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Copper Road Resources — Audit Report / Information 2025
Apr 24, 2026
45353_rns_2026-04-24_5103a164-0ae9-4b5c-aecb-e906d1413345.pdf
Audit Report / Information
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COPPER ROAD RESOURCES INC.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2025 and 2024
(EXPRESSED IN CANADIAN DOLLARS)
McGovern Hurley
Audit. Tax. Advisory.
Independent Auditor's Report
To the Shareholders of Copper Road Resources Inc.
Opinion
We have audited the financial statements of Copper Road Resources Inc. (the "Company"), which comprise the statements of financial position as at December 31, 2025 and 2024, and the statements of income and comprehensive income, statements of changes in equity and statements of cash flows for the years then ended, and notes to the financial statements, including material accounting policy information.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2025 and 2024, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).
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 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial statements, which indicates that the Company earned net income of $2,713,673 for the year ended December 31, 2025, and had a positive working capital as at that date. The Company is in the exploration stage and is dependent on future financing to fund its activities and meets its obligations. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that material uncertainties exist that cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. 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.
251 Consumers Road, Suite 800
Toronto, Ontario
M2J 4R3
mcgovernhurley.com
t. 416-496-1234
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McGovern Hurley
Except for the matter described in the Material uncertainty related to going concern section, we have determined that there were no additional key audit matters to communicate in our report.
Other information
Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.
Our opinion on the 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 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.
We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the 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 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.
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 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 judgement and maintain professional skepticism throughout the audit. We also:
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McGovern Hurley
- 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 risks 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.
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.
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McGovern
Hurley
The engagement partner of the audit resulting in this independent auditor's report is Nimesh Ratnarajah.
McGovern Hurley LLP
McGovern Hurley LLP
Chartered Professional Accountants
Licensed Public Accountants
Toronto, Ontario
April 24, 2026
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Copper Road Resources Inc.
Statements of Financial Position
(Expressed in Canadian dollars)
| As at December 31, 2025 | As at December 31, 2024 | |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash | $ 1,125,894 | $ 101,098 |
| Prepaid expenses | 5,181 | 5,534 |
| Sales tax recoverable | 5,585 | 38,655 |
| Marketable securities (note 6) | 3,312,309 | 655,143 |
| Total assets | $ 4,448,969 | $ 800,430 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities | ||
| Amounts payable and other liabilities (note 14) | $ 169,099 | $ 303,463 |
| Flow-through share liability (note 7) | 93,666 | - |
| Total liabilities | 262,765 | 303,463 |
| Shareholders' equity | ||
| Share capital (note 8) | 28,092,260 | 27,622,161 |
| Reserves (notes 9 and 10) | 896,553 | 689,597 |
| Accumulated deficit | (24,802,609) | (27,814,791) |
| Total shareholders' equity | 4,186,204 | 496,967 |
| Total liabilities and shareholders' equity | $ 4,448,969 | $ 800,430 |
The accompanying notes to the financial statements are an integral part of these statements.
Nature of operations and going concern (note 1)
Commitments and contingencies (note 17)
Subsequent events (note 18)
Approved on behalf of the Board:
"Birks Bovaird", Director
"Eric Szustak", Director
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Copper Road Resources Inc.
Statements of Income and Comprehensive Income
(Expressed in Canadian dollars)
| Year Ended December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Operating expenses | ||
| Exploration and evaluation expenditures (note 12) | $ 10,622 | $ 339,587 |
| General and administrative (note 13) | 173,080 | 354,865 |
| Share-based compensation (notes 10 and 14) | 92,341 | 1,171 |
| Operating loss before the following | (276,043) | (695,623) |
| Sale of Copper Road Project (note 12(ii)) | - | 6,810,744 |
| Unrealized gain (loss) on marketable securities (note 6) | 2,898,966 | (655,144) |
| Realized gain on sale of marketable securities (note 6) | 90,750 | - |
| Loss on settlement of debt (note 8(b)(i)) | - | (19,007) |
| Net income and comprehensive income for the year | $ 2,713,673 | $ 5,440,970 |
| Basic and diluted income per share (note 11) | $ 0.04 | $ 0.09 |
| Weighted average number of common shares outstanding - basic and diluted (note 11) | 65,277,016 | 60,024,236 |
The accompanying notes to the financial statements are an integral part of these statements.
Copper Road Resources Inc.
Statements of Changes in Equity
(Expressed in Canadian dollars)
| Share capital | Reserves | Accumulated deficit | Total | |
|---|---|---|---|---|
| Balance, December 31, 2024 | $ 27,622,161 | $ 689,597 | $(27,814,791) | $ 496,967 |
| Shares issued through private placement (note 8(b)(iii)(iv)) | 630,895 | 454,005 | - | 1,084,900 |
| Share issue costs (note 8(b)(iii)(vi)) | (67,130) | (40,881) | - | (108,011) |
| Flow-through share premium (note 7(i)) | (93,666) | - | - | (93,666) |
| Warrants expired (note 9) | - | (220,313) | 220,313 | - |
| Stock options expired (note 10) | - | (78,196) | 78,196 | - |
| Share-based compensation (note 10) | - | 92,341 | - | 92,341 |
| Net income for the year | - | - | 2,713,673 | 2,713,673 |
| Balance, December 31, 2025 | $ 28,092,260 | $ 896,553 | $(24,802,609) | $ 4,186,204 |
| Balance, December 31, 2023 | $ 27,304,551 | $ 806,774 | $(28,232,136) | $ (120,811) |
| Shares issued through settlement of debt (note 8(b)(i)) | 209,075 | - | - | 209,075 |
| Share issue costs (note 8(b)(ii)) | (11,465) | - | - | (11,465) |
| Share issued through private placement (note 8(b)(ii)) | 120,000 | - | - | 120,000 |
| Warrants expired (note 9) | - | (70,593) | 70,593 | - |
| Stock options expired (note 10) | - | (80,755) | 80,755 | - |
| Dividend-in-kind (note 12(ii)) | - | - | (5,174,973) | (5,174,973) |
| Forgiveness of debt by directors | - | 33,000 | - | 33,000 |
| Share-based compensation (note 10) | - | 1,171 | - | 1,171 |
| Net income for the year | - | - | 5,440,970 | 5,440,970 |
| Balance, December 31, 2024 | $ 27,622,161 | $ 689,597 | $(27,814,791) | $ 496,967 |
The accompanying notes to the financial statements are an integral part of these statements.
Copper Road Resources Inc.
Statements of Cash Flows
(Expressed in Canadian dollars)
| Year Ended December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Operating activities | ||
| Net income for the year | $ 2,713,673 | $ 5,440,970 |
| Adjustments for: | ||
| Loss on settlement of debt (note 8(b)(i)) | - | 19,007 |
| Share-based compensation (note 10) | 92,341 | 1,171 |
| Unrealized (gain) loss on marketable securities (note 6) | (2,898,966) | 655,144 |
| Realized gain on sale of marketable securities (note 6) | (90,750) | - |
| Shares received for the sale of Copper Road Project (note 12(ii)) | - | (6,485,260) |
| Changes in non-cash working capital items: | ||
| Prepaid expenses | 353 | 3,328 |
| Sales tax recoverable | 33,070 | (16,901) |
| Amounts payable and other liabilities | (134,364) | 363,445 |
| Net cash used in operating activities | (284,643) | (19,096) |
| Investing activities | ||
| Proceeds from sale of marketable securities (note 6) | 332,550 | - |
| Net cash provided by investing activities | 332,550 | - |
| Financing activities | ||
| Proceeds from private placement | 1,084,900 | 120,000 |
| Shares issue costs | (108,011) | (11,465) |
| Net cash provided by financing activities | 976,889 | 108,535 |
| Net change in cash | 1,024,796 | 89,439 |
| Cash, beginning of year | 101,098 | 11,659 |
| Cash, end of year | $ 1,125,894 | $ 101,098 |
| Supplemental information | ||
| Shares issued for settlement of debt (note 8(b)(i)) | $ - | $ 209,075 |
| Broker warrants granted (note 8(b)(iii)(iv)) | 15,674 | - |
| Dividend in kind (note 12(ii)) | - | 5,174,973 |
| Forgiveness of debt by directors | - | (33,000) |
The accompanying notes to the financial statements are an integral part of these statements.
Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
1. Nature of operations and going concern
Copper Road Resources Inc. (the "Company" or "Copper Road") was incorporated by a Certificate of Incorporation issued pursuant to the provisions of the Ontario Business Corporations Act on December 13, 2002. The Company is engaged in the acquisition, exploration and evaluation of properties for the mining of precious and base metals. The primary office of the Company is located at 82 Richmond Street East, Toronto, Ontario, M5C 1P1.
On February 12, 2024, 100797918 Ontario Inc. (the "Subsidiary") was incorporated. The Subsidiary is a wholly-owned subsidiary of the Company. On May 10, 2024, the Company sold the Subsidiary. Refer to note 12(ii).
These financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period.
The Company has earned income of $2,713,673 for the year ended December 31, 2025 (December 31, 2024 - income of $5,440,970) and as at December 31, 2025, had an accumulated deficit of $24,802,609 (December 31, 2024 - $27,814,791). Although the Company's current working capital is positive, this position is not expected to be sustainable without additional financing.
The business of acquisition, exploration and evaluation for minerals involves a high degree of risk and there can be no assurance that the current exploration programs will result in profitable operations.
The Company is in the process of exploring its mineral properties and has not yet determined whether these properties contain mineral reserves that are economically recoverable. The Company's continued existence is dependent upon the establishment of a sufficient quantity of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development and upon future profitable production or proceeds from the disposition of these assets.
Although the Company has taken steps to verify title to the properties on which it is conducting its exploration activities, these procedures do not guarantee the Company's title. Property title may be subject to government licensing requirements or regulations, social licensing requirements, unregistered prior agreements, unregistered claims and non-compliance with regulatory and environmental requirements. The Company's assets may also be subject to increases in taxes and royalties, renegotiation of contracts, currency exchange fluctuations and restrictions, and political uncertainty.
These factors indicate the existence of a material uncertainties that casts significant doubt on the Company's ability to continue as a going concern. These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and classification of assets and liabilities that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations for the foreseeable future. These adjustments could be material.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
2. Material accounting policies
(a) Statement of compliance
The financial statements have been prepared in accordance with IFRS® Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), effective for the Company's reporting for the year ended December 31, 2025.
The financial statements were approved by the Board of Directors on April 24, 2026.
(b) Basis of presentation
These financial statements have been prepared on a historical cost basis except for financial instruments classified as fair value through profit and loss ("FVTPL") that are carried at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information.
In the preparation of these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Actual results could differ from these estimates. Of particular significance are the estimates and assumptions used in the recognition and measurement of items included in note 2(n).
(c) Functional and reporting currency
The functional and reporting currency, as determined by management, of the Company is the Canadian dollar as this is the principal currency of the economic environment in which the Company operates.
(d) Cash
Cash in the statements of financial position is comprised of cash held on deposit with a Canadian financial institution or in trust by external legal counsel of the Company.
(e) Financial instruments
Under IFRS 9 - Financial Instruments ("IFRS 9"), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. IFRS 9 contains the primary measurement categories for financial assets: measured at amortized cost, fair value through other comprehensive income ("FVOCI") and FVTPL.
Below is a summary showing the classification and measurement bases of our financial instruments.
| Financial instruments | Classification |
|---|---|
| Cash | Amortized cost |
| Marketable securities | FVTPL |
| Amounts payable and other liabilities | Amortized cost |
The carrying value of the Company's cash and amounts payable and other liabilities approximate fair value due to their short-term maturity.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
- Material accounting policies (continued)
(e) Financial instruments (continued)
Financial assets
Initial recognition and measurement
Non-derivative financial assets within the scope of IFRS 9 are classified and measured as FVTPL, FVOCI or amortized cost, as appropriate. The Company determines the classification of financial assets at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows.
All financial assets are recognized initially at fair value plus, in the case of financial assets not at FVTPL, directly attributable transaction costs on the trade date at which the Company becomes a party to the contractual provisions of the instrument.
Financial assets with embedded derivatives are considered in their entirety when determining their classification at FVTPL or at amortized cost.
Subsequent measurement – financial assets at amortized cost
After initial recognition, financial assets measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate ("EIR") method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the statements of income and comprehensive incomes.
Subsequent measurement – financial assets at FVTPL
Financial assets measured at FVTPL include financial assets management intends to sell in the short term and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial assets measured at FVTPL are carried at fair value in the statements of financial position with changes in fair value recognized in other income or expense in the statements of income and comprehensive income.
Subsequent measurement – financial assets at FVOCI
Financial assets measured at FVOCI are non-derivative financial assets that are not held for trading and the Company has made an irrevocable election at the time of initial recognition to measure the assets at FVOCI. The Company does not measure any financial assets at FVOCI.
Derecognition
A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership.
Impairment of financial assets
The Company has no financial assets subject to impairment. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, amounts receivable have been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
- Material accounting policies (continued)
(e) Financial instruments (continued)
Financial liabilities
Initial recognition and measurement
Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL as is the case for held for trading or derivative instruments, or the Company has opted to measure the financial liability at FVTPL. All financial liabilities are recognized initially at fair value and in the case of long-term debt, net of directly attributable transaction costs.
Subsequent measurement – financial liabilities at amortized cost
After initial recognition, financial liabilities measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in finance cost in the statements of income and comprehensive income.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires with any associated gain or loss recognized in other income or expense in the statements of operations.
(f) Exploration and evaluation expenditures
The Company expenses exploration and evaluation expenditures as incurred on mineral properties not commercially viable and financially feasible. Exploration and evaluation expenditures include acquisition costs of mineral properties, property option payments and evaluation activities.
Once a project has been established as commercially viable and technically feasible, related development expenditures are capitalized. This includes costs incurred in preparing the site for mining operations. Capitalization ceases when the mine is capable of commercial production, with the exception of development costs that give rise to a future benefit.
Option payments received are recorded as property option revenue in profit or loss when received.
(g) Provisions
A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flows to present value.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
2. Material accounting policies (continued)
(h) Flow-through shares
The Company will from time to time, issue flow-through common shares to finance a significant portion of its exploration program. Pursuant to the terms of the flow-through share agreements, these shares transfer the tax deductibility of qualifying resource expenditures to investors. On issuance, the Company bifurcates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability, and ii) share capital. Upon expenditures being incurred, the Company derecognizes the liability and recognizes a premium on flow-through shares to the statement of income and comprehensive income.
Proceeds received from the issuance of flow-through shares are restricted to be used only for Canadian resources property exploration expenditures. The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Look-back Rule, in accordance with Government of Canada flow-through regulations. When applicable, this tax is accrued as a financial expense until paid.
(i) Share-based payment transactions
Where equity-settled share options are awarded to employees and consultants, the fair value of the options at the date of grant is charged to the statements of income and comprehensive income over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.
Where the terms and conditions of options are modified, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the statements of loss over the remaining vesting period. When stock options are granted by the Company, the corresponding increase is recorded to contributed surplus.
Where equity instruments are granted to employees, they are recorded at the fair value at the grant date. The grant date fair value is recognized in the statements of income and comprehensive income over the vesting period, described as the period during which all the vesting conditions are to be satisfied.
Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statements of income and comprehensive income. When the value of goods and services received in exchange for the share-based payment cannot be reliably estimated, the transaction is measured at the fair value of the equity instrument granted.
All equity-settled share-based payments are reflected in contributed surplus, until exercised. Upon exercise, the shares are issued from treasury and the amount reflected in contributed surplus is credited to share capital for any consideration paid. Stock option expense incorporates an expected forfeiture rate. Amounts recorded for expired stock options and warrants are transferred to accumulated deficit.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
2. Material accounting policies (continued)
(j) Restoration, rehabilitation and environmental obligations
A legal or constructive obligation to incur restoration, rehabilitation and environmental costs may arise when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property interest. Such costs are discounted to their net present value and are provided for and capitalized at the start of each project to the carrying amount of the asset, as soon as the obligation to incur such costs arises. Discount rates using a pretax rate that reflects the time value of money are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either a unit-of-production or the straight-line method as appropriate. 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 does not currently have any legal or constructive obligations relating to the reclamation of its exploration and evaluation projects as at December 31, 2025 and 2024.
(k) Income taxes
Income tax comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case the income tax is also recognized directly in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years.
In general, deferred tax is recognized in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the financial position reporting date and are expected to apply when the deferred tax asset or liability is settled. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized.
(l) Earnings per share
The Company presents basic and diluted earnings per share data for its common shares, calculated by dividing the earnings attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. The treasury stock method is used to arrive at the diluted earnings per share, which is determined by adjusting the earnings attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all options and warrants outstanding that are dilutive. The Company's diluted earnings per share does not include the effect of stock options and warrants as they are anti-dilutive.
(m) Operating segments
The Company has one operating segment which is the acquisition and exploration of mineral properties in Canada. In making this determination, the chief operating decision maker reviews various factors including geographical location of the properties and that activity on all properties is managed centrally.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
2. Material accounting policies (continued)
(n) Material accounting judgments and estimates
The preparation of these financial statements in accordance with IFRS requires the Company to make judgments in applying its accounting policies and estimates and assumptions about the future. These judgments, estimates and assumptions affect the reported amounts of assets, liabilities and expenses, and the related disclosure of assets and liabilities included in the Company's financial statements. The Company evaluates its estimates on an ongoing basis. Such estimates are based on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances, and these estimates form the basis for making judgments about the carrying value of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The following discusses the most significant accounting judgments, estimates and assumptions that the Company has made in the preparation of its financial statements.
- The measurement of income taxes requires management to make judgments in the interpretation and application of the relevant tax laws. The actual amount of income taxes only becomes final upon filing and acceptance of the tax return by the relevant authorities, which occurs subsequent to the issuance of the financial statements.
- The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company's provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company's income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company's interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.
- Share-based payments - Estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Company has made estimates as to the volatility of its own shares, the probable life of options granted and the time of exercise of those options.
- Contingencies (note 17).
- Going concern (note 1).
3. New accounting standard adopted and future accounting standards
New accounting standard adopted
Certain pronouncements were issued by the IASB or International Financial Reporting Interpretations Committee ("IFRIC") and have been adopted in the current period or are applicable for future periods.
Lack of Exchangeability (Amendments to IAS 21)
In August 2023, the IASB amended IAS 21, The effects of changes in foreign exchange rates, to clarify when a currency is exchangeable into another currency; and how a company estimates a spot rate when a currency lacks exchangeability. Under the amendments, companies will need to provide new disclosures to help users assess the impact of using an estimated exchange rate on financial statements. The amendments apply for annual reporting periods beginning on or after January 1, 2025. The adoption did not have an impact on the Company's financial statements.
- 15 -
Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
- New accounting standard adopted and future accounting standards (continued)
Future accounting pronouncements
Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2026. Many are not applicable or do not have a significant impact to the Company and have been excluded.
Presentation and Disclosure in Financial Statements (IFRS 18)
In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting of financial performance. The new standards replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new categories and required subtotals in the statement of profit and loss and also requires disclosure of management-defined performance measures. It also includes new requirements for the location, aggregation and disaggregation of financial information. The standard is effective for annual reporting periods beginning on or after January 1, 2027, including interim financial statements. Retrospective application is required and early adoption is permitted.
Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)
In May 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments – Disclosures. The amendments clarify the derecognition of financial liabilities and introduces an accounting policy option to derecognize financial liabilities that are settled through an electronic payment system. The amendments also clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features and the treatment of non-recourse assets and contractually linked instruments (CLIs). Further, the amendments mandate additional disclosures in IFRS 7 for financial instruments with contingent features and equity instruments classified at FVOCI.
The amendments are effective for annual periods starting on or after January 1, 2026. Retrospective application is required and early adoption is permitted.
- Capital risk management
The Company manages its capital with the following objectives:
- to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and
- to maximize shareholder return.
The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by management and the Board of Directors on an ongoing basis. The Company's ability to continue to carry out its operating activities is uncertain and dependent upon the continued financial support of its shareholders and securing additional financing.
The Company considers its capital to be equity, comprising share capital, reserves and accumulated deficit, which at December 31, 2025, totaled an equity of $4,186,204 (December 31, 2024 - $496,967) which is an increase of $3,689,237.
The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities.
There are no restrictions on the Company's capital and there were no significant changes in the Company's approach to capital management for the reporting periods. The Company is not subject to any capital requirements imposed by a lending institution or regulatory body, other than of the TSXV which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months.
- 16 -
Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
5. Financial risk management
Financial risk
The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate risk, foreign currency risk and price risk).
(i) Credit risk
Credit risk is the risk of loss associated with a counterpart's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash. Cash is held with a major Canadian chartered bank, from which management believes the risk of loss to be minimal.
(ii) 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. The Company's liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flow primarily from its financing activities or sale of assets. As at December 31, 2025, the Company had cash of $1,125,894 (December 31, 2024 - $101,098) to settle current liabilities of $262,765 (December 31, 2024 - $303,463). All of the Company's financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. The Company regularly evaluates its cash position to ensure preservation and security of capital as well as liquidity.
The Company notes that the flow-through share liability which represents $93,666 of current liabilities balance is not settled through cash payment. Instead, this balance is amortized against qualifying flow-through expenditures which are required to be incurred before December 31, 2026.
The Company's ability to continually meet its obligations is uncertain and dependent upon the continued financial support of its shareholders and securing additional financing.
Fair Value Hierarchy
Financial instruments recorded at fair value on the statements of financial position are classified using a financial value hierarchy that reflects the significance of the inputs used in marking the measurements. The fair value hierarchy has the following levels:
- Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 - valuation techniques based on inputs other than quoted prices including Level 1 that are observable for assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3 - valuation techniques using inputs for the asset and liability that are not based on observable market data (unobservable inputs).
The Company's investment in Sterling Metals Corp. is classified as level 1.
(iii) Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates and equity price.
(a) Interest rate risk
The Company has cash balances and no interest-bearing debt at December 31, 2025. The Company periodically monitors the investments it makes and is satisfied with the creditworthiness of its Canadian chartered bank.
- 17 -
Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
5. Financial risk management (continued)
(iii) Market risk (continued)
(b) Foreign currency risk
The Company's functional and reporting currency is the Canadian dollar and major purchases are transacted in Canadian dollars. As a result, the Company's exposure to foreign currency risk is $nil.
(c) Price risk
The ability of the Company to acquire new properties and the future profitability of the Company is directly related to the market price of certain minerals. The Company's risk management objectives are to ensure that business and financial exposures to risk that have been identified and measured are minimized using the most effective and efficient methods to reduce, transfer and, when possible, eliminate such exposures. Operating decisions contemplate associated risks and management strives to structure proposed transactions to avoid or reduce risk whenever possible.
The Company is exposed to price risk with respect to equity prices. Equity price risk is defined as the potential adverse impact on the Company's loss due to movements in individual equity prices or general movements in the level of stock market.
The Company has $3,312,309 invested in marketable securities as at December 31, 2025. These investments are classified as FVTPL and are subject to equity price risk. The fluctuation in the price of these marketable securities could have a significant impact on the Company's profit or loss for the year ended December 31, 2025. The Company's year end equity would also increase or decrease by the additional profit or loss amount. Had these investments increased/decreased by 10% with all other variables held constant, the Company's reported net income for the year ended December 31, 2025, would have been approximately $331,200 (2024 - $65,500) higher/lower. Similarly, as at December 31, 2025, reported shareholders' equity would have been approximately $331,200 (2024 - $65,500) higher/lower as a result of this.
6. Marketable securities
| Number of Shares | Fair market value | |
|---|---|---|
| Opening Balance, December 31, 2023 | - | $ - |
| Common shares of Sterling Metal Corp. ("Sterling") (Note 12 (ii)) | 21,838,123 | 1,310,287 |
| Unrealized loss | - | (655,144) |
| Balance, December 31, 2024 | 21,838,123 | 655,143 |
| Stock consolidation | (19,654,311) | - |
| Unrealized gain | - | 2,898,966 |
| Proceeds on disposal of shares | (325,000) | (332,550) |
| Realized gain on disposal | - | 90,750 |
| Balance, December 31, 2025 | 1,858,812 | $ 3,312,309 |
- 18 -
Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
- Flow-through share liability
The following is a continuity schedule of the liability of the flow-through shares issuance:
| Balance, December 31, 2023 and 2024 | $ - |
|---|---|
| Liability incurred on flow-through shares issued (i) | 93,666 |
| Balance, December 31, 2025 | $ 93,666 |
(i) The flow-through units issued in the private placements completed in December 24, 2025 and December 31, 2025 were issued at a premium to the market price in recognition of the tax benefits accruing to subscribers (Note 8(b)(iii)(iv)). The flow-through premium was calculated to be $93,666.
- Share capital
a) Authorized share capital
The authorized share capital consisted of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
b) Common shares issued
As at December 31, 2025, the issued share capital amounted to $28,092,260 (December 31, 2024 - $27,622,161). Changes in issued share capital for the periods presented are as follows:
| Number of common shares | Amount | |
|---|---|---|
| Balance, December 31, 2023 | 55,214,951 | $ 27,304,551 |
| Shares issued for settlement of debt (i) | 3,801,365 | 209,075 |
| Shares issued through private placements (ii) | 6,000,000 | 120,000 |
| Share issue costs (ii) | - | (11,465) |
| Balance, December 31, 2024 | 65,016,316 | 27,622,161 |
| Shares issued through private placements (iii)(iv) | 24,780,837 | 1,084,900 |
| Warrants (iii)(iv) | - | (454,005) |
| Flow-through share premium (iii)(iv) | - | (93,666) |
| Share issue costs (iii)(iv) | - | (67,130) |
| Balance, December 31, 2025 | 89,797,153 | $ 28,092,260 |
(i) On March 21, 2024, the Company issued 3,801,365 common shares of the Company to settle $190,068 of accounts payable for professional services. The fair value of the shares issued was $209,075 based on the quoted market price, resulting in a loss on settlement of debt of $19,007.
(ii) On September 10, 2024, the Company completed a non-brokered private placement consisting of the sale of 6,000,000 common shares of the Company at a price of $0.02 per share, for aggregate gross proceeds of $120,000. Of these shares, 2,500,000 were issued to certain directors of the Company. There were share issue costs of $11,465.
(iii) On December 24, 2025, the Company completed a non-brokered private placement of 9,952,447 flow-through units of the Company at a price of $0.045 per flow-through unit and 2,435,000 hard-dollar units ("Units") at a price of $0.04 per Unit for aggregate gross proceeds of $545,260. Each flow-through unit was comprised of one common share of the Company issued as a "flow-through share" within the meaning of the Income Tax Act (Canada) (the "Tax Act") and one warrant. Each unit was comprised of one common share of the Company and one warrant. Each warrant entitles the holder thereof to purchase one common share of the Company at a price of $0.05 for a period of 18 months after the date of issuance.
- 19 -
Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
- Share capital (continued)
b) Common shares issued (continued)
The fair value of the 12,387,447 warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: exercise price of $0.05; expected dividend yield of 0%; risk-free interest rate of 2.54%; expected volatility of 255% and an expected life of 18 months. The fair value assigned to these warrants was $224,400.
In connection with the offering, the Company paid a commission in the aggregate amount of $53,475 and issued 762,862 finder warrants to eligible finders. Each finder's warrant entitles the holder to acquire one common share in the capital of the Company at a price of $0.05 for a period of 18 months following the closing of the offering. The fair value of the 762,862 finder's warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: exercise price of $0.05; expected dividend yield of 0%; risk-free interest rate of 2.54%; expected volatility of 255% and an expected life of 18 months. The fair value assigned to these warrants was $13,822. The flow-through premium was calculated to be $49,762 using a residual approach.
(iv) On December 31, 2025, the Company completed a non-brokered private placement of 3,380,889 flow-through units of the Company at a price of $0.045 per flow-through unit, 2,700,000 flow-through units of the Company at a price of $0.05 per flow-through unit and 6,312,500 hard-dollar units ("Units") at a price of $0.04 per Unit for aggregate gross proceeds of $539,640. Each flow-through unit was comprised of one common share of the Company issued as a "flow-through share" within the meaning of the Tax Act and one warrant. Each unit was comprised of one common share of the Company and one warrant. Each warrant entitles the holder thereof to purchase one common share of the Company at a price of $0.05 for a period of 18 months after the date of issuance.
The fair value of the 12,393,389 warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: exercise price of $0.05; expected dividend yield of 0%; risk-free interest rate of 2.55%; expected volatility of 274% and an expected life of 18 months. The fair value assigned to these warrants was $229,564.
In connection with the offering, the Company paid a commission in the aggregate amount of $33,000, legal fees of $34,888 related to both December 24th and December 31st financing and issued 100,000 finder warrants to eligible finders. Each finder's warrant entitles the holder to acquire one common share in the capital of the Company at a price of $0.05 for a period of 18 months following the closing of the offering. The fair value of the 100,000 finder's warrants was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: exercise price of $0.05; expected dividend yield of 0%; risk-free interest rate of 2.55%; expected volatility of 274% and an expected life of 18 months. The fair value assigned to these warrants was $1,852. The flow-through premium was calculated to be $43,604 using a residual approach.
Of these units, 1,333,334 were subscribed by certain directors and officers of the Company for total proceeds of $60,000.
- Warrants
The following table reflects the continuity of warrants for the years ended December 31, 2025 and December 31, 2024:
| Number of warrants | Weighted average exercise price ($) | |
|---|---|---|
| Balance, December 31, 2023 | 10,862,180 | 0.161 |
| Expired | (787,500) | 0.300 |
| Balance, December 31, 2024 | 10,074,680 | 0.151 |
| Issued (note 8(b)(iii)(iv)) | 25,643,699 | 0.050 |
| Expired | (6,872,500) | 0.160 |
| Balance, December 31, 2025 | 28,845,879 | 0.059 |
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
- Warrants (continued)
The following table reflects the actual warrants issued and outstanding as of December 31, 2025:
| Number of warrants outstanding | Grant date fair value ($) | Exercise price ($) | Expiry date |
|---|---|---|---|
| 3,202,180 | 118,196 | 0.150 | July 26, 2026 |
| 13,150,309 | 205,929 | 0.050 | June 24, 2027 |
| 12,493,390 | 207,195 | 0.050 | June 30, 2027 |
| 28,845,879 | 531,320 | 0.059 |
- Stock options
The Company adopted an incentive stock option plan (the "Plan"), dated December 13, 2002, which provides that the directors of the Company may, from time to time, grant to directors, employees and consultants of the Company, or any subsidiary of the Company, the option to purchase common shares, provided that the number of common shares reserved for issuance under the Plan not exceed ten percent (10%) of the issued and outstanding common shares. In addition, the number of common shares reserved for issuance to any one person shall not exceed five percent (5%) of the issued and outstanding common shares in any twelve-month period. The Plan provides that the terms of the option and the option price shall be fixed by the directors of the Company. Stock options granted under the Plan may not be for a period longer than five years and the exercise price must be paid in full upon exercise of the option.
The following table reflects the continuity of stock options:
| Number of stock options | Weighted average exercise price ($) | |
|---|---|---|
| Balance, December 31, 2023 | 3,770,000 | 0.15 |
| Expired | (820,000) | 0.05 |
| Balance, December 31, 2024 | 2,950,000 | 0.18 |
| Granted (i)(ii) | 3,600,000 | 0.05 |
| Expired | (800,000) | 0.15 |
| Balance, December 31, 2025 | 5,750,000 | 0.09 |
(i) On October 3, 2025, the Company granted a total of 1,600,000 incentive stock options to officers and directors of the Company at the exercise price of $0.05, expiring October 3, 2030. The options vested immediately. The grant date fair value of $69,989 or $0.0437 per option was valued using the Black-Scholes valuation model with the following assumptions: share price of $0.045, expected dividend yield of 0%, expected volatility of 196% which is based on historical volatility of the Company's share price, risk-free rate of return of 2.73% and an expected maturity of 5 years. For the year ended December 31, 2025, $69,989 was expensed to share-based compensation (year ended December 31, 2024 - $nil).
(ii) On December 8, 2025, the Company granted a total of 2,000,000 incentive stock options to consultants of the Company at the exercise price of $0.05, expiring December 8, 2027. The options vest 50% upon the date of TSXV approval for the Company's option transactions as described in the consulting agreements between the parties and 50% once $1 million of expenditures on the Ben Nevis Project have been incurred by the Corporation. The grant date fair value of $97,310 or $0.0487 per option was valued using the Black-Scholes valuation model with the following assumptions: share price of $0.05, expected dividend yield of 0%, expected volatility of 246% which is based on historical volatility of the Company's share price, risk-free rate of return of 2.64% and an expected maturity of 2 years. For the year ended December 31, 2025, $22,352 was expensed to share-based compensation (year ended December 31, 2024 - $nil).
(iii) The portion of the estimated fair value of options granted in the current and prior years and vested during the year ended December 31, 2025, amounted to $92,341 (year ended December 31, 2024 - $1,171).
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
10. Stock options (continued)
The following table reflects the actual stock options issued and outstanding as of December 31, 2025:
| Expiry date | Exercise price ($) | Weighted average remaining contractual life (years) | Number of options outstanding | Number of options vested (exercisable) |
|---|---|---|---|---|
| July 12, 2026 | 0.11 | 0.53 | 100,000 | 100,000 |
| February 10, 2027 | 0.15 | 1.11 | 1,250,000 | 1,250,000 |
| November 2, 2027 | 0.15 | 1.84 | 800,000 | 800,000 |
| October 3, 2030 | 0.05 | 4.76 | 1,600,000 | 1,600,000 |
| December 8, 2027 | 0.05 | 1.94 | 2,000,000 | - |
| 2.50 | 5,750,000 | 3,750,000 |
11. Net income per common share
The calculation of basic and diluted income per share for the year ended December 31, 2025 was based on the income attributable to common shareholders of $2,713,673 (December 31, 2024 - $5,440,970) and the weighted average number of common shares outstanding of 65,277,016 (December 31, 2024 - 60,024,236). Diluted income per share did not include the effect of 5,750,000 stock options (December 31, 2024 - 2,950,000 stock options) and 28,845,879 warrants (December 31, 2024 - 10,074,680 warrants) as they are anti-dilutive.
12. Exploration and evaluation expenditures
| Year Ended December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Copper Road Project | ||
| Drilling | $ - | $ 206 |
| Legal fees | - | 180 |
| Property acquisition costs (i) | - | 55,000 |
| Property maintenance | - | 4,027 |
| Other | - | 3,592 |
| $ - | $ 63,005 | |
| Mount Jamie North Property | ||
| General and geology | - | 275,920 |
| Property maintenance | 8,103 | 662 |
| $ 8,103 | $ 276,582 | |
| Ben Nevis Property | ||
| Legal | 2,519 | - |
| $ 2,519 | $ - | |
| Total | $ 10,622 | $ 339,587 |
Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
12. Exploration and evaluation expenditures (continued)
(i) On March 4, 2024, the Company paid $40,000 according to the East Breccia Option Agreement and paid $15,000 according to the Tribag Option Agreement.
(ii) On May 10, 2024, the Company completed the sale of its 100% interest in the Copper Road Project located in Batchewana Bay, Ontario ("Copper Road Project") from the Company (the "Transaction") to Sterling.
Pursuant to the terms of the share purchase agreement dated February 13, 2024, Sterling acquired the Subsidiary which holds the Copper Road Project, in consideration for:
i. the payment of $460,000 in cash; and
ii. the issuance of an aggregate of 108,087,669 common shares of Sterling (the "Consideration Shares") (fair value of $6,485,260 based on the quoted market price of the shares at the time of closing),
The Company incurred legal fees and other transaction costs for a total of $129,516, resulting in a gain of sale of $6,815,744.
On March 26, 2024, the Company's board of directors declared a dividend-in-kind for a portion of the common shares of Sterling held by the Company to the Company's shareholders of record as at May 10, 2024. Each holder of the Company's common shares on the record date would receive 1.46 of a Sterling share for each one common share held by the Company's shareholders. As a result, a total of 86,249,546 shares of Sterling were distributed by way of the dividend-in-kind and the Company retained 21,838,123 shares representing approximately 9% of Sterling shares outstanding.
During the year ended December 31, 2024, the Company recognized no realized gain or loss on the disposition of Sterling shares in connection with the issuance of the dividend-in-kind.
Subsequent to acquiring the Sterling shares, a director and officer of the Company became a director of the Sterling.
(a) Copper Road Project
On September 18, 2017, the Company acquired a 100% interest in certain mining claims situated in Kincaid, Ryan and Palmer townships in the Province of Ontario.
All of the claims carry a 0.5% royalty, with the exception of certain claims which carry an additional 1.5% royalty.
On March 10, 2021, the Company announced that it entered into an option agreement (the "East Breccia Option Agreement") to earn a 100% interest in certain mineral claims in Batchewana Bay, Ontario making up the East Breccia project (the "East Breccia Project") and a second option agreement with current claims holders (the "Tribag Option Agreement") to earn a 100% interest in certain minerals claims in Batchewana Bay, Ontario making up the Tribag project (the "Tribag Project").
- 23 -
Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
12. Exploration and evaluation expenditures (continued)
East Breccia Option Agreement
Under the terms of the East Breccia Option Agreement, the Company had the option to acquire a 100% interest in the East Breccia Project by making the following cash payments and shares issuances:
- cash payment of $15,000 (paid) on the day of acceptance of the transaction by the TSXV (received on April 22, 2021);
- issuance of 200,000 common shares of the Company ("Shares") (issued and valued at $22,000) by the 30th day following April 22, 2021;
- cash payment of $25,000 (paid) and issuance of 200,000 Shares (issued and valued at $40,000) by the first anniversary of April 22, 2022;
- cash payment of $35,000 (paid) and issuance of 200,000 Shares (issued and valued at $27,000) by the second anniversary of April 22, 2023; (paid)
- cash payment of $40,000 (paid) and issuance of 100,000 Shares by the third anniversary of April 22, 2024; and
- cash payment of $50,000 and issuance of 100,000 Shares by the fourth anniversary of April 22, 2025.
To further maintain the East Breccia Option Agreement in full force and effect, the Company shall also incur cumulative exploration expenditures on the East Breccia Project of $300,000 as follows: (1) $100,000 on or before the second anniversary of the closing; (2) $100,000 on or before the third anniversary of the closing; and (3) $100,000 on or before the fourth anniversary of the closing.
Under the terms of the East Breccia Option Agreement, the Company will pay a 2% Net Smelter Return royalty (the "NSR") to the vendors on commencement of commercial production. The Company will have the right, at any time until one year after commercial production to purchase 1% of the 2% NSR for $1,000,000.
Tribag Option Agreement
Under the terms of the East Breccia Option Agreement, the Company has the option to acquire a 100% interest in the Tribag Project by making the following cash payments and Shares issuances:
- cash payment of $15,000 (paid) on the date of execution of the Tribag Option Agreement;
- issuance of 500,000 Shares (issued and valued at $55,000) by the 30th day following April 22, 2021;
- cash payment of $30,000 (paid) and issuance of 250,000 Shares (issued and valued at $50,000) by the first anniversary of April 22, 2022;
- cash payment of $15,000 (paid) and issuance of 250,000 Shares (issued and valued at $33,750) by the second anniversary of April 22, 2023; and
- cash payment of $15,000 (paid) and issuance of 500,000 Shares by the third anniversary of April 22, 2024.
To further maintain the Tribag Option Agreement in full force and effect, the Company shall also incur cumulative exploration expenditures on the Tribag Project of $400,000 as follows: (1) $100,000 on or before the second anniversary of the execution date; (2) $100,000 on or before the third anniversary of the execution date; and (3) $200,000 on or before the fourth anniversary of the execution date.
Under the terms of the Tribag Option Agreement, the Company will pay a 2% NSR to the vendors on commencement of commercial production. The Company will have the right, at any time until one year after completion of any bankable feasibility study to purchase 0.5% of the 2% NSR for $500,000, and at any time until one year after commercial production to purchase an additional 0.5% of the 2% NSR for $750,000.
The Copper Road Project was sold during 2024.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
12. Exploration and evaluation expenditures (continued)
(b) Mount Jamie North Property
On June 3, 2020, the Company announced it entered into an option agreement with Bounty Gold Corp. ("Bounty"), a private company, to purchase a 100% interest in the Mount Jamie North Property (the "MJ Property") located in Red Lake, Ontario. The MJ Property consists of certain mineral claims located in Todd Township, Red Lake Mining Division, District of Kenora, Northwestern Ontario.
Under the terms of the option agreement, the Company had the option to acquire a 100% interest in the MJ Property by making the following cash payments and share issuances:
- An initial cash payment of $7,500 (paid) and the issuance of 150,000 common shares of the Company (issued and valued at $14,250) by the seventh day following acceptance of the TSXV (the "Closing");
- A cash payment of $7,500 (paid) and issuing 150,000 common shares (issued and valued at $16,500) within 180 days after the Closing; and
- A cash payment of $10,000 (paid) and issuing 200,000 common shares (issued and valued at $17,000) within one year after the Closing.
In addition, the Company will pay a 2.0% NSR to Bounty on commencement of commercial production. The Company will have the right, at any time and upon 30 days' notice, to purchase 1.0% of the 2.0% NSR for $1,000,000.
13. General and administrative
| Year Ended December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Part XII.6 tax expense | $ - | $ 9,500 |
| Professional fees (note 14) | 95,862 | 181,758 |
| Management compensation (note 14) | 15,000 | 90,000 |
| Office and general | 14,364 | 24,911 |
| Director fees (note 14) | - | (9,000) |
| Reporting issuer costs | 32,423 | 37,817 |
| Shareholder and investors relations | 6,091 | 17,379 |
| Business development | 8,500 | 1,500 |
| Bank charges | 840 | 1,000 |
| $ 173,080 | $ 354,865 |
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
14. Related party disclosures
Related parties include the Board of Directors and officers, close family members and enterprises that are controlled by these individuals as well as certain persons performing similar functions.
Remuneration of directors and key management personnel including Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and directors of the Company was as follows:
| Year Ended December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Management compensation and salaries and benefits (1) | $ 15,000 | $ 81,000 |
| Share-based compensation | $ 69,989 | $ 312 |
(1) Salaries and benefits include director fees. The Board of Directors and select officers do not have employment or service contracts with the Company. Directors are entitled to director fees and stock options for their services and officers are entitled to fees and stock options for their services. As at December 31, 2025, officers and directors (excluding the CFO) were owed $nil (December 31, 2024 - $nil) and this amount was included in amounts payable and other liabilities.
The Company entered into the following transactions with related parties:
| Notes | Year Ended December 31, | ||
|---|---|---|---|
| 2025 | 2024 | ||
| Marrelli Group | (i) | $ 57,576 | $ 47,464 |
| Dixcart Trust Corporation Limited ("Dixcart") | (ii) | $ 17,176 | $ 20,093 |
(i) During the year ended December 31, 2025, the Company paid professional fees of $57,576 (year ended December 31, 2024 - $47,464) to Marrelli Support Services Inc., and certain of its affiliates, together known as the "Marrelli Group", for: (i) bookkeeping and office support, (ii) regulatory filing services, and (iii) press release services. The Marrelli Group was owed $14,482 (December 31, 2024 - $nil) and these amounts were included in amounts payable and other liabilities.
(ii) Shaun Drake, who is the Corporate Secretary Officer of the Company, is an employee of Dixcart. During the year ended December 31, 2025, the Company paid professional fees of $17,176 (year ended December 31, 2024 - $20,093) to Dixcart. The amounts charged by Dixcart are recorded at their exchange value. As at December 31, 2025, Dixcart was owed $3,021 (December 31, 2024 - $14,561).
(iii) See note 8(b)
(iv) A director of the Company is a director of Sterling. Please see note 6.
All amounts due to related parties are unsecured, non-interest bearing and due on demand.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
15. Income taxes
(a) Provision for income taxes
Major items causing the Company's effective income tax rate to differ from the combined Canadian federal and provincial statutory rate of 26.5% (2024 - 26.5%) were as follows:
| Year Ended December 31, | 2025 | 2024 |
|---|---|---|
| Income before income taxes | $ 2,713,673 | $ 5,440,970 |
| Expected income tax expense based on statutory rate: | (719,000) | (1,442,000) |
| Adjustment to expected income tax recovery | ||
| Non-capital loss carry-forward | - | 15,000 |
| Tax pools not previously valued | - | 1,677,000 |
| Marketable securities | 27,000 | 87,000 |
| Share-based compensation | (24,000) | - |
| Flow-through renunciation | - | (71,000) |
| Expenses not deductible for tax purposes | - | (8,000) |
| Other | 400,000 | - |
| Change in tax assets not recognized | 316,000 | (258,000) |
| Income tax recovery | $ - | $ - |
(b) Deferred income tax
Deferred taxes are a result of temporary differences that arise due to the differences between the income tax values and the carrying amount of assets and liabilities.
| Year Ended December 31, | 2025 | 2024 |
|---|---|---|
| Recognized deferred tax assets and liabilities: | ||
| Investments | $ (297,000) | $ - |
| Non-capital loss carry-forwards | 282,000 | - |
| Capital losses | 15,000 | - |
| Deferred income tax liability | $ - | $ - |
Deferred income tax assets have not been recognized in respect of the following deductible temporary differences:
| Year Ended December 31, | 2025 | 2024 |
|---|---|---|
| Unrecognized deductible temporary differences | ||
| Non-capital loss carry-forwards | $ 2,213,000 | $ 6,691,000 |
| Marketable securities | - | 655,000 |
| Share issue costs | - | 123,000 |
| Resource properties | 3,575,000 | - |
| Financing costs | 162,000 | - |
| $ 5,950,000 | $ 7,469,000 |
Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can use the benefits.
The tax losses expire from 2033 to 2045. The other temporary differences do not expire under current legislation.
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
16. Segmented information
The Company's operations comprise a single reporting operating segment engaged in mineral exploration in Canada. As the operations comprise a single reporting segment, amounts disclosed in the financial statements also represent segment amounts. In order to determine reportable operating segments, the chief operating decision maker reviews various factors including geographical location, quantitative thresholds and managerial structure.
17. Commitments and contingencies
Environmental contingencies
The Company's exploration activities are subject to various laws and regulations governing the protection of the environment. The Company believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations. Management estimates that there is no material financial effect of environmental contingencies as at the dates presented in the statements of financial position.
Flow-through shares
Pursuant to the terms of a flow-through share agreement, the Company has complied with flow-through contractual obligations to subscribers with respect to the Income Tax Act (Canada) requirements for flow-through shares. As of December 31, 2025, the Company is committed to incurring approximately $735,000 of current year Canadian Exploration Expenditures (as such term is defined in the Income Tax Act (Canada)) by December 31, 2026 arising from the flow-through offerings. The Company has indemnified the subscribers of previous flow-through issuance for any related tax amounts that become payable by the subscribers as a result of the Company not meeting its expenditure commitments. The Company believes that it has incurred all of the required eligible flow-through expenditures to satisfy all previous flow-through commitments.
Tax matters
In the ordinary course of business, the Company is subject to ongoing audits by tax authorities. While the Company believes that its tax filing positions are appropriate and supportable, from time to time, certain matters are reviewed and challenged by the tax authorities.
The Company regularly reviews the potential for adverse outcomes in respect of tax matters. The Company believes that the ultimate disposition of any tax matters in dispute with tax authorities will not have a material adverse effect on its liquidity, financial position or results of operations because the Company believes that it has complied with the appropriate taxation rules. Should the ultimate tax liability materially differ from the Company's expectations, the Company's cash position could be affected positively or negatively in the period in which the matters are resolved.
18. Subsequent events
(i) On January 29, 2026, the Company announced that it has entered into four separate option agreements to acquire options to earn a 100% interest in certain mining claims and patented mining claims, located in northeast Ontario (the "Ben Nevis Project"). The Company has made initial aggregate milestone payments of $37,500 and issued 2,250,000 common shares of the Company in connection with the option of the Ben Nevis Project with the following payments remaining:
| Cash ($) | Shares | |
|---|---|---|
| - Year 1 | 65,000 | 750,000 |
| - Year 2 | 120,000 | 1,450,000 |
| - Year 3 | 200,000 | 2,750,000 |
| - Certain other events | 2,000,000 | |
| Total | $385,000 | 6,950,000 |
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Copper Road Resources Inc.
Notes to Financial Statements
Years Ended December 31, 2025 and 2024
(Expressed in Canadian dollars)
18. Subsequent events (continued)
The Company has also granted a 2% Net Smelter Return Royalty ("NSR") to the optionors over the optioned claims. The patents that were optioned have existing royalties and therefore no new royalties were created. The Company has the option to purchase ½ or 1.0% of the 2% NSRs for $2.5 million. The Company has a further option to purchase 0.5% of the NSRs over a portion of the claims for $3.0 million with a Right of First Refusal on the balance of the NSRs. The Company has also assumed royalties on the patented claims to Wallbridge Mining Company Limited in the amount of three percent (3%) NSR for precious metals and two percent (2%) NSR for other minerals as well as an additional one percent to other holders.
(ii) On March 16, 2026, the Company announced that it had closed a non-brokered private placement (the "Offering") for gross proceeds of $650,500 from the sale of 5,656,522 flow-through shares of the Company at a price of $0.115 per flow-through share ("FT Shares"). A certain officer of the Company subscribed for an aggregate of 23,698 FT Shares under the offering. In connection to the offering, the Company had agreed to pay a cash commission in the aggregate of $38,314 to eligible finders and to issue 250,478 finder warrants each exercisable for a common share of the Company at a price of $0.115 for a period of 18 months. The securities issued pursuant to the Offering will be subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws.
(iii) On April 22, 2026, the Company granted 400,000 Options to a consultant of the Company. Each Option is exercisable into one common share of the Company at an exercise price of $0.10 for a five-year term expiring on April 22, 2031.
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