Arcus Development Group Inc. — Management Reports 2025

Dec 19, 2025

ARCUS
DEVELOPMENT GROUP Inc.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTHS OCTOBER 31, 2025

(including Subsequent Events to December 19, 2025)

The following discussion and analysis of the results of operations and financial condition of Arcus Development Group Inc. ("Arcus" or the "Company") for the three months ended October 31, 2025 should be read in conjunction with the Arcus audited financial statements and related notes for the twelve months ended July 31, 2025 and the condensed interim financial statements and related notes for the three months ended October 31, 2025. All Arcus financial statements are prepared in accordance with the International Financial Reporting Standards ("IFRS").

Management is responsible for the preparation and integrity of the financial statements, including the maintenance of appropriate information systems, procedures and internal controls. Management is also responsible for ensuring that information disclosed externally, including the financial statements and this Management Discussion and Analysis ("MD&A") document is complete and reliable.

Additional information about Arcus as filed with Canadian securities commissions, (including quarterly reviews) is available under the Arcus Development Group Inc. profile on SEDAR+ at www.sedarplus.com.

The reporting currency in this MD&A is Canadian dollars unless otherwise noted.

FORWARD-LOOKING STATEMENTS

Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are usually identified by the Company's use of certain terminology, including "will", "believes", "may", "expects", "should", "seeks", "anticipates" or "intends" or by discussions of strategy or intentions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results or achievements to be materially different from any future results or achievements expressed or implied by such forward-looking statements.

Forward-looking statements are statements that are not historical facts, and include but are not limited to, estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to the effectiveness of the Company's business model; future operations, products and services; the impact of regulatory initiatives on the Company's operations; the size of and opportunities related to the market for the Company's products; general industry and macroeconomic growth rates; expectations related to possible joint or strategic ventures; and statements regarding future performance.

Forward-looking statements used in this MD&A are subject to various risks and uncertainties, most of which are difficult to predict and generally beyond the control of Arcus. If risks or uncertainties materialize, or if underlying assumptions prove incorrect, the actual results may vary materially from those expected, estimated or projected. Forward-looking statements in this MD&A are not a prediction of future events or circumstances and those future events or circumstances may not occur. Given these

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uncertainties, the reader of the information included herein is cautioned not to place undue reliance on such forward-looking statements.

DESCRIPTION OF BUSINESS

Arcus is a mineral exploration and development company. It is engaged in the business of acquiring and exploring mineral properties with the aim of discovering commercially exploitable deposits of minerals which can be sold at a profit to companies interested in placing such deposits into commercial production. Arcus currently holds a 100% interest in one early stage mineral exploration property in the Yukon Territory, Canada.

On March 15, 2023, the Arcus exchange listing was transferred to the NEX trading platform of the TSX Venture Exchange. The common shares of Arcus currently trade under the symbol ADG.H. The listing transfer occurred as a result of the Company's failure to meet the activity requirements for a TSX Venture Exchange Tier 2 company in accordance with TSX Venture Exchange Policy 2.5.

The Company name has not changed, there has been no change to its CUSIP number and no consolidation of capital has occurred. Arcus continues to review financing opportunities that will qualify it to return to the TSX Venture Exchange. See "Subsequent Events" for additional information.

Arcus is a reporting issuer in the provinces of Alberta, British Columbia and Ontario.

OVERALL PERFORMANCE

Arcus currently holds a 100% interest in the Touleary mineral property located in the Dawson Mining District, Yukon Territory (the "Dawson Gold Project"). See "Property Transactions and Exploration" for additional information.

SELECTED ANNUAL INFORMATION

The selected financial information set out below has been obtained from the Arcus financial statements, which reflect the Arcus operations in the mineral exploration business. The following table summarizes information pertaining to the operations of Arcus for the last three fiscal years:

	Year ended July 31, 2025 ($)	Year ended July 31, 2024 ($)	Year ended July 31, 2023 ($)
General and administrative expenses	42,712	39,436	34,285
Property acquisition and exploration expenses	41,762	144,496	8,726
Loss for the year	84,474	183,932	43,011
Loss per share	0.00	0.00	0.00
Total assets	854	28,224	81,470

SUMMARY OF QUARTERLY RESULTS

The following table contains comparative information for the eight previous Arcus financial quarters:

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Period Ended	Income (Loss) ($)	Income (Loss) per Share ($)	Total Assets ($)
October 31, 2025	(29,383)	(0.00)	1,391
July 31, 2025	(3,347)	(0.00)	854
April 30, 2025	(22,202)	(0.00)	1,667
January 31, 2025	(32,304)	(0.00)	4,611
October 31, 2024	(26,621)	(0.00)	14,479
July 31, 2024	(4,461)	(0.00)	28,224
April 30, 2024	(3,998)	(0.00)	31,961
January 31, 2024	(151,064)	(0.00)	35,780

RESULTS OF OPERATIONS

Arcus is a mineral exploration company and has no operating revenue. Expenditures related to exploration on the Company's mineral property interests are expensed as incurred and arguably the discretionary nature of such expenditures makes comparative analysis by fiscal period somewhat irrelevant. For the three month period ended October 31, 2025, Arcus incurred a net loss of $29,383 ($0.00 per share), compared to a net loss of $26,621 ($0.00 per share) for the three month period ended October 31, 2024. The change in the amount of the loss from the comparative period ended October 31, 2025 was immaterial. See "Property Transactions and Exploration" for additional information.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a working capital deficiency of approximately $225,000 as of October 31, 2025, compared to a working capital deficiency of approximately $138,000 as of October 31, 2024.

The Company's current and comparative operations have been partially funded by non-interest bearing cash advances aggregating $125,000, received from directors of the Company and private companies controlled by directors. All such advances are due on demand with no fixed terms of repayment and were required to provide the Company with general-purpose working capital.

Arcus currently has no ongoing cash payment or share issuance obligations in respect of its Touleary mineral property interest.

(a) Share Capital Information
(i) Shares

The authorized share capital of Arcus consists of an unlimited number of no-par value common shares. As at October 31, 2025, there were 73,878,065 issued and outstanding common shares. As of December 19, 2025, there were 73,878,065 issued and outstanding common shares.

(ii) Stock Options

The Company had no outstanding incentive stock options as of October 31, 2025 or December 19, 2025.

(iii) Share Purchase Warrants

The Company had no outstanding share purchase warrants as of October 31, 2025 or December 19, 2025.

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(b) Off-Balance Sheet Arrangements

Arcus does not utilize off-balance sheet arrangements.

TRANSACTIONS WITH RELATED PARTIES

(a) Management Services

No fees for management services were paid to Ian Talbot ("Talbot"), the Arcus President and Chief Executive Officer during the three month period ended October 31, 2025.

(b) Geological Consulting Services

No fees for geological consulting services were paid to Talbot during the three month period ended October 31, 2025.

(c) Administrative Services

No fees for administrative services were paid to De Visser Gray LLP Chartered Accountants, a firm in which James Gray, a director and the Chief Financial Officer of Arcus, is a partner, during the three month period ended October 31, 2025.

(d) Ongoing Services

All related party transactions are carried out in the normal course of the Company's operations and are measured at fair market value at their exchange amount, which is that amount of consideration established and agreed to by the related parties. Where applicable, all services provided to Arcus by related parties are provided on an "as needed" basis only.

(e) Demand Loans

In December of 2023, the Company received an aggregate of $100,000 in cash advances from directors and private companies controlled by directors. On November 15, 2024, the Company received an additional $25,000 cash advance from a private company controlled by a director. All of these cash advances are non-interest bearing and are due on demand with no fixed terms for repayment and were intended to provide the Company with general-purpose working capital.

(f) Reimbursable Expenses

During the three month period ended October 31, 2025, the Company's CEO and an entity related to the Company's CFO have also incurred an aggregate of $52,857 in expenses on behalf of the Company, which is unreimbursed as at October 31, 2025.

RISKS AND UNCERTAINTIES

In conducting its business, Arcus faces a number of risks and uncertainties related to the mineral exploration industry. Some of these risk factors include risks associated with land title, exploration and development, government and environmental regulations, permits and licenses, competition, fluctuating metal prices, the requirement and ability to raise additional capital through future financings and price volatility of publicly traded securities.

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(a) Title Risks

Although Arcus has exercised due diligence with respect to determining title to the properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. Third parties may have valid claims underlying portions of the Company's interests, and the permits or tenures may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by undetected defects. If a title defect exists, it is possible that Arcus may lose all or part of its interest in the properties to which such defects relate.

(b) Exploration and Development

Resource exploration and development is a highly speculative business, characterized by a number of significant risks including, but not limited to, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral deposits that, though present, are insufficient in quantity and quality to return a profit from production.

(c) Environmental Regulations, Permits and Licenses

The Company's operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas that would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner that means standards are stricter, and enforcement, fines and penalties for noncompliance are more stringent.

(d) Competition

The mineral exploration industry is intensely competitive in all its phases, and Arcus competes with other companies that have greater financial and technical resources. Competition could adversely affect the Company's ability to acquire suitable properties or prospects in the future.

(e) Fluctuating Metal Prices

Factors beyond the control of Arcus have a direct affect on global metal prices, which have fluctuated widely, particularly in recent years. Consequently, the economic viability of any of the Company's exploration projects and the Company's ability to finance the development of its projects cannot be accurately predicted and may be adversely affected by fluctuations in metal prices.

(f) Future Financings

The Company's continued operation will be dependent upon its ability to procure additional equity financing. To date, the Company's sole source of funding has been equity financing.

The constantly changing state of global equity markets has a direct effect on the ability of exploration companies, including Arcus, to finance project acquisition and development through the equity markets. There can be no assurance that funds from the Company's previous revenue sources can be generated or that other forms of financing can be obtained at a future date. Failure to obtain additional financing on a timely basis may cause Arcus to postpone development plans, forfeit rights in some or all of the properties or joint ventures, or reduce or terminate some or all of its operations.

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(g) Price Volatility of Publicly Traded Securities

During the past year, global equity markets have experienced a high level of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations in price that have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that continual fluctuations in price will not occur.

(h) Impact of Epidemics

All of the Company's operations are subject to the risk of emerging infectious diseases including COVID-19. Any outbreak or threat of an outbreak of a virus or other contagions or epidemic disease could have a material adverse effect on the Company's business and financial condition.

MANAGEMENT AND BOARD OF DIRECTORS

No changes to the Arcus board or management occurred during the three month period ended October 31, 2025. On December 3, 2025, Darryl Jones was appointed to the Arcus board of directors, expanding the current board to six members.

PROPERTY TRANSACTIONS AND EXPLORATION

Touleary Property

Arcus holds a 100% interest in the Touleary property, located in the White Gold District of Yukon Territory, approximately 100 km south of Dawson City. The Touleary property is the location of the first significant volcanogenic massive sulphide ("VMS") system identified in the White Gold District of Yukon Territory and is located immediately south of and adjacent to White Gold Corp.'s White Gold property.

The VMS system at the Touleary was discovered by Arcus as part of a 2011 diamond drill program. The 2011 program consisted of five holes totaling 935 meters and targeted a 300 by 100 m area within a 5.7 km long zone of coincident geophysical and intermittent copper:gold-in-soil geochemical anomalies. Additional soil sampling and hand pitting programs were completed during the 2012 and 2013 field seasons focusing on separate targets 6 km south of the original VMS discovery. No field work has been carried out on the property since 2013.

In spring 2022, Arcus conducted a detailed property-wide evaluation of all available data which identified seven high priority stand-alone VMS targets, not including the original discovery. Subject to available financing, Arcus has designed a reverse circulation ("RC") drill program to broadly test these targets with the intention of following up positive results with detailed diamond drilling.

The targets identified at the Touleary property are located within an area approximately 10 x 4 kilometers. The original 2011 VMS discovery is located at the northeastern end of the target area. Targets have been identified using combinations of coincident soil and rock geochemistry, specific airborne magnetic signatures, geological and structural reinterpretations and VTEM (versatile time-domain electromagnetic) surveys. The surface footprint of each discrete target could represent a standalone VMS deposit, therefore, the Touleary property is believed to host significant VMS district potential

In November of 2023, Arcus staked an additional 214 mining claims to the north, west and south of the existing Touleary claims. The new claims were added to the Touleary property to provide a buffer zone adjacent to a number of the VMS targets identified during the detailed property-wide evaluation of available exploration data.

A future RC drill program consisting of eighteen to twenty drill holes has been modelled for the four highest priority targets at Touleary which span the 10 km by 4 km area of potential. Drill hole locations

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and section azimuths have been suggested based on target orientations and structural contour information from the linear magnetic data. Drill fences are recommended as a tip-to-tail style geometric test along section lines spaced between 300 m to 700 m apart. Core portions of each target are intended to be tested along the favorable VMS trend for distances between 500 to 900 m with two to three drill sections per target area.

A first phase of the RC drill program has been recommended to test strategic portions of the two highest priority targets at a budgeted cost of $1,380,500. This program should consist of a minimum of nine drill holes totaling approximately 1,600 m assuming maximum depths are obtained.

Arcus holds a Class 3 Quartz Mining Land Use Approval (permit), valid for work on the Touleary property until August 7, 2026.

Technical Review

The technical information contained in this MD&A document has been reviewed by William A. Wengzynowski, B.A.Sc., P.Eng., a consultant to Arcus and a qualified person for the purposes of National Instrument 43-101.

SUBSEQUENT EVENTS

1. As announced on November 13, November 4 and October 15, 2025, Arcus is in the process of completing a private placement up to a maximum of $1,650,000. Subject to TSX Venture Exchange acceptance, the financing will close concurrently with an Arcus share consolidation, as described below:

(i) immediately prior to the closing of the financing, Arcus will complete the consolidation on the basis of a 10 existing Arcus common shares for 1 post-consolidation Arcus common share. The issued Arcus share capital following the consolidation but prior to the closing of the financing will be 7,387,807 common shares;

(ii) the closing of the financing will immediately follow the consolidation and will consist of two separate, but concurrent tranches as set out below:

(a) the first tranche of the financing will consist of a $500,000 offering of post-consolidation units at a price of $0.25 per unit. Each of these units will consist of one Arcus post-consolidation common share and one Arcus share purchase warrant. Each of these warrants will entitle the holder to purchase one Arcus post-consolidation share for a period of two years at a price of $0.40 per share. Up to 2,000,000 post-consolidation Arcus shares and up to 2,000,000 warrants will be issued under the first tranche offering; and

(b) the second tranche of the financing will consist of a $1,150,000 offering of post-consolidation units at a price of $0.30 per unit. Each of these units will consist of one Arcus post-consolidation common share and one Arcus share purchase warrant. Each of these warrants will entitle the holder to purchase one Arcus post-consolidation share for a period of two years at a price of $0.40 per share. Up to 3,833,333 post-consolidation Arcus shares and up to 3,833,333 warrants will be issued under the second tranche offering.

Following the completion of the share consolidation and the successful closing of both tranches of the financing, Arcus will have 13,221,140 common shares issued and outstanding. The proceeds from the financings will be used by Arcus as general working capital and to fund work at its wholly-owned Touleary project, located in the White Gold District of Yukon Territory.

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Arcus has also applied to list its common shares on the TSX Venture Exchange as a Tier 2 company concurrently with the share consolidation and the financing.

The concurrent share consolidation, two tranche financing and reactivation of trading on TSX Venture Exchange all remain subject to Exchange acceptance. Closing of the concurrent transactions is expected to occur prior to the end of December 2025.

1. On December 3, 2025, Darryl Jones was appointed to the Arcus board of directors. See "Management and Board of Directors" for additional information.

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ARCUS DEVELOPMENT GROUP INC.
402 – 905 West Pender Street
Vancouver, British Columbia
V6C 1L6
Tel: (778) 893-9325
Trading Symbol: TSX-V: ADG
Web Site: www.arcusdevelopmentgroup.com

CORPORATE INFORMATION

Ian J. Talbot, North Vancouver, B.C.
James Gray, Vancouver, B.C.
Grant Longhurst, West Vancouver, B.C.
P. Gary Paulson, Prince George, B.C.
Graham Downs, Squamish, B.C.
Darryl Jones, North Vancouver
Rhonda Schultz, Maple Ridge, B.C.

President, Chief Executive Officer and Director
Chief Financial Officer and Director
Independent Director
Independent Director
Independent Director
Independent Director
Secretary

Registered Office
1200 – 750 West Pender Street
Vancouver, B.C. V6C 2T8

Transfer Agent
Computershare Investor Services Inc.
2nd Floor - 510 Burrard
Vancouver, B.C. V6C 3B9

Legal Counsel
Morton Law LLP
1200 – 750 West Pender Street
Vancouver, B.C. V6C 2T8

Auditors
D&H Group LLP
300 – 855 Homer Street
Vancouver, B.C. V6B 2W2

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