Azimut Exploration Inc. — Audit Report / Information 2024

Dec 23, 2024

Azimut Exploration Inc.

Financial Statements August 31, 2024 and 2023

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Independent auditor’s report

To the Shareholders of Azimut Exploration Inc.

Our opinion

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Azimut Exploration Inc. (the Company) as at August 31, 2024 and 2023, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

What we have audited

The Company’s financial statements comprise:

• the statements of financial position as at August 31, 2024 and 2023;

• the statements of net earnings (loss) and comprehensive income (loss) for the years then ended;

• the statements of changes in equity for the years then ended;

• the statements of cash flows for the years then ended; and

• the notes to the financial statements, comprising material accounting policy information and other explanatory information.

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 financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

PricewaterhouseCoopers LLP

1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1 T.: +1 514 205 5000, F.: +1 514 876 1502, Fax to mail: ca_montreal_main_fax@pwc.com

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended August 31, 2024. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

How our audit addressed the key audit matter

Assessment of indicators of impairment of exploration and evaluation assets

Refer to note 2 – Summary of material accounting policies and note 4 – Critical accounting estimates, judgments and assumptions to the financial statements.

The carrying value of exploration and evaluation assets amounted to $41,493,946 as at August 31, 2024. Exploration and evaluation assets are reviewed for an indication of impairment at each statement of financial position date or when a triggering event is identified. The determination of whether indicators of impairment exist requires the use of judgment by management. Factors which could trigger an impairment test (indicators of impairment) include, but are not limited to, (i) the period for which the Company has the right to explore in the specific area has expired or will expire in the near future, and is not expected to be renewed; (ii) substantive exploration and evaluation expenditures in a specific area is neither budgeted nor planned, and (iii) no commercially viable deposits have been discovered, and management has decided to discontinue such activities in the specific area.

• Our approach to addressing the matter included the following procedures, among others:

• Assessed the judgment by management in determining indicators of impairment related to exploration and evaluation assets, which included the following:

  • Obtained for all claims, by reference to government registries, evidence to support (i) the right to explore the areas and (ii) claims’ expiration dates.

  • Read the Board of Director minutes and obtain budget approvals to (i) evidence continued and planned exploration and evaluation expenditures, (ii) assess whether the right to explore in the specific areas is expected to be renewed, and (iii) assess whether exploration for and evaluation of mineral resources in specific areas has not led to commercially viable deposits and management as a result decided to discontinue such activities in the specific area.

The total impairment loss related to exploration and evaluation assets is $936,659 for the year ended August 31, 2024, which pertained to abandoned claims.

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How our audit addressed the key audit Key audit matter matter

We considered this a key audit matter due to the significance of the exploration and evaluation assets and the judgment made by management in their assessment of indicators of impairment related to exploration and evaluation assets; which resulted in a high degree of subjectivity in performing procedures related to the judgment applied by management.

Other information

Management is responsible for the other information. The other information comprises the Management’s Discussion and Analysis.

Our opinion on the 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 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 financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

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Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the 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 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 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 Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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.

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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 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 Maxime Guilbault.

1

/s/PricewaterhouseCoopers LLP

Montréal, Quebec December 23, 2024

1 CPA auditor, public accountancy permit No. A112345

Azimut Exploration Inc. Statements of Financial Position (in Canadian dollars)

Assets Current assets Cash and cash equivalents (Note 5) Amounts receivable (Note 6) Prepaid expenses Tax credit and mining rights receivable (Note 9) Non-current assets Tax credit and mining rights receivable (Note 9) Investments (Note 7) Property and equipment (Note 8) Intangible assets (less accumulated amortization of $34,421; $32,021 as at August 31, 2023) Right-of-use assets Exploration and evaluation assets (Note 9) Total assets Liabilities and Equity Current liabilities Accounts payable and accrued liabilities Advances received for exploration work Lease liabilities Flow-through shares premium liability (Note 12) Non-current liabilities Lease liabilities Asset retirement obligations (Note 10) Deferred income tax liabilities Total liabilities Equity Share capital (Note 11) Underwriters’ options (Note 12) Stock options (Note 13) Contributed surplus Deficit Total equity Total liabilities and equity The accompanying notes are an integral part of these financial statements. Approved by the Board of Directors	As at August 31, 2024 $ 11,766,113 763,484 101,260 1,047,592 13,678,449 - 931,242 1,507,074 1,930 50,513 41,493,946 43,984,705 57,663,154 3,392,355 687,111 50,673 442,314 4,572,453 - 1,977,549 1,351,318 3,328,867 7,901,320 65,200,783 52,464 4,533,469 5,039,601 (25,064,483) 49,761,834 57,663,154	As at August 31, 2023 $ 3,320,226 1,486,176 160,048 - 4,966,450 4,388,216 36,251 1,537,871 2,060 111,119 35,630,349 41,705,866 46,672,316 1,265,981 217,609 54,485 - 1,538,075 50,672 1,549,924 - 1,600,596 3,138,671 60,035,081 - 3,747,701 4,857,941 (25,107,078) 43,533,645 46,672,316

(s) Jean-Charles Potvin Director (s) Jean-Marc Lulin Director

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Azimut Exploration Inc.

Statements of Net Earnings (Loss) and Comprehensive Income (Loss) For the years ended August 31, 2024 and 2023

(in Canadian dollars, except number of common shares)

Revenues Operator income (Notes 10a, b, e, f, g, h and i) Expenses General and administrative (Note 14) General exploration (Note 14) Impairment of exploration and evaluation assets (Note 9) Operating expenses Financing cost (income), net Interest income Interest and bank charges Part XII.6 Tax Unwinding of discount on asset retirement obligations (Note 10) Interest on lease liabilities Other losses (gains) Change in fair value – investments (Note 7) Gain on option payments on exploration and evaluation assets (Note 9e, i, j) Gain on sale of assets (Note 9k) Loss before income taxes Deferred income tax recovery (Note 16) Net earnings (loss) and comprehensive income (loss) for the year Basic and diluted net earnings (loss) per share(Note 17) Weighted average number of shares outstanding(Note 17)	2024 $ 443,583 2,499,736 10,379 936,659 3,446,774 (462,268) 7,676 43,306 71,511 9,705 (330,070) 566,009 (506,119) (1,693,689) (1,633,799) (1,039,322) 1,081,917 42,595 0.00 85,221,422	2023 $ 139,555
		1,477,158 194,431 829,394
		2,500,983
		(274,483) 3,790 8,328 99,237 10,926
		(152,202)
		15,139 (15,606) (377,793)
		(378,260)
		(1,830,966) -
		(1,830,966)
		(0.02)
		79,671,460

The accompanying notes are an integral part of these financial statements.

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Azimut Exploration Inc. Statements of Changes in Equity For the years ended August 31, 2024 and 2023 (in Canadian dollars, except number of common shares)

Balance as at September 1, 2023 Net earnings and comprehensive income for the year Common shares private placement (Note 11) Flow-through private placement (Note 11) Less: Premium Stock options exercised (Note 13) Stock options expired Stock-based compensation (Note 13) Share issue expenses Balance as at August 31, 2024 Balance as at September 1, 2022 Net earnings and comprehensive income for the year Common shares repurchased for cancellation Stock options exercised (Note 13) Stock options expired (Note 13) Underwriters’ options expired (Note 13) Stock-based compensation (Note 13) Share issue expenses Balance as at August 31, 2023	Share capital Number (1) $ 79,963,844 60,035,081 - - 2,082,100 2,186,205 2,992,700 6,000,365 - (3,037,592) 555,000 343,974 - - - - - (327,250) 85,593,644 65,200,783 82,193,844 61,933,968 - - (2,900,000) (2,291,000) 670,000 395,306 - - - - - - - (3,193) 79,963,844 60,035,081	Underwriters’ options $ - - - - - - - - 52,464 52,464 635,182 - - - - (635,182) - - -	Stock options $ 3,747,701 - - - - (156,124) (181,660) 1,123,552 - 4,533,469 3,779,214 - - (180,106) (119,786) - 268,379 - 3,747,701	Contributed surplus $ 4,857,941 - - - - - 181,660 - - 5,039,601 4,102,973 - - - 119,786 635,182 - - 4,857,941	Deficit $ (25,107,078) 42,595 - - - - - - - (25,064,483) (23,276,112) (1,830,966) - - - - - - (25,107,078)	Total
	Number (1) 79,963,844 - 2,082,100 2,992,700 - 555,000 - - - 85,593,644 82,193,844 - (2,900,000) 670,000 - - - - 79,963,844					$ 43,533,645 42,595 2,186,205 6,000,365 (3,037,592) 187,850 - 1,123,552 (274,786)
						49,761,834
						47,175,225 (1,830,966) (2,291,000) 215,200 - - 268,379 (3,193)
						43,533,645

(1) There were no common shares that were unpaid as at August 31, 2024 (Nil in 2023).

The accompanying notes are an integral part of these financial statements.

(9)

Azimut Exploration Inc. Statements of Cash Flows For the years ended August 31, 2024 and 2023 (in Canadian dollars)

Cash flows (used in) from operating activities Net earnings (loss) for the year Items not affecting cash Depreciation of property and equipment (Note 8) Amortization of intangible assets Depreciation of right-of-use assets Change in fair value, investments (Note 7) Impairment of exploration and evaluation assets (Note 9) Gain on option payments on exploration and evaluation assets (Note 9) Gain on sale of exploration property (Note 9k) Stock-based compensation cost (Note 13) Unwinding of discount on asset retirement obligations (Note 10) Recovery of deferred income taxes (Note 16) Changes in non-cash working capital items Amounts receivable Prepaid expenses Accounts payable and accrued liabilities Cash flows from financing activities Issuance of common shares Issuance of flow-through shares Share issue expenses Stock options exercised Repayment of lease liabilities - Cash flows from (used in) investing activities Advance received for exploration work, net Additions to property and equipment Additions to intangible assets Recovery from insurances Additions to exploration and evaluation assets Option payments on E&E assets (Note 9) Proceeds from sale of E&E assets (Note 9) Proceeds from sale of investments Tax credit and mining rights received Net change in cash and cash equivalents Cash and cash equivalents – Beginning of the year Cash and cash equivalents – End of the year Additional information Interest received Interest paid Additional cash flow information(Note 19)	August 31, 2024 $ 42,595 72,810 2,401 60,606 566,009 936,659 (506,119) (1,693,689) 952,504 71,511 (1,081,917) (576,630) (336,887) 58,788 342,430 64,331 (512,299) 2,186,205 6,000,365 (436,828) 187,850 (54,484) 7,883,108 6,118,411 (59,897) (2,270) 88,100 (10,906,276) 890,000 500,000 - 4,447,010 1,075,078 8,445,887 3,320,226 11,766,113 462,268 (9,705)	August 31, 2023 $ (1,830,966) 19,045 6,199 54,266 15,139 829,394 (15,606) (377,793) 268,379 99,237 -
		(932,706)
		863,605 (30,308) (636,474)
		196,823
		(735,883)
		- - (3,193) 215,200 (53,264)
		158,743
		1,790,693 (320,140) (1,500) - (16,525,068) 70,000 - 550 4,847,396
		(10,138,069)
		(10,715,209) 14,035,435
		3,320,226
		274,483 (10,926)

The accompanying notes are an integral part of these financial statements.

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Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

1 Nature of operations and general information

Azimut Exploration Inc. (“Azimut” or the “Company”), governed by the Business Corporations Act (Quebec) , is in the business of acquiring and exploring mineral properties. The Company’s registered office is at 110 De La Barre Street, Suite 224, Longueuil, Quebec, Canada. The mining and mineral exploration business involves a high degree of risk, and there can be no assurance that planned exploration and development programs will result in profitable mining operations. The Company’s shares are listed on the TSX Venture Exchange (“TSXV”) under the symbol AZM and on the OTCQX Market (“OTCQX”) under the symbol AZMTF.

Until it is determined that a property contains mineral reserves or resources that can be economically mined, it is classified as an exploration and evaluation asset (“E&E asset”). It has not yet been determined whether the Company’s properties contain economically recoverable ore reserves. The recoverability of the amounts shown for E&E assets is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration and evaluation of its properties, and the profitable sale of the E&E assets.

Although management has taken steps to verify the titles to mineral properties in which the Company has an interest, in accordance with industry standards for the current stage of exploration and evaluation of the properties, these procedures do not guarantee the Company’s title. Property titles may be subject to unregistered prior agreements and may not comply with regulatory requirements.

2 Summary of material accounting policies

The material accounting policies used in preparing these financial statements are described below.

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IFRS Accounting Standards”). The accounting policies applied to these financial statements, are consistent with those applied in previous fiscal years unless otherwise stated. The Company’s Board of Directors approved these financial statements for issue on December 23, 2024.

Basis of measurement

These financial statements have been prepared on a historical cost basis, except for the revaluation of certain financial instruments to fair value.

Presentation and functional currency

The financial statements are presented in Canadian dollars, the functional currency of the Company.

Jointly controlled assets and exploration activities

A jointly controlled asset involves joint control and offers joint ownership by the Company and other venturers of assets contributed to or acquired for the purpose of the joint venture (“JV”) without the formation of a corporation, partnership or other entity.

Where the Company’s activities are conducted through jointly controlled assets and exploration activities, the financial statements include the Company’s share in the assets and liabilities and the income and expenses from the joint operations.

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, bank balances, and highly liquid short-term investments with original maturities of three (3) months or less from the date of purchase and which are readily convertible to known amounts of cash.

Financial instruments

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred substantially all risks and rewards of ownership.

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Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

2 Summary of material accounting policies (cont’d)

Financial instruments (cont’d)

Financial assets and liabilities are offset, and the net amount is reported in the Statements of Financial Position when there is an unconditional and legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

Financial assets are initially measured at fair value. If the financial asset is not subsequently accounted for at fair value through profit or loss, then the initial measurement includes transaction costs that are directly attributable to the asset’s acquisition or origination. On initial recognition, the Company classifies its financial instruments into the following categories depending on the purpose for which the instruments were acquired.

• a) Fair value through profit and loss investments: Investments at fair value through profit and loss are equity investments recognized initially at fair value and subsequently measured at fair value. Gains or losses arising from changes in fair value are recorded in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss).

• b) Amortized cost: Financial assets at amortized cost are non-derivative financial assets with fixed or determinable payments constituted solely of payments of principal and interest that are held within a “held to collect” business model. Financial assets at amortized cost are initially recognized at the amount expected to be received, less, when material, a discount to reduce the financial assets to fair value. Subsequently, financial assets at amortized cost are measured using the effective interest method less a provision for expected losses. The Company’s cash and cash equivalents and amounts receivable are classified within this category.

Investments are currently measured at fair value with changes in fair value, including any interest or dividend income recognized in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss).

Financial liabilities at amortized cost: Accounts payable and accrued liabilities and advances received for exploration work, which are classified as financial liabilities at amortized cost, are initially recognized at the amount required to be paid, less, when material, a discount to reduce to fair value. Accounts payable and accrued liabilities and advances received for exploration work are measured at amortized cost using the effective interest method.

Financial liabilities are classified as current liabilities if payment is due within twelve (12) months. Otherwise, they are presented as non-current liabilities.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are charged to the Statement of Net Earnings (Loss) and Comprehensive Income (Loss) during the period in which they are incurred.

Property and equipment are depreciated as they become available using the declining balance method at the rates indicated below, except for camps and camps under finance lease, which are amortized using the straight-line method over periods of 54 and 126 months (camps) and 18 months (camps under finance lease). Depreciation of camps and camps under finance lease is capitalized to E&E assets.

	Rate
Office furniture	20%
Office equipment	20%
Computer equipment	30%
Specialized equipment	30%
Vehicle	30%

The Company allocates the amount initially recognized in respect of an item of property and equipment to its significant parts and depreciates separately each such part. Residual values, methods of amortization and useful lives of the assets are reviewed annually and adjusted if appropriate.

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Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

2 Summary of material accounting policies (cont’d)

Property and equipment (cont’d)

Gains and losses on disposals of property and equipment are determined by comparing the proceeds with the carrying amount of the asset and are included as part of other gains and losses in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss).

E&E assets

E&E assets comprise mineral properties and deferred exploration and evaluation expenses. Expenditures incurred during activities before mineral resource exploration and evaluation begins, being all expenditures incurred prior to securing the legal rights to explore an area, are expensed as incurred and presented under general exploration in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss).

E&E assets include rights in mineral properties, paid or acquired through a business combination or an acquisition of assets, and costs related to the initial search for mineral deposits with economic potential or to obtain more information about existing mineral deposits. Mineral property rights are recorded at acquisition cost. Mineral property rights and options to acquire undivided interests in mineral property rights are depreciated only as these properties are put into commercial production. These costs are impaired when properties are abandoned or when cost recovery or resource access is uncertain.

From time to time, the Company may acquire or dispose of a property pursuant to the terms of an option agreement. Since options are exercisable entirely at the discretion of the option holder, the amounts payable or receivable are not recorded.

Option payments are recorded as additions to E&E assets when the payments are made or as a reduction to E&E assets when payments are received.

From time to time, the Company may acquire or dispose of a property pursuant to the terms of an option agreement. Since options are exercisable entirely at the discretion of the option holder, the amounts payable or receivable are not recorded.

Proceeds on the sale of mineral properties are applied by property in reduction of the acquisition costs, then in reduction of the exploration costs and any residual is recorded in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss) unless contractual work is required, in which case the residual gain is deferred and will be reduced once the contractual disbursements are done.

Funds received from partners for exploration work on certain properties where the Company is the operator, as per agreements, are accounted for in the Statement of Financial Position as advances received for exploration work. These amounts are reduced gradually once the exploration work is performed. Project management fees, received when the Company is the operator, are recorded in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss).

The Company’s exploration and evaluation expenditures for each separate area of interest are capitalized and include costs associated with prospecting, sampling, trenching, drilling and other work involved in the search for deposits, including topographical, geological, geochemical and geophysical activities. They also reflect costs related to establishing the technical and commercial viability of extracting a mineral resource identified through exploration or acquired through a business combination or asset acquisition.

Exploration and evaluation expenditures include the cost of the following:

• establishing the volume and grade of deposits through core drilling, trenching and sampling activities in an orebody;

• determining the optimal extraction methods and metallurgical and treatment processes;

• studies related to surveying, transportation and infrastructure requirements;

• permitting activities; and

• economic evaluations to determine whether the development of the mineralized material is commercially justified, including scoping, prefeasibility and final feasibility studies.

When a project moves into the development phase, exploration and evaluation expenditures are capitalized to development costs in property and equipment and are tested for impairment.

Exploration and evaluation expenditures include overhead expenses directly attributable to the related activities.

Cash flows attributable to capitalized E&E costs are classified as investing activities in the Statements of Cash Flows.

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Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

2 Summary of material accounting policies (cont’d)

Impairment of non-financial assets

Property and equipment and exploration and evaluation assets are reviewed by management for indicators of impairment at each statement of financial position date or when a triggering event is identified. E&E assets are reviewed by area of interest. If any such indication is present, the recoverable amount of the asset is estimated in order to determine whether impairment exists. Where the asset does not generate cash flows that are independent of other assets, the Company estimates the recoverable amount of the asset group to which the asset belongs.

An asset’s recoverable amount is the higher of fair value less costs to sell or value in use. 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 which estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or asset group is estimated to be less than its carrying amount, the carrying amount is reduced to the recoverable amount. Impairment is recognized immediately in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss). Where an impairment subsequently reverses, the carrying amount is increased to the revised estimate of the recoverable amount but only to the extent that this does not exceed the carrying value that would have been determined if no impairment had previously been recognized. A reversal is recognized as a reduction in the impairment charge for the period.

Government assistance

The Company is entitled to a refundable tax credit on qualified mineral exploration expenses incurred in the province of Quebec and to a mining duties credit, which are recorded against the deferred exploration expenditures in the financial position or recognized in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss) when the related general mining exploration expenses have been recognized in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss).

Provisions and asset retirement obligations

A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, when it is probable that an outflow of economic benefits will be required to settle the obligation, and when the amount of the obligation can be reliably estimated. If the effect 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.

Provisions for asset retirement obligations are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting period and are discounted to present value where the effect is material. The discount rate used is based on a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability, excluding the risks for which future cash flow estimates have already been adjusted. The increase in the provision due to the passage of time is recognized in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss) Loss. Changes in assumptions or estimates are reflected in the period in which they occur. The Company also records a corresponding asset amount, which is amortized in a logical and systematic manner.

Share-based payment transactions

The fair value of share options granted to employees is recognized as an expense or capitalized to E&E assets over the vesting period with a corresponding increase in stock options. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee, including directors of the Company.

The fair value is measured at the grant date and recognized over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. At each Statement of Financial Position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.

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Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

2 Summary of material accounting policies (cont’d)

Share capital and warrants

Common shares and warrants are classified as equity. Incremental costs directly attributable to the issuance of shares or warrants are recognized as a deduction from the proceeds in equity in the period where the transaction occurs. Proceeds from unit placements are allocated between shares and warrants issued on a pro-rata basis of their value within the unit using the Black-Scholes pricing model to determine the fair value of warrants issued.

Warrants issued to brokers, in respect of an equity financing, are recognized as share issue expenses, reducing the share capital with a corresponding credit to warrants.

Underwriters’ options

The fair value of share options granted to the underwriters is measured by using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted and are recognized as share issue expenses, reducing the share capital with a corresponding credit to Underwriters’ options.

Flow-through shares

The Company finances some exploration and evaluation expenditures through the issuance of flow-through shares. The resource expenditure deductions for income tax purposes are renounced to investors in accordance with the appropriate income tax legislation. The Company recognizes a deferred tax liability for flow-through shares and a deferred tax recovery at the moment the eligible expenditures are incurred. The difference between the quoted price of the common shares and the amount the investors paid for the shares (the “premium”), measured in accordance with the residual value method, is recognized as other liability, which is reversed in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss) as a deferred tax recovery when eligible expenditures have been made.

Income taxes

Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss) except to the extent that it relates to items recognized directly in other comprehensive loss or in equity, in which case it is recognized in other comprehensive loss or in equity, respectively. Mining taxes represent Canadian provincial taxes levied on mining operations and are classified as income taxes since such taxes are based on a percentage of mining profits.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at period-end, adjusted for amendments to tax payable with regards to previous years. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities.

Deferred tax is provided using the liability method, providing for temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. A temporary difference is not provided for if it arises from the initial recognition of goodwill or the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss.

The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet reporting date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

Deferred income tax assets and liabilities are presented as non-current and are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Loss per share

The Company presents basic and diluted income per share data for its common shares, calculated by dividing the loss by the weighted average number of common shares outstanding during the year. Diluted loss per share is determined by adjusting the loss and the weighted average number of common shares outstanding for the effects of all warrants, brokers’ units and stock options that may add to the total number of common shares in the case where they would not have an anti-dilutive impact.

(15)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

2 Summary of material accounting policies (cont’d)

Segment disclosures

The Company currently operates in a single segment: the acquisition, exploration and evaluation of mineral properties. All of the Company’s activities are conducted in the province of Quebec (Canada).

3 Accounting standards adopted and accounting standards issued but not yet effective

New accounting standards adopted

Amendments to IAS 1 presentation of financial statements - classification of liabilities as current or non-current

In January 2020, the IASB amended IAS 1 Presentation of Financial Statements, which is effective for financial years beginning on or after January 1, 2024 (originally January 1, 2023). The standard amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period which only impacts the presentation of liabilities in the statement of financial position. The classification is unaffected by expectations about whether the Company will exercise its right to defer settlement of a liability. The Company adopted the amendments on September 1, 2023, and the adoption of these amendments did not have any impact on the Company’s financial statements.

Amendments to IAS 1 presentation of financial statements and IFRS practice statement 2

In February 2021, the IASB amended IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 to require the Company to disclose its material accounting policy information rather than its significant accounting policies, effective for financial years beginning on or after January 1, 2023. With the adoption of these amendments, the Company removed accounting policies that were not material in the annual financial statements.

New accounting standards issued but not yet effective

IFRS 18, Presentation and Disclosure in Financial Statements

On April 9, 2024, the IASB issued IFRS 18 to improve reporting of financial performance. The new standard replaces IAS 1 Presentation of Financial Statements . It carries forward many requirements from IAS 1 unchanged. IFRS 18 applies for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted.

The new Accounting Standard introduces significant changes to the structure of income statements and introduces new principles for aggregation and disaggregation of information.

The impact of adoption of the amendments has not yet been determined by the Company.

Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instrument Disclosures

In May 2024, the IASB published Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures ). The amendments to IFRS 9 clarify derecognition and classification of specific financial assets and liabilities respectively while the amendments to IFRS 7 clarify the disclosure requirements for investments in equity instruments designated at fair value through other comprehensive income and contractual terms that could change the timing or amount of contractual cash flows on the occurrence or non-occurrence of a contingent event. The amendments to IFRS 9 and IFRS 7 are effective for annual reporting beginning on or after January 1, 2026. Earlier application is permitted. The impact of adoption of the amendments has not yet been determined by the Company.

4 Critical accounting estimates, judgments and assumptions

Many of the amounts included in the financial statements require management to make judgments and/or estimates and assumptions. These judgments and estimates are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. Actual results may differ from the amounts included in the financial statements. Revisions to estimates are recognized prospectively.

(16)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

4 Critical accounting estimates, judgments and assumptions (cont’d)

Areas of critical estimates and assumptions affecting the amounts recognized in the financial statements include the following:

a) Asset retirement obligations

Asset retirement obligations arise from the development, construction and normal operation of mining property and equipment, as mining activities are subject to laws and regulations governing the protection of the environment. Such costs arising from the decommissioning of site preparation work, discounted to their net present value, are provided for and capitalized to the carrying amount of the asset as soon as the obligation to incur such costs arises. The discount rate used is based on a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability, excluding the risks for which future cash flow estimates have already been adjusted. The related liability is adjusted for each period for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation. The Company also records a corresponding asset amount which is amortized over the remaining service life of the asset.

Future remediation costs are accrued based on management’s best estimate at the end of each period of the undiscounted cash costs expected to be incurred at each site. Changes in estimates are reflected in the period during which an estimate is revised. Accounting for reclamation and remediation obligations requires management to make estimates of the future costs that the Company will incur to complete the reclamation and remediation work required to comply with existing laws and regulations at each site. The Company also estimates the timing of the cash outflow, which is subject to change and is currently estimated to be the year 2026 in the Nunavik region and the year 2033 in the James-Bay region for the Elmer Discovery, which represents a critical accounting estimate by the Company. Actual costs incurred may differ from those estimated amounts. Also, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required from the Company. Increases in future costs could materially impact the amounts charged to activities for reclamation and remediation.

Areas of significant judgment affecting the amounts recognized in the financial statements include the following:

a) Valuation of the refundable duties credit for losses and the refundable tax credit for resources

The refundable mining duties credit and the refundable tax credit for resources for the current and prior periods are measured at the amount expected to be recovered from the taxation authorities using the tax rates and tax laws that have been enacted or substantively enacted at each Statement of Financial Position reporting date. Uncertainties exist with respect to the interpretation of tax regulations, including the mining duties credit and the tax credit for resources for which certain expenditures could be disallowed by the taxation authorities in the calculation of credits and the amount and timing of their collection. The calculation of the Company’s mining duties credit and tax credit for resources necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined until a notice of assessments and payments has been received from the relevant taxation authority. Differences arising between the actual results following the final resolution of some of these items and the assumptions made, or future changes to such assumptions, could necessitate adjustments to the mining duties credit and tax credit for resources, the exploration and evaluation assets and expenses, and the income tax expenses in future periods.

The amounts recognized in the financial statements are derived from the Company’s best estimation and judgement as described above. However, the inherent uncertainty regarding the outcome of these items means that the eventual resolution could differ from the accounting estimates and therefore impact the Company’s financial position and its financial performance and cash flows.

b) Impairment of non-financial assets

The Company’s measurement with respect to the carrying amount of non-financial assets is based on numerous assumptions and may differ significantly from actual recoverable amounts. The recoverable amounts are based, in part, on certain factors that may be partially or totally outside of the Company’s control. This evaluation involves a comparison of the estimated recoverable amounts of non-financial assets to their carrying values. The estimated recoverable amounts may differ from actual recoverable amounts, and these differences may be significant and could have a material impact on the Company’s financial position and the result of operations. Assets are reviewed for an indication of impairment at each Statement of Financial Position reporting date or when a triggering event is identified.

(17)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

4 Critical accounting estimates, judgments and assumptions (cont’d)

b) Impairment of non-financial assets (cont’d)

Management is required to apply judgment when assessing whether there are any impairment indicators that could give rise to the requirement to conduct a formal impairment test related to exploration and evaluation assets. Factors which could trigger an impairment test (indicators of impairment) include, but are not limited to, (i) the period for which the Company has the right to explore in the specific area has expired or will expire in the near future, and is not expected to be renewed; (ii) substantive exploration and evaluation expenditures in a specific area is neither budgeted nor planned, and (iii) no commercially viable deposits have been discovered, and management has decided to discontinue such activities in the specific area.

Based on an impairment analysis performed in 2024, the Company impaired certain properties for which, some claims had been abandoned. In the James Bay region, the Opinaca property was impaired for a total amount of $40,092 and a total of $893,167 in the Nunavik region impacting mainly the properties Rex-Duquet ($430,251), Rex South ($190,143), Nantais ($211,396) and Diamrex ($61,098) (see Note 9).

5 Cash and cash equivalents

As at August 31, 2024, the Company’s cash and cash equivalents of $11,766,113 ($3,320,266 – August 31, 2023) included $5.5 million of high-interest saving accounts bearing interest at 4.15% ($2.3 million bearing interest 3.27% – August 31, 2023), cashable any time without any penalties.

6 Amounts receivable

Commodity taxes Amounts receivable Current amount receivable	2024 $ 510,872 252,612 763,484	2023 $ 66,536 1,419,640
		1,486,176

7 Investments

Fair value through profit or loss investments Balance – September 1 Acquisitions Received from disposal of E&E assets (Note 9) Disposal Change in fair value Balance – August 31	As at August 31, 2024 36,251 - 1,461,000 - (566,009) 931,242	As at August 31, 2023
		51,940 2,123 - (2,673) (15,139) 36,251

The investments are mainly held in common shares of Canadian publicly traded companies. The fair value of each investment in common shares is based on the quoted market prices of those shares on a recognized stock exchange at the end of each reporting period.

(18)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

8 Property and equipment

Year ended August 31, 2024 Opening net book amount Additions Disposition Change in estimate Depreciation for the year (1) Closing net book amount As at August 31, 2024 Cost Accumulated depreciation Net book amount Year ended August 31, 2023 Opening net book amount Additions Change in estimate Depreciation for the year (1) Closing net book amount As at August 31, 2023 Cost Accumulated depreciation Net book amount	Office furniture $ Office equipment $ Computer equipment $ Specialized equipment $ Camp(1) $ Vehicles(1) $ Total $ 1,650 5,606 32,430 256,366 1,241,727 92 1,537,871 700 - 7,297 51,900 - - 59,897 - - - (88,100) - - (88,100) - - - - 356,114 - 356,114 (1,754) (5,606) (9,489) (55,961) (285,806) (92) (358,708)
	596 - 30,238 164,205 1,312,035 - 1,507,074
	23,363 29,914 120,128 241,476 2,637,403 3,702 3,055,986 (22,767) (29,914) (89,890) (77,271) (1,325,368) (3,702) (1,548,912)
	596 - 30,238 164,205 1,312,035 - 1,507,074
	1,413 6,882 33,238 76 1,508,327 126 1,550,062 538 - 10,105 262,844 46,653 - 320,140 - - - - (62,415) - (62,415) (301) (1,276) (10,913) (6,554) (250,838) (34) (269,916)
	1,650 5,606 32,430 256,366 1,241,727 92 1,537,871
	22,663 29,914 112,831 277,676 2,281,289 3,702 2,728,075 (21,013) (24,308) (80,401) (21,310) (1,039,562) (3,610) (1,190,204)
	1,650 5,606 32,430 256,366 1,241,727 92 1,537,871

(1) Depreciation of property and equipment included in E&E assets in the amount of $285,898 ($250,871 – August 31, 2023)

(19)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets

All mineral properties are located in the Province of Quebec.

Change in E&E assets in 2024

Mineral property Undivided interest % James Bay – Gold Elmer 100 Acquisition costs Exploration costs SOQUEM – JB Alliance (a) 50 Acquisition costs Exploration costs Opinaca * (c) 25 - 100 Acquisition costs Exploration costs Wabamisk (d) 100 Acquisition costs Exploration costs 2 Wapatik (e) 100 Acquisition costs Exploration costs Kukamas (f) 100 Acquisition costs Exploration costs Other 100 Acquisition costs Exploration costs Total James Bay – Gold	Cost as at August 31, Additions Option payments Sale of property Tax credit Cost as at August 31, Accumulated impairment as at August 31, Impairment Accumulated impairment as at August 31, Net book value as at August 31, 2023 2024 2023 2024 2024 $ $ $ $ $ $ $ $ $ $ 198,676 32,757 - - - 231,433 - - - 231,433 28,793,141 3,285,893 - - (792,879) 31,286,155 - - - 31,286,155
	28,991,817 3,318,650 - - (792,879) 31,517,588 - - - 31,517,588
	74,000 7,048 - - - 81,048 - - - 81,048 454,069 9,504 - - (24,483) 439,090 - - - 439,090
	528,069 16,552 - - (24,483) 520,138 - - - 520,138
	166,159 - - - - 166,159 (148,416) (17,743) (166,159) - 286,580 - - - - 286,580 (264,231) (22,349) (286,580) -
	452,739 - - - - 452,739 (412,647) (40,092) (452,739) -
	65,418 - - - - 65,418 - - - 65,418 220,987 197,095 - - (65,909) 352,173 - - - 352,173
	286,405 197,095 - - (65,909) 417,591 - - - 417,591
	- - - - - - - - - - 15,957 18,823 (15,957) - (8,593) 10,230 - - - 10,230
	15,957 18,823 (15,957) - (8,593) 10,230 - - - 10,230
	36,718 - (36,718) - - - - - - - 69,258 - (13,282) - - 55,976 - - - 55,976
	105,976 - (50,000) - - 55,976 - - - 55,976
	99,632 3,400 - - - 103,032 (57,706) (3,400) (61,106) 41,926 36,880 25,165 - - (10,984) 51,061 (37,442) - (37,442) 13,619
	136,512 28,565 - - (10,984) 154,093 (95,148) - (98,548) 55,545
	30,517,475 3,579,685 (65,957) - (902,848) 33,128,354 (507,795) (43,492) (551,287) 32,577,068

(20)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets (cont’d)

Change in E&E assets in 2024 (cont’d)

Mineral property Undivided interest % James Bay – Chromium-PGE Chromaska 100 Acquisition costs Exploration costs Total James Bay – Chromium-PGE James Bay – Base Metals Mercator 100 Acquisition costs Exploration costs Corne 100 Acquisition costs Exploration costs Others 100 Acquisition costs Exploration costs Total James Bay – Base Metals James Bay – Nickel JBN-57 (k) 100 Acquisition costs Exploration costs JBN 100 Acquisition costs Exploration costs Total James Bay – Nickel James Bay – Lithium Dalmas & Galinée (b) 50 Acquisition costs Exploration costs Corvet & Kaanaayaa (i) 100 Acquisition costs Exploration costs	Cost as at August 31, Additions Option payments Sale of property Tax credit Cost as at August 31, Accumulated impairment as at August 31, Impairment Accumulated impairment as at August 31, Net book value as at August 31, 2023 2024 2023 2024 2024 $ $ $ $ $ $ $ $ $ $ 46,029 - - - - 46,029 (32,929) - (32,929) 13,100 921,721 30,205 - - (13,184) 938,742 (916,580) - (916,580) 22,162
	967,750 30,205 - - (13,184) 984,771 (949,509) - (949,509) 35,262
	112,671 - - - - 112,671 - - - 112,671 38,529 142,656 - - - 181,185 - - - 181,185
	151,200 142,656 - - - 293,856 - - - 293,856
	56,817 - - - - 56,817 - - - 56,817 36,738 50,933 - - - 87,671 - - - 87,671
	93,555 50,933 - - - 144,488 - - - 144,488
	1,502 - - - - 1,502 (822) - (822) 680 835 - - - - 835 - - - 835
	2,337 - - - - 2,337 (822) - (822) 1,515
	247,092 193,589 - - - 440,681 (822) - (822) 439,859
	- 6,092 - (6,092) - - - - - - - 33,764 - (21,220) (12,544) - - - - -
	- 39,856 - (27,312) (12,544) - - - - -
	502,527 3,753 - - - 506,280 - - - 506,280 102,596 83,641 - - 12,401 198,638 - - - 198,638
	605,123 87,394 - - 12,401 704,918 - - - 704,918
	605,123 127,250 - (27,312) (143) 704,918 - - - 704,918
	78,662 10,024 - - - 88,686 - - - 88,686 229,883 2,437,980 - - (13,486) 2,654,377 - - - 2,654,377
	308,545 2,448,004 - - (13,486) 2,743,063 - - - 2,743,063
	- - - - - - - - - - - - - - - - - - - -
	- - - - - - - - - -

(21)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets (cont’d)

Change in E&E assets in 2024 (cont’d)

Mineral property Undivided interest % James Bay – Lithium (cont’d) Pilipas (j) 100 Acquisition costs Exploration costs SOQUEM – JB Alliance (a) 50 Acquisition costs Exploration costs JBL 100 Acquisition costs Exploration costs Total James Bay – Lithium Total James Bay Nunavik – Gold Rex-Duquet (g & h) 100 Acquisition costs Exploration costs Rex South (h) 100 Acquisition costs Exploration costs Nantais (h) 100 Acquisition costs Exploration costs Other 100 Acquisition costs Exploration costs Total Nunavik – Gold Nunavik – Base Metals Doran 100 Acquisition costs Exploration costs Total Nunavik – Base Metals	Cost as at August 31, Additions Option payments Sale of property Tax credit Cost as at August 31, Accumulated impairment as at August 31, Impairment Accumulated impairment as at August 31, Net book value as at August 31, 2023 2024 2023 2024 2024 $ $ $ $ $ $ $ $ $ $ 20,790 - (20,790) - - - - - - - 26,749 17,185 (37,134) - - 6,800 - - - 6,800
	47,539 17,185 (57,924) - - 6,800 - - - 6,800
	149,700 8,767 - - - 158,467 - - - 158,467 1,903,257 815,373 - - (153,762) 2,564,868 - - - 2,564,868
	2,052,957 824,140 - - (153,762) 2,723,335 - - - 2,723,335
	73,448 - - - - 73,448 - - - 73,448 450,864 553,761 - - (8,341) 996,284 - - - 996,284
	524,312 553,761 - - (8,341) 1,069,732 - - - 1,069,732
	2,933,353 3,843,090 (57,924) - (175,589) 6,542,930 - - - 6,542,930
	35,270,793 7,773,819 (123,881) (27,312) (1,091,764) 41,801,655 (1,458,126) (43,492) (1,501,618) 40,300,037
	1,372,065 12,765 - - - 1,384,830 (1,148,800) (102,026) (1,250,826) 134,004 4,176,913 61,038 - - (2,414) 4,235,537 (3,527,133) (328,225) (3,855,358) 380,179
	5,548,978 73,803 - - (2,414) 5,620,367 (4,675,933) (430,251) (5,106,184) 514,183
	521,539 10,728 - - - 532,267 (264,351) (77,702) (342,053) 190,214 593,531 123,259 - - (1,286) 715,504 (327,810) (112,441) (440,251) 275,253
	1,115,070 133,987 - - (1,286) 1,247,771 (592,161) (190,143) (782,304) 465,467
	180,457 5,030 - - - 185,487 (95,299) (90,188) (185,487) - 325,984 243 - - (106) 326,121 (204,913) (121,208) (326,121) -
	506,441 5,273 - - (106) 511,608 (300,212) (211,396) (511,608) -
	738,409 - - - - 738,409 (738,282) (127) (738,409) - 982,241 - - - - 982,241 (982,241) - (982,241) -
	1,720,650 - - - - 1,720,650 (1,720,523) (127) (1,720,650) -
	8,891,139 213,063 - - (3,806) 9,100,396 (7,288,829) (831,917) (8,120,746) 979,650
	59,732 66,272 - - - 126,004 - - - 126,004 37,237 15,524 - - (2,571) 50,190 - - - 50,190
	96,969 81,796 - - (2,571) 176,194 - - - 176,194
	(22)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets (cont’d)

Change in E&E assets in 2024 (cont’d)

Change in E&E assets in 2024 (cont’d)
Mineral property Undivided interest % Nunavik – Diamonds Diamrex 100 Acquisition costs Exploration costs Total Nunavik – Diamonds Nunavik – Uranium North Rae 100 Acquisition costs Exploration costs Total Nunavik – Uranium Total Nunavik Total E&E assets	Cost as at August 31, Additions Option payments Sale of property Tax credit Cost as at August 31, Accumulated impairment as at August 31, Impairment Accumulated impairment as at August 31, Net book value as at August 31, 2023 2024 2023 2024 2024 $ $ $ $ $ $ $ $ $ $ 52,948 - - - - 52,948 - (52,948) (52,948) - 7,885 470 - - (205) 8,150 - (8,150) (8,150) -
	60,833 470 - - (205) 61,098 - (61,098) (61,098) -
	484,977 152 - - - 485,129 (484,977) (152) (485,129) - 709,305 - - - - 709,305 (709,305) - (709,305) -
	1,194,282 152 - - - 1,194,434 (1,194,282) (152) (1,194,434) -
	10,243,223 295,481 - - (6,582) 10,532,122 (8,483,111) (893,167) (9,376,278) 1,155,844
	45,514,016 8,069,300 (123,881) (27,312) (1,098,346) 52,333,777 (9,941,237) (936,659) (10,877,896) 41,455,881

• Fully impaired properties for which the Company still holds mining claims. The commodity reflects the exploration work performed during the period. This classification can change over the years.

(23)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets (cont’d)

Change in E&E assets in 2023

Mineral property Undivided interest % James Bay – Gold Elmer 100 Acquisition costs Exploration costs SOQUEM – JB Alliance (a) 50 Acquisition costs Exploration costs Opinaca (c) 25 - 100 Acquisition costs Exploration costs Wabamisk (d) 100 Acquisition costs Exploration costs 2 Wapatik (e) 100 Acquisition costs Exploration costs Kukamas (f) 100 Acquisition costs Exploration costs Other 100 Acquisition costs Exploration costs Total James Bay – Gold James Bay – Chromium-PGE Chromaska 100 Acquisition costs Exploration costs Total James Bay – Chromium-PGE	Cost as at August 31, Additions Option payments Tax credit Cost as at August 31, Accumulated impairment as at August 31, Impairment Accumulated impairment as at August 31, Net book value as at August 31, 2022 2023 2022 2023 2023 $ $ $ $ $ $ $ $ $ 159,896 38,780 - - 198,676 - - - 198,676 23,670,148 9,068,868 - (3,945,875) 28,793,141 - - - 28,793,141
	23,830,044 9,107,648 - (3,945,875) 28,991,817 - - - 28,991,817
	181,525 38,474 - - 219,999 - - - 219,999 2,314,242 88,667 - (41,882) 2,361,027 - - - 2,361,027
	2,495,767 127,141 - (41,882) 2,581,026 - - - 2,581,026
	166,159 - - - 166,159 (148,416) - (148,416) 17,743 286,517 63 - - 286,580 (264,231) - (264,231) 22,349
	452,676 63 - - 452,739 (412,647) - (412,647) 40,092
	23,838 41,580 - - 65,418 - - - 65,418 38,254 323,733 - (141,000) 220,987 - - - 220,987
	62,092 365,313 - (141,000) 286,405 - - - 286,405
	- - - - - - - - - 35,957 - (20,000) - 15,957 - - - 15,957
	35,957 - (20,000) - 15,957 - - - 15,957
	86,718 - (50,000) - 36,718 - - - 36,718 57,450 11,808 - - 69,258 - - - 69,258
	144,168 11,808 (50,000) - 105,976 - - - 105,976
	87,620 32,802 - - 120,422 (57,706) - (57,706) 62,716 59,381 7,537 - (3,289) 63,629 (37,442) - (37,442) 26,187
	147,001 40,339 - (3,289) 184,051 (95,148) - (95,148) 88,903
	27,167,705 9,652,312 (70,000) (4,132,046) 32,617,971 (507,795) - (507,795) 32,110,176
	42,506 3,523 - - 46,029 (32,929) - (32,929) 13,100 918,645 5,456 - (2,380) 921,721 (916,580) - (916,580) 5,141
	961,151 8,979 - (2,380) 967,750 (949,509) - (949,509) 18,241

(24)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets (cont’d)

Change in E&E assets in 2023 (cont’d)

Mineral property Undivided interest % James Bay – Base Metals Mercator 100 Acquisition costs Exploration costs Corne 100 Acquisition costs Exploration costs Others 100 Acquisition costs Exploration costs Total James Bay – Base Metals James Bay – Nickel JBN 100 Acquisition costs Exploration costs Total James Bay – Nickel James Bay – Lithium Dalmas-Galinée (b) 50 Acquisition costs Exploration costs Corvet & Kaanaayaa (j) 100 Acquisition costs Exploration costs JBL 100 Acquisition costs Exploration costs Total James Bay – Lithium Total James Bay*	Cost as at August 31, Additions Option payments Tax credit Cost as at August 31, Accumulated impairment as at August 31, Impairment Accumulated impairment as at August 31, Net book value as at August 31, 2022 2023 2022 2023 2023 $ $ $ $ $ $ $ $ $ 53,001 59,670 - - 112,671 - - - 112,671 34,254 7,585 - (3,310) 38,529 - - - 38,529
	87,255 67,255 - (3,310) 151,200 - - - 151,200
	26,727 30,090 - - 56,817 - - - 56,817 33,152 6,364 - (2,778) 36,738 - - - 36,738
	59,879 36,454 - (2,778) 93,555 - - - 93,555
	822 680 - - 1,502 (822) - (822) 680 - 835 - - 835 - - - 835
	822 1,515 - - 2,337 (822) - (822) 1,515
	147,956 105,224 - (6,088) 247,092 (822) - (822) 246,270
	352,859 149,668 - - 502,527 - - - 502,527 46,498 99,498 - (43,400) 102,596 - - - 102,596
	399,357 249,166 - (43,400) 605,123 - - - 605,123
	51,581 27,081 - - 78,662 - - - 78,662 142,380 161,453 - (73,950) 229,883 - - - 229,883
	193,961 188,534 - (73,950) 308,545 - - - 308,545
	184,322 128,630 (312,952) - - - - - - 105,046 124,283 (171,442) (57,887) - - - - -
	289,368 252,913 (484,394) (57,887) - - - - -
	- 450,864 - - 450,864 - - - 450,864 - 130,341 - (56,893) 73,448 - - - 73,448
	- 581,205 - (56,893) 524,312 - - - 524,312
	483,329 1,022,652 (484,394) (188,730) 832,857 - - - 832,857
	29,159,498 11,038,333 (554,394) (4,372,644) 35,270,793 (1,458,126) - (1,458,126) 33,812,667

(25)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets (cont’d)

Change in E&E assets in 2023 (cont’d)

Mineral property Undivided interest % Nunavik – Gold Rex-Duquet (g & h) 100 Acquisition costs Exploration costs Rex South (h) 100 Acquisition costs Exploration costs Nantais (h) 100 Acquisition costs Exploration costs Other 100 Acquisition costs Exploration costs Total Nunavik – Gold Nunavik – Base Metals Doran 100 Acquisition costs Exploration costs Total Nunavik – Base Metals Nunavik – Diamonds Diamrex 100 Acquisition costs Exploration costs Total Nunavik – Diamonds Nunavik – Uranium North Rae 100 Acquisition costs Exploration costs Total Nunavik – Uranium Total Nunavik Total E&E assets*	Cost as at August 31, Additions Option payments Tax credit Cost as at August 31, Accumulated impairment as at August 31, Impairment Accumulated impairment as at August 31, Net book value as at August 31, 2022 2023 2022 2023 2023 $ $ $ $ $ $ $ $ $ 1,290,271 81,794 - - 1,372,065 (1,054,369) (94,431) (1,148,800) 223,265 4,101,701 90,712 - (15,500) 4,176,913 (3,134,729) (392,404) (3,527,133) 649,780
	5,391,972 172,506 - (15,500) 5,548,978 (4,189,098) (486,835) (4,675,933) 873,045
	453,353 68,186 - - 521,539 (104,513) (159,838) (264,351) 257,188 484,771 118,360 - (9,600) 593,531 (145,089) (182,721) (327,810) 265,721
	938,124 186,546 - (9,600) 1,115,070 (249,602) (342,559) (592,161) 522,909
	172,357 8,100 - - 180,457 (95,299) - (95,299) 85,158 325,365 619 - - 325,984 (204,913) - (204,913) 121,071
	497,722 8,719 - - 506,441 (300,212) - (300,212) 206,229
	738,409 - - - 738,409 (738,282) - (738,282) 127 982,241 - - - 982,241 (982,241) - (982,241) -
	1,720,650 - - - 1,720,650 (1,720,523) - (1,720,523) 127
	8,548,468 367,771 - (25,100) 8,891,139 (6,459,435) (829,394) (7,288,829) 1,602,310
	59,732 - - - 59,732 - - - 59,732 19,817 30,913 - (13,493) 37,237 - - - 37,237
	79,549 30,913 - (13,493) 96,969 - - - 96,969
	52,948 - - - 52,948 - - - 52,948 7,885 - - - 7,885 - - - 7,885
	60,833 - - - 60,833 - - - 60,833
	484,977 - - - 484,977 (484,977) - (484,977) - 709,305 - - - 709,305 (709,305) - (709,305) -
	1,194,282 - - - 1,194,282 (1,194,282) - (1,194,282) -
	9,883,132 398,684 - (38,593) 10,243,223 (7,653,717) (829,394) (8,483,111) 1,760,112
	39,042,630 11,437,017 (554,394) (4,411,237) 45,514,016 (9,111,843) (829,394) (9,941,237) 35,572,779

(26)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets (cont’d)

Exploration and evaluation assets (cont’d)
Acquisition and exploration – Net book value Prepaid exploration expenses	August 31, 2024 $ 41,455,881 38,065 41,493,946	August 31, 2023 $ 35,572,779 57,570
		35,630,349

The 2023 E&E assets have been regrouped where necessary to reflect the same area of interest and to conform with the 2024 presentation.

• a) The James Bay Strategic Alliance (the “JB Alliance”) was formed between Azimut and SOQUEM on September 22, 2016, to identify, acquire and explore gold targets in the Eeyou Istchee James Bay Territory (the “James Bay region”) of Quebec. The properties are held as 50/50 JV projects, each property subject to a JV agreement between Azimut and SOQUEM. Azimut remains the operator of Munischiwan, Pontois and Desceliers. SOQUEM is the operator of Pikwa.

• b) The Dalmas and Galinée properties are subject to a JV agreement between Azimut and SOQUEM. On April 25, 2019, SOQUEM acquired a 50% interest in the Dalmas Property. Azimut remains the operator.

• c) The Opinaca A and B properties are subject to a JV agreement with the following parties:

• Opinaca A is a 50/50 JV project with Everton Resources Inc. (“Everton”).

• Opinaca B is a 25/50/25 JV project with Hecla Quebec Inc. (“Hecla”) and Everton.

• d) The Wabamisk Property is 100% owned by Azimut and consists of 544 mining claims. Eight (8) of the property’s claims are subject to a 2.1% NSR payable to Virginia Mines (1.4%, now Osisko Exploration James Bay Inc.) and SOQUEM (0.7%), with a buy-back of 1.05% for $350,000.

• e) On September 21, 2020, the Company granted Mont Royal Resources Limited (“Mont Royal”) the option to earn a 50% interest in the Wapatik Property by making cash payments to Azimut aggregating $80,000, funding a minimum of $4 million in work expenditures over four (4) years and performing a minimum 4,000 metres of diamond drilling. Under the terms of the agreement, Mont Royal may earn an additional 20% interest, for a total interest of 70%, by making an additional cash payment of $120,000 and incurring an additional $3 million in work expenditures over three (3) years from the election date, and by delivering a - preliminary economic assessment under National Instrument 43-101 on or before the third anniversary of the election notice. On November 9, 2024, Mont Royal decided to terminate the option after making a cumulative cash payment of $60,000 and carrying out work expenditures totaling $2,620,894.

• f) On November 30, 2022, the Company granted KGHM International Ltd (“KGHM”) the option to earn an initial 50% interest (the “first option”) in the Kukamas Property by making cash payments to Azimut aggregating $250,000, funding a minimum of $5 million in work expenditures over four (4) years and performing a minimum of 5,000 metres of diamond drilling. Azimut shall act as the operator during the first option phase.

KGHM may earn an additional 20% interest for a total interest of 70% (the “second option”) by making an additional cash payment of $225,000 and incurring an additional $4.2 million in work expenditures over three (3) years from the election date, and by delivering a preliminary economic assessment under National Instrument 43-101 on or before the third anniversary of the election notice. The second option period may be extended by up to three (3) years by incurring work expenditures of $1,700,000 per extension year and making cash payments to Azimut of $100,000 per extension year. KGHM will act as the operator during the second option phase.

If KGHM has exercised the first option and elects not to exercise the second option, it must pay Azimut $75,000 in cash as a final payment.

• g) The Duquet Property was transferred to Azimut on September 30, 2015, in consideration of an aggregate 2.25% NSR royalty on the property under an agreement reached with SOQUEM, Osisko Exploration James Bay Inc. and Newmont Northern Mining ULC. The Duquet Property was grouped with the Rex Property to form a single entity (the Rex-Duquet Property) and became subject to the Nunavik Alliance (see h ).

• h) The Nunavik Strategic Alliance (the “Nunavik Alliance”) was formed between Azimut and SOQUEM on April 25, 2019, under which SOQUEM has the option to earn an initial 50% interest in the Rex (now Rex-Duquet), Rex South and Nantais properties by investing $16 million in exploration work over four (4) years, of which the first two (2) have a firm commitment of $4 million per year.

(27)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

9 Exploration and evaluation assets (cont’d)

SOQUEM may also acquire an additional 10% interest by investing $8 million per designated property over two (2) years, including the delivery of a preliminary economic assessment. Azimut is the operator of the Nunavik Alliance. During field seasons, SOQUEM has the right to provide up to 30% of the Company’s field personnel at a mutually agreed upon imputed rate.

On April 1, 2023, SOQUEM could decide to a) extend the suspension of its financial obligations for a maximum additional period of 1 year, b) pursue the option within the Alliance, including assuming the costs incurred by Azimut, or c) abandon the option. SOQUEM decided to extend the suspension of its financial obligations until October 1, 2024 and then the option was terminated.

• i) On July 7, 2023, the Company signed Option to Joint Venture agreements with Rio Tinto Exploration Canada Inc (“Rio Tinto) for its wholly owned Corvet and Kaanaayaa lithium properties.

Under the agreements, Rio Tinto can acquire a 50% interest in each property over four (4) years by funding $1.5 million in exploration expenditures in the first year and $5.5 million in subsequent years and making cash payments totalling $850,000, including $250,000 per property on signing. The Company is the operator during this first option phase. Rio Tinto can earn an additional 20% interest over five (5) years with further work expenditures of $50 million per property. Rio Tinto will act as the operator during this second option phase.

Upon Rio Tinto earning a 70% interest in a property, Azimut will have the option to be funded to production through a secured loan from Rio Tinto in exchange for an additional 5% interest in the property. At this stage, the respective interests in the property will be Azimut 25% and Rio Tinto 75%. If exercised, the loan shall accrue interest at SOFR + 4.5% per annum, to be paid back from 50% of the cash flow from production.

• j) On December 8, 2023, the Company signed an Option to Joint Venture agreement with Ophir Gold Corp. (now Ophir Metals Corp.; “Ophir”) for its wholly-owned Pilipas Property. Under the agreement, Ophir can earn up to a 70% interest in the property from the Company over three (3) years by funding $4 million in exploration expenditures and by making payments totalling 6 million Ophir shares and $100,000 in cash.

• k) On April 30, 2024, Azimut and Patriot Battery Metals Inc. entered into an agreement for the sale of Azimut’s 100% interest in the JBN-57 property. In consideration for the sale of its property, Azimut received 150,000 shares of Patriot and $500,000 in cash. Azimut retained a 2% NSR royalty on the property.

10 Asset retirement obligations

The following tables summarize the Company’s asset retirement obligations as at August 31, 2024 and 2023:

Opening balance Change in estimate Unwinding of discount on asset retirement obligations Balance – End of year		2024	Total $ 1,549,924 356,114 71,511 1,977,549		2023
	Rex- Duquet, Rex South $ 1,006,149 175,791 47,071 1,229,011	Elmer $ 543,775 180,323 24,440 748,538		Rex- Duquet, Rex South $ 969,713 (29,607) 66,043 1,006,149	Elmer $ 543,389 (32,808) 33,194 543,775	Total $ 1,513,102 (62,415) 99,237
						1,549,924

The following are the assumptions used to estimate the provisions for asset retirement obligation:

	Rex-Duquet,
	Rex South	Elmer	Total
	$	$	$
Estimated undiscounted cash flows to settle obligations	$1,094,929	$758,316	$1,853,245
Weighed average discount rate	3.43%	3.11%
Estimated number of years before disbursements to settle obligations	1.50 years	8.50 years

(28)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

11 Share capital

An unlimited number of common shares are authorized, without par value, voting and participating.

Issuance of shares and flow-through shares

On September 28, 2023, the Company closed a $8.18 million bought deal private placement financing. The private placement consisted of 2,442,100 premium flow-through common shares at a price of $2.05 that will be used for critical mineral exploration expenditures, 550,600 flow-through common shares at a price of $1.82 per share and 2,082,100 common shares at a price of $1.05.

The underwriters received: (a) a cash commission of $250,509 and (b) 152,244 non-transferable compensation options, representing 3% of the total number of offered shares sold under the offering, each exercisable for one common share of the Company at a price of $1.05 per share until March 28, 2025. The estimated fair value of $52,464 was determined by the BlackScholes pricing model using the following assumptions: risk-free interest of 4.96%, expected life of 18 months, annualized volatility rate of 67,95% (based on the Company’s historical volatility for 18 months up to the issuance date) and dividend rate of 0%.

Flow-through share premium

Flow-through share premium – Beginning of year Addition Amortization Flow-through share premium – End of year	August 31, 2024 $ - 2,875,549 (2,433,235)
	442,314

As at August 31, 2024, an amount of $904,654 of E&E expenditures remains to be incurred, pursuant to the flow-through financing agreement.

12 Underwriters’ options

The following table presents the Underwriters’ option compensation activities for the year ended August 31, 2024:

Outstanding – Beginning of the year Granted Outstanding – End of the year	Number - 152,244 152,244	Weighted average exercise price Expiry $ - 1.05 March 28, 2025 1.05

13 Stock option plan

The Company maintains a stock option plan in which a maximum of 8,190,000 stock options may be granted. The number of shares reserved for issuance under the stock option plan is approximately 9.99% of the Company’s 81,903,844 common shares issued and outstanding as at April 4, 2022, at which time the Company filed for an increase in the stock option plan. The exercise price of the options is set at the closing price of the Company’s shares on the TSXV the day before the grant date. The options have a maximum term of ten (10) years following the grant date. If a blackout period should be in effect at the end of the term, the expiry date will be extended by ten (10) business days following the end of the blackout period. The options vest immediately unless otherwise approved and disclosed by the Board of Directors.

(29)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

13 Stock option plan (cont’d)

The following tables summarize the information about stock options outstanding and their vesting status as at August 31, 2024 and 2023:

Outstanding – Beginning of the year Granted Exercised Expired Outstanding – End of the year Vested – End of the year Exercise price $ Between 0.20 – 0.50 Between 0.51 – 1.00 Between 1.01 – 1.50 Between 1.51 – 2.00	2024 Number Weighted average exercise price $ 5,598,000 0.82 1,212,000 0.93 (555,000) 0.34 (220,000) 0.87 6,035,000 0.88 5,683,000 Options outstanding 810,000 3,857,000 1,360,000 8,000 6,035,000	2024 Number Weighted average exercise price $ 5,598,000 0.82 1,212,000 0.93 (555,000) 0.34 (220,000) 0.87 6,035,000 0.88 5,683,000 Options outstanding 810,000 3,857,000 1,360,000 8,000 6,035,000	2023 Number Weighted average exercise price $ 6,079,000 0.77 300,000 0.89 (670,000) 0.32 (111,000) 1.26 5,598,000 0.82 5,139,000 Options vested Weighted average remaining contractual life (years) 810,000 2.48 3,680,000 7.15 1,185,000 7.63 8,000 5.93 5,683,000 5.93	2023 Number Weighted average exercise price $ 6,079,000 0.77 300,000 0.89 (670,000) 0.32 (111,000) 1.26 5,598,000 0.82 5,139,000 Options vested Weighted average remaining contractual life (years) 810,000 2.48 3,680,000 7.15 1,185,000 7.63 8,000 5.93 5,683,000 5.93	2023 Number Weighted average exercise price $ 6,079,000 0.77 300,000 0.89 (670,000) 0.32 (111,000) 1.26 5,598,000 0.82 5,139,000 Options vested Weighted average remaining contractual life (years) 810,000 2.48 3,680,000 7.15 1,185,000 7.63 8,000 5.93 5,683,000 5.93
	Number 5,598,000 1,212,000 (555,000) (220,000) 6,035,000 5,683,000				Weighted average exercise price $ 0.77 0.89 0.32 1.26
					0.82
					Weighted average remaining contractual life (years) 2.48 7.15 7.63 5.93
					5.93

During the 2024 fiscal year, 1,212,000 stock options were granted to board members, management, employees and consultants, with a fair value of $970,183. These stock options vest immediately except for three grants, for which half the options vest immediately and the other half one year after the grant date.

The options were accounted for at their fair value determined by the Black-Scholes option pricing model based on the vesting period and the following assumptions:

period and the following assumptions:
	Year ended	Year ended
	August 31,	August 31,
	2024	2023
Weighted average closing price the day before the grant date	$0.93	$0.89
Weighted average exercise price	$0.93	$0.89
Weighted average risk-free interest rate	3.93%	2.90%
Weighted average expected volatility	88%	87%
Weighted average expected life	10 years	10 years
Weighted average expected dividend yield	0%	0%
Weighted average fair value of options granted	$0.80	$0.76

On December 17, 2024, the Company granted a total of 845,000 stock options to its directors, officers, employees and consultants. Of this number, 730,000 were granted to its directors and officers, and 115,000 to its employees and consultants. These options have an exercise price of $0.61 per share and are exercisable for a 10-year period.

(30)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

14 Expenses by nature

Expenses by nature
Salaries and fringe benefits Stock-based compensation Professional and maintenance fees Administration and office Business development and administration fees Advertising Rent Insurance Conferences and meetings Depreciation of property and equipment Amortization of intangible assets Depreciation on right-of-use asset General and administrative expenses Salaries for project generation Other exploration expenses Stock-based compensation Refundable duties credit for losses and refundable tax credit for resources, net General exploration	2024 $ 739,560 952,504 226,945 103,758 45,185 2,351 7,874 88,134 197,608 72,810 2,401 60,606 2,499,736	2023 $ 379,346 114,833 324,489 113,986 256,039 7,029 7,912 88,567 105,447 19,045 6,199 54,266
		1,477,158
	12,807 5,612 - (8,040) 10,379	32,205 8,680 153,546 -
		194,431

15 Related party transactions

Compensation of key management

Key management consists of the directors, the President and Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”), the Vice-President of Corporate Development (starting May 16, 2022) (“VPD”) and the Vice-President of Exploration (starting April 13, 2023) (“VPE”). The compensation paid or payable for services provided by key management was as follows:

Salaries Director fees Stock-based compensation	2024 $ 1,032,500 140,000 965,067 2,137,567	2023 $ 947,000 140,000 223,698
		1,310,698

An amount of $560,000 for salaries ($531,000 in 2023) and $94,746 for stock-based compensation ($Nil in 2023) were capitalized to E&E assets.

As at August 31, 2024, accounts payable and accrued liabilities include an amount of $56,250 ($168,874 at August 31, 2023) owed to key management. These amounts are unsecured, non-interest bearing and due on demand.

If termination of employment is for reasons other than gross negligence, the CEO and CFO will be entitled to receive an indemnity equal to twelve (12) months of salary, the VPD shall be entitled to receive an indemnity equal to twelve (12) weeks of salary after completing the first year of employment, increasing by four (4) weeks for every additional year of employment to a maximum of one (1) year of salary, and the VPE shall be entitled to receive an indemnity equal to twelve (12) weeks of salary after one (1) year of employment and increasing by four (4) weeks for every additional year of employment to a maximum of one (1) year of salary after two (2) years of employment. The indemnity paid must not represent more than 10% of the Company’s cash and cash equivalents at such time. As at August 31, 2024, the entitled indemnity amounted to $704,231.

(31)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

15 Related party transactions (cont’d)

In the event of a change of control or a termination of employment following a change of control, the CEO will be entitled to receive an indemnity of $680,000, equal to twenty-four (24) months of salary, the CFO will be entitled to receive an indemnity of $315,000, equal to eighteen (18) months of salary, the VPD will be entitled to receive an indemnity of $300,000 within the twelve (12) months following the change of control, equal to sixteen (16) months of salary, and the VPE will be entitled to receive an indemnity of $146,667 within the twelve (12) months following the change of control, equal to eight (8) months of salary.

16 Income taxes

Component of income tax

The deferred tax recovery consists of the following items:

Deferred income tax expense Amortization of flow-through share premiums Recovery of deferred income taxes	2024 $ 1,351,318 (2,433,235) (1,081,917)	2023 $ - -
		-

The effective income tax rate differs from the Canadian statutory tax rate due to the following items:

Loss before income taxes Combined federal and provincial income tax of 26,5% (26.5% in 2023) Non-deductible expenses Change in unrecognized deductible temporary differences Tax effect of renounced flow-through share expenditures Amortization of flow-through share premiums Adjustments from previous year-end Other Recovery of deferred income taxes	2024 $ (1,039,428) (275,448) 378,277 (210,588) 1,350,363 (2,433,235) 108,714 - (1,081,917)	2023 $ (1,830,966)
		(485,206) 50,729 425,399 - - - 9,078
		-

As at August 31, 2024 and 2023, the significant components of the Company’s deferred income tax assets and liabilities are as follows:

Deferred income tax assets Non-capital losses Capital losses Investments Share and warrant issue expenses Asset retirement obligations Lease liability Property and equipment and intangible assets	2024 $ 2,799,000 38,000 163,000 205,000 524,000 13,000 - 3,742,000	2023 $ 2,565,000 38,000 88,000 280,000 411,000 28,000 220,000
		3,630,000

(32)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

16 Income taxes (cont’d)

Deferred income tax liabilities Property and equipment and intangible assets Exploration and evaluation assets Right-of-use asset Unrecognized deferred income tax liabilities Deferred tax, net Unrecognized deferred income tax assets Deferred tax presented	2024 $ (105,000) (4,974,000) (13,000) (5,092,000) (1,350,000) - (1,350,000)	2023 $ - (3,150,000) (30,000)
		(3,180,000)
		450,000 (450,000)
		-

The ability to realize the tax benefits is dependent upon a number of factors, including the sale of properties. Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable profits will be available to allow the asset to be recognized. Unrecognized deferred tax assets amounted to $450,000 for 2023 (nil for 2024).

As at August 31, 2024, the amounts and expiry dates of the losses available to reduce income tax in future years’ are as follows:

2044 2043 2042 2041 2040 2039 2038 2037 2036 2035 2034 2033 2032 2031 2030 2029 2026	Federal $ 1,189,000 1,529,000 1,075,000 797,000 702,000 74,000 211,000 185,000 306,000 410,000 514,000 436,000 790,000 687,000 719,000 816,000 139,000 10,580,000	Provincial $ 1,189,000 1,529,000 1,076,000 797,000 700,000 74,000 210,000 184,000 306,000 409,000 512,000 434,000 787,000 705,000 719,000 818,000 99,000
		10,548,000

As at August 31, 2024, the Corporation has accumulated capital losses in Canada for income tax purposes amounting to approximately $283,000 ($283,000 – August 31, 2023), and these can be carried forward indefinitely against future capital gains.

17 Net Earnings (Loss) per share

For the year ended August 31, 2023, the diluted loss per share was the same as the basic loss per share since the potential dilutive instruments had an anti-dilutive effect. Accordingly, the basic and diluted loss per share for 2023 was calculated using the basic weighted average number of shares outstanding of 79,671,460 in 2023.

For the year ended August 31, 2024, the diluted net earnings per share was calculated using the basic weighted average number of shares outstanding of 85,221,422 adjusted by the potential dilutive instruments of each stock option where the exercise price was lower than the average market price of the Company’s share. During the year ended August 31, 2024, there were 640,949 stock options vested with an exercise price lower than the average market price of the Company’s shares. As a result, the diluted weighted average number of shares of 85,862,371 was used to calculate the diluted net earnings per share in 2024.

(33)

Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

18 Financial instruments, financial risks and capital management

Classification

The Company’s financial instruments as at August 31, 2024, consist of cash and cash equivalents, amounts receivable, investments and accounts payable, accrued liabilities, and advances received for exploration work. The fair value of these financial instruments is either equal to their fair value (investments) or approximates their carrying value due to their shortterm maturity or the fact that they bear interest at current market rates.

The classification of the Company’s financial instruments is summarized as follows:

Financial assets Classification Cash and cash equivalents Amortized cost Amounts receivable Amortized cost Investments Fair value through profit and loss Financial liabilities Accounts payable and accrued liabilities Financial liabilities at amortized cost Advances received for exploration work Financial liabilities at amortized cost	Fair value	Fair value
	2024 $ 11,766,113 763,484 931,242 13,460,389	2023 $ 3,320,226 1,419,640 36,251
		4,776,117
	3,392,355 687,111 4,079,466	1,265,981 217,609
		1,483,590

The Company defines the fair value hierarchy under which its financial instruments are valued as follows: Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 includes inputs other than quoted prices in Level 1 that are observable for assets or liabilities, either directly or indirectly; and Level 3 includes inputs for assets or liabilities that are not based on observable market data. There was no transfer of hierarchy level during the years ended August 31, 2024, and 2023.

Financial risks

The Company is exposed to various financial risks, such as credit risk, liquidity risk and market risk, from its use of financial instruments.

Credit risk

The Company’s credit risk is primarily attributable to cash and cash equivalents and amounts receivable. Cash and cash equivalents are deposited in Canadian chartered bank accounts or invested in a diversified manner in securities having an investment-grade rating, from which management believes the risk of loss to be minimal.

The credit risk associated with trade accounts receivable from partners arises from the possibility that the partners may be unable to repay their debts. These receivables result from expenditures incurred on behalf of partners. In 2024 and 2023, no allowance for doubtful accounts was recorded. The Company closely follows its cash position to reduce its credit risk on amounts receivable.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. As at August 31, 2024, the Company had sufficient funds, with a cash and cash equivalents balance of $11,766,113 ($3,320,226 – August 31, 2023), to settle current liabilities of $4,572,453 ($1,588,747 – August 31, 2023).

The following are the contractual maturities of financial liabilities, including interest where applicable, as at August 31, 2024:

	Carrying	Contractual	0 to 12	12 to 24	More than
	amount	cash flows	months	months	24 months
	$	$	$	$	$
Accounts payable and accrued liabilities,
advances received for exploration work	4,079,466	4,079,466	4,079,466	-	-
Lease liabilities	50,673	53,491	53,491	-	-

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Azimut Exploration Inc. Notes to Financial Statements For the years ended August 31, 2024 and 2023 (in Canadian dollars)

18 Financial instruments, financial risks and capital management (cont’d)

Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s risk in that respect arises from its cash and cash and equivalents and is not significant.

Equity price risk

Equity price risk is the risk that the fair value of a financial instrument varies due to the changes in the Canadian mining sector and equity market. Changes in the fair value of investments at fair value through profit and loss are recorded under other gains and losses in the Statement of Net Earnings (Loss) and Comprehensive Income (Loss). For the Company’s investments at fair value through profit and loss, a variation of ±10% of the quoted market price as at August 31, 2024, would result in an estimated effect on the net income (loss) of $93,000 for the year ended August 31, 2024 ($4,000 – August 31, 2023).

The fair values of the investments in common shares of Canadian publicly traded companies are classified as Level 1 in the fair value hierarchy.

Capital management

The Company considers the items included in equity as capital components.

In terms of capital management, the objectives of the Company are to maximize its ability to continue as a going concern. Management reviews its capital management approach on an ongoing basis, and as needed, the Company raises funds through private placements.

There were no significant changes in the Company’s approach to capital management during the year ended August 31, 2024. The Company is not subject to any externally imposed capital requirements unless the Company closes a flow-through placement, in which case the funds so raised are committed to being spent on qualifying exploration expenses. The variation of capital components is depicted in the Statements of Changes in Equity.

19 Additional cash flow information

Additional cash flow information
	2024	2023
	$	$
Acquisition of E&E assets included in accounts payable and accrued liabilities	2,620,800	836,855
Depreciation of property & equipment included in E&E assets	285,898	250,871
Refundable duties credit for losses and refundable tax credit for resources presented as a
reduction in E&E assets, net	1,098,346	4,381,262
Option payment received in shares presented as a reduction in E&E assets	240,000	-
Proceeds from sale of E&E assets received as shares, presented as a reduction in E&E assets	1,221,000	-
Stock-based compensation included in E&E assets	171,048	-

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