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Cosa Resources Corp. Management Reports 2026
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Management Reports
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COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
MANAGEMENT'S DISCUSSION AND ANALYSIS
This Management's Discussion and Analysis ("MD&A") of Cosa Resources Corp. ("Cosa" or the "Company") supplements but does not form part of the audited financial statements and the notes thereto for the years ended December 31, 2025 and 2024 (the "financial statements") and includes events up to the date of this MD&A.
The financial statements have been prepared by management in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretations Committee. All amounts are expressed in Canadian dollars unless otherwise stated. Other information contained in this document has been prepared by management and is consistent with the information contained in the financial statements.
The Company's certifying officers are responsible for ensuring that the financial statements and MD&A do not contain any untrue statement of a material fact or omit to state a material fact required to be stated, or that is necessary to make a statement not misleading in light of the circumstances under which it was made. The Company's certifying officers certify that the financial statements together with the other financial information included in the filings fairly present, in all material respects, the financial condition, financial performance and cash flows of the Company as of the date of, and for the periods presented in the filings.
The Company's Audit Committee and the Board of Directors provide an oversight role with respect to all public financial disclosures by the Company. The Board of Directors approves the financial statements and MD&A after the completion of its review and recommendation for approval by the Audit Committee, which meets periodically to review all financial reports, prior to filing.
In this MD&A, the words "we", "us", or "our", collectively refer to Cosa. The first, second, third, fourth quarters of the Company's fiscal years are referred to as "Q1", "Q2", "Q3", "Q4", respectively.
This MD&A is prepared by management and approved by the Board of Directors as of April 22, 2026 (the "MD&A Date"). This discussion covers the years ended December 31, 2025 and 2024 and the subsequent period up to the MD&A Date.
FORWARD-LOOKING STATEMENTS
This MD&A contains "forward-looking statements" (referred to as "forward-looking information") within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this MD&A that address activities, events or developments that Cosa expects or anticipates will or may occur in the future, including, without limitation, statements about the future exploration activities; sources, and proposed uses, of funds; capital and operating cost estimates, including general and administrative expenses; expectations regarding the ability to raise capital for future activities; and other such matters are forward-looking statements. The use of words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", believe, outlook, "forecast" and similar expressions are intended to identify forward-looking statements.
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Forward-looking information and statements are based on expectations, beliefs, assumptions, estimates and forecasts about Cosa's business and the industry and markets in which it operates. Forward-looking information and statements are made based upon certain assumptions and other important factors that could cause the actual results, performances, or achievements of Cosa to be materially different from future results, performances or achievements expressed or implied by such information or statements. Such information and statements are based on numerous assumptions including, among others, that the results of planned exploration activities are as anticipated, the price of copper and uranium, the anticipated cost of planned exploration activities, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed on reasonable terms and that third party contractors, equipment, supplies and governmental and other approvals required to conduct Cosa's planned exploration activities will be available on reasonable terms and in a timely manner.
Forward-looking information and statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievements of Cosa to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks related to the negative operating cash flow and dependence on third party financing; the uncertainty of additional financing; the limited operating history of Cosa; the lack of known mineral resources or reserves; the influence of a large shareholder; copper prices; uranium prices; aboriginal title and consultation issues; risks related to exploration activities generally; reliance upon key management and other personnel; title to properties; uninsurable risks; conflicts of interest; permits and licenses; environmental and other regulatory requirements; political regulatory risks; competition; and the volatility of share prices, all as more particularly described in the "risks and uncertainties" section below.
Although Cosa has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place reliance on forward-looking statements.
DESCRIPTION OF BUSINESS
The Company was incorporated under the Business Corporations Act of British Columbia on November 16, 2020. The Company's head office is located at 1723 - 595 Burrard St, Vancouver British Columbia, Canada, V7X 1L4; and its registered office is located at 401 - 353 Water Street, Vancouver, British Columbia, Canada, V6B 1B8. The Company's common shares trade on the TSX Venture Exchange ("TSX-V") under the symbol "COSA", the OTCQB Venture Market under the ticker symbol "COSAF", and on the Frankfurt Stock Exchange under the ticker symbol "SSKU".
The Company's principal business activities include the acquisition and exploration of mineral property assets. The Company is in the exploration stage with respect to its interests in exploration and evaluation assets. The recoverability of the amounts comprising exploration and evaluation assets is dependent upon the confirmation of economically recoverable reserves, the ability of the Company to obtain necessary financing to successfully complete their exploration and development and upon future profitable production.
OVERALL PERFORMANCE
During the year ended October 31, 2022, the Company completed its initial public offering ("IPO") and listing on the TSX-V, completed the acquisition of Polaris and carried out exploration work on the Heron property. Subsequently, Cosa transitioned to uranium-focused exploration activities and acquired several assets in Saskatchewan's Athabasca basin, as detailed in the "Discussion of Operations" section below. As an exploration stage company, Cosa does not have revenues and is expected to generate operating losses. As at December 31, 2025, the Company had cash and cash equivalents of $9,700,247 (December 31, 2024 - $1,682,243), a deficit of $14,543,338 (December 31, 2024 - $10,153,995) and working capital of $7,434,708 (December 31, 2024 - $1,480,123). The working capital includes the flow-through premium liability of $2,432,033 (2024 - $617,147) a non-cash item.
The business of mineral property exploration involves a high degree of risk. Cosa is an exploration company and is subject to risks and challenges similar to companies in a comparable stage and industry. These risks include, but are not limited to, the challenges of securing adequate capital; exploration, development, and operational risks inherent in the mining industry; changes in government policies and regulations; the ability to obtain the necessary permitting; as well as global economic and commodity price volatility; all of which are uncertain.
The underlying value of the Company's exploration and evaluation assets is dependent upon the existence and economic recovery of mineral reserves and is subject to, but not limited to, the risks and challenges identified above. Changes in future conditions could require material write-downs of the carrying value of the Company's exploration and evaluation assets.
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
The Company does not generate revenue. As a result, Cosa continues to be dependent on third party financing to continue exploration activities on the Company's properties. Accordingly, the Company's future performance will be most affected by its access to financing, whether debt, equity, or other means. Access to such financing, in turn, is affected by general economic conditions, the price of copper, and uranium or commodities or metals exploration risks and the other factors described in the "risks and uncertainties" section below.
SELECTED ANNUAL INFORMATION
The selected annual information below is derived from the Company's annual financial statements.
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| $ | $ | $ | |
| Net loss | (4,389,343) | (6,247,788) | (2,635,023) |
| Basic and diluted loss per share | (0.05) | (0.11) | (0.07) |
| Total assets | 17,658,311 | 4,457,798 | 6,101,928 |
| Total liabilities | 4,635,123 | 942,180 | 1,045,618 |
Net loss for the year ended December 31, 2025 is mainly driven by exploration and evaluation expenses, share-based compensation, marketing and investor relations, and salaries and management fees, partially offset by the amortization of flow-through premium liability, service revenue and interest income. The decrease in net loss during the year ended December 31, 2025 is mainly due to less exploration and evaluation expenditures. For further details, refer to the Results of Operations section.
Total assets are mainly comprised of cash and exploration and evaluation assets. The increase during the year ended December 31, 2025 is mainly due to an increase in the cash balance from a private placement in December and the acquisition of mineral properties.
Total liabilities are comprised of accounts payable and accrued liabilities and flow-through premium liability. The increase during the year ended December 31, 2025 is mainly due to the increase in the flow-through premium liability from flow-through funding raised in December.
TECHNICAL DISCLOSURE
The Company's disclosure of technical or scientific information in this MD&A has been reviewed and approved by Andy Carmichael, P.Geo., Vice President of Exploration for Cosa. Mr. Carmichael is a Qualified Person as defined under the terms of National Instrument 43-101 Standards of Disclosure for Mineral Projects. Mr. Carmichael is not independent by virtue of his position as an officer of the Company.
DISCUSSION OF OPERATIONS
During the year ended December 31, 2025 and the period to the MD&A Date, the Company had the following corporate activities:
- Completed the period with $7,434,708 in working capital, including cash and cash equivalents of $9,700,247.
- On January 13, 2025, the Company completed an acquisition (the "Acquisition") to acquire from Denison Mines Corp. ("Denison") a 70% ownership interest in three prospective eastern-Athabasca uranium properties: Murphy Lake North, Darby, and Packrat.
i. Murphy Lake North - comprises of two mineral claims totaling 1532 hectares. The property is immediately east of and within three kilometres of IsoEnergy's Hurricane deposit at their Larocque East property.
ii. Darby - comprises 18,069 hectares across 12 mineral claims. The property is roughly 10 kilometres west of the Cigar Lake Uranium Mine which is currently producing and operated by Cameco Corporation. Darby is roughly 6 kilometres east-southeast of Cosa's 100% owned Orion property.
iii. Packrat - comprises one mineral claim covering 1,621 hectares. The property resides along the eastern margin of the Athabasca Basin and is roughly 28 kilometres east of the Cigar Lake Mine.
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
- In addition to transferring a 70% property interest for each property, Denison has agreed to participate in Cosa's equity financings for an aggregate total of up to $1 million at Cosa's discretion. In exchange for the property interests, Cosa has granted, issued or agreed to additional considerations paid to Denison:
i. 14,195,506 common shares at $0.255 per share for a fair value of $3,619,854 representing 19.95% of Cosa's then current outstanding shares issued on the Closing Date (January 13, 2025) and;
ii. Common shares of the Company with an aggregate value of $2,250,000 ("Deferred Consideration Shares").
-
On February 26, 2025, the Company closed a brokered private placement for aggregate gross proceeds of $6,000,000 by issuing 8,800,000 units at a price of $0.25 per unit and 8,941,176 charity flow-through units at a price of $0.425 per unit.
-
On April 8, 2025, the Company entered into an option agreement with Global Uranium Corporation ("Global Uranium"), pursuant to which Global Uranium may earn up to an 80% interest in the Company's Astro uranium property. The earn-in is structured over five phases through December 31, 2029, requiring total exploration expenditures of $9.5 million, cash payments of $800,000, and the issuance of 2.6 million Global Uranium shares.
-
On December 4, 2025, the Company closed a brokered private placement for gross proceeds of $7,500,001 by issuing 11,538,462 units at $0.26 per unit, 7,537,690 charity flow-through units at $0.398 per unit and 5,000,000 flow-through shares at $0.30 per share.
-
Through 2025 Company completed a winter and summer drill program at Murphy Lake North for a total of 12 holes. The drilling results are considered to warrant follow up and the Company is planning additional work (refer to Exploration and Evaluation Asset section for additional details). The Company has met the minimum expenditures of $1,500,000 on Murphy Lake to confirm its percentage ownership of 70%.
-
The Company has spent a net of $3.0 million on exploration expenses, $2.0 million of which was on Murphy Lake North drilling and $0.5 million on Ursa primarily related to demobilisation. (refer to Exploration and Evaluation Asset section for additional details).
-
Subsequent to December 31, 2025 the Company has completed winter drilling programs at Darby and Murphy Lake North.
-
Drilling at Darby comprised three drill holes targeting the Charlie, Delta, and Gamma trends and the Company anticipates disclosing the Darby drilling results in the first half of 2026.
-
The Company reported intersections of anomalous radioactivity in multiple drill holes at Murphy Lake North. The winter drilling which is now completed reported:
-
Radioactivity intersected in three drill holes at the Cyclone trend
- Radioactivity remains open in multiple directions including for at least 600 metres along strike to the east and 600 metres to the west within the larger kilometre-scale Cyclone alteration zone
- Depth of the radioactivity is shallow at approximately 260 metres vertically from surface
- Cyclone trend structural corridor is over 100 metres wide and hosts significant alteration consistent with major eastern Athabasca uranium deposits
4
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
- As at the MD&A Date the Company's properties are as follows:
| Commodity | Property | Hectares | Ownership | Date Acquired | Acquisition Type | Encumbrance |
|---|---|---|---|---|---|---|
| Uranium | Murphy Lake | 1,532 | 70%^{(1)} | 2025 | Purchased | 2% NSR^{(2)} |
| Darby | 18,069 | 70%^{(1)} | 2025 | Purchased | 2% NSR^{(2)} | |
| Packrat | 1,621 | 70%^{(1)} | 2025 | Purchased | 2% NSR^{(2)} | |
| Ursa | 60,599 | 100% | 2022 | Purchased/Staked | 2% NSR^{(3)} | |
| Astro | 45,734 | 100% | 2023 | Staked | None | |
| Charcoal | 21,181 | 100% | 2022 | Purchased | None | |
| Castor | 5,686 | 100% | 2022 | Purchased | None | |
| Orion | 20,255 | 100% | 2022 | Purchased/Staked | None | |
| Aurora | 18,744 | 100% | 2023 | Purchased | None | |
| Eclipse | 1,622 | 100% | 2023 | Staked | None | |
| Orbit | 15,012 | 100% | 2023 | Purchased/Staked | None | |
| Cosmo | 10,145 | 100% | 2023 | Staked | None | |
| Copper | Heron | 3,697 | 100% | 2021 | Staked | 2% NSR^{(4)} |
| 223,897 |
(1) Subject to Cosa issuing Denison $2,250,000 in deferred consideration shares and funding a total of $6,500,000 in work.
(2) 2% NSR can be reduced to 1% for $2,000,000
(3) 2% net smelter return royalty ("NSR") can be reduced to 1% for $1,000,000
(4) 2% NSR can be reduced to 1% for $2,000,000. Remaining 1% can be purchased for $5,000,000
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Use of proceeds
The Company has completed six financings since November 1, 2021, its IPO on March 18, 2022 for net proceeds of $0.4 million, a private placement on April 22, 2022 for net proceeds of $2.0 million, a brokered private placement on June 21, 2023 for net proceeds of $5.1 million, a brokered private placement on March 5, 2024 for net proceeds of $6.5 million, a brokered private placement on February 26, 2025 for net proceeds of $5.5 million and a brokered private placement on December 4, 2025 for net proceeds of $6.9 million. Along with its opening working capital, the Company has used the proceeds as follows:
| Total ($millions) | |
|---|---|
| Available proceeds | |
| Working capital - November 1, 2021 | 0.3 |
| Net proceeds from financings | 25.9 |
| Available proceeds to December 31, 2025 | 26.2 |
| Use of proceeds | |
| Heron - phase 1 | (0.3) |
| Acquisition of exploration and evaluation assets | (0.4) |
| Exploration and evaluation expenses | (11.2) |
| General administration and other operating expenses | (4.9) |
| Use of proceeds to December 31, 2025 | (16.8) |
| Working capital as at December 31, 2025 | 9.4 |
Considering the current uncertainty as to the general market and competitive conditions, the Company continues to maintain its fiscally responsible approach to its mineral exploration activities. In particular, the Company continues to evaluate market conditions on an ongoing basis, with the goal of, among other things: (i) identifying the appropriate time to initiate certain business objectives, and (ii) exploring potential alternatives, viable opportunities to further develop and expand the Company's business. As such, the Company notes that there may be circumstances where, for sound business reasons, the Company may be required to reallocate funds, including due to demands for shifting focus or investment in mining exploration and/or development activities, requirements for accelerating, increasing, reducing, or eliminating initiatives in response to changes in market, regulations and/or developments in the mining sector generally and in the prices of uranium and copper, unexpected setbacks, and strategic opportunities, such as partnerships, strategic partners, joint ventures, mergers, acquisitions, and other opportunities.
EXPLORATION AND EVALUATION ASSETS
Denison Properties Acquisition
On November 27, 2024, the Company entered into an agreement with Denison Mines Corp. ("Denison") to acquire a 70% ownership interest in the Murphy Lake North, Darby and Packrat properties (collectively, the "Denison Properties") from Denison (the "Acquisition"). Upon closing of the Acquisition, the parties agreed to form a joint venture for each of the Denison Properties. The Acquisition was completed on January 13, 2025.
The Company, with a 70% ownership interest, retains control over the Denison Properties and full decision-making authority. Under IFRS 11 Joint arrangements, since the joint venture agreement does not establish joint control, the Company as the operator recognizes in full all assets, liabilities, revenue and expenses less the 30% contribution from Denison according to relevant IFRS® Accounting Standards.
The Acquisition has been accounted for as an equity-settled share-based payment transaction within the scope of IFRS 2 Share-based payments. The Acquisition did not qualify as a business combination under IFRS 3 Business combinations, as the significant inputs, processes, and outputs that together constitute a business did not exist in the Denison Properties at the time of acquisition. Accordingly, the consideration in excess of net assets acquired was recognized as exploration and evaluation asset acquisition costs and capitalized.
Consideration for the Acquisition of the Denison Properties comprised:
- 14,195,506 common shares of the Company at $0.255 per share for a fair value of $3,619,854 ("Effective Date Consideration Shares");
- Deferred Consideration Shares of $2,250,000.
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Due to the deferral in issuing the Deferred Consideration Shares, their value is measured at the acquisition date by discounting the future payment using the effective interest method. At acquisition date, the fair value of the Deferred Consideration Shares was $1,752,377. During the year ended December 31, 2025, the Company recognized $141,260 as accretion expense in connection with the Deferred Consideration Shares. As at December 31, 2025, the carrying value of the Deferred Consideration Shares is $1,893,637.
As part of the Acquisition, the Company has agreed to fund $1,500,000 before December 31, 2027 and $5,000,000 before June 30, 2029 for evaluation and exploration expenditures on Murphy Lake North and Darby, respectively. Failure to complete the required expenditure will reduce the Company's ownership percentage in each property to 49%. As of December 31, 2025, the Company has completed the $1,500,000 funding requirement for Murphy Lake North and completed $202,692 of expenditures towards the Darby.
A summary of the Company's fair value of the consideration and net assets acquired is as follows:
| January 13, 2025 | |
|---|---|
| $ | |
| Consideration | |
| Effective Date Consideration Shares | 3,619,854 |
| Deferred Consideration Shares | 1,752,377 |
| Acquisition cost - professional fees | 181,375 |
| 5,553,606 | |
| Net assets acquired | |
| Murphy Lake North | 2,550,338 |
| Darby | 2,040,271 |
| Packrat | 962,997 |
| 5,553,606 |
A summary of the Company's exploration and evaluation assets comprising capitalized acquisition costs is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Murphy Lake North | 2,550,338 | 49,978 |
| Darby | 2,040,271 | 39,983 |
| Packrat | 962,997 | 18,872 |
| Ursa | 398,371 | 398,371 |
| Astro | - | 27,286 |
| Other | 1,490,493 | 1,489,576 |
| 7,442,470 | 2,024,066 |
A summary of the Company's exploration and evaluation expenses for the years ended December 31, 2025 and 2024 is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Murphy Lake North | 2,006,705 | - |
| Darby | 202,692 | - |
| Packrat | 1,755 | - |
| Ursa | 463,559 | 5,526,071 |
| Other | 353,508 | 902,871 |
| 3,028,219 | 6,428,942 |
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Murphy Lake North
Murphy Lake North comprises two mineral claims totaling 1,532 hectares and has been attributed $2.6 million of the total consideration of $5.5 million. The property is immediately east of and within three kilometers of IsoEnergy's Hurricane deposit at their Larocque East project. Hurricane boasts the world's highest grade Indicated Mineral Resource for uranium. Hurricane was discovered and delineated by several members of Cosa's management team between 2018 and 2022. As part of the Agreement with Denison, Cosa must sole-fund the first $1.5 million of exploration expenditures at Murphy Lake North which must be incurred by December 31, 2027. The Company has met its commitment to incur $1.5 million on Murphy Lake North.
A summary of the Company's exploration and evaluation expenses relating to its 70% interest in Murphy Lake North is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Drilling | 2,041,489 | - |
| Geophysics | 5,628 | - |
| General exploration | 301,082 | - |
| JV contributions | (341,494) | - |
| 2,006,705 | - |
In early 2025, the Company completed an initial drilling program at the Murphy Lake North Joint Venture. The four hole, 1,739 metre campaign sought to locate and define the interpreted strike extension of the Hurricane trend within Murphy Lake North and follow-up historical intersections of weak mineralization. Drilling was successful in locating the Hurricane Trend, and the fourth and final drill hole and the southernmost on the Hurricane trend, intersected the strongest sandstone alteration on the property to that date. The results are considered encouraging.
In June and July 2025, the Company completed a second drilling program at the Murphy Lake North Joint Venture. The eight hole, 3,323 metre campaign sought to complete an evaluation of the Cyclone conductive trend in the central portion of the property and follow up positive results on the Hurricane trend from the winter drilling program. Drilling determined that the Cyclone trend contains geological characteristics which are prospective for the region's uranium deposits and intersected significant alteration and structure over a strike length of two kilometres. Drilling also extended the alteration zone on the Hurricane trend by 400 metres to the east. The drilling results are considered to warrant follow up and planning for geophysical surveying and further drilling and other is underway.
Darby
Darby comprises 18,069 hectares across 12 mineral claims and has attributed $2.0 million of the total consideration of $5.5 million. The property is roughly 10 kilometers west of the Cigar Lake Uranium Mine which is currently produced and operated by Cameco Corporation. Darby is roughly 6 kilometers east-southeast of Cosa's 100% owned Orion property. As part of the Agreement, Cosa must sole-fund the first $5 million of exploration expenditures at Darby which must be incurred by June 30th, 2029. Darby is subject to a buydown ("Buydown") which permits Denison to reclaim up to 60% of Darby and is to be the greater of: (i) $50 million or (ii) 450% of Cosa's exploration expenditures to date (excluding the initial $5 million in Cosa funded expenditures) incurred on the Darby claim(s) for the proportion of the property interest subject to the Buydown. The Buydown can be completed through a combination of cash payments and Denison sole-funded property expenditure and must be a minimum of 25% cash. The Buydown will be extinguished if Denison's interest in Darby property claims subject to the Buydown fall below 10%, or upon commercial production of 500,000 lbs of U₃O₈ from the claims subject to the Buydown.
A summary of the Company's exploration and evaluation expenses relating to its 70% interest in Darby is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Drilling | 98,903 | - |
| Geophysics | 3,600 | - |
| General exploration | 100,189 | - |
| 202,692 | - |
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Packrat
Packrat comprises one mineral claim covering 1621 hectares and has attributed $1.0 million of the total consideration of $5.4 million. The property resides along the eastern margin of the Athabasca Basin and is roughly 28 kilometers east of Lake Cigar Mine.
During the year ended December 31, 2025, the Company incurred exploration and evaluation expenses of $1,755 (2024 - $nil) for general exploration related to its 70% interest in Packrat.
Other
A summary of the Company's exploration and evaluation expenses relating to Aurora for the years ended December 31, 2025 and 2024 is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Cost recovery | (1,432) | - |
| Geophysics | 203,813 | 406,065 |
| General exploration | 158,127 | 26,213 |
| 353,508 | 432,278 |
As at December 31, 2025, the Company holds a portfolio of properties in the Athabasca Basin which includes seven uranium exploration properties, totaling of 93,273 hectares of prospective uranium exploration ground (together known as the "Other Athabasca Uranium Properties"). These properties have been acquired through staking and purchase and include Charcoal, Castor, Orion, Aurora, Eclipse, Orbit and Cosmo.
Ursa
The Company holds a 100% interest in Ursa, which is a large property comprised of over 60,599 hectares of highly prospective uranium exploration ground in the Eastern Athabasca Basin, located 43 km west of Cameco Corp.'s McArthur River uranium mine. Ursa covers more than 60 kilometers of strike length of the Cable Bay Shear Zone, a structural corridor with known uranium occurrences. The vast majority of the strike length remains completely untested.
The Company's second and latest Ursa diamond drilling campaign comprising three drill holes totaling 3,423 metres was completed in August through October 2024 to follow up the results of the winter drilling, historical drilling, and ANT surveys. The final drill hole of the program, UR24-06, intersected significant alteration in the lower sandstone and several intervals of weak uranium mineralization in the basement. Drilling to follow up alteration and structure in UR24-03 intersected weaker alteration and is interpreted to have undershot the optimal target by approximately 50 metres. Strongly graphitic and pyritic basement rocks were intersected down-dip of the UR24-03 sandstone alteration and structure.
In Q1 and Q2 2025 the Company demobilised its camp operations at Ursa, including the remediation of contaminated soil from a small fuel spill at the camp, of which the Company has received a full recovery of costs incurred under its insurance policies. The camp which was used for drilling and geophysical exploration work in 2024 has now been fully vacated. The Company will be analysing the results of 2024 exploration activities through the year to determine the best approach to increase value at Ursa.
A summary of the Company's exploration and evaluation expenses relating to Ursa for the years ended December 31, 2025 and 2024 is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Drilling | 92,310 | 3,980,352 |
| Geophysics | 2,001 | 1,228,238 |
| General exploration | 369,248 | 317,481 |
| 463,559 | 5,526,071 |
(1) During the year ended December 31, 2025, the Company received $412,867 for the remediation of contaminated soil under its insurance policies.
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Astro
On April 8, 2025, the Company entered into an option agreement with Global Uranium, pursuant to which Global Uranium may earn up to an 80% interest in the Company's Astro property. Under the terms of the agreement, Global Uranium can earn this interest by funding exploration expenditures of up to $9,500,000, making aggregate cash payments of $800,000, and issuing 2,600,000 common shares to the Company over five earn-in phases through December 31, 2029.
The Company will act as the initial operator of the property and is entitled to charge an operator fee of 7.5%. Upon completion of Phase 2, and at the conclusion of each subsequent phase, Global Uranium may elect either to continue with the earn-in or to form a joint venture with the Company. If Global Uranium terminates the agreement prior to completing Phases 1 and 2 by their respective deadlines, all consideration paid will be forfeited, and no interest in Astro will be retained.
A summary of Global Uranium's obligations under the agreement is as follows:
| Exploration expenditures | Cash payments | Share payments | Total ownership | |
|---|---|---|---|---|
| $ | $ | # | ||
| Signing (fulfilled) | - | - | 100,000 | 0% |
| Phase 1 - December 31, 2025 | 500,000 | 100,000 | 200,000 | 20% |
| Phase 2 - December 31, 2026 | 1,500,000 | 100,000 | 300,000 | 35% |
| Phase 3 - December 31, 2027 | 2,000,000 | 200,000 | 500,000 | 50% |
| Phase 4 - December 31, 2028 | 2,500,000 | 200,000 | 500,000 | 65% |
| Phase 5 - December 31, 2029 | 3,000,000 | 200,000 | 1,000,000 | 80% |
| 9,500,000 | 800,000 | 2,600,000 |
During the year ended December 31, 2025, Global Uranium issued 300,000 common shares to the Company. The Global Uranium common shares have a fair value of $31,500 as at December 31, 2025.
As at December 31, 2025, Global Uranium has funded $257,446 of the $500,000 in required Phase 1 exploration expenditures. During the year ended December 31, 2025, the Company recognized services revenue of $21,648 (2024 - $nil) related to operator fee charged to Global Uranium. As at December 31, 2025, $8,138 (December 31, 2024 - $nil) was due from Global Uranium.
RESULTS OF OPERATIONS
A summary of the Company's results of operations is as follows:
| Q4 2025 | Q4 2024 | Year ended December 31, 2025 | Year ended December 31, 2024 | |
|---|---|---|---|---|
| $ | $ | |||
| Operating expenses | ||||
| Depreciation | 827 | 827 | 3,282 | 3,291 |
| Exploration and evaluation expenses | 224,856 | 903,680 | 3,028,219 | 6,428,942 |
| Marketing and investor relations | 77,123 | 130,420 | 553,921 | 800,889 |
| Office and administrative | 42,761 | 51,553 | 174,601 | 171,293 |
| Professional fees | 32,172 | 24,266 | 179,420 | 138,072 |
| Salaries and management fees | 333,056 | 255,534 | 768,619 | 657,843 |
| Share-based compensation | 238,841 | 45,745 | 681,614 | 288,496 |
| Transfer agent and filing fees | 2,823 | 1,865 | 56,434 | 60,021 |
| Travel | 28,596 | 7,395 | 52,904 | 43,932 |
| (981,055) | (1,421,285) | (5,499,014) | (8,592,779) | |
| Other income | ||||
| Accretion expense | (36,348) | - | (141,260) | - |
| Amortization of flow-through premium liability | (46,710) | 311,457 | 990,022 | 2,141,242 |
| Change in fair value of investment | (10,000) | - | (10,500) | - |
| Income on sale of mineral rights | 94,714 | - | 114,714 | - |
| Interest income | 8,364 | 25,206 | 105,474 | 203,749 |
| Services income | 4,465 | - | 53,445 | - |
| Write off of mineral rights | (2,224) | - | (2,224) | - |
| Net loss and comprehensive loss | (968,794) | (1,084,622) | (4,389,343) | (6,247,788) |
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
For the quarter ended December 31, 2025, the Company's net loss decreased to $968,794 compared to $1,084,622 in the prior year comparable period. The primary drivers of this decrease in net loss were decreases to expenses as follows:
- Exploration and evaluation expenses decreased to $224,856 compared to $903,680 in the prior year comparable period due to decreased geological drilling and surveys on its properties, primarily Ursa.
- Marketing and investor relations decreased to $77,123 compared to $130,420 in the prior year comparable period due to increased investor relations activities in the prior year comparable period to raise public awareness of the Company as well as to support the equity financings completed in 2024.
- Amortization of flow-through premium liability decreased to a recovery of $46,710 compared to $311,457 in the prior year comparable period as the Company incurred less eligible expenditures in the current period.
- Service income of $4,465 was earned in Q4 2025 compared to $Nil in Q4 2024 as the Company is the operator of properties under joint venture agreements.
For the year ended December 31, 2025, the Company's net loss decreased to $4,389,343 compared to $6,247,788 in the prior year comparable period. The primary drivers of this decrease in net loss were as follows:
- Exploration and evaluation expenses decreased to $3,028,219 compared to $6,428,942 in the prior year due to decreased geological drillings and surveys on its properties. The Company moved its focus away from Ursa, once the Denison properties were acquired, which resulted in lower expenditures as the Company determined the best approach to explore the Denison properties.
- Marketing and investor relations decreased to $553,921 compared to $800,889 in the prior year primarily due investor relations activities to promote the profile of the Company and boost their presence in key investor markets in the prior year.
- Amortization of flow-through premium liability decreased to $990,022 compared to $2,141,242 in the prior year as the Company incurred less eligible expenditures in the current year.
- Interest income decreased to $105,474 compared to $203,749 in the prior year due to the Company investing unutilized funds in a savings account and guaranteed investment certificates for a longer period during the year ended December 31, 2024.
- Service income of $53,445 was earned in the year ended December 31, 2025 compared to $Nil during the year ended December 31, 2024 as the Company is the operator of properties under joint venture agreements.
SUMMARY OF QUARTERLY RESULTS
The following summarizes quarterly financial results of the Company for the last eight most recently completed quarters:
| December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Net loss and comprehensive loss | (968,794) | (746,019) | (1,034,527) | (1,640,003) |
| Basic and diluted loss per share | (0.01) | (0.01) | (0.01) | (0.02) |
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |
| $ | $ | $ | $ | |
| Net loss and comprehensive loss | (1,084,622) | (1,165,686) | (1,552,859) | (2,444,621) |
| Basic and diluted loss per share | (0.02) | (0.02) | (0.03) | (0.05) |
The Company's exploration and evaluation assets are all in the exploration stage. The Company has not generated revenue since inception and operating results are seasonal in nature. The quarterly results have been mainly due to the amount of exploration activities and corporate costs each quarter. Starting Q3 2023, the net loss and comprehensive loss increased significantly from the prior quarters primarily due to an increase in the exploration and evaluation expenditures related the airborne surveys at Ursa. During Q1 2024, the net loss and comprehensive loss increased from prior quarters due to increased exploration geophysical surveys, drilling, and consulting at Ursa. During Q2 2024, the net loss and comprehensive loss decreased from prior quarter as the winter exploration was completed in early Q2 2024. Limited field activity was completed in the remainder of Q2 2024, however the Company has commenced drilling in the later part of Q3 2024 which continued into Q4 2024. During Q1 2025, the net loss and comprehensive loss increased from prior quarters due to increased exploration drilling activities at both Ursa and Murphy Lake North. Net loss and comprehensive loss in 2025 were primarily driven by exploration expenditures and remuneration paid to the Company's executives, officers and employees.
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN
The Company is in the exploration stage and therefore has no cash flow from operations. Its only source of funds since incorporation has been from the issuance of common shares. The Company is in the process of exploring mineral claims. The Company has not yet determined whether or when the claims could be economically viable.
As at December 31, 2025, the Company had cash and cash equivalents of $9,700,247 (December 31, 2024 - $1,682,243) and working capital of $7,434,708 (December 31, 2024 - $1,480,123). During 2025, the Company completed brokered private placements for gross proceeds of $13,500,001.
The Company's cash flows from operations are negative as it is an exploration stage company. During the year ended December 31, 2025, the Company used cash of $4,406,665 in operating activities (December 31, 2024 - $8,251,309) primarily due to cash payments of exploration and evaluation expenses, salaries and management fees, professional fees, as well as marketing and investor relations fees.
During the year ended December 31, 2025, the Company used cash of $75,683 in investing activities on asset acquisition costs (December 31, 2024 - $46,146) and received $100,000 in option proceeds (December 31, 2024 - $nil)
During the year ended December 31, 2025, the Company received cash of $12,400,352 from financing activities (December 31, 2024 - $6,079,376) primarily due to proceeds from private placements offset by cash issuance costs.
The Company has not yet achieved profitable operations. The continuing operations of the Company are dependent upon obtaining necessary financing to meet the Company's commitments as they come due and to finance future exploration and development, potential business acquisitions, economically recoverable reserves, securing and maintaining title and beneficial interest in the properties and upon future profitable production. Failure to continue as a going concern would require that assets and liabilities be recorded at their liquidation values, which may differ materially from their carrying values. The financial statements do not include adjustments that would be necessary should the Company be unable to continue as a going concern.
Capital management
The Company's capital structure consists of all components of shareholders' equity. The Company's objective when managing capital is to maintain adequate levels of funding to support current operations comprising the acquisition and development of its exploration and evaluation assets. The Company obtains funding primarily through issuing common stock. Future financings are dependent on market conditions and there can be no assurance the Company will be able to raise funds in the future.
There were no changes to the Company's approach to capital management during the year ended December 31, 2025. The Company is not subject to externally imposed capital requirements.
As at December 31, 2025 and the MD&A Date, the Company has no commitments for capital expenditure.
CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING JUDGEMENTS
The preparation of the Company's financial statements and applying its accounting policies requires management to make judgments, estimates and assumptions that affect the reported amounts of expenses, assets and liabilities, the accompanying disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these judgments, assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The judgements, key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.
Going concern
The financial statements were prepared under the assumption that the Company will continue as a going concern. The Company's management has assessed the Company's ability to continue as a going concern and has exercised judgment in its determination that the Company has the necessary resources and access to capital to continue its business for the foreseeable future.
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Impairment of exploration and evaluation assets
At the end of each financial reporting period, the carrying amounts of the Company's non-financial assets are reviewed to determine whether there is any indication that an impairment loss or reversal of previous impairment should be recorded. Where such an indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment, if any.
With respect to exploration and evaluation assets, the Company is required to make estimates and judgments about future events and circumstances and whether the carrying amount of exploration assets exceeds its recoverable amount. Recoverability depends on various factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development and upon future profitable production or proceeds from the disposition of the exploration and evaluation assets themselves. Additionally, there are numerous geological, economic, environmental, and regulatory factors and uncertainties that could impact management's assessment as to the overall viability of its properties or its ability to generate future cash flows necessary to cover or exceed the carrying value of the Company's exploration and evaluation assets.
Significant areas requiring the use of management estimates and assumptions include:
Fair value calculation of share-based compensation
The fair value of share-based compensation in relation to the options granted is calculated using the Black-Scholes option pricing model. There are a number of inputs used in the calculation such as the expected option life, risk-free interest rate used and the future price volatility of the underlying security, which can vary from actual future events. The factors applied in the calculation are management's best estimates based on industry average and future forecasts.
OFF-BALANCE SHEET ARRANGEMENTS
As at December 31, 2025 and the MD&A Date, the Company had no off-balance sheet arrangements.
PROPOSED TRANSACTIONS
As at December 31, 2025 and the MD&A Date, the Company had no proposed transactions.
SUBSEQUENT EVENTS
On January 14, 2026, the Company issued 1,960,000 common shares to Denison at a deemed price of $0.3891 to reduce the Deferred Consideration Shares balance from $2,250,000 by $762,636 to $1,487,364.
On February 10, 2026, the Company entered into an option agreement with Traction Uranium Corp. ("Traction") pursuant to which Traction has a right to earn up to an 80% interest in the Aurora Uranium property by incurring $9,150,000 in exploration expenditures, making $1,500,000 in cash payments and issuing 5,000,000 shares of Traction in stages by the following deadlines:
| Exploration Expenditures | Cash Payments | Shares of Traction | Traction Total Ownership | Deadline | |
|---|---|---|---|---|---|
| $25,000 | 250,000 | 0% | Upon Signing | ||
| Phase 1 | $1,150,000 | $75,000 | 500,000 | 20% | December 31, 2026 |
| Phase 2 | $2,000,000 | $100,000 | 500,000 | 35% | December 31, 2027 |
| Phase 3 | $2,000,000 | $100,000 | 750,000 | 49% | December 31, 2028 |
| Phase 4 | $2,000,000 | $200,000 | 1,000,000 | 65% | December 31, 2029 |
| Phase 5 | $2,000,000 | $1,000,000 | 2,000,000 | 80% | December 31, 2030 |
| $9,150,000 | $1,500,000 | 5,000,000 |
Upon completion of phase 2 through 5, Traction will have to option to continue the earn-in or elect to enter into a Joint Venture with the Company.
Subsequent to December 31, 2025, the Company has issued 2,681,635 shares on the exercise of warrants for proceeds of $955,014.
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
OUTSTANDING SHARE DATA
A summary of the Company's securities issued and outstanding is as follows:
| Type | December 31, 2025 | MD&A Date |
|---|---|---|
| # | # | |
| Common shares issued and outstanding (1) | 112,972,748 | 117,614,383 |
| Warrants | 25,751,547 | 18,129,893 |
| Stock options | 10,370,000 | 10,370,000 |
(1) Authorized: Unlimited common shares without par value.
Escrowed Shares
During the year ended December 31, 2025, the Company released 881,250 (2024 - 4,562,500) common shares from escrow and as at December 31, 2025 the Company has no (2024 - 881,250) common shares subject to escrow.
IPO Escrowed Shares
On March 21, 2022, in connection with the Company's IPO, an escrow agreement (the "IPO Escrow Agreement") between management and the Company's Board of Directors was completed resulting in 5,375,000 common shares (the "IPO Escrowed Shares") being deposited in escrow. Pursuant to the IPO Escrow Agreement, 10% of the IPO Escrowed Shares were released from escrow on the IPO Escrow Agreement date (the "Initial Release") and an additional 15% to be released every six-month interval thereafter, for a period of 36 months following the Initial Release. These IPO Escrowed Shares, may not be transferred, assigned, or otherwise dealt without the consent of the regulatory authorities.
As at December 31, 2025, 5,375,000 IPO Escrowed Shares have been released from escrow.
Titan acquisition
On January 12, 2024, the Company acquired a 100% interest in the Titan Uranium property, an extension to the Orion presented as part of the Polaris Athabasca Uranium properties, issued 300,000 common shares (the "Titan Consideration Shares") to complete its remaining obligation under the terms of the agreement. The Titan Consideration Shares are subject to a 4-month hold period in escrow, with 25% being released from escrow every three months commencing on May 13, 2024.
As at December 31, 2025, 300,000 Titan Consideration Shares have been released from escrow.
RELATED PARTY DISCLOSURES
Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company's Board of Directors and corporate officers.
A summary of the Company's related party transactions with key management personnel for the years ended December 31, 2025 and 2024 is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Exploration and evaluation expenses | 180,407 | 137,161 |
| Salaries and management fees | 476,634 | 499,484 |
| Share-based compensation | 444,543 | 192,513 |
| 1,101,584 | 829,158 |
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
The Company's financial instruments comprise cash and cash equivalents, deposits and accounts payable and accrued liabilities which are classified as and subsequently measured at amortized cost. The carrying values of cash and cash equivalents and accounts payable and accrued liabilities approximate their fair values because of their short-term nature.
The Company is exposed in varying degrees to a variety of financial instrument related risks. The type of risk exposure and the way in which such exposure is managed is as follows:
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the Company by failing to discharge an obligation. Credit risk for the Company is associated with its cash and cash equivalents and deposit. The Company has minimal exposure of credit risk on its cash and cash equivalents as the Company's cash and cash equivalents are held with major Canadian financial institutions and its deposit with a government ministry.
Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates and foreign exchange rates. The Company holds its cash and cash equivalents in bank accounts that earn variable interest rates. Due to the short-term nature of these financial instruments, fluctuations in market interest rates do not have a significant impact on the estimated fair value of the Company's cash and cash equivalents balance as at December 31, 2025. The Company does not have any financial assets or liabilities subject to changes in exchange rates so does not expect exchange rates to have a material impact to the Company.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. The Company reviews its working capital position regularly to ensure there is sufficient capital in order to meet short-term business requirements, after taking into account the Company's holdings of cash and cash equivalents. The Company's cash and cash equivalents are invested in business accounts, which are available on demand. The Company manages its liquidity risk mainly through raising funds from private placements.
The Company's financial liabilities, accounts payable and accrued liabilities $309,453 (2024 - $325,033), based on contractual undiscounted payments, will all be settled in less than three months from December 31, 2025.
RISKS AND UNCERTAINTIES
The operations of the Company are subject to significant uncertainty due to the high-risk nature of its business, which is the acquisition, exploration, discovery, development and production of uranium from a portfolio of exploration and development stage assets. The following risk factors could materially affect the Company's financial condition and/or future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to the Company. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may adversely affect the Company's business.
The Company's ability to pursue its objectives will depend on its ability to obtain further equity financing which may not occur
The further development and exploration of the Company's properties depends upon the Company's ability to obtain financing through equity financing, joint ventures, debt financing, or other means. There is no assurance that the Company will be successful in obtaining required financing as and when needed. Volatile markets for precious and base metals may make it difficult or impossible for the Company to obtain equity financing or debt financing on favourable terms or at all. Failure to obtain additional financing on a timely basis may cause the Company to postpone its exploration and development plans, forfeit rights in some or all of its properties or reduce or terminate some or all of its operations.
Resource exploration and development is highly speculative
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits that, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors that are beyond the control of the Company and that cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties,
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
allowable production, importing and exporting minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital. The mineral properties that the Company has an interest in (the "Properties") are in the exploration stage only and is without a known body of commercial ore. Development of the Properties would follow only if favourable exploration results are obtained.
The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. There is no assurance that the Company's mineral exploration and development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company's operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors.
Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.
Some aspects of the Company's operations entail risk that cannot be insured against or may not be covered by insurance
The Company's business is subject to a number of risks and hazards generally, including adverse conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company's properties or the properties of others, delays in mining, monetary losses and possible legal liability.
Although the Company intends to maintain insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance may not cover all the potential risks associated with a mining company's operations. The Company may be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to the Company or to other companies in the mining industry on acceptable terms. The Company might become subject to liability for pollution or other hazards which may not be insured against or which the Company may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.
The Company does not have a guarantee of title
Although the Company has exercised the usual due diligence with respect to determining title to the Properties, there is no guarantee that title to the Properties will not be challenged or impugned. The Properties may be subject to prior unregistered agreements or transfers, or native land claims and title may be affected by undetected defects. The Properties include mineral claims which have not been surveyed, and therefore, their existence and area could be in doubt. Until competing interests in the mineral lands have been determined, the Company can give no assurance as to the validity of title of the Company to those lands or the size of such mineral lands.
The Company is an early-stage company
The Company has only recently commenced operations and has no operating earnings. The likelihood of success of the Company must be considered in light of the problems, expenses and difficulties, complications and delays frequently encountered in connection with the establishment of any business. The Company has limited financial resources and there is no assurance that additional funding will be available to it for further exploration and development of its projects or to fulfil its obligations under applicable agreement. There can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of the property interest of the Company with the possible dilution or loss of such interest. Further, revenues, financings and profits, if any, will depend upon various factors, including the success, if any, of exploration programs and general market conditions for natural resources. There is no assurance that the Company can operate profitably or that it will successfully implement its plans.
The Company operates at a loss and may never generate a profit
The Company operates at a loss and there is no assurance that the Company will ever be profitable. The Company has had a negative operating cash flow since its founding and will continue to for the foreseeable future. The Company cannot predict when it will reach positive operating cash flow.
16
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Significant resources are required to conduct mining exploration activities
Mining exploration requires ready access to mining equipment such as drills, and crews to operate that equipment. There can be no assurance that such resources will be available to the Company on a timely basis or at a reasonable cost. Failure to obtain these resources when needed may result in delays in the Company's exploration programs.
The Company operates in a highly competitive environment
The mineral exploration and mining business is competitive in all of its phases. The Company competes with numerous other companies and individuals, including competitors with greater financial, technical and other resources that the Company, in the search for and the acquisition of attractive mineral properties. The ability of the Company to acquire properties in the future will depend not only on its ability to develop its present properties, but on its ability to select and acquire suitable properties or prospects for mineral exploration. There is no assurance that the Company will continue to be able to compete successfully with its competition in acquiring such properties or prospects.
The Company operates in a highly regulated environment that is subject to changes, some unforeseen, to government policy
The current or future operations of the Company, including exploration and development activities and commencement of production on its properties, require permits from various levels of government. Such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. The Company believes it is in substantial compliance with all material laws and regulations that currently apply to its activities. There can be no assurance however, that all permits which the Company may require for construction of mining facilities and conduct of mining operations, particularly environmental permits, will be obtainable on reasonable terms or that compliance with such laws and regulations would not have an adverse effect on the profitability of any mining project that the Company might undertake.
Failure to comply with applicable laws, regulations and permit requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular, environmental laws.
Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in development of new mining properties.
The Company may be subject to significant environmental risks
The Company's operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner that means standards are stricter, and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations. The Company intends to comply fully with all environmental regulations. The current or future operations of the Company, including development activities and commencement of production on its properties, require permits from various federal, provincial and local governmental authorities, and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters.
Such operations and exploration activities are subject to substantial regulation under applicable laws by governmental agencies that may require the Company to obtain permits from various governmental agencies. There can be no assurance, however, that all permits that the Company may require for its operations and exploration activities will be obtainable on reasonable terms or on a timely basis or that such laws and regulations will not have an adverse effect on any mining project which the Company might undertake.
17
COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
The Company is largely dependent on the performance of the Board and senior management
The success of the Company is currently largely dependent on the performance of the Board and senior management. The loss of the services of these persons will have a materially adverse effect on the Company's business and prospects. There is no assurance the Company can maintain the services of the Board and management or other qualified personnel required to operate its business. Failure to do so could have a material adverse effect on the Company and its prospects. The Company does not maintain "key person" insurance.
The Company's prospects are subject to the inherent volatility of metal prices
The mining industry is intensely competitive and there is no assurance that, even if commercial quantities of a mineral resource are discovered, a profitable market will exist for the sale of the same. There can be no assurance that metal prices will be such that the Company's properties can be mined at a profit. Factors beyond the control of the Company may affect the marketability of any minerals discovered. Metal prices are subject to volatile price changes from a variety of factors including international economic and political trends, expectations of inflation, global and regional demand, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods. The supply of, and demand for, the Company's principal product and exploration target, uranium, is affected by various factors, including political events, economic conditions and production costs.
The Company's proposed operations will require access to adequate infrastructure
Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants which affect capital and operating costs. Unusual or infrequent weather phenomena, terrorism, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Company's operations, financial condition and results of operations.
The Company's growth will require new personnel
Recruiting and retaining qualified personnel is critical to the Company's success. The number of persons skilled in the acquisition, exploration and development of mining properties is limited and competition for such persons is intense. As the Company's business activity grows, it will require additional key financial, administrative, mining, marketing and public relations personnel as well as additional staff on the operations side. Although the Company believes that it will be successful in attracting and retaining qualified personnel, there can be no assurance of such success.
Some of the Company's directors have significant involvement in other companies in the same sector
Certain of the directors of the Company serve as directors of other companies or have significant shareholdings in other companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In the event that such a conflict of interest arises at a Board of Directors meeting, a director who has such a conflict will abstain from voting for or against the approval of such a participation or such terms. From time to time several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing financial exposure in respect of any one program. It may occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment. In accordance with the laws of the Province of British Columbia, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company. In determining whether or not the Company will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.
The Company has not paid any dividends and does not anticipate doing so in the foreseeable future
The Company has not paid any dividends since incorporation and does not anticipate declaring any dividends on the common shares in the foreseeable future. The directors of the Company will determine if and when dividends should be declared and paid in the future based on the Company's financial position at the relevant time.
First Nations Land Claims
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COSA RESOURCES CORP.
Management's Discussion and Analysis
For the year ended December 31, 2025 and 2024
Many lands in Saskatchewan and elsewhere are or could become subject to aboriginal land claim to title, which could adversely affect the Company's title to its properties. The Company is required to obtain consent of the aboriginal title holders which may adversely affect the Company's activities. There can be no assurance that satisfactory agreements can be reached.
First Nations rights may be claimed on Crown properties or other types of tenure with respect to which mining rights have been conferred. The Supreme Court of Canada's 2014 decision in Tsilhqot'in Nation v. British Columbia marked the first time in Canadian history that a court has declared First Nations title to lands outside of reserve land. The Properties may now or in the future be the subject of aboriginal or indigenous land claims. The legal nature of aboriginal land claims is a matter of considerable complexity. The impact of any such claim on the Company's ownership interest in the Properties cannot be predicted with any degree of certainty and no assurance can be given that a broad recognition of aboriginal rights in the area in which the Properties are located, by way of a negotiated settlement or judicial pronouncement, would not have an adverse effect on the Company's activities. Even in the absence of such recognition, the Company may at some point be required to negotiate with and seek the approval of holders of aboriginal interests in order to facilitate exploration and development work on the Properties, there is no assurance that the Company will be able to establish a practical working relationship with any First Nations in the area which would allow it to ultimately develop the Properties.
ADDITIONAL INFORMATION
Additional information relating to the Company is available at the Company's website at https://cosaresources.ca/ and at www.sedarplus.ca.
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