | 36,864 | 216,939 | ||||||||||||||
| Net loss | $ | (21,846,290 | ) | $ | - | $ | (21,846,290 | ) | Loss for the year pre tax | |||||||
| (1) | Represents a reclassification of Silver47’s exploration expenditures to operating expenses at Bunker Hill. |
| (2) | Represents a reclassification of Silver47’s general and administrative expenses to operating expenses at Bunker Hill. |
| (3) | Represents a reclassification of Silver47’s share-based compensation to operating expenses at Bunker Hill. |
| (4) | Represents a reclassification of Silver47’s depreciation expenses to operating expenses at Bunker Hill. |
| (5) | Represents a reclassification of Silver47’s change in fair value of share-based payment liabilities to operating expenses at Bunker Hill. |
6. Transaction Accounting Adjustments
The following adjustments have been made to the Unaudited Pro Forma Financial Information to reflect certain preliminary purchase price accounting and other pro forma adjustments. Further review may identify additional adjustments that could have a material impact on the unaudited pro forma financial information of the combined group. At this time, Bunker Hill is not aware of any additional Transaction related adjustments that would have a material impact on the unaudited pro forma financial information that are not reflected or disclosed in the pro forma adjustments.
| (a) | Exploration and evaluation assets |
The adjustment to increase Exploration and evaluation assets by $76,706,740 reflects the adjustment to Silver47’s Exploration and evaluation assets based on the estimated fair value as of April 30, 2026 and the preliminary purchase consideration, see Note 2 for further detail. The fair value was determined as the excess of the consideration paid for the identifiable assets and liabilities acquired in relation to the Transaction.
| (b) | Transaction costs and other one-time charges |
As at June 30, 2026, Bunker Hill had incurred approximately $500,000 in transaction costs comprised of legal and professional services fees, historically reported in Operating expenses. The amount was reversed and capitalized as part of the Transaction. Bunker Hill estimates an additional $5,500,000 in transaction costs will be incurred in relation to the Transaction which have not been reflected in the historical financial statements.
| (c) | Share-based payment liabilities |
Immediately prior to consummation of the Transaction, each outstanding Silver47 RSU will be deemed to be bested and settled by Silver47 for Silver47 shares. In accordance with the plan of arrangement governing the Transaction, each such Silver47 share will then be exchanged for 0.1724 shares of Bunker Hill common stock. See Note 2 for further detail on the Transaction.
| (d) | Derivative warrant liability |
The adjustment to Derivative warrant liability represents the fair value of the Replacement Warrants that Bunker Hill will issue upon closing of the Transaction, as per the Arrangement Agreement. See Note 2 for further detail on the Transaction.
| (e) | Shareholders’ equity |
The adjustment to Shareholders’ equity of $57,085,172 represents the elimination of Silver47’s equity and the net impact to Shareholders’ equity, including common stock, additional paid-in-capital, accumulated other comprehensive income (loss), and accumulated deficit, in relation to the Arrangement Agreement, as summarized below:
| Common stock | Additional paid-in-capital | Accumulated other comprehensive income (loss) | Accumulated deficit | Total adjustment | ||||||||||||||||
| Issuance of Bunker Hill shares for Transaction(1) | $ | 141 | $ | 141,165,380 | $ | - | $ | - | $ | 141,165,521 | ||||||||||
| Fair value of Replacement Options(2) | - | 7,658,204 | - | - | 7,658,204 | |||||||||||||||
| Transaction costs incurred to June 30, 2026(3) | - | - | - | 500,000 | 500,000 | |||||||||||||||
| Elimination of Silver47’s historical equity(4) | - | (120,960,685 | ) | 484,088 | 28,238,044 | (92,238,553 | ) | |||||||||||||
| Net transaction accounting adjustments to shareholders’ equity | $ | 141 | $ | 27,862,899 | $ | 484,088 | $ | 28,738,044 | $ | 57,085,172 | ||||||||||
| (1) | Common shares of Silver47 in the amount of 209,625,021 issued and outstanding as of August 20, 2026 and RSUs of Silver47 in the amount of 180,000 outstanding as of August 20, 2026 multiplied by the Exchange Ratio. See Note 2 for further detail. |
| (2) | Represents fair value of the Replacement Options to be issued pursuant to the Transaction. See Note 2 for further detail. |
| (3) | Represents transaction costs incurred to June 30, 2026, historically reported in Bunker Hill’s Operating costs. The amount was reversed and capitalized as part of the Transaction. |
| (4) | Represents adjustments to eliminate Silver47’s historical shareholders’ equity as at April 30, 2026. |
| (f) | Earnings per share |
The pro forma combined earnings per share below reflects pro forma combined net income (loss) attributable to shareholders of Bunker Hill divided by the pro forma weighted average number of shares of common stock outstanding, after giving effect to 36,170,385 shares issued as share consideration and the dilutive effect of Silver47 options and warrants, assuming such shares have been outstanding for the entirety of the periods presented:
| For the six months ended June 30, 2026 | For the year ended December 31, 2025 | |||||||
| Pro forma net income (loss) attributable to Bunker Hill shareholders | $ | 30,187,554 | $ | (114,978,305 | ) | |||
| Pro forma basic weighted average Bunker Hill stock outstanding(1) | 80,398,454 | 58,917,619 | ||||||
| Pro forma basic earnings (loss) per share | $ | 0.38 | $ | (1.95 | ) | |||
| Pro forma diluted weighted average Bunker Hill stock outstanding(2) | 85,225,947 | 58,917,619 | ||||||
| Pro forma diluted earnings (loss) per share | $ | 0.37 | $ | (1.95 | ) | |||
| (1) | Basic weighted average shares is comprised of pre-existing shares of Bunker Hill common stock and 36,170,385 shares of Bunker Hill common stock to be exchanged for 209,625,021 shares of Silver47 common stock issued and outstanding and in settlement of 180,000 RSUs of Silver47 outstanding as of August 20, 2026 in accordance with the Exchange Ratio. | |
| (2) | Diluted weighted average shares is comprised of pre-existing dilutive shares of Bunker Hill common stock and for the six months ended June 30, 2026 includes 2,524,295 of potential dilutive shares of Silver47. |
7. Summa Arrangement Accounting Adjustments
Silver47 completed the acquisition of Summa on August 1, 2025. Silver47’s historical consolidated financial statements for the period January 1, 2025 through July 31, 2025 do not include Summa’s results of operations.
In accordance with Article 11 of Regulation S-X, the Unaudited Pro Forma Financial Information gives effect to this arrangement as if it had occurred at the beginning of the periods presented. The Unaudited Pro Forma Financial Information also reflects a separate arrangement for the completed acquisition of Summa that required separate financial statements under Rule 3-05 of Regulation S-X.
To provide a more meaningful presentation of the Combined Company’s operating results, management has prepared Silver47’s historical statements of loss adjusted to include Summa’s historical results, together with related pro forma adjustments. These adjustments include:
| (a) | Adjustments to align Summa’s historical financial information with Silver47’s accounting policies; | |
| (b) | Silver47 and Summa’s historical financial information and pro forma adjustments translated from its reporting currency of CAD to be presented in Bunker Hill’s reporting currency of USD using the exchange rates in Note 4. |
The table below presents a construction of Silver47’s historical statements of loss for the year ended December 31, 2025, adjusted for Summa’s historical results for the adjustments noted above.
Condensed Consolidated Statements of Loss
For the Year Ended December 31, 2025
(Expressed in U.S. Dollars)
| Historical Silver47 Seven-Months Ended July 31, 2025 | Historical Summa Seven-Months Ended July 31, 2025 | Historical Consolidated Silver47 Five-Months Ended December 31, 2025 | Accounting Policy Alignment Adjustments | Note | Historical Silver47 Twelve months ended December 31, 2025 Adjusted for Summa | |||||||||||||||||
| Operating expenses | ||||||||||||||||||||||
| Exploration expenses | $ | (2,888,060 | ) | $ | (117,099 | ) | $ | (2,977,561 | ) | $ | (1,829,871 | ) | (1) | $ | (7,812,591 | ) | ||||||
| General and administrative expenses | (2,269,397 | ) | (2,150,761 | ) | (4,046,910 | ) | - | (8,467,068 | ) | |||||||||||||
| Share-based compensation | (736,955 | ) | (346,331 | ) | (4,655,888 | ) | - | (5,739,174 | ) | |||||||||||||
| Depreciation expenses | (490 | ) | - | (7,042 | ) | - | (7,532 | ) | ||||||||||||||
| (5,894,902 | ) | (2,614,191 | ) | (11,687,401 | ) | (1,829,871 | ) | (22,026,365 | ) | |||||||||||||
| Other items | ||||||||||||||||||||||
| Interest income | 56,993 | 16,842 | 178,938 | - | 252,773 | |||||||||||||||||
| Flow through share premium | 46,354 | - | - | - | 46,354 | |||||||||||||||||
| Change in fair value of share-based payment liabilities | 204,421 | - | (241,285 | ) | - | (36,864 | ) | |||||||||||||||
| Foreign exchange loss | (31,690 | ) | (35,214 | ) | (15,284 | ) | - | (82,188 | ) | |||||||||||||
| 276,078 | (18,372 | ) | (77,631 | ) | - | 180,075 | ||||||||||||||||
| Net loss | $ | (5,618,824 | ) | $ | (2,632,563 | ) | $ | (11,765,032 | ) | $ | (1,829,871 | ) | $ | (21,846,290 | ) | |||||||
| (1) | Represents an adjustment to align Summa’s accounting policy for exploration and evaluation expenditures to that of Silver47’s accounting policy and U.S. GAAP, under which such expenditures are expensed in the period incurred instead of capitalized. |