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AbraSilver Resource Corp. — Audit Report / Information 2025
Mar 31, 2026
42598_rns_2026-03-30_b47b0358-3b98-4ddc-a710-cfbab387de7e.pdf
Audit Report / Information
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ABRASILVER RESOURCE CORP.
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2025 AND 2024
(Expressed in Canadian Dollars)
Crowe
Crowe MacKay LLP
1400 - 1185 West Georgia Street
Vancouver, BC V6E 4E6
Main +1 (604) 687-4511
Fax +1 (604) 687-5805
www.crowemackay.ca
Independent Auditor's Report
To the Shareholders of AbraSilver Resource Corp.
Opinion
We have audited the consolidated financial statements of AbraSilver Resource Corp. (the "Group"), which comprise the consolidated statements of financial position as at December 31, 2025 and December 31, 2024 and the consolidated statements of loss and comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2025 and December 31, 2024, and its consolidated financial performance 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 audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.
Other Information
Management is responsible for the other information. The other information comprises:
- Management's Discussion and Analysis
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained the other information prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the work performed for the purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Pejman Mahlooji.
Clowe Mackay LLP
Chartered Professional Accountants
Vancouver, Canada
March 30, 2026
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ABRASILVER RESOURCE CORP.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
| As at | December 31, 2025 | December 31, 2024 |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 29,411,799 | $ 13,726,498 |
| Term deposits (*) | 29,046,863 | - |
| Receivables | 394,907 | 281,949 |
| Prepaid expenses | 306,457 | 73,168 |
| Total current assets | 59,160,026 | 14,081,615 |
| Equipment (note 7) | 388,116 | 343,453 |
| Mineral property interests (note 8) | 26,513,249 | 25,255,237 |
| Total Assets | $ 86,061,391 | $ 39,680,305 |
| Liabilities | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities (notes 8 and 14) | $ 7,244,333 | $ 1,641,818 |
| Consideration payable (note 11) | - | 9,286,969 |
| Total current liabilities | 7,244,333 | 10,928,787 |
| Total Liabilities | 7,244,333 | 10,928,787 |
| Shareholders' Equity | ||
| Share capital (note 12) | 226,693,884 | 123,609,217 |
| Reserves (notes 12(b), (c) and (d)) | 13,121,862 | 7,208,197 |
| Accumulated other comprehensive income | 1,219,502 | 2,449,138 |
| Accumulated deficit | (162,218,190) | (104,515,034) |
| Total shareholders' equity | 78,817,058 | 28,751,518 |
| Total Liabilities and Shareholders' Equity | $ 86,061,391 | $ 39,680,305 |
(*) The term deposits consist of guaranteed investment certificates with maturities between April and November 2026.
Nature of operations and going concern (note 1)
Commitments (note 17)
Subsequent events (notes 8 and 18)
Approved by the Board of Directors:
Director: (s) "Flora Wood"
Director: (s) "Robert Bruggeman"
The notes to the consolidated financial statements are an integral part of these statements.
ABRASILVER RESOURCE CORP.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
| For the years ended December 31, | 2025 | 2024 |
|---|---|---|
| Administrative expenses | ||
| Consulting fees | $ 2,295,559 | $ 737,326 |
| Insurance | 168,836 | 167,610 |
| Investor relations | 137,957 | 141,985 |
| Office and administration and depreciation | 2,210,071 | 1,561,919 |
| Professional fees (note 14) | 1,851,428 | 978,445 |
| Salaries, benefits and director fees (note 14) | 2,089,373 | 1,182,657 |
| Share-based payments (notes 12 and 14) | 7,294,931 | 2,750,765 |
| Transfer agent and filing fees | 318,002 | 130,647 |
| Total administrative expenses | 16,366,157 | 7,651,354 |
| Evaluation and exploration expenses (note 10) | 42,245,983 | 20,347,734 |
| Other (income) expenses | ||
| Gain on sale of marketable securities (note 15) | (699,458) | (3,901,435) |
| Teck management fees and other income (note 8(b)) | (9,147) | (571,463) |
| Other income (note 8(a)) | (682,150) | - |
| Interest income | (1,790,496) | (557,091) |
| Accretion of consideration payable (note 11) | 361,163 | 1,156,744 |
| Foreign exchange loss | 1,545,379 | 951,047 |
| Loss on settlement of consideration payable (note 11) | 200,211 | - |
| Loss on disposition of subsidiary (note 9) | 88,205 | - |
| Total other loss | (986,293) | (2,922,198) |
| Net loss from continuing operations | 57,625,847 | 25,076,890 |
| Loss from discontinued operation (note 9) | 12,370 | 19,415 |
| Total net loss for the year | 57,638,217 | 25,096,305 |
| Other comprehensive (income) loss: | ||
| Foreign currency translation adjustment | ||
| - continuing operations | 1,217,437 | (1,616,849) |
| Foreign currency translation adjustment | ||
| - discontinued operations | 12,199 | (258,086) |
| Total comprehensive loss for the year | ||
| - continuing operations | 58,843,284 | 23,460,041 |
| Total comprehensive loss (income) for the year | ||
| - discontinued operation | 24,569 | (238,671) |
| Total comprehensive loss for the year | $ 58,867,853 | $ 23,221,370 |
| Basic and diluted loss per share | ||
| - continuing operations | $ 0.38 | $ 0.21 |
| Basic and diluted loss per share | ||
| - discontinued operation | $ 0.00 | $ 0.00 |
| Weighted average number of shares outstanding - basic and diluted | 151,403,721 | 121,914,700 |
The notes to the consolidated financial statements are an integral part of these statements.
ABRASILVER RESOURCE CORP.
Consolidated Statements of Changes in Shareholders' Equity
(Expressed in Canadian Dollars)
| Share Capital | Share-based payment reserve | Warrant reserve | Accumulated other comprehensive income (loss) | Accumulated Deficit | Total | ||
|---|---|---|---|---|---|---|---|
| Number | Amount | ||||||
| Balance, December 31, 2023 | 113,264,741 | $ 93,204,742 | $ 5,233,849 | $ 1,879,383 | $ 574,203 | $(79,432,223) | $ 21,459,954 |
| Shares issued in private placement, net of costs | 10,408,163 | 19,958,813 | - | - | - | - | 19,958,813 |
| Shares issued from exercise of warrants | 3,822,817 | 9,312,193 | - | (1,757,301) | - | - | 7,554,892 |
| Fair value of warrants issued | - | (51,591) | - | 51,591 | - | - | - |
| Expiry of warrants | - | 173,673 | - | (173,673) | - | - | - |
| Shares issued for settlement of RSU | 76,667 | 143,750 | (143,750) | - | - | - | - |
| Shares issued from exercise of stock options | 1,120,982 | 867,637 | (632,667) | - | - | 13,494 | 248,464 |
| Share-based payments | - | - | 2,750,765 | - | - | - | 2,750,765 |
| Foreign currency translation adjustment | - | - | - | - | 1,874,935 | - | 1,874,935 |
| Net loss for the year from continuing operations | - | - | - | - | - | (25,076,890) | (25,076,890) |
| Net loss for the year from discontinued operation | - | - | - | - | - | (19,415) | (19,415) |
| Balance, December 31, 2024 | 128,693,370 | 123,609,217 | 7,208,197 | - | 2,449,138 | (104,515,034) | 28,751,518 |
| Shares issued in private placement, net of costs | 29,743,075 | 101,459,259 | - | - | - | - | 101,459,259 |
| Shares issued for settlement of RSU | 76,667 | 143,750 | (143,750) | - | - | - | - |
| Shares issued from exercise of stock options | 1,366,400 | 1,481,658 | (1,237,516) | - | - | (64,939) | 179,203 |
| Share-based payments | - | - | 7,294,931 | - | - | - | 7,294,931 |
| Foreign currency translation adjustment | - | - | - | - | (1,229,636) | - | (1,229,636) |
| Net loss for the year from continuing operations | - | - | - | - | - | (57,625,847) | (57,625,847) |
| Net loss for the year from discontinued operation | - | - | - | - | - | (12,370) | (12,370) |
| Balance, December 31, 2025 | 159,879,512 | $ 226,693,884 | $ 13,121,862 | $ - | $ 1,219,502 | $(162,218,190) | $ 78,817,058 |
The notes to the consolidated financial statements are an integral part of these statements.
ABRASILVER RESOURCE CORP.
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
| Years Ended December 31, | 2025 | 2024 |
|---|---|---|
| Operating Activities | ||
| Net loss for the year from continuing operations | $ (57,625,847) | $ (25,076,890) |
| Items not affecting cash: | ||
| Accrued interest income | (568,003) | - |
| Accretion of consideration payable | 361,163 | 1,156,744 |
| Foreign exchange loss | 1,545,379 | 950,752 |
| Share-based payments | 7,294,931 | 2,750,765 |
| Gain on sale of marketable securities | (699,458) | (3,901,435) |
| Loss on settlement of consideration payable | 200,211 | - |
| Depreciation | 76,456 | 20,894 |
| Changes in non-cash operating working capital: | ||
| Receivables | (109,274) | 165,134 |
| Prepaid expenses | (233,289) | (22,989) |
| Accounts payable and accrued liabilities | 5,604,450 | 851,775 |
| Cash (used in) operating activities from continuing operations | (44,153,281) | (23,105,250) |
| Cash (used in) operating activities from discontinued operation (note 9) | (17,989) | (22,341) |
| Cash (used in) operating activities | (44,171,270) | (23,127,591) |
| Investing Activities | ||
| Additions to mineral interests | (6,442,947) | (2,775,346) |
| Option payments received | 3,896,680 | 3,990,996 |
| Proceeds from sale of marketable securities | 36,011,289 | 22,562,551 |
| Proceeds from redemption of term deposits | - | 2,000,000 |
| Purchase of term deposit | (29,417,170) | - |
| Purchase of marketable securities | (35,311,831) | (18,659,951) |
| Additions to equipment | (138,632) | (347,853) |
| Cash (used in) provided by investing activities - continuing operations | (31,402,611) | 6,770,397 |
| Cash (used in) provided by investing activities - discontinued operation | - | - |
| Cash (used in) provided by investing activities | (31,402,611) | 6,770,397 |
| Financing Activities | ||
| Proceeds from issuance of shares in private placements, net of issuance costs | 101,459,259 | 19,958,813 |
| Proceeds from exercise of warrants | - | 7,554,892 |
| Proceeds from exercise of stock options | 179,203 | 248,464 |
| Payment to settle consideration payable | (9,660,618) | - |
| Cash provided by financing activities - continuing operations | 91,977,844 | 27,762,169 |
| Cash (used in) financing activities - discontinued operation | - | - |
| Cash provided by financing activities | 91,977,844 | 27,762,169 |
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ABRASILVER RESOURCE CORP.
Consolidated Statements of Cash Flows (Continued)
(Expressed in Canadian Dollars)
| Years Ended December 31, | 2025 | 2024 |
|---|---|---|
| Foreign exchange effect on cash and cash equivalents - continuing operations | (718,559) | (461,124) |
| Foreign exchange effect on cash and cash equivalents - discontinued operation | (103) | (14,718) |
| Foreign exchange effect on cash and cash equivalents | (718,662) | (475,842) |
| Change in cash and cash equivalents during the year | 15,685,301 | 10,929,133 |
| Cash and cash equivalents, beginning of the year | 13,726,498 | 2,797,365 |
| Cash and cash equivalents, end of the year | $ 29,411,799 | $ 13,726,498 |
| Cash and cash equivalents are comprised of: | ||
| Cash | $ 26,181,531 | $ 4,843,156 |
| Cash equivalents | 3,230,268 | 8,883,342 |
| $ 29,411,799 | $ 13,726,498 | |
| Supplemental cash flow information: | ||
| Interest received | $ 1,222,493 | $ 573,426 |
| Non-cash investing and financing activities | ||
| Shares issued for settlement of RSU | $ 143,750 | $ 143,750 |
The notes to the consolidated financial statements are an integral part of these statements.
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
1. Nature of operations and going concern
AbraSilver Resource Corp. (formerly AbraPlata Resource Corp.) (the "Company" or "AbraSilver") was incorporated on August 31, 1993 under the Alberta Business Corporations Act. On September 30, 2015, the Company's incorporation jurisdiction was moved to British Columbia. The Company's registered office is located at Suite 550, 220 Bay Street, Toronto, Ontario, M5J 2W4.
These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2025, the Company has working capital of $51,915,693 (December 31, 2024 – $3,152,828) and has an accumulated deficit of $162,218,190. The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing. As at December 31, 2025, the Company has not achieved profitable operations however it had $51,915,693 working capital and therefore has sufficient resources to sustain operations for the next 12 months, although the Company will need additional funding to achieve its long-term business objectives. These consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.
On March 4, 2021, the Company changed its name from "AbraPlata Resource Corp." to "AbraSilver Resource Corp.". The common shares of the Company began trading under the Company's new name on the TSX Venture Exchange (the "TSXV") on March 9, 2021. On February 24, 2025, the Company announced that it has received final listing approval from the Toronto Stock Exchange (the "TSX") to graduate from the TSXV. The common shares of the Company began trading on the TSX effective at the market open on February 27, 2025, under the symbol "ABRA".
On May 17, 2024, the Company announced that it would implement the consolidation of its common shares in the capital of the Company on the basis of five (5) pre-consolidation shares for every one (1) post consolidation share (the "Consolidation"). The Consolidation took effect at market open on May 22, 2024. Accordingly, the number of shares, warrants, stock options ("Options") and restricted share units ("RSUs") and the exercise prices in these consolidated financial statements have been restated to reflect the Consolidation.
The Company's business may be affected by changes in political and market conditions, such as interest rates, availability of credit, inflation rates, changes in laws, tariffs, and national and international circumstances. Recent geopolitical events, and potential economic global challenges such as the risk of higher inflation and energy crises, may create further uncertainty and risk with respect to the prospects of the Company's business.
2. Basis of preparation
Statement of compliance
These consolidated financial statements of the Company have been prepared in accordance with IFRS® Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
These consolidated financial statements were authorized for issue by the Board of Directors on March 30, 2026.
Basis of measurement
These consolidated financial statements are expressed in Canadian dollars, the Company's presentation currency and have been prepared on the historical cost basis except for certain financial instruments, which are measured at 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 used in the preparation of these consolidated financial statements are the policies listed in note 4. These accounting policies have been applied consistently to all periods presented in these consolidated financial statements as if the policies have always been in effect, except adoption of new accounting policy in note 3.
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
3. Change in accounting policy
Certain new accounting standards and interpretations have been published that are either applicable in the current period or not mandatory for the current period.
New accounting policies adopted
Amendments to IAS 21 – Lack of Exchangeability
The amendments require companies to provide more useful information in their financial statements when a currency cannot be exchanged into another currency. The amendments respond to stakeholder feedback and concerns about diversity in practice in accounting for a lack of exchangeability between currencies. The amendments will help companies and investors by addressing a matter not previously covered in the accounting requirements for the effects of changes in foreign exchange rates. These amendments will require companies to apply a consistent approach in assessing whether a currency can be exchanged into another currency and when it cannot, in determining the exchange rate to use and the disclosures to provide. The Company has assessed Amendments to IAS 21 - Lack of Exchangeability, and determined it did not have a material impact on the Company in the current reporting period.
Future accounting standards
IFRS 18 Presentation and Disclosure in Financial Statements was issued by the IASB in April 2024, and introduces three sets of new requirements to give investors more transparent and comparable information about companies' financial performance for better investment decisions, with mandatory application of the standard in annual reporting periods beginning on or after January 1, 2027. The Company is still assessing the impact of the implementation of these amendments. No standards have been early adopted in the current period.
4. Material accounting policies
(a) Basis of consolidation
The consolidated financial statements include the accounts of the Company and the Company's wholly-owned subsidiaries at the end of the reporting year. All inter-company transactions and balances have been eliminated.
| Jurisdiction | Percentage of ownership | ||
|---|---|---|---|
| 2025 | 2024 | ||
| Aethon Minerals Corporation ("Aethon") | Canada | 100% | 100% |
| Huayra Minerals Corp. ("Huayra") | Canada | 100% | 100% |
| AbraPlata Argentina S.A.(2) | Argentina | 100% | 100% |
| Pacific Rim Mining Corporation Argentina S.A. (1) | Argentina | 100% | 100% |
| Minera Cerro Bayo S.A. | Argentina | 100% | 100% |
| ABP Global Inc. (BVI) | BVI | 100% | 100% |
| ABP Diablillos Inc. (BVI) | BVI | 100% | 100% |
| Aethon Minerals Chile SpA. | Chile | 0% | 100% |
| Abrasilver US Resource Corp. | USA | 100% | 100% |
(1) Please refer to note 8 (a) for outstanding payments and note 11 for consideration paid for the mineral property interests in Pacific Rim Mining Corporation Argentina S.A.
(2) Please refer to 8(b) for outstanding payments for the mineral property interests in AbraPlata Argentina S.A.
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4. Material accounting policies (continued)
(a) Basis of consolidation (continued)
The results of subsidiaries are fully consolidated from the date on which control is transferred to the Company. The results of these subsidiaries will continue to be included in the consolidated financial statements of the Company until the date that the Company's control over the subsidiary ceases. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
(b) Critical accounting estimates and judgments
The preparation of these consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates
Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period could result in a material adjustment to the carrying amounts of assets, liabilities and equity in the event that actual results differ from assumptions made.
Valuation of Options Granted
The fair value of common share purchase options granted is determined at the issue date using the Black-Scholes option pricing model. The Black-Scholes model involves six key inputs to determine the fair value of an option, which are: risk-free interest rate, exercise price, market price at the grant date, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are, or could be, affected by significant factors that are out of the Company's control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share-based payments expense. These estimates impact the values of stock-based compensation expense and reserves.
Critical accounting judgments
Critical accounting judgments are accounting policies that have been identified as being complex or involving subjective judgments or assessments, which are discussed below.
Impairment of mineral interests
The application of the Company's accounting policy for exploration and evaluation expenditures and impairment of the capitalized expenditures requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in profit or loss in the year the new information becomes available.
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ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4. Material accounting policies (continued)
Critical accounting judgments (continued)
Legal claims and contingencies
Management applies significant judgment, in consultation with external legal counsel, in assessing the existence, likelihood and potential outcome of legal claims and disputes involving the Company. These judgments include evaluating the probability that an outflow of economic resources will be required to settle such matters and determining whether a provision should be recognized or a contingent liability disclosed. The assessment of these matters is inherently judgmental and is based on the information available at the reporting date.
Functional currency
The assessment of each entity's functional currency involves significant judgment. Refer to our discussion in note 4(d).
Going concern risk assessment
The assessment of the Company's ability to continue as a going concern involves significant judgment. Refer to our discussion in Note 1.
(c) Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
(d) Foreign currency translation
Functional and presentation currency
Items included in the financial statements of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the functional currency). These consolidated financial statements are presented in Canadian Dollars. The Company's presentation currency is the Canadian dollar and the Company and its subsidiaries' functional currencies are summarized below.
The functional currency of AbraPlata Argentina S.A., Pacific Rim Mining Corporation Argentina S.A., Minera Cerro Bayo S.A., ABP Global Inc. (BVI), ABP Diablillos Inc. (BVI) and AbraSilver (US) Resource Corp. is the US dollar. The functional currency of AbraSilver Resource Corp., Aethon Minerals Corporation, and Huayra Minerals Corp. is the Canadian dollar. The function currency of Aethon Minerals Chile SpA is the Chilean Peso.
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ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4. Material accounting policies (continued)
(d) Foreign currency translation (continued)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the consolidated statement of loss and comprehensive loss in the period in which they arise. Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive (income) loss in the consolidated statement of loss and comprehensive (income) loss to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive (income) loss. Where the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.
Parent and Subsidiary Companies
The results and financial position of all subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- assets and liabilities are translated at period-end exchange rates prevailing at that reporting date; and
- income and expenses are translated at the average exchange rates for the period.
Exchange differences are transferred directly to other comprehensive (income) loss and are included in a separate component of equity titled "Accumulated other comprehensive income or loss – foreign currency translation adjustment". These differences are recognized in profit or loss in the period in which the operation is disposed.
(e) Evaluation and exploration expenses
Evaluation and exploration expenses are comprised of costs that are directly attributable to:
- researching and analyzing existing exploration data;
- conducting geological studies, exploratory drilling and sampling;
- examining and testing extraction and treatment methods; and
- activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral resource.
All exploration and evaluation expenditures are expensed until properties are determined to contain economically viable reserves. When economically viable reserves have been determined, technical feasibility has been determined and the decision to proceed with development has been approved, the subsequent costs incurred for the development of that project are capitalized as mining properties, a component of property, plant and equipment.
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ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4. Material accounting policies (continued)
(f) Mineral interests
Mineral interests include any costs relating to the acquisition and claim maintenance of mineral properties, including option payments and annual fees to maintain the property in good standing minus option payments received on mineral properties. When economically viable reserves have been determined, technical feasibility has been determined and the decision to proceed with development has been approved by the Board of Directors, the capitalized mineral interests for that project are capitalized as mining properties, a component of property, plant and equipment. Upon determination and the decision to proceed with development of a mineral interest, the mineral interest is tested for impairment and then reclassified from mineral interests to mining properties, net of any impairment losses.
The Company assesses its capitalized mineral interests for indications of impairment on a regular basis and when events and circumstances indicate a risk of impairment. A mineral interest is written down or written off when the Company determines that an impairment of value has occurred or when exploration results indicate that no further work is warranted.
Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers, or title may be affected by undetected defects.
(g) Impairment of long-lived assets
Long-lived assets are assessed for impairment at each reporting date. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less cost to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). These are typically individual mines or development projects.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
(h) Loss (earnings) per share
The basic loss (earnings) per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The diluted loss per share reflects the potential dilution of common share equivalents, such as outstanding stock options and share purchase warrants, in the weighted average number of common shares outstanding during the period if dilutive. The Company uses the treasury stock method of calculating fully diluted per share amounts whereby any proceeds from the exercise of stock options or other dilutive instruments are assumed to be used to purchase common shares at the average market price during the year. Diluted loss (earnings) per share has not been presented separately as the outstanding options and warrants are anti-dilutive for each period presented.
All of the outstanding stock options, warrants and RSUs as of December 31, 2025 and 2024 were not included in the calculation of diluted per share amounts.
- 15 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4. Material accounting policies (continued)
(i) Cash and cash equivalents
The Company considers deposits that are highly liquid, readily convertible to known amounts of cash, redeemable on demand to be cash equivalents. Interest income is recorded as earned on the accrual basis at the stated rate of interest over the term of the investment.
(j) Income taxes
Income tax expense comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity.
Current tax
Current tax expense is the expected tax payable on 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.
Deferred tax
Deferred tax is accounted for using the liability method, providing for the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their respective tax bases. A deferred tax liability is recognized for all taxable temporary differences except where the deferred income tax liability arises from the initial recognition of goodwill, or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences, and in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
A deferred income tax asset is recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and losses can be utilized, except where the deferred income tax asset related to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences. In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
Deferred tax is measured on an undiscounted basis using the tax rates that are expected to apply in the period when the liability is settled or the asset is realized, based on tax rates and tax laws enacted or substantively enacted at the statement of financial position date. Deferred tax assets and liabilities are offset 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.
- 16 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4. Material accounting policies (continued)
(k) Share-based compensation
The Company grants share-based awards to certain officers, employees, directors and other eligible persons. For equity-settled awards, the fair value is charged to profit or loss and credited to the related reserve account, on a straight-line basis over the vesting period, after adjusting for the estimated number of awards that are expected to vest.
Our amended stock options plan include provisions that allow for the "net exercise" of options by plan participants at the Company's discretion. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the option holder can be paid for by having the option holder tender back to the Company a number of shares at fair value equal to the amounts due. In the case of cashless exercises of options, the amounts transferred from the reserve for share-based payment to share capital are based on the ratio of shares actually issued to the number of options originally granted. The remainder is transferred to deficit. In the case of net exercise of options for withholding and related taxes, the increase in the value of the equity instrument relative to the historical amounts vested and recorded within share based payment reserve is recorded to deficit.
The fair value of the equity-settled awards is determined at the date of the grant. In calculating fair value, no account is taken of any vesting conditions, other than conditions linked to the price of the shares of the Company. The fair value is determined by using the Black-Scholes option pricing model.
At each statement of financial position date, the cumulative expense representing the extent to which the vesting period has expired and management's best estimate of the awards that are ultimately expected to vest is computed. The movement in cumulative expense is recognised in profit or loss with a corresponding entry against the related reserve. No expense is recognised for awards that do not ultimately vest. The amount remains in the related reserve for options which expire unexercised. When options are exercised, the related amount in reserve is reclassified to share capital.
Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss, unless they are related to the issuance of shares. Amounts related to the issuance of shares are recorded as a reduction of share capital. When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The fair value of options granted to non-employees is re-measured at the earlier of each financial reporting or vesting date, and any adjustment is charged or credited to operations upon re-measurement.
The terms of the Company's RSU arrangement provide the Company with a choice of whether to settle in cash or by issuing equity instruments. For RSU which are considered equity-settled awards, the fair value of the grant is determined by multiplying the Company's share price at grant date by the number of RSU granted and recorded as share-based payments expense in profit or loss, a corresponding credit is recorded to share-based payments reserve and is recognized over the vesting period. Actual number of RSU that will eventually vest is likely to be different from estimation. Upon settlement of the RSU through the issuance of shares, the amount reflected in share-based payment reserve is credited to share capital. If the Company elects the settlement alternative with the higher fair value, as at the date of settlement, the Company recognizes an additional expense for the excess value given, ie the difference between the cash paid and the fair value of the equity instruments that would otherwise have been issued, or the difference between the fair value of the equity instruments issued and the amount of cash that would otherwise have been paid, whichever is applicable.
(l) Share capital
Common shares
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.
- 17 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4. Material accounting policies (continued)
(I) Share capital (continued)
Equity units
The Company has adopted a prorata value method with respect to the measurement of shares and warrants issued as private placement equity units. The prorata value method values the fair value of warrants issued in the unit using Black-Scholes valuation model and the fair value of the shares is determined by the closing bid price on the closing date of the private placement. The unit price in the private placement is then allocated between warrants and shares prorata on the basis of the fair value of warrants and shares. The value attributed to the warrants is recorded as an equity reserve. If the warrants are exercised or expired unexercised, the value attributable to the warrants is transferred to share capital.
(m) Financial instruments
Classification and measurement
IFRS 9 requires financial assets and liabilities to be classified into three measurement categories on initial recognition: those measured at fair value through profit and loss ("FVTPL"), those measured at fair value through other comprehensive loss and those measured at amortized cost. Measurement and classification of financial assets and financial liabilities is dependent on the Company's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets and liabilities.
The Company classified cash and cash equivalents, receivables, term deposits, accounts payable and accrued liabilities and consideration payable as amortized costs, and marketable securities as FVTPL.
The term deposits are guaranteed investment certificates held at a major Canadian financial institution and have fixed interests rates between 2.73 to 4.35% that will mature between April 9, 2026 to November 5, 2026.
Financial assets and liabilities at amortized costs are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment. Investments in equity instruments are required to be measured by default at fair value through profit or loss, unless the Company makes an irrevocable election to present subsequent changes in the fair value of its equity investments in other comprehensive (income) loss.
De-recognition
The Company derecognizes financial assets 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 risk and rewards of ownership to another entity. A financial liability is derecognized when the obligation under the liability is discharged, canceled or expired. Gains and losses on de-recognition of financial assets and liabilities are generally recognized in profit and loss in the consolidated statements of loss and comprehensive loss.
Impairment
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized costs based on a probability-weighted estimate of credit losses over the expected life of the financial asset.
The expected credit losses are reviewed and updated at each reporting date as appropriate to reflect changes in the credit risk of the financial instruments, whereby 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 loss 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. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the expected credit losses are reversed after the impairment was recognized.
- 18 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
4. Material accounting policies (continued)
(n) Rehabilitation obligations
The Company recognizes the fair value of a legal or constructive liability for a rehabilitation obligation in the year in which it is incurred and when a reasonable estimate of fair value can be made. The carrying amount of the related long-lived asset is increased by the same amount as the liability. Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation. The amount will be recognized as an increase in the liability and an accretion expense in profit or loss. Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease to the carrying amount of the liability and the related long-lived asset. The Company does not have significant rehabilitation obligations.
5. Financial instruments
(a) Fair value estimation
The fair value of financial instruments is determined by valuation methods depending on hierarchy levels as defined below:
- Level 1 of the fair value hierarchy includes unadjusted quoted prices in active markets for identical assets or liabilities;
- Level 2 of the hierarchy includes inputs that are observable for the asset or liability, either directly or indirectly; and
- Level 3 includes inputs for the asset or liability that are not based on observable market data.
The Company's marketable securities are valued using level 1 fair value hierarchy. At December 31, 2025 and December 31, 2024, the carrying value was $nil. The carrying values of other financial instruments maturing in the short term approximates their fair values.
(b) Financial risks
The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The Company manages risks to minimize potential losses. The main objective of the Company's risk management process is to ensure that the risks are properly identified and that the capital base is adequate in relation to those risks. The Company's risk exposure and the impact on the Company's financial instruments are summarized below:
Credit risk
Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations.
The Company is exposed to credit risk with respect to its cash and cash equivalents, receivables and term deposits. The Company's maximum exposure to credit risk is their carrying amounts disclosed in the consolidated statements of financial position. Credit risk associated with cash and cash equivalents and term deposits are minimized by placing these instruments with major Canadian financial institutions with strong investment-grade ratings as determined by a primary ratings agency. Credit risk associated with receivables is minimal.
- 19 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
- Financial instruments (continued)
(b) Financial risks (continued)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
At December 31, 2025, the Company had a cash and cash equivalents balance of $29,411,799 and term deposits of $29,046,863 to settle current liabilities of $7,244,333.
The Company intends to finance future requirements from share issuances, the exercise of options, debt or other sources. There can be no certainty of the Company's ability to raise additional financing through these means.
The Company has the following contractual cash flow requirements as at December 31, 2025:
| Years ended December 31, | ||
|---|---|---|
| 2025 | 2026 | |
| Accounts payable and accrued liabilities | $ 7,244,333 | $ - |
| $ 7,244,333 | $ - |
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market factors. Market risk comprises three types of risk: price risk, interest rate risk and currency risk.
Price risk
Price risk is the risk that the fair value of future cash flows of the Company's financial instruments will fluctuate because of changes in market prices. The Company is not exposed to price risks.
Interest rate risk
Interest rate risk is the risk that the fair values and future cash flows of the Company will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk to the extent that the cash and cash equivalents and term deposits, if any, maintained at financial institutions is subject to a floating rate of interest. The interest rate risk on cash and cash equivalents and term deposits is not considered significant.
Currency risk
Currency risk is the risk that the fair values or future cash flows of the Company's financial instruments will fluctuate because of changes in foreign currency exchange rates. The Company is exposed to currency risk through financial assets and liabilities denominated in currencies other than the functional currency of the entity which holds the financial asset or liability. The Company's financial instruments denominated in currencies other than the functional currency of the entity which holds the financial asset of liability as at December 31, 2025 are as follows:
- 20 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
- Financial instruments (continued)
(b) Financial risks (continued)
Market risk (continued)
Currency risk (continued)
| Cost | Argentine peso | US$ | C$ equivalent |
|---|---|---|---|
| Cash and cash equivalents | 174,423,416 | 8,478,229 | 11,794,684 |
| Term deposits | - | 20,383,583 | 27,937,739 |
| Accounts payable and accrued liabilities | 1,087,892,280 | 1,686,746 | 3,399,746 |
The Company's sensitivity analysis suggests that a 10% depreciation or appreciation of the foreign currencies against the Canadian dollar would have resulted in an approximate $3,611,000 decrease or increase in the Company's total net income or loss.
As at December 31, 2025, US dollar amounts have been translated at a rate of C$1.3706 per US dollar, and Argentine peso amounts have been translated at C$0.0010 per Argentine peso.
- Capital management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the development and exploration of its mineral properties and to maintain a flexible capital structure, which optimizes the costs of capital to an acceptable risk. The Company considers its capital to include shareholders' equity.
The Company depends on external financing to fund its activities and there can be no guarantee that external financing will be available at terms acceptable to the Company. Additional funding will be required by the Company to complete its strategic objectives and continue as a going concern. There is no certainty that additional financing at terms that are acceptable to the Company will be available. The capital structure of the Company currently consists of common shares. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new debt, new shares or warrants. The Company is not subject to externally restricted capital requirements.
Management reviews its capital management approach on a regular basis. There were no changes in the Company's approach to capital management.
- 21 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
- Equipment
| Cost | Equipment |
|---|---|
| Balance, December 31, 2023 | $ 4,659 |
| Additions | 347,853 |
| Impact of foreign exchange | 17,548 |
| Balance, December 31, 2024 | 370,060 |
| Additions | 138,632 |
| Impact of foreign exchange | (24,701) |
| Balance, December 31, 2025 | $ 483,991 |
Accumulated depreciation
| Balance, December 31, 2023 | $ 4,659 |
|---|---|
| Depreciation | 20,894 |
| Impact of foreign exchange | 1,054 |
| Balance, December 31, 2024 | 26,607 |
| Depreciation | 76,456 |
| Impact of foreign exchange | (7,188) |
| Balance, December 31, 2025 | $ 95,875 |
Net book value
| Balance, December 31, 2024 | $ 343,453 |
|---|---|
| Balance, December 31, 2025 | $ 388,116 |
The additions to the equipment during the year ended December 31, 2025 include containers used in mineral property interest projects and are depreciated over five years on a declining balance. The additions to equipment during the year ended December 31, 2024 include two power generators, two effluent treatment plants and a fuel tank which are depreciated over five years on a declining balance. The depreciation of the equipment is included in the evaluation and exploration expenses (note 10).
- Mineral property interests
Through the Company's wholly-owned subsidiaries, the Company controls exploration projects in Argentina classified by the Company into the Diablillos Project and La Coipita Project. All acquisition costs and option payments related to these exploration projects are capitalized as mineral interests and are incurred in US dollars and translated to Canadian dollars, the presentation currency for the Company.
- 22 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
8. Mineral property interests (continued)
(a) Diablillos project
(1) On November 1, 2016, the Company closed a share purchase agreement dated August 23, 2016, as amended and restated on March 21, 2017, and further amended on September 11, 2019, with SSR Mining Inc. ("SSRM") and Fitzcarraldo Ventures Inc. (the "Diablillos SPA") pursuant to which Huayra Mineral Corporation, a wholly owned subsidiary of the Company, acquired from SSRM all of the issued and outstanding shares of Pacific Rim Mining Corporation Argentina S.A., ABP Global Inc. (BVI) and ABP Diablillos Inc.(BVI) (together, the "SSRM subsidiaries"). Through the acquisition of the SSRM subsidiaries, the Company acquired certain exploration projects in Salta Province, Argentina (the "Diablillos Project").
Cash consideration payable to SSRM consists of the following:
- US$300,000 on closing; this amount to be increased by an amount equal to the US dollar equivalent of the amount of Argentine pesos deposited in entity purchased by the Company (paid);
- US$300,000 on or before February 15, 2017 (as amended) (paid);
- US$500,000 on 180th day after closing (paid);
- US$50,000 on or before January 12, 2018 (as amended) (paid);
- $200,000 to be paid on December 19, 2019 (paid);
- US$5,000,000 to be paid on the earlier of (paid):
- the date on which a Diablillos Feasibility Study in respect of all or any part of the Diablillos Concessions has been obtained;
- July 31, 2023; and
- 90 days after demand by SSRM for payment if (a) AbraSilver's market capitalization exceeds $100,000,000 for 20 consecutive trading days (on the primary stock exchange on which such entity's shares are traded) or (b) after November 1, 2020, the spot price of silver (based on the London Bullion Market Association (LBMA) Silver Price as published by the LBMA on its website (or should that quotation cease, another similar quotation acceptable to the parties acting reasonably) (the "Benchmark") exceeds $25 per ounce for 20 consecutive trading days on the Benchmark;
- US$7,000,000 to be paid on the earlier of (note 11 and paid):
- the date on which Commercial Production occurs in respect of all or any part of the Diablillos Concessions (not reached yet); and
- July 31, 2025.
On September 2, 2020 AbraSilver's market capitalization exceeded $100,000,000 for twenty (20) consecutive trading days on the TSXV for the period from and after August 6, 2020 to and including September 2, 2020. On the same day SSRM requested the US$5,000,000 to be paid within 90 days. During the year ended December 31, 2020, the Company paid $6,533,500 (US$5,000,000) as an addition to the Diablillos project.
- 23 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
- Mineral property interests (continued)
(a) Diablillos project (continued)
The US$7,000,000 balance would be paid on earlier of the date on which commercial production occurs in respect of all or any part of the Diablillos Project and July 31, 2025.
On April 10, 2025, the Company completed the final payment ahead of schedule by the paying US$6.85 million, a reduced total obligation from the original US$7.0 million payment obligation. With this final payment, the Company has fully satisfied its purchase obligation, securing 100% ownership of the Diablillos project.
(2) On August 30, 2017 the Company signed a share purchase agreement, which was amended September 6, 2019, to acquire all of the issued and outstanding shares of Minera Cerro Bayo S.A. ("Cerro Bayo"), a privately held Argentine company. Cerro Bayo owns certain mineral rights that, as a result of a long-standing border dispute between two neighboring provinces in northwestern Argentina, overlap and potentially conflict with the Company's mineral rights to its Diablillos Ag-Au project. The acquisition of the potentially conflicting mineral rights through the acquisition of Cerro Bayo means that the Company will retain its title to the Diablillos Ag-Au project regardless of the ultimate outcome of the provincial border dispute.
Cash and equity consideration payable under the agreement is as follows:
- US$225,000 upon closing (paid);
- US$175,000 on or before February 28, 2018 (paid);
- US$15,000 upon signing of the September 6, 2019, amendment (paid);
- US$350,000 and 300,000 common shares on or before November 30, 2019 (paid and issued);
- US$65,000 on or before April 30, 2020 (paid);
- US$65,000 and 200,000 common shares on or before October 31, 2020 (paid and issued);
- US$65,000 on or before April 30, 2021 (paid);
- US$65,000 on or before October 31, 2021 (paid);
- US$65,000 on or before April 30, 2022 (paid);
- US$65,000 on or before October 31, 2022 (paid);
- US$1,000,000 on or before July 31, 2023 (paid);
-
US$1,170,000 on or before July 31, 2025 (paid).
-
24 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
8. Mineral property interests (continued)
(a) Diablillos project (continued)
(3) On June 20, 2025, the Company entered into a net smelter returns royalty agreement (the "Catamarca Agreement") with EMX Royalty Corporation ("EMX") in respect of certain mineral concessions comprising part of the Diablillos Project and located in the province of Catamarca. The mineral concessions that are subject to the Catamarca Agreement overlap with certain mineral concessions located in the province of Salta and which are subject to the historical net smelter returns royalty agreement dated November 1, 2016 and which has been duly assigned to EMX. The Catamarca Agreement memorializes the agreement of the parties to grant, in the aggregate, a 1% production royalty to EMX on the net smelter returns from the Diablillos Project, irrespective of whether certain of the mineral concessions comprising the Diablillos Project are finally determined to be located in the province of Salta or Catamarca. As consideration for the entering into of the Catamarca Agreement, EMX made a payment to AbraSilver of US$500,000 ($682,150) which is recorded as other income in profit or loss.
(4) On December 2025, the Company entered into agreements with multiple arms' length parties to acquire several strategic mining properties in the vicinity of its flagship Diablillos project in Argentina.
- Mi Belelo 3 Property
On December 3, 2025, AbraSilver, through its wholly owned subsidiary, Pacific Rim Mining Corporation Argentina SA ("PRMC"), received an offer to enter into a purchase agreement to purchase a 100% interest in a mineral property known as Mi Belelo 3 Property, located in the Antofagasta de la Sierra Department in the Province of Catamarca, Argentina. In accordance with the agreement, the Company must pay to the owners US$200,000. This amount was accrued as at December 31, 2025 and paid subsequent to year end.
- Natalia Property
On December 3, 2025, AbraSilver, through its wholly owned subsidiary, PRMC received an offer to enter into a purchase agreement to purchase a 100% interest in a mineral property known as Natalia Property, located in the Antofagasta de la Sierra Department in the Province of Catamarca, Argentina. In accordance with the agreement, the Company must pay to the owners US$200,000. This amount was accrued as at December 31, 2025 and paid subsequent to year end.
- Condoryacu Property
On December 15, 2025, AbraSilver, through its wholly owned subsidiary, PRMC received an offer to enter into an Agreement for the Exploration of Condoryacu Mining Properties and Purchase Option of Condoryacu SRL ("Condoryacu"), the offer was accepted by PRMC on December 17, 2025 (the execution date). The Condoryacu Property is in the cooperation area between the provinces of Salta and Catamarca and includes the following Mining concessions: María Amalia Mine, located in the province of Salta; Condor Yacu I Mine, located in the province of Catamarca, and a water easement, in the province of Salta. To earn 100% interest in Condoryacu the interest the Company must:
i. Pay US$250,000 within 15 days from the Execution date (paid); and
ii. Pay US$2,500,000 within 90 days from the execution date (paid).
On March 11, 2026, the option agreement was amended to be extended for 20 calendar days.
On March 27,2026, the Company submitted the notice exercising the Exploration of Condoryacu Mining Properties and the Purchase Option of Condoryacu SRL.
- 25 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
8. Mineral property interests (continued)
(a) Diablillos project (continued)
- Condoryacu Property (continued)
Condoryacu SRL only assets consist of a group of mining properties described above, and it does not have any processes, workforce, or other inputs capable of producing outputs.
As the acquired corporation does not meet the definition of a business under IFRS 3 Business Combinations, the transaction has been accounted for as an asset acquisition.
Accordingly, no goodwill has been recognized, and no other assets or liabilities were acquired.
Because the acquired corporation holds only mineral properties and does not constitute a business, the Company will allocate the total consideration, including transaction costs, to the mineral property interests acquired. The assets have been recognized as exploration and evaluation assets in accordance with IFRS 6 Exploration for and Evaluation.
- María Amalia 1 Property
On December 15, 2025, AbraSilver, through its wholly owned subsidiary, PRMC received an offer to enter into a option agreement to purchase a 100% interest in a mineral property known as María Amalia 1 Property, located in the Los Andes Department in the Province of Salta, Argentina. To earn the interest the Company must pay to the owner the total amount of US$250,000 within 90 days from the offer date (paid subsequent to year end).
(b) La Coipita project
On January 31, 2020, AbraSilver entered into an option agreement, through its wholly owned subsidiary, AbraPlata Argentina SA, to acquire a 100% interest in the La Coipita project (“La Coipita”) located in San Juan province, Argentina by paying a total of US$4,265,000 in staged payments over 60 months (US$2,765,000 paid to December 31, 2025) to the optionors.
On October 23, 2023, the Company and the optionors amended the US$1,000,000 cash amount to be paid to the optionors in January 2024 and the US$2,500,000 cash amount to be paid in January 2025. As per the amendment the Company paid US$ 500,000 on January 31, 2024, paid US$1,000,000 in January 2025 and will pay the remaining US$ 2,000,000 will be paid in January 2026.
Cash consideration payable per the letter agreement were as follows:
- US$35,000 upon celebration of the letter agreement (paid);
- US$30,000 in February 2020 (paid);
- US$100,000 in January 2021 (paid);
- US$200,000 in January 2022 (paid);
- US$400,000 in January 2023 (paid);
- US $500,000 in January 2024 (paid);
- US$1,000,000 in January 2025 (paid); and
- US$2,000,000 in January 2026 (US$500,000 paid and US$1,500,000 included in accounts payable and accrued liabilities as at December 31, 2025 and paid in January 2026).
In the event the project is placed into commercial production, the optionors shall be entitled to collect 1.1% of the net smelter return (“NSR”), which AbraSilver may purchase for US$3,000,000 during the 60 months after the first staged payment was made, or for US$5,000,000 thereafter until start-up of construction of the project.
- 26 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
8. Mineral property interests (continued)
(b) La Coipita project (continued)
On February 5, 2020, AbraPlata Argentina SA ("AbraPlata") entered into a binding letter agreement with Altius Resources Inc. to sell its right to acquire the 1.1% NSR from the optionors. In consideration, Altius agreed to invest in AbraPlata by way of subscription for common shares or share units in its next equity financing a minimum sum of $125,000 (received).
On August 9, 2021, AbraSilver entered into an option agreement, through its wholly owned subsidiary, AbraPlata, to acquire a 100% interest in the Yaretas project ("Yaretas") located in San Juan province, Argentina by paying a total of US$3,025,000 in staged payments over 60 months (US$1,525,000 paid to December 31, 2025) to the optionors ("Yaretas Project Owners").
On August 11, 2023, the Company and the Yaretas Project Owners amended the US$ 200,000 cash amount to be paid to the owners in August 2023. As per the amendment the Company paid US$ 100,000 on August 31, 2023 and the remaining US$ 100,000 was paid in August 2024.
Cash consideration payable per the letter agreement is as follows:
- US$50,000 upon celebration of the letter agreement (paid);
- US$75,000 in August 2022 (paid);
- US$100,000 in August 2023 (paid);
- US$500,000 in August 2024 (paid);
- US$800,000 in August 2025 (paid); and
- US$1,500,000 in August 2026.
In the event the project is placed into commercial production, the Yaretas Project Owners shall be entitled to collect 1.1% of NSR, which AbraSilver may purchase for US$5,000,000 at any time.
Agreement with Teck Resources Limited ("Teck")
On January 22, 2024 the Company announced that it has executed a definitive option and joint venture agreement (the "Agreement") with a subsidiary of Teck, to explore and develop the La Coipita copper-gold project in San Juan, Argentina.
The Agreement grants Teck an option (the "La Coipita Option") to acquire an 80% interest in La Coipita by funding cumulative exploration expenditures of US$20,000,000 over a five-year period, making staged cash payments to AbraSilver, and participating in an equity placement in AbraSilver totaling US$3,059,545 (including an initial mandatory payment of US$559,545), and making up to US$6,300,000 in optional cash payments in respect of amounts payable to the underlying Project vendors. Following an initial transition period during which AbraSilver will support field operations, Teck is expected to act as operator for the duration of the La Coipita Option.
Cash consideration receivable per the Agreement are as follows:
- US$559,545 cash payment upon closing of the agreement (optional payment - received);
- US$1,000,000 cash payment or at Teck's election, subscription for US$1,000,000 of common shares of AbraSilver ("ABRA Shares") on or before January 31, 2025, to be priced at the greater of (a) a 25% premium to the preceding 20-day volume weighted average price of ABRA shares, or (b) $1.75 per ABRA Share (optional payment or subscription) (shares issued); and
- US$1,500,000 cash payment on or before January 31, 2028 (optional payment).
In settlement of the second milestone above, 408,163 shares were issued on December 19, 2024 for gross proceeds of $1,426,326 (US$1,000,000). The value of the shares were determined to be $944,695 based on the fair market value of the Company's shares on the date of issuance and the difference of $481,631 was offset against the capitalized costs of the La Coipita project.
- 27 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
8. Mineral property interests (continued)
(b) La Coipita project (continued)
Agreement with Teck Resources Limited (continued)
Additional cash payments in respect of amounts for expenditures required to settle payments to the project optionors:
- US$500,000 Initial payment (mandatory payment - received);
- US$500,000 on or before July 31, 2024 (optional payment - received);
- US$1,000,000 on or before January 15, 2025 (optional payment - received);
- US$800,000 on or before July 31, 2025 (optional payment - received);
- US$2,000,000 on or before January 15, 2026 (optional payment - received in December 2025); and
- US$1,500,000 on or before July 31, 2026 (optional payment).
The $3,896,680 (US$2,800,000) received from Teck during the year ended December 31, 2025 and $3,509,365 (US$2,559,545) received from Teck during the year ended December 31, 2024 were applied against the mineral property interest of La Coipita.
Upon exercise of the La Coipita Option, the parties will incorporate a company in Argentina ("Newco") to become the titleholder of La Coipita. Teck will hold 80% of Newco's outstanding shares, with AbraSilver holding the remaining 20%. Each party will fund its pro-rata share of future expenditures on La Coipita through equity contributions to Newco or incur dilution in Newco. If a party's shareholding interest in Newco is diluted below 10% or pursuant to certain other conditions of the Agreement, its shareholding interest will be converted to a 1.1% net smelter returns royalty on La Coipita, of which 0.6% can be bought back by the payor for a cash payment of US$3,000,000 at any time.
Agreement with Teck Discovery Argentina S.A.S.
On February 1,2024, Teck Discovery Argentina S.A.S. ("Teck Discovery") accepted an offer of Technical Service Agreement from AbraPlata Argentina S.A. to perform some management services in support of Teck Discovery exploration activities on the La Coipita project. During the year ended December 31, 2024, the Company recorded $560,671 management fee income from Teck Discovery which is included in the $571,463 Teck management fees and other income in the consolidated statements of loss and comprehensive loss. As at December 31, 2024, the Company had $17,526 management fee receivable from Teck Discovery which is included in receivables in the consolidated statements of financial position as at December 31, 2024.
| Diablillos Project | La Coipita Project | Total | |
|---|---|---|---|
| December 31, 2023 | $22,809,774 | $1,568,588 | $24,378,362 |
| Additions, cash | - | 2,775,346 | 2,775,346 |
| Options payment received from Teck | - | (3,990,996) | (3,990,996) |
| Foreign exchange translation | 2,005,728 | 86,797 | 2,092,525 |
| December 31, 2024 | 24,815,502 | 439,735 | 25,255,237 |
| Additions, cash (i) | 2,546,267 | 3,896,680 | 6,442,947 |
| Options payment received from Teck | - | (3,896,680) | (3,896,680) |
| Foreign exchange translation | (1,267,382) | (20,873) | (1,288,255) |
| December 31, 2025 | $26,094,387 | $418,862 | $26,513,249 |
(i) The additions of $2,546,267 includes $1,639,712 of additions which fulfilled the payment obligation of US$1,170,000 as shown in note 8(a)(2) and $906,555 which fulfilled the payment obligation of US$650,000 for the new properties acquired in 2025 under Diablillos project as shown in note 8(a)(3).
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ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
9. Discontinued operation
On June 16, 2025, the Company disposed of its subsidiary, Aethon Minerals Chile SpA to a third party in Chile for $18,212 (US$13,433). The net assets of Aethon Minerals Chile SpA disposed of on June 16, 2025 was $106,417, resulting a loss on disposition of subsidiary of $88,205.
Aethon Minerals Chile SpA met the definition of a discontinued operation and has been presented as such in the statement of loss and comprehensive loss. The comparative statements of loss and comprehensive loss have been represented to show the discontinued operation separately from continuing operations. The financial performance and cash flow information presented for the years ended December 31, 2025 and 2024 are set out below.
| Years Ended December 31, | 2025 | 2024 |
|---|---|---|
| Administrative expenses | ||
| Office and administration and depreciation | $ 2,133 | $ 6,280 |
| Professional fees | 10,631 | 19,606 |
| Total administrative expenses | 12,764 | 25,886 |
| Evaluation and exploration expenses | - | 10,159 |
| Other (income) expenses | ||
| Foreign exchange (gain) loss | 32 | (295) |
| Interest income | (426) | (16,335) |
| Total other income | (394) | (16,630) |
| Net loss from discontinued operations | $ 12,370 | $ 19,415 |
Cash flows from Aethon Minerals Chile SpA are as below:
| Years Ended December 31, | 2025 | 2024 |
|---|---|---|
| Operating Activities | ||
| Net loss for the period from discontinued operation | $ (12,370) | $ (19,415) |
| Changes in non-cash operating working capital: | ||
| Receivables | (3,684) | (3,866) |
| Accounts payable and accrued liabilities | (1,935) | 940 |
| Cash (used in) operating activities | $ (17,989) | $ (22,341) |
- 29 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
- Evaluation and exploration expenses
| Years Ended December 31, | 2025 | 2024 |
|---|---|---|
| Diablillos | ||
| Camp costs | $ 4,992,744 | $ 2,919,443 |
| Drilling | 16,573,707 | 11,432,499 |
| Legal and regulatory fee | 208,688 | 119,263 |
| Engineering | 3,134,238 | 130,213 |
| Geology and lab | 2,679,099 | 2,461,147 |
| Personnel costs | 3,936,033 | 2,171,790 |
| Permitting | 50,306 | 21,124 |
| Travel and transport | 935,954 | 491,797 |
| Administration | 998,870 | 531,581 |
| Feasibility study | 8,659,826 | - |
| Depreciation | 76,456 | 20,894 |
| $ 42,245,921 | $ 20,299,751 | |
| La Coipita | ||
| Professional and access fees | $ 12 | $ 47,073 |
| Travel and administration | 50 | 910 |
| $ 62 | $ 47,983 | |
| Total evaluation and exploration expenses | $ 42,245,983 | $ 20,347,734 |
- Consideration payable
| As at December 31, 2025 | As at December 31, 2024 | |
|---|---|---|
| Opening balance | $ 9,286,969 | $ 7,420,066 |
| Accretion | 361,163 | 1,156,744 |
| Loss on settlement | 200,211 | - |
| Payment | (9,660,618) | - |
| Foreign exchange loss (gain) | (187,725) | 710,159 |
| Ending balance | $ - | $ 9,286,969 |
The consideration payable represents the remaining payment in the amount of US$7,000,000 as per the Diablillos SPA, which is to be paid on the earlier of the date on which commercial production occurs in respect of all or any part of the Diablillos Concessions and July 31, 2025. The payment obligation is discounted and accreted at a discount rate of 15% per annum, with an estimated payment date of July 31, 2025, see note 8 (a). On April 10, 2025, the Company made the payment ahead of schedule by paying $9,660,618 (US$ 85 million), a reduced total obligation and recorded a loss on settlement of consideration payable of $200,211 and foreign exchange gain of $187,725.
- Share capital
a) Authorized and issued
Authorized: Unlimited common shares without par value. Unlimited first preferred shares without par value. Unlimited second preferred shares without par value.
- 30 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
12. Share capital (continued)
a) Authorized and issued (continued)
(i) On April 26, 2024, the Company completed a private placement with the issuance of 10,000,000 common shares of the Company at a price of $2.00 per share for aggregate proceeds of $20 million as per the subscription agreements with Kinross Gold Corporation ("Kinross") (NYSE: KGC, TSX: K) and an affiliate of Central Puerto SA ("Central Puerto") (NYSE: CEPU). The Company incurred share issuance costs of $977,800.
The Company will use the proceeds of the private placement for exploration and development of the Company's flagship Diablillos project in Salta Province, Argentina and for working capital and general corporate purposes.
The highlights of the subscription agreements are:
- Each of Kinross and Central Puerto have entered into a subscription agreement with AbraSilver pursuant to which they will each invest $10 million, resulting in aggregate gross proceeds of $20 million to the Company. The Company issued an aggregate of 10,000,000 Common Shares at a subscription price of $2.00 per Common Share, representing approximately a 3% premium to the closing price of the Common Shares on April 19, 2024.
- Upon closing of the Private Placement, Kinross and Central Puerto each owned approximately 4.0% of the outstanding Common Shares on an undiluted basis.
- Upon closing of the Private Placement, AbraSilver entered into an Investor Rights Agreement with each of Kinross and Central Puerto that includes, among other things, standard anti-dilution and equity participation rights and the formation of a Technical Advisory Committee and a Strategic & Operational Committee.
- Pursuant to the terms of the Investor Rights Agreement with Kinross, AbraSilver and Kinross will form a regional partnership to jointly explore for and acquire new projects in Argentina focused on silver, gold, and copper.
All Common Shares issued in connection with the closing of the private placement are subject to a four-month- and one-day statutory hold period in accordance with applicable securities laws.
(ii) On December 19, 2024, the Company issued 408,163 common shares of the Company at a price of US$2.45 per share for aggregate proceeds of $1,416,326 (approximately US$1,000,000), of which $944,695 was recorded to share capital based on the fair market value of the Company's shares on December 19, 2024. The Company incurred transaction costs of $8,082 for the private placement.
The share subscription by Teck was in accordance with the option agreement for the La Coipita project (note 8 (b)).
(iii) On February 12, 2025, the Company announced the completion of a bought deal public offering (the "Offering"). The Company issued 11,765,650 common shares at a price of $2.55 per share for aggregate gross proceeds of $30,002,408. The Offering was completed pursuant to an underwriting agreement dated February 4, 2025 entered into among the Company and a syndicate of underwriters, led by National Bank Financial Inc. and Beacon Securities Limited, acting as co-bookrunners, and including Raymond James Ltd., Scotia Capital Inc. and TD Securities Inc. (collectively, the "Underwriters"). In connection with the Offering, the Company paid the Underwriters a cash commission equal to 6.0% of the aggregate gross proceeds raised. In connection with the Offering, the Company also issued 10,094,697 common shares to an affiliate of Central Puerto S.A. and 1,098,868 Common Shares to Kinross Gold Corporation, upon the exercise of certain participation rights held by such persons for gross proceeds of $28,543,591. The common shares sold pursuant to the Offering are subject to a hold period of four months plus one day from the closing date of the Offering. The Company incurred total transaction costs of $2,326,427.
- 31 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
12. Share capital (continued)
a) Authorized and issued (continued)
(iv) On October 22, 2025, the Company closed a bought deal private placement, pursuant to the listed issuer financing exemption (the "October 2025 Offering"), of 6,513,000 common shares at a price of $7.10 per share for aggregate gross proceeds of $46,242,300. This total includes the partial exercise of the underwriters' option. Concurrently with the October 2025 Offering, the Company issued 270,860 common shares to Kinross Gold Corporation, upon the exercise of a participation right held by Kinross (the "Concurrent Private Placement"), for aggregate gross proceeds of $1,923,106. The Company incurred share issuance costs of $2,925,719 related to the bought deal private placement and Concurrent Private Placement. The common shares sold pursuant to the Concurrent Private Placement are subject to a hold period of four months plus one day from the date of issuance.
b) Stock options
The share compensation plan of the Company (the "Share Compensation Plan") was adopted by the Company's board of directors (the "Board") on July 16, 2020 and approved by the Company's shareholders on August 27, 2020. On July 13, 2022, the Board approved certain administrative amendments to the share compensation plan, including: (i) clarifying the circumstances which the expiry time for options and RSUs may be extended during a black-out period; (ii) placing limits on when RSUs may vest; (iii) modifying the certain amendments to the share compensation plan that would require shareholder approval; (iv) adding certain defined terms to the share compensation plan to conform to the policies of the TSXV; (v) specifying that decisions relating to certain adjustments and vesting acceleration shall require the prior approval of the TSXV; (vi) specifying certain instances where a TSXV imposed hold period will be applied to awards; and (vii) allowing for the issuance of "incentive stock options". On July 18, 2023, the Board approved a further amendment to the Share Compensation Plan in order to allow for the exercise of Options on a net basis whereby the option holders will be entitled to receive that number of common shares that is the equal to the quotient obtained by dividing: (i) the product of the number of options being exercised multiplied by the difference between the market price of the common shares based on the volume weighted average price of the common shares traded on the TSXV for the five (5) consecutive trading days prior to such date and the exercise price of the subject Options; by (ii) the market price of the common shares based on the volume weighted average price of the common shares traded on the TSXV for the five (5) consecutive trading days prior to such date. On August 7, 2024, the Board approved a further amendment to the Share Compensation Plan to adjust, following the Consolidation, the type and number of securities or other property to be received upon exercise or redemption of awards granted pursuant to and the total number of securities reserved and available for issuance under the Share Compensation Plan. On February 27, 2025, in connection with the Company's delisting from the TSXV and listing on the TSX, the Board approved a further amendment to the Share Compensation Plan in order to effect administrative amendments to comply with the policies of the TSX. On May 15, 2025, the Board approved a further amendment to the Share Compensation Plan in order to change the Share Compensation Plan from a "rolling 10% plan" in respect of Options and a "fixed plan" in respect of RSUs to a "rolling 10% plan" in respect of Options and RSUs. The Share Compensation Plan was approved by the Company's shareholders on June 26, 2025.
- 32 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
12. Share capital (continued)
b) Stock options (continued)
Under the Share Compensation Plan, the Company is authorized to grant Options and/or RSUs to officers, directors, employees and consultants enabling them to acquire up to that number of common shares equal to 10% of the issued and outstanding common shares of the Company at the time of the grant. The Options can be granted for a maximum of ten years and vest as determined by the Board. The exercise price of each option granted may not be less than the fair market value of the common shares.
On March 28, 2024 the Company granted an aggregate of 1,136,000 Options to directors, officers, employees, advisors and consultants of the Company. The Options issued entitle the holder to acquire the same number of common shares of the Company and are exercisable at a price of $1.78 per common share for a period of five years from the date of grant. The Options vest in 25% instalments every 6 months, starting from the date of the grant, and were granted under and are subject to the terms and conditions of the Share Compensation Plan. The fair value of the Options was determined to be $1,557,379 using the Black-Scholes option pricing model with the following assumptions: 5 years expected life; share price at the grant date of $1.80; 103% volatility; risk free interest rate of 3.51%; and a dividend yield of 0%.
On June 17, 2024, the Company granted an aggregate of 400,000 Options to a consultant of the Company. The Options issued entitle the holder to acquire the same number of common shares of the Company and are exercisable at a price of $2.19 per common share for a period of five years from the date of grant. The Options vest in 25% instalments every 6 months, starting from the date of the grant, and were granted under and are subject to the terms and conditions of the Share Compensation Plan. The fair value of the Options was determined to be $562,200 using the Black-Scholes option pricing model with the following assumptions: 5 years expected life; share price at the grant date of $2.73; 101% volatility; risk free interest rate of 3.34%; and a dividend yield of 0%. During the year ended December 31, 2024, the 400,000 Options were cancelled.
On September 3, 2024, the Company granted an aggregate of 400,000 Options to a consultant of the Company. The Options issued entitle the holder to acquire the same number of common shares of the Company and are exercisable at a price of $2.21 per common share for a period of five years from the date of grant. The Options vest in 25% instalments every 6 months, starting from the date of the grant, and were granted under and are subject to the terms and conditions of the Company's Stock Option Plan. The fair value of the Options was determined to be $658,249 using the Black-Scholes option pricing model with the following assumptions: 5 years expected life; share price at the grant date of $2.21; 98% volatility; risk free interest rate of 2.94%; and a dividend yield of 0%.
On September 18, 2024, the Company granted an aggregate of 2,155,000 Options to directors, officers, employees, advisors and consultants of the Company. The Options issued entitle the holder to acquire the same number of common shares of the Company and are exercisable at a price of $2.51 per common share for a period of five years from the date of grant. The Options vest in 25% instalments every 6 months, starting from the date of the grant, and were granted under and are subject to the terms and conditions of the Share Compensation Plan. The fair value of the Options was determined to be $3,994,252 using the Black-Scholes option pricing model with the following assumptions: 5 years expected life; share price at the grant date of $2.51; 97% volatility; risk free interest rate of 2.74%; and a dividend yield of 0%.
- 33 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
12. Share capital (continued)
b) Stock options (continued)
On March 10, 2025 the Company granted 300,000 Options to Boris Caro. The Options are exercisable at a price of $3.32 per common share for a period of five years from the date of grant. The options vest in 50% instalments on January 31, 2026 and June 30, 2026. The fair value of the Options was determined to be $699,960 using the Black-Scholes option pricing model with the following assumptions: 5 years expected life; share price at the grant date of $3.13; 89% volatility; risk free interest rate of 2.63%; and a dividend yield of 0%.
On June 26, 2025 the Company granted an aggregate of 1,305,000 Options to directors, officers, employees, advisors and consultants of the Company. The Options are exercisable at a price of $4.55 per common share for a period of five years from the date of grant. The Options vest in 25% instalments every 6 months, starting from the date of the grant. The fair value of the Options was determined to be $3,940,366 using the Black-Scholes option pricing model with the following assumptions: 5 years expected life; share price at the grant date of $4.55; 82% volatility; risk free interest rate of 2.87%; and a dividend yield of 0%.
On October 30, 2025 the Company granted an aggregate of 100,000 Options to a director of the Company. The Options are exercisable at a price of $6.59 per common share for a period of five years from the date of grant. The Options vest in 25% instalments every 6 months, starting from the date of the grant. The fair value of the Options was determined to be $419,839 using the Black-Scholes option pricing model with the following assumptions: 5 years expected life; share price at the grant date of $6.59; 77% volatility; risk free interest rate of 2.71%; and a dividend yield of 0%.
Expected volatility was estimated based on the historical prices of the Company's stock.
During the year ended December 31, 2025, the Company recorded $5,809,735 (2024 - $2,694,490) in share-based payments related to the stock options.
The movement in the Company's share options for the years ended December 31, 2025 and 2024 are as follows:
| Number of stock options outstanding | Weighted average exercise price | |
|---|---|---|
| Balance, December 31, 2023 | 4,751,875 | $ 1.25 |
| Exercised | (1,390,375)(2) | 0.70 |
| Granted | 4,091,000 | 2.25 |
| Cancelled | (400,000) | 2.19 |
| Expired | (135,000) | 1.81 |
| Balance, December 31, 2024 | 6,917,500 | 1.69 |
| Exercised | (1,701,500)(1) | 1.02 |
| Granted | 1,705,000 | 4.45 |
| Expired | (40,000) | 2.25 |
| Balance, December 31, 2025 | 6,881,000 | $ 2.73 |
(1) 980,000 options were net settled by issuance of 644,900 shares.
(2) 645,000 options were net settled by issuance of 375,607 shares.
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
12. Share capital (continued)
b) Stock options (continued)
The weighted average trading price of the Company's shares on the dates of the exercises of Options was $4.00 for the year ended December 31, 2025 (2024 - $2.21).
Stock options outstanding as at December 31, 2025:
| Expiry date | Options outstanding | Exercise price ($) | Remaining contractual life (years) | Options exercisable |
|---|---|---|---|---|
| October 22, 2026 | 150,000 | 2.65 | 0.81 | 150,000 |
| February 11, 2027 | 450,000 | 1.88 | 1.12 | 450,000 |
| February 17, 2028 | 950,000 | 1.85 | 2.13 | 950,000 |
| March 28, 2029 | 1,071,000 | 1.78 | 3.24 | 803,250 |
| September 3, 2029 | 400,000 | 2.21 | 3.68 | 200,000 |
| September 18, 2029 | 2,155,000 | 2.51 | 3.72 | 1,077,500 |
| March 10, 2030 | 300,000 | 3.32 | 4.19 | - |
| June 26, 2030 | 1,305,000 | 4.55 | 4.49 | 326,250 |
| October 30, 2030 | 100,000 | 6.59 | 4.83 | - |
| 6,881,000 | 2.73 | 3.37 | 3,957,000 |
c) Warrants
Warrant transactions are summarized as follows:
| Number of warrants | Weighted average exercise price | |
|---|---|---|
| Balance, December 31, 2023 | 4,032,115 | $ 1.95 |
| Exercised | (3,822,817) | 1.98 |
| Expired | (297,105) | 1.68 |
| Issued | 87,807 | 2.50 |
| Balance, December 31, 2024 and 2025 | - | $ - |
The Company has no warrants outstanding as at December 31, 2025 and December 31, 2024.
- 35 -
ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
12. Share capital (continued)
(d) RSU
RSU movements are as follows:
| Balance, December 31, 2023 | 153,334 |
|---|---|
| Vested and settled | (76,667) |
| Balance, December 31, 2024 | 76,667 |
| Granted | 1,085,000 |
| Vested and settled | (76,667) |
| Balance, December 31, 2025 | 1,085,000 |
During the year ended December 31, 2025, the Company issued 76,667 shares (2024 - 76,667 shares in settlement upon vesting of 76,667 RSUs) in settlement upon vesting of 76,667 RSUs.
On June 26, 2025, the Company granted 985,000 RSUs to officers, directors and consultants. The RSU will vest as follows: 33.33% on June 26, 2026; 33.33% on June 26, 2027 and 33.34% on June 26, 2028.
On October 30, 2025, the Company granted 100,000 RSUs to a director. The RSU will vest as follows: 33.33% on October 30, 2026; 33.33% on October 30, 2027 and 33.34% on October 30, 2028.
For the year ended December 31, 2025, the Company recorded $1,485,196 (2024 - $56,275) as a share-based payments relating to the RSUs.
13. Income taxes
| Years ended December 31, | 2025 | 2024 |
|---|---|---|
| Loss before recovery of income taxes | $(57,638,217) | $ 25,096,305 |
| Statutory rate of income tax | 26.5% | 26.5% |
| Expected income tax (recovery) | (15,274,000) | (6,651,000) |
| Items not deductible for tax purposes | 4,211,000 | 365,000 |
| Tax rate differences | 526,000 | 264,000 |
| Non-capital losses derecognized on sale of subsidiary | 2,265,000 | - |
| Impact of foreign exchange and other items | 1,903,000 | 184,000 |
| Change in unrecognized tax benefit | 6,369,000 | 5,838,000 |
| Actual income tax recovery | $ - | $ - |
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ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
13. Income taxes (continued)
The Company has unrecognized deductible temporary differences aggregating $171,181,841 (2024 - $123,130,127) as shown in table below, that are available to offset future taxable income. The potential benefit of these deductible temporary differences has not been recognized in these consolidated financial statements as it is not considered probable that the sufficient future taxable profit will allow the temporary differences to be recovered.
| 2025 | Expiry dates | 2024 | |
|---|---|---|---|
| Non-capital losses | $ 46,603,000 | 2026 to 2045 | $ 48,146,000 |
| Resource pools - mineral properties | 107,378,000 | No expiry | 74,945,000 |
| Share issue costs, hyperinflation adjustments and other | 4,796,000 | No expiry | 39,000 |
| Capital losses | 12,405,000 | - | |
| Unrecognized deferred tax asset | $171,182,000 | $123,130,000 |
As at December 31, 2025, the Company has Canadian non-capital loss carryforwards of approximately $26,946,000 (2024 - $21,700,000) that are available to reduce taxable income in Canada. These losses expire between 2029 and 2045. As at December 31, 2025, the Company has Argentine loss carryforwards of approximately $18,721,000 (2024 - $17,731,000) that are available to reduce taxable income in Argentina. These losses expire between 2026 and 2030.
As at December 31, 2025 and 2024, the Company has unrecognized deferred tax liabilities of $1,373,000 due to temporary differences arising on the initial recognition of the acquisition of all of the issued and outstanding common shares of Minera Cerro Bayo S.A. and ABP Global Inc. As at December 31, 2025 and 2024, the Company has unrecognized deferred tax liabilities of $240,000 due to temporary differences arising on the initial recognition of the acquisition of all of the issued and outstanding common shares of Aethon.
14. Related party transactions
Key management personnel include the members of the Board of Directors and officers of the Company, who have the authority and responsibility for planning, directing and controlling the activities of the Company. Amounts paid and accrued to directors, former director, officers and companies in which directors and officers are shareholders or partners are as follows:
| Years Ended December 31, | 2025 | 2024 |
|---|---|---|
| Salaries, benefits and director fees | $ 2,085,167 | $ 818,834 |
| Consulting fees | - | 9,500 |
| Professional fees | 528,359 | 216,856 |
| Share-based payments | 4,840,519 | 1,747,200 |
| $ 7,454,045 | $ 2,792,390 |
As at December 31, 2025, $528,222 (December 31, 2024 – $168,209) was payable to directors, officers and companies in which directors and officers are shareholders or partners of the Company. These amounts are unsecured, non-interest bearing and have no specific terms of repayment.
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ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
15. Use of marketable securities
From time to time, the Company may acquire and transfer marketable securities to facilitate intragroup funding transfers between the Canadian parent and its Argentine operating subsidiaries. The Company does not acquire marketable securities or engage in these transactions for speculative purposes. In this regard, under this strategy, the Company generally uses marketable securities of large and well established companies, with high trading volumes and low volatility. Nonetheless, as the process to acquire, transfer and ultimately sell the marketable securities occurs over several days, some fluctuations are unavoidable. As the marketable securities are acquired with the intention of a near term sale, they are considered financial instruments that are held for trading, all changes in the fair value of the instruments, between acquisition and disposition, are recognized through profit or loss. The subsequent disposition of these marketable securities in exchange for Argentine pesos gave rise to a gain as the amount received in Argentine peso exceeds the amount of Argentine peso the Company would have received from a direct foreign currency exchange. As a result of having utilized this mechanism for intragroup funding for the year ended December 31, 2025, the Company realized a gain of $699,458 (2024 - $3,901,435) from the favorable foreign currency impact. During the year ended December 31, 2025, the Company received $36,011,289 (2024 - $22,562,551) from the disposal of the marketable securities and paid $35,311,831 (2024 - $18,659,951) for the purchase of the marketable securities.
16. Segmented information
Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision maker. The chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments and has been identified as the Company's CEO. During the year ended December 31, 2025, the Company has four (2024 - four) operating segments.
The Company's reportable segments are based on the geographic region for the Company's operations and include Argentina, U.S. and Chile. The gains on sale of marketable securities are allocated to Argentina, as they are the result of funding provided to the Company's Argentine subsidiaries.
The segmental report is as follows:
| As at December 31, 2025 | US | Argentina | Chile | Canada | Total |
|---|---|---|---|---|---|
| Current assets | $ 139,394 | $ 2,117,506 | $ - | $ 56,903,126 | $ 59,160,026 |
| Equipment | - | 388,116 | - | - | 388,116 |
| Mineral property interests | - | 26,513,249 | - | - | 26,513,249 |
| Total assets | $ 139,394 | $ 29,018,871 | $ - | $ 56,903,126 | $ 86,061,391 |
| Total liabilities | $ 112,377 | $ 3,497,660 | $ - | $ 3,634,296 | $ 7,244,333 |
| As at December 31, 2024 | US | Argentina | Chile | Canada | Total |
| Current assets | $ 35,351 | $ 573,663 | $ 364,104 | $13,108,497 | $ 14,081,615 |
| Equipment | - | 343,453 | - | - | 343,453 |
| Mineral property interests | - | 25,255,237 | - | - | 25,255,237 |
| Total assets | $ 35,627 | $ 26,172,353 | $ 364,104 | $13,108,497 | $ 39,680,305 |
| Total liabilities | $ - | $ 913,765 | $ 1,963 | $10,013,059 | $ 10,928,787 |
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ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
16. Segmented information (continued)
Year ended December 31, 2025
| US | Argentina | Chile | Canada | Total | |
|---|---|---|---|---|---|
| Continuing operations | |||||
| Gain on sale of marketable securities | $ - | $ 699,458 | $ - | $ - | $ 699,458 |
| Net loss | $(936,158) | $(35,115,670) | $ - | $(21,574,019) | $(57,625,847) |
| Discontinued operation | |||||
| Net loss | $ - | $ - | $(12,370) | $ - | $(12,370) |
Year ended December 31, 2024
| US | Argentina | Chile | Canada | Total | |
|---|---|---|---|---|---|
| Continuing operations | |||||
| Gain on sale of marketable securities | $ - | $ 3,901,435 | $ - | $ - | $ 3,901,435 |
| Net loss | $(448,279) | $(17,562,782) | $ - | $(7,065,829) | $(25,076,890) |
| Discontinued operation | |||||
| Net loss | $ - | $ - | $(19,415) | $ - | $(19,415) |
17. Commitments
As at December 31, 2025, the Company has mineral interest commitments at its La Coipita and Diablillos projects in the form of option payments.
The Company has the following commitments (option payments - at the Company's discretion):
| Year ended December 31, 2026 | |
|---|---|
| Diablillos | $ 3,769,150 |
| La Coipita | 2,055,900 |
| Total commitments | $ 5,825,050 |
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ABRASILVER RESOURCE CORP.
Notes to Consolidated Financial Statements
December 31, 2025 and 2024
(Expressed in Canadian Dollars)
18. Subsequent events
- On January 30, 2026, AbraSilver, through its wholly owned subsidiary, PRMC received an offer to enter into a purchase option agreement to purchase a 100% interest in a mineral property known as El Chañal, with a surface area of 3,498.91 hectares, located in San Antonio de los Cobres, los Andes Department in the Province of Salta, Argentina. To acquire the interest, the Company must pay to the owners US$350,000.
- On February 6, 2026, AbraSilver, through its wholly owned subsidiary, PRMC received an offer to enter into a purchase agreement to purchase a 100% interest in a mineral property known as Bianca X, with a surface area of 2,945.5 hectares, located in San Antonio de los Cobres los Andes Department in the Province of Salta, Argentina. To acquire the interest, the Company paid to the owners US$100,000, and issued 94,650 shares of the Company.
- Subsequent to December 31, 2025, the Company issued 852,518 shares after 1,008,750 options were exercised at a weighted average exercise price of $2.20 for net proceeds of $259,000. 868,750 of those Options were exercised using the Net Exercise procedure.
-
Subsequent to December 31, 2025, 18,752 shares were canceled, as the deadline outlined in the Aethon Minerals Corporation and AbraPlata Resource Corp. Depositary Agreement had passed without the holder tendering their position.
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