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Element 29 Resources Inc. Management Reports 2026
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Management Reports
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Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
ELEMENT 29
RESOURCES
Management's Discussion and Analysis
Three Months Ended March 31, 2026
(Expressed in Canadian dollars, except per share amounts and where otherwise noted)
May 19, 2026
This Management's Discussion and Analysis ("MD&A") should be read in conjunction with the condensed consolidated interim financial statements for the period ended March 31, 2026 and related notes thereto which have been prepared in accordance with IFRS 34, Interim Financial Reporting of the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, as well as the annual audited consolidated financial statements for the year ended December 31, 2025, which are in accordance with IFRS, and the related MD&A. References to "E29", "Element 29", and the "Company" are to Element 29 Resources Inc. and/or one or more of its wholly owned subsidiaries. Further information on the Company is available on SEDAR+ at www.sedar.com. Information is also available on the Company's website at www.e29copper.com. Information on risks associated with investing in the Company's securities is contained in this MD&A. Technical and scientific information under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") concerning the Company's material properties are located in their respective technical reports: technical and scientific information regarding the Flor de Cobre Project (the "Flor de Cobre") is contained in the technical report titled "NI 43-101 Technical Report Flor de Cobre Property Arequipa and Moquegua Regions, Peru" with an effective date of March 15, 2020, prepared for the Company by Derrick Strickland (P. Geo.) (the "Flor de Cobre Technical Report")) and technical and scientific information regarding the Elida Project ("Elida") is contained in the technical report titled "NI 43-101 Technical Report Mineral Resource Estimation of the Elida Porphyry Copper Project in Peru" with an effective date of September 20, 2022 prepared for the Company by Marc Jutras (P.Eng., M.A. Sc.), Ginto Consulting Inc. The disclosure in this MD&A of scientific and technical information regarding the Company's other mineral projects has been reviewed and approved by Richard Osmond (P. Geo.), the President and CEO of the Company. Each of Mr. Strickland, Mr. Jutras, and Mr. Osmond are a "Qualified Person" for the purposes of NI 43-101.
COMPANY BACKGROUND
Element 29 is a Canadian resource company engaged in the exploration and development of mineral resource properties in Peru. The Company is exploring for copper ("Cu"), molybdenum ("Mo"), gold ("Au"), silver ("Ag"), and other metals including lead ("Pb"), and zinc ("Zn"). At present, none of the Company's mineral properties are at a commercial development or production stage. The Company's objective is to confirm, delineate and potentially develop Cu-(Mo-Ag-Au) mineralization on its 100% owned mineral properties. At the Company's flagship Elida project, exploration and resource expansion programs are planned to further delineate Cu-Mo-Ag mineralization in the Zone 1 deposit and also to drill test the four other similar porphyry targets located on the project.
The Company also holds three other projects; the Flor de Cobre porphyry Cu-Mo project, the Paka Cu-Zn (Au-Ag) skarn project (referred to previously as the Muñaorjo project), and the Pahuay porphyry Cu-(Mo-Ag) skarn project, which are all located in southern Peru.
The Company was incorporated in British Columbia on August 30, 2017. The Company's corporate headquarters is in Vancouver, British Columbia, Canada. Field operations are conducted out of a local office in Peru. On December 7, 2020, the Company's common shares commenced trading on the TSX Venture Exchange ("TSX-V") under the symbol "ECU". On November 16, 2022, the Company's common shares commenced trading on the Bolsa de Valores de Lima ("BVL" or the "Lima Stock Exchange") under the trading symbol "ECU". On February 4, 2021, the Company's common shares commenced trading on the Frankfurt Stock Exchange ("FSE") under the trading symbol "2IK". On May 27, 2021, the Company commenced trading on the Over-the-Counter OTCQB Venture Market ("OTCQB") under the symbol "EMTRF".
The Company has three wholly owned subsidiaries; Candelaria Resources S.A.C., Elida Resources S.A.C., and Pahuay Resources S.A.C., all of which were incorporated under the laws of Peru (the "Subsidiaries").
Element 29 is led by a team of mining, corporate finance, and corporate governance professionals, who have the experience to advance the Company's projects and generate value for Element 29's shareholders.
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
HIGHLIGHTS
Corporate
-
On January 7th, 2026, the Company announced receiving the new Declaración de Impacto Ambiental ("DIA") environmental certificate for the Elida Project representing an Important step towards securing a new Programma de Inicio de Actividades ("PIA") Drill Permit that would significantly expand the current permitted drilling footprint and support the continued advancement of the Elida porphyry Cu-Mo-Ag deposit.
-
On January 26th, 2026, the Company announced the results from the first five drill holes completed in 2025 for 4,456 metres ("m") from its Phase 3 drilling program at its Elida Project. The Company continued to intersect long intervals of Cu-Mo-Ag mineralization starting near surface and extending to vertical depths of over 1000 m highlighting the potential for further resource expansion. Highlights included:
-
Drill hole ELID037 intersected 0.44% Cu, 0.04% Mo, 4.09 g/t Ag over 1,489.0 m, from bedrock surface to the end of the hole ("EOH") at 1,552.0 m.
-
Including 1,152.0 m grading 0.49% Cu, 0.04% Mo, 4.65 g/t Ag, from a depth of 400.0 m to the EOH.
-
Several higher-grade Cu-Mo-Ag sub-intervals were intersected in ELID037 including:
-
401.0 m grading 0.60% Cu, 0.03% Mo, 7.67 g/t Ag, starting at a depth of 401.0 m; and
-
283.8 m grading 0.58% Cu, 0.06% Mo, 3.68 g/t Ag, starting at a depth of 1268.2 m.
-
The Cu grades in ELID037 are increasing at depth with the last 93.8 m grading 0.71% Cu, 0.06% Mo, 3.99 g/t Ag, which correlates with the upper part of a large, low resistivity MT geophysical anomaly potentially outlining a large high-grade copper core.
-
On February 27th, 2026, the Company announced receiving the new DIA environmental certificate for the Paka Project representing an Important step towards securing a new PIA Drill Permit for an inaugural drilling program.
-
On April 22, 2026, the Company closed a non-brokered private placement and issued 32,245,269 common shares of the Company at a price of $1.10 per share for aggregate gross proceeds of $35,469,796. The Company paid an aggregate cash finder's fees totaling $630,000.
The Company's financial highlights for the three months ended March 31, 2026, included:
- Operating loss was $450,614 compared to an operating loss of $721,765 in Q1 2025;
- Operating cash outflow before working capital was $330,744 compared to an operating cash outflow before working capital of $175,504 in Q1 2025; and
- As at March 31, 2026, cash and cash equivalents was $4,935,913 and working capital was $4,959,194.
Page 2
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
OUTLOOK
Elida
On September 3rd, 2025, the Company announced the recommencement of the Phase 3 drilling program, with plans to complete an additional 7,000 m of diamond drilling. Currently, there are two drill rigs actively drilling on site with the objective to continue potential resource expansion and to enhance the overall Cu-Mo-Ag grades. In addition, exploration drilling outside the Inferred Mineral Resource Estimate is supported by the 3D resistivity model derived from the MT geophysical survey completed in July 2025.
The Company is in the process of upgrading the Programma de Inicio de Actividades ("PIA") Drill Permit from a Ficha Técnica Ambiental ("FTA") environmental certificate, which allows drilling from a maximum of 20 diamond drill platforms, to a Declaración de Impacto Ambiental ("DIA") environmental certificate, increasing this maximum to 40 platforms for an additional 5 years.
On January 6th, 2026, the Company reported that it has received the DIA environmental certificate which provides a comprehensive review of potential environmental impacts associated with exploration activities and outlines appropriate mitigation measures for up to 40 drilling platforms. This approval represents an important advancement toward securing an upgraded PIA, which would allow the Company to continue exploration beyond the current pit-constrained Mineral Resource Estimate and further evaluate the larger hydrothermal alteration footprint of the Elida porphyry Cu-Mo-Ag system.
As part of the requirements for the new PIA drilling permit application, the Company also executed a new five-year Access Agreement with the host community on April 30, 2025 and is in the process of completing a Collective Impacts Report (Informe de Impactos Colectivos) for submission to the Ministerio de Cultura as part of the Prior Consultation (Consulta Previa) process.
The receipt of the DIA, together with the execution of the Access Agreement, represents key milestones for Elida, as they satisfy critical requirements of the new PIA Drill Permit application.
Flor de Cobre
The PIA Drill Permit application for Flor de Cobre is ongoing with the submission of a Collective Impacts Report to MINEM in March 2024. On October 21st, 2024, the Company received notice that it had been exempted from the Prior Consultation process. Upon completing the surface access agreement with the host community, all requirements for MINEM to issue the Drill Permit will be met, with plans to conduct an initial drill program potentially later in 2026. Negotiations with the host community are ongoing with plans to finalize access agreements prior to the Drill Permit.
Paka
On February 27th, 2026, the Company announced that it had received the DIA environmental certification, satisfying a critical requirement for the new PIA Drill Permit application at Paka. The DIA represents a major catalyst advancing the project closer to its inaugural drill program to test a large, highly prospective porphyry-skarn system along the possible northwest extension of the Southern Perú Copper Belt.
The Company is also in the process of completing a Collective Impacts Report for submission to the Ministerio de Cultura as part of the Prior Consultation process and plans to complete an Access Agreement with the host community as part of the requirements for the new PIA Drill Permit application.
PROJECT DETAILS - PERU
ELIDA PORPHYRY CU-MO-AG PROJECT
The Elida Project is located in the province of Ocros, in the district of Carhuapampa, Department of Ancash which is 170 km northwest of Lima and roughly 85 km from the coast. The property is accessible along paved and maintained unpaved roads that extend inland from the city of Barranca. Barranca is connected to Lima by the Pan American Highway (Figure 1).
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
The property is made up of 29 mining concessions, totalling 19,159.06 ha, and 3 claims with 3,000 ha recently staked as shown in Figure 2. The concessions are currently registered in the name of Elida Resources SAC. There is currently one mineral concession internal to the Elida property and that concession is not owned by Element 29.
Figure 1. The location of the Elida property approximately 200km north of Lima at an elevation of approximately 1600m.
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Figure 2. Elida property concession map.
The property was originally staked by GlobeTrotters Resource Group Inc. ("GlobeTrotters") over a large, remote-sensing anomaly situated in an emerging porphyry belt in central Peru. Ground follow-up of this anomaly by GlobeTrotters eventually led to the discovery of an untested porphyry Cu-Mo centre that is part of a porphyry cluster enclosed by a $2.5 \times 2.5$ km alteration zone. The porphyry system is a multiphase complex of porphyry stocks and dikes, composed of quartz monzonite and quartz monzodiorite intruded into Cretaceous Casma volcanic, volcaniclastic and sedimentary rocks as well as the eastern margin of the Coastal Batholith. In the central part of the system, the Casma Group is a sequence of volcanic and volcanoclastic rocks intercalated with sandstone, calcareous sandstone, siltstone, and shales.
Lundin Mining Peru SAC ("Lundin") optioned the property from GlobeTrotters and undertook an exploration program on the Elida property from 2013 to 2016 which consisted of regional and detailed geological mapping, drone topographic surveying, rock geochemistry, ground magnetics, induced polarization/resistivity ("IP"), and culminating in drilling 18 diamond drill holes.
Regional geological mapping was undertaken at a district scale of 1:10,000, with local detailed mapping at a scale of 1:2,500. A concurrent rock geochemistry sampling program was also completed; this part of the program included radiometric age-dating of four rock samples by a Uranium $^{238}$ /Lead $^{206}$ method on magmatic zircon. Eight lines of ground magnetics with a total coverage of $19.5 \mathrm{~km}$ and 12 IP lines using a pole-dipole configuration, at $100 \mathrm{~m}$ spacing along NW-SE oriented survey lines were conducted from January to March 2014. Thirty additional lines of ground magnetic surveying, at $100 \mathrm{~m}$ spacing with NE-SW oriented lines totalling $76.26 \mathrm{~km}$ was carried out in July 2014.
A total of $9,880\mathrm{m}$ of diamond drilling in 18 drill holes was completed by Lundin in 2015. All holes intercepted Cu-Mo mineralization and six of the holes intercepted significant Cu-Mo mineralization. Diamond drill hole ELID012 intersected an interval of $502.9\mathrm{m}$ of $0.42\%$ Cu, $0.046\%$ Mo, $3.2\mathrm{g/t}$ Ag including $181.8\mathrm{m}$ of $0.55\%$
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Cu, 0.046% Mo, 4.5 g/t Ag. The remaining half core for all holes is stored at the Company's secure core storage facility near Lima.
The Elida porphyry complex is a Cu-Mo-Ag mineralized multiphase porphyry system approximately 2.5 by 2.5 km in size at surface, associated with Eocene-aged quartz monzonite stocks, emplaced into the Cretaceous volcano-sedimentary sequence and a granodiorite member of the Peruvian Coastal Batholith. Elida is one of the first Eocene-age mineralized porphyry systems discovered in Peru.
The initial drill program by Lundin intersected a Cu-Mo-Ag mineralized porphyry system centred on an early quartz-feldspar porphyry stock. This stock has an elliptical shape in plan with dimensions approximately 300 x 500 m and is elongated east-west. Porphyry mineralization displays a clear zonation from a central, high temperature core containing Mo and minor Cu outward to a concentric Cu-Mo zone that contains the better drill hole intersections. The Ag content is relatively common yet minor in content throughout the mineralization. The Zn grades are anomalous throughout the mineralized intervals and shows a crude zonation, increasing toward the outer limits of mineralization. Most of the mineralized porphyry rocks at surface are variably replaced by sericite and accompanied by pyrite (phyllic alteration) and modified by weathering. A leached profile is preserved at higher elevations within the porphyry complex. In-situ and transported hematitic leached cap is locally abundant. Both exotic and indigenous Cu oxide minerals are present.
Lundin terminated the option with GlobeTrotters in 2016. The project was later acquired by the Company in February 2019 through a share purchase agreement with GlobeTrotters to acquire 100% of the shares in Peruvian subsidiary Elida Resources S.A.C.
Drill Program Results (Figure 3)
The Company completed 4,481.4 m of diamond drilling in a seven-hole Phase 1 drill program in December 2021. The results were disclosed in the following press releases:
- Element 29 Reports Final Three Holes from the Elida Phase I Drilling and Reports 908.75 metres of 0.55% CuEq (See January 19, 2022 press release https://www.e29copper.com/news/2022/element-29-reports-final-three-holes-from-the-elida-phase-1-drilling-and-reports-90875-metres-of-055--cueq)
- Element 29 Drills 418.0 metres of 0.51% CuEq at the Elida Copper Project (See November 15, 2021 press release http://www.e29copper.com/news/2021/element-29-drills-4180--of-051-cueq-at-the-elida-copper-project)
- Element 29 Drills 383.75 metres of .71% CuEq at the Elida Copper Project (See October 18, 2021 press release http://www.e29copper.com/news/2021/element-29-drills-38375-metres-of-71-cueq--at-the-elida-copper-project)
The Company completed 2,043 m of diamond drilling in a seven-hole Phase 2 drill program in November 2022. The results were disclosed in the following press releases:
- Element 29 Commences Phase 2 Drill Program at the Elida Copper Deposit in Peru (see October 13, 2022 press release https://www.e29copper.com/news/2022/element-29-commences-phase-2-drill-program-at-the-elida-copper-deposit-in-peru)
- Element 29 Announces Results from the Elida Phase 2 Drill Program including 404.5 metres of 0.60% CuEq (see March 6, 2023 press release https://www.e29copper.com/news/2023/element-29-announces-results-from-elida-phase-2-drill-program-including-4045-metres-of-060-cueq1)
The Company completed 2,249 m of diamond drilling from the first two-holes of a Phase 3 drill program in December 2024. The results were disclosed in the following press releases:
- Element 29 Announces Results from Elida Phase-III Drill Program including 1039.6 metres of 0.54% CuEq (See January 22, 2025 press release https://www.e29copper.com/news/2025/element-29-announces-results-from-elida-phase-iii-drill-program-including-10396-metres-of-054-cueq2)
Page 6
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
The Company completed 4,456 m of diamond drilling from an additional five holes of the Phase-3 diamond drilling program in December 2025. The results were disclosed in the following press release:
- Element 29 Reports Longest and Highest-Grade Intercepts to Date at Elida with 1,489 m of 0.58% CuEq (See January 26, 2026, press release https://www.e29copper.com/news/2026/element-29-reports-longest-and-highest-grade-intercepts-to-date-at-elida-with-1489-m-of-058-cueq2)
The Company completed 1,232 m of diamond drilling from the first hole of the Phase-3 diamond drilling program in April 2026. The results were disclosed in the following press release:
- Element 29 Continues to Drill Long Mineralized Intercepts to Potentially Expand Mineral Resources1 at its Elida Porphyry Cu-Mo-Ag Deposit, Perú (See April 1, 2026, press release https://www.e29copper.com/news/2026/element-29-reports-longest-and-highest-grade-intercepts-to-date-at-elida-with-1489-m-of-058-cueq2)
Results of drilling are summarized in Table 2 and collar locations are shown Table 3.
Table 2. Results from the Elida drilling program expressed as length-weighted assay intervals.
| HoleID | From (m) | To (m) | Length^{3} (m) | Cu (%) | Mo (%) | Ag (ppm) |
|---|---|---|---|---|---|---|
| ELID019 | 43.2 | 426.9 | 383.8 | 0.54 | 0.035 | 4.2 |
| includes | 43.2 | 358.0 | 314.9 | 0.60 | 0.033 | 4.7 |
| ELID020 | 143.0 | 451.0 | 308.0 | 0.43 | 0.028 | 3.9 |
| includes | 249.0 | 353.0 | 104.0 | 0.54 | 0.031 | 4.6 |
| includes | 384.2 | 451.0 | 66.8 | 0.62 | 0.041 | 5.2 |
| ELID021 | 207.9 | 764.0 | 556.1 | 0.36 | 0.024 | 2.4 |
| includes | 244.0 | 662.0 | 418.0 | 0.40 | 0.025 | 2.6 |
| ELID022 | 145.0 | 533.0 | 388.0 | 0.34 | 0.026 | 2.4 |
| includes | 201.0 | 405.0 | 204.0 | 0.38 | 0.026 | 2.7 |
| and includes | 201.0 | 229.0 | 28.0 | 0.62 | 0.022 | 4.2 |
| and includes | 283.0 | 405.0 | 122.0 | 0.39 | 0.032 | 2.8 |
| includes | 425.0 | 451.0 | 26.0 | 0.43 | 0.024 | 3.2 |
| ELID023 | 87.0 | 610.5 | 523.5 | 0.24 | 0.024 | 2.9 |
| includes | 87.0 | 178.1 | 91.1 | 0.41 | 0.032 | 4.1 |
| includes | 425.0 | 610.5 | 185.5 | 0.30 | 0.017 | 4.6 |
| ELID024 | 198.5 | 650.2 | 451.8 | 0.38 | 0.034 | 3.1 |
| includes | 198.5 | 467.5 | 269.1 | 0.31 | 0.026 | 2.8 |
| includes | 467.5 | 650.2 | 182.7 | 0.47 | 0.047 | 3.9 |
| and includes | 467.5 | 540.0 | 72.5 | 0.59 | 0.048 | 4.5 |
| ELID025 | 38.5 | 947.2 | 908.8 | 0.39 | 0.035 | 2.9 |
| includes | 38.5 | 378.0 | 339.6 | 0.50 | 0.036 | 4.3 |
| includes | 442.0 | 821.2 | 379.2 | 0.30 | 0.033 | 1.9 |
| includes | 821.2 | 861.0 | 39.8 | 0.58 | 0.027 | 3.6 |
| includes | 861.0 | 947.2 | 86.2 | 0.34 | 0.039 | 2.0 |
| ELID026 | 29.1 | 117.7 | 88.6 | 0.01 | 0.000 | 2.6 |
| ELID027 | 22.9 | 272.6 | 249.7 | 0.01 | 0.000 | 2.3 |
| ELID028 | 144.3 | 250.6 | 106.4 | 0.01 | 0.001 | 3.9 |
| ELID029 | 3.4 | 250.9 | 247.5 | 0.03 | 0.001 | 2.3 |
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
| ELID030 | 144.3 | 300.3 | 156.1 | 0.13 | 0.033 | 1.1 |
|---|---|---|---|---|---|---|
| ELID031 | 34.1 | 401.0 | 366.9 | 0.27 | 0.027 | 2.2 |
| includes | 34.1 | 70.3 | 36.2 | 0.14 | 0.025 | 2.7 |
| includes | 70.3 | 189.4 | 119.1 | 0.38 | 0.025 | 2.5 |
| includes | 189.4 | 389.3 | 200.0 | 0.23 | 0.028 | 1.9 |
| includes | 389.3 | 401.0 | 11.7 | 0.17 | 0.015 | 1.3 |
| ELID032 | 45.5 | 450.0 | 404.5 | 0.45 | 0.032 | 3.6 |
| includes | 45.5 | 93.5 | 48.0 | 0.38 | 0.029 | 3.3 |
| includes | 93.5 | 216.5 | 123.0 | 0.52 | 0.036 | 4.0 |
| includes | 216.5 | 271.0 | 54.5 | 0.36 | 0.029 | 2.8 |
| includes | 271.0 | 361.0 | 90.0 | 0.50 | 0.034 | 3.9 |
| includes | 361.6 | 450.0 | 88.4 | 0.41 | 0.029 | 3.4 |
| and includes | 436.6 | 450.0 | 13.4 | 0.75 | 0.032 | 7.2 |
| ELID033 | 69.9 | 1109.6 | 1039.7 | 0.39 | 0.036 | 3.0 |
| includes | 245.8 | 588.0 | 342.2 | 0.41 | 0.037 | 3.7 |
| includes | 799.5 | 1109.6 | 310.1 | 0.56 | 0.040 | 3.5 |
| ELID034 | 57.7 | 161.2 | 103.6 | 0.28 | 0.025 | 3.1 |
| ELID035 | 56.6 | 979.0 | 922.4 | 0.33 | 0.045 | 2.8 |
| includes | 56.6 | 417.8 | 361.2 | 0.40 | 0.029 | 4.0 |
| includes | 520.2 | 610.0 | 89.9 | 0.40 | 0.040 | 3.1 |
| includes | 706.5 | 747.9 | 41.4 | 0.45 | 0.058 | 3.1 |
| ELID036 | 122.5 | 215.2 | 92.7 | 0.36 | 0.030 | 3.1 |
| and | 380.9 | 540.0 | 159.1 | 0.24 | 0.020 | 3.1 |
| ELID037 | 63.0 | 1552.0 | 1489.0 | 0.44 | 0.040 | 4.1 |
| includes | 400.0 | 1552.0 | 1152.0 | 0.49 | 0.040 | 4.7 |
| includes | 400.0 | 801.0 | 401.0 | 0.60 | 0.030 | 7.7 |
| includes | 589.2 | 750.5 | 161.3 | 0.66 | 0.030 | 9.2 |
| includes | 1268.2 | 1552.0 | 283.8 | 0.58 | 0.060 | 3.7 |
| includes | 1381.5 | 1552.0 | 170.5 | 0.63 | 0.060 | 3.5 |
| and includes | 1458.2 | 1552.0 | 93.8 | 0.71 | 0.060 | 4.0 |
| ELID038 | 48.0 | 715.0 | 667.0 | 0.28 | 0.030 | 2.3 |
| includes | 61.7 | 145.4 | 83.7 | 0.43 | 0.040 | 3.0 |
| and includes | 447.9 | 564.3 | 116.4 | 0.29 | 0.050 | 1.9 |
| ELID039 | 13.3 | 615.0 | 601.7 | 0.30 | 0.030 | 4.1 |
| includes | 13.3 | 117.9 | 104.6 | 0.50 | 0.030 | 4.7 |
| includes | 202.5 | 292.0 | 89.5 | 0.31 | 0.030 | 3.3 |
| and includes | 445.5 | 615.0 | 169.5 | 0.28 | 0.040 | 6.3 |
| ELID040 | 39.6 | 154.6 | 115.0 | 0.37 | 0.020 | 3.5 |
| and | 242.6 | 297.9 | 55.3 | 0.29 | 0.020 | 4.8 |
| ELID041 | 29.8 | 933.5 | 903.7 | 0.31 | 0.020 | 2.2 |
| includes | 29.8 | 737.5 | 707.7 | 0.33 | 0.030 | 2.4 |
| and includes | 29.8 | 525.0 | 495.2 | 0.35 | 0.030 | 2.8 |
Page 8
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Table 3. Drill hole collar locations for reported drill holes. Coordinates are in WGS84 zone 18S UTM.
| Hole ID | East | North | Elev (m) | EOH (m) | Azimuth (degrees) | Dip (degrees) |
|---|---|---|---|---|---|---|
| ELID019 | 260056 | 8835184 | 1690 | 480 | 0 | -90 |
| ELID020 | 259900 | 8835350 | 1759 | 567 | 180 | -65 |
| ELID021 | 260150 | 8835360 | 1740 | 770 | 179 | -78 |
| ELID022 | 260274 | 8835320 | 1713 | 602 | 179 | -70 |
| ELID023 | 260000 | 8834960 | 1613 | 662 | 180 | -65 |
| ELID024 | 259700 | 8835200 | 1794 | 650 | 83 | -65 |
| ELID025 | 260058 | 8835187 | 1690 | 947 | 0 | -80 |
| ELID026 | 260300 | 8836000 | 1948 | 118 | 90 | -65 |
| ELID027 | 260300 | 8836000 | 1948 | 273 | 263 | -65 |
| ELID028 | 260300 | 8836000 | 1948 | 251 | 90 | -60 |
| ELID029 | 260200 | 8835750 | 1835 | 251 | 80 | -60 |
| ELID030 | 259800 | 8835250 | 1776 | 300 | 180 | -60 |
| ELID031 | 260150 | 8835280 | 1710 | 401 | 180 | -60 |
| ELID032 | 260059 | 8835182 | 1686 | 450 | 277 | -65 |
| ELID033 | 259903 | 8835209 | 1729 | 1110 | 274 | -82 |
| ELID034 | 260003 | 8835291 | 1731 | 161 | 270 | -85 |
| ELID035 | 260003 | 8835295 | 1731 | 979 | 270 | -85 |
| ELID036 | 259904 | 8834950 | 1622 | 831 | 180 | -54 |
| ELID037 | 260001 | 8835292 | 1731 | 1552 | 270 | -75 |
| ELID038 | 260071 | 8835044 | 1634 | 845 | 91 | -68 |
| ELID039 | 260096 | 8834956 | 1583 | 695 | 180 | -50 |
| ELID040 | 259992 | 8834809 | 1556 | 532 | 175 | -46 |
| ELID041 | 260213 | 8835159 | 1666 | 1232 | 5 | -80 |
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Figure 3. Location and trace of the 41 diamond drill holes completed at Elida as well as the surface projection of the Mineral Resource at a greater than $0.2\%$ Cu cutoff for Zone 1.
Mineral Resource Estimation
The Company announced the completion of an initial independent Inferred Mineral Resource Estimate $^{1}$ ("Mineral Resource") of the Elida porphyry Cu-Mo deposit on September 27, 2022, with an effective date of September 20, 2022. The pit constrained, Inferred Mineral Resource Estimate of 321.7 million tonnes grading $0.32\%$ Cu, $0.029\%$ Mo and $2.6\mathrm{g / tAg}$ , using a $0.20\%$ Cu cut-off grade was prepared by Mr. Marc Jutras, P.Eng., M.A.Sc., Principal, Mineral Resources at Ginto Consulting Inc. ("Ginto Consulting"). Mr. Jutras is an Independent Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Standards on Mineral Resources and Mineral Reserves, as adopted and amended by the CIM Council.
Mineral Resources at Elida shown in Error! Reference source not found.4 were estimated by:
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
- Developing a geologic interpretation of Cu mineralization in collaboration with the Element 29 geology team based on geologic observations from surface exposure and drill core.
- Performing a statistical evaluation of the Elida drill hole database, which contained 25 diamond drill holes of HQ and NQ diameter.
- Three-dimensional modeling two mineralized domains represented by a higher Cu grade domain and a lower Cu grade domain.
- Integration of an accurate digital terrain model into the mineralization model.
- Compositing original samples to two m lengths.
- Exploratory data analysis to understand different geometric and statistical properties of Cu-Mo-Ag grades.
- Applying capping of high-grade outliers based on the statistical properties of the grade populations.
- Variographic analysis to spatially establish the preferred directions of grade continuity.
- Grade estimation of Cu-Mo-Ag with ordinary kriging using a strategy and parameters tailored to account for the various geometrical, geologic, and geostatistical characteristics identified in previous steps.
- Validation of grade estimates using a set of validation tests.
- Applying a pit constraint optimized using the Lerchs-Grossman algorithm.
The Cu grade populations within the mineralized domains were found to be well-behaved with low coefficients of variation (values of less than 0.6). The capping of the high-grade outliers has only had a minor effect on the average grades and the metal content. As such, ordinary kriging technique with capped composited grades is believed to be an adequate strategy for the grade interpolation process.
The validation of the Cu grade estimates has shown good results from the various tests carried out. It can be concluded that the Cu grade estimates are not biased and have an adequate amount of smoothing/variability. Therefore, it is believed that the Cu grade estimates are an adequate representation of the Mineral Resource at Elida, based on the current geologic understanding and available data. The potential exists for additional mineral resources on the property also associated with untested targets.
The Mineral Resource has a low modeled strip ratio of 0.74:1 (waste: mineralized material). A near surface, higher-grade subset of the Mineral Resource consisting of 59.7 million inferred tonnes at 0.49% Cu, 0.036% Mo, and 3.99g/t Ag at a cut-off grade of 0.4% Cu ("Higher-Grade Resource") has potential to be mined with minimal stripping in the initial years of mining. Significant Mo and Ag grades have the potential to enhance the economics of the deposit, subject to metallurgical test work.
The effective date of the Initial Inferred Mineral Resource Estimate is September 20, 2022. A NI 43-101 technical report prepared by Ginto Consulting was filed on SEDAR+ within 45 days of September 29, 2022, and is available on the Company's website.
For readers to fully understand the Mineral Resource information contained in this document, they should read the technical report in its entirety, including all qualifications, assumptions, exclusions, and risks. The technical report is intended to be read as a whole, and sections should not be read or relied upon out of context.
Exploration Potential
The Mineral Resource utilized widely spaced drill holes that tested a portion of the interpreted Zone 1 mineralization surrounding a lower-grade porphyry centre. More drilling will be required in the southwest and northwest sectors to completely evaluate the mineral resource potential of Zone 1. The Company elected to complete a Mineral Resource Estimate at this stage to quantify the size of the drilled portion of Zone 1 and use the three-dimensional mineralization model for future drill hole planning to potentially expand the size and upgrade the Mineral Resource.
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Table 4. Pit-constrained Inferred Mineral Resource estimates for the Elida Cu-Mo deposit.
| Cu Cut-Off (%) | Tonnes (millions) | Cu (%) | Contained Cu (M lb) | Contained Cu (tonnes) | Mo (%) | Contained Mo (M lb) | Contained Mo (tonnes) | Ag (g/l) | Contained Ag (M oz) |
|---|---|---|---|---|---|---|---|---|---|
| 0.10 | 520.8 | 0.255 | 2,927.9 | 1,328,057 | 0.026 | 298.5 | 135,410 | 2.15 | 36.0 |
| 0.15 | 439.4 | 0.278 | 2,692.9 | 1,221,456 | 0.028 | 271.2 | 123,024 | 2.31 | 32.7 |
| 0.20 | 321.7 | 0.316 | 2,241.2 | 1,016,568 | 0.029 | 205.7 | 93,293 | 2.61 | 27.0 |
| 0.25 | 214.9 | 0.363 | 1,719.4 | 779,926 | 0.031 | 146.8 | 66,605 | 2.97 | 20.5 |
| 0.30 | 143.0 | 0.407 | 1,283.4 | 582,150 | 0.033 | 104.1 | 47,201 | 3.31 | 15.2 |
| 0.35 | 94.7 | 0.449 | 937.9 | 425,415 | 0.034 | 71.0 | 32,214 | 3.65 | 11.1 |
| 0.40 | 59.7 | 0.493 | 649.1 | 294,423 | 0.036 | 47.4 | 21,499 | 3.99 | 7.7 |
| 0.45 | 34.1 | 0.547 | 411.7 | 186,736 | 0.037 | 27.8 | 12,631 | 4.40 | 4.8 |
| 0.50 | 20.1 | 0.599 | 265.4 | 120,396 | 0.038 | 16.8 | 7,638 | 4.76 | 3.1 |
Phase 3 Drilling Program
The Company announced on September 24th, 2024, the start of the Phase 3 drilling program for a total of 5000 m to further test Zone 1. This drilling program had the following objectives:
- Show potential to expand the existing pit-constrained Mineral Resource of 321.7 million tonnes of 0.32% Cu, 0.03% Mo and 2.61 g/t Ag at a 0.2% Cu cutoff and a 0.74:1 strip ratio; and
- Infill gaps within the exiting pit-shell to show potential to increase the Higher-Grade Resource of 59.7 million tonnes of 0.49% Cu, 0.036% Mo and 3.99 g/t Ag at a 0.4% Cu cutoff.
- Continue to explore outside the Zone 1 pit shell to depths of up to 1000 m while in porphyry Cu-Mo-Ag mineralization.
The drilling program was postponed on December 26th, 2024, for operational purposes after completing three holes for a total of 2,249.8 m of drilling. The restart of the Phase 3 drilling program was announced on September 3rd, 2025, with plans to complete an additional 7,000 m of diamond drilling in 2025 and 2026. The Phase 3 drilling program is currently ongoing with 6,706 m completed to date. Results from the 2025-2026 drilling are summarized as follows (Figure 4):
ELID036 (Figure 5)
ELID036 was drilled to a depth of 831.4 m at a dip of -55° towards a 180° azimuth. The hole was designed to (1) infill within the current pit shell to potentially improve overall Cu-Mo-Ag grades, (2) extend mineralization south of the pit shell without materially increasing the strip ratio, and (3) test a large, low-resistivity MT geophysical anomaly located south of the existing pit shell.
Starting at a depth of 122.5 m, the hole intersected 92.7 m grading 0.36% Cu, 0.03% Mo and 3.11 g/t Ag, associated with biotitic hornfels interbedded with lesser calcsilicate hornfels. A second intercept of 159.1 m of 0.24% Cu, 0.02% Mo and 3.05 g/t Ag was encountered starting at a depth of 380.9 m, hosted by calcsilicate hornfels interbedded with biotitic hornfels and minor skarn lenses.
In both intercepts, the Cu-Mo-Ag mineralization is associated with porphyry-style A- and B-type vein stockworks, as well as C-type veins related to retrograde chlorite-epidote alteration. These results highlight the potential to increase the overall grades within the pit shell and expand mineral resources to the south. The hole was terminated at a depth of 831.4 m without fully testing the southern low-resistivity MT geophysical anomaly due to a decrease in chalcopyrite mineralization at depth.
ELID037 (Figure 6)
ELID037 was drilled to a depth of 1,552.0 m at a dip of -75° towards an azimuth of 270°, corresponding to a vertical depth of approximately 1,479 m, making it the deepest hole drilled at Elida to date. The hole was designed to follow up higher-grade Cu-Mo-Ag mineralization previously intersected at the bottom of ELID033 and to test a large, low-resistivity MT geophysical anomaly at depth interpreted to represent a
deeper, high-grade copper core, a mineralization event commonly associated with economic porphyry copper systems.
The hole intersected approximately 63 m of overburden, followed by 1,489 m grading 0.44% Cu, 0.04% Mo, and 4.09 g/t Ag, and was terminated at a depth of 1,552.0 m due to operational constraints.
The entire mineralized interval is strongly potassic altered and comprised predominately of thick sequences of skarn and calcsilicate hornfels, with minor interbedded biotitic hornfels. Local limestone units are partially to completely replaced by semi-massive to massive pyrrhotite-chalcopyrite, interpreted as carbonate replacement deposit (“CRD”)-style mineralization.
The interval is crosscut by multiple generations of porphyry-related A- and B-type vein forming stockworks, which are subsequently cut by C-type veins and patches associated with retrograde chlorite-epidote-amphibole alteration.
ELID037 also intersected 1,152 m grading 0.49% Cu, 0.04% Mo, 4.65 g/t Ag, starting at a depth of 400 m near the edge of the current pit shell and continuing to EOH at 1,552.0 m, extending the Cu-Mo-Ag mineralization well beyond the existing pit shell.
This interval includes several higher-grade sub-intervals, notably 401.0 m grading 0.60% Cu, 0.03% Mo, and 7,67 g/t Ag starting at 400 m depth, and 283.8 m grading 0.58% Cu, 0.06% Mo and 3.68 g/t Ag from 1,268.2 m to the EOH.
The hole terminated in 93 m grading 0.71% Cu, 0.06% Mo, and 3.99 g/t Ag at 1,552.0 m depth due operational constraints. This deeper, higher-grade Cu-Mo-Ag mineralization remains open at depth and correlates well with the upper portion of the large, low-resistivity MT geophysical anomaly and is interpreted to represent the western edge of a high-grade copper core (Figure 11).
ELID038 (Figure 7)
ELID038 was drilled to a depth of 845.1 m at a dip of -70° towards an azimuth of 90°. The hole was designed to test the Elida porphyry system on the eastern side of the current pit shell. The drill collar is positioned immediately west of outcropping, strongly altered volcanoclastic rocks cut by phyllic-altered QMP stocks and dykes hosting A-, B-, and D-type veins (intermineral porphyries) that are leached and locally contain visible copper oxide mineralization. The hole was also designed to test several strongly potassic-altered QMP dykes and fingers previously intersected in hole ELID005. These intrusions are interpreted as potassic-altered early porphyries characterized by pervasive secondary biotite replacement, EDM-type veins, and disseminated chalcopyrite.
The hole intersected 667.0 m grading 0.28% Cu, 0.03% Mo, and 2.26 g/t Ag from 48.0 m to 715.0 m depth.
In the upper part of the hole, a sub-interval of 83.0 m grading 0.43% Cu, 0.04% Mo and 2.97 g/t Ag, starting at 61.7 m depth, is associated with a phreatic breccia containing heterolithic fragments including mineralized biotitic hornfels, early-intermineral QMPs, and minor skarn, supported in a fragmental rock flour matrix. The mineralization occurs both within breccia fragments and within the matrix as disseminations, stringers, and locally as pockets of semi-massive to massive sulphide replacement.
A second sub-interval of 116.4 m grading 0.29% Cu, 0.05% Mo and 1.92 g/t Ag starting at 447.9 m depth, is associated with C-type veins developed along the structural foliation, as well as open-space--filling veins and local breccias hosted within interbedded biotitic hornfels and fine-grained biotitic sandstones. The hole was terminated at a depth of 845.1 m due to a visible decrease in chalcopyrite mineralization at depth.
ELID039 (Figure 8)
ELID039 was drilled to a depth of 695.1 m at a dip of -50° towards a 180° azimuth. Similar to ELID036, this hole was designed to (1) infill within the current pit-shell to potentially improve the overall Cu-Mo-Ag grades, (2) extend the mineralization outside the pit shell to the south without materially changing the strip ratio, and (3) test a large, low resistivity MT geophysical anomaly observed to the south of the existing pit shell.
The hole intersected 601.7 m grading 0.30% Cu, 0.03% Mo, and 4.10 g/t Ag, starting at 13.3 m depth, associated with a sequence of calcsilicate hornfels interbedded with biotitic hornfels and locally cut by phyllic-altered QMP dykes and phreatic breccias.
Within the pit shell, the hole intersected two sub-intervals, including 104.6 m grading 0.50% Cu, 0.03% Mo, and 4.66 g/t Ag, starting at depth of 13.3 m and 89.5 m grading 0.31% Cu, 0.03% Mo, and 3.31 g/t Ag, starting at a depth 202.5 m. Both mineralized intervals are associated with A- and B-type vein stockworks with later C-type veins developed as stringers along the structural foliation, and as patches within interbedded biotitic hornfels and calcsilicate hornfels. These results highlight the potential to increase the overall grades within the pit shell.
Outside the pit shell, the hole intersected a third sub-interval of 169.5 m grading 0.28% Cu, 0.04% Mo, and 6.31 g/t Ag, starting at 445.5 m depth, associated with a thick sequence of calcsilicate hornfels locally cut by phreatic breccias. Mineralization in this interval is also associated with C-type veins developed along the structural foliation, as well as locally developed replacement patches within both the calcsilicate hornfels and phreatic breccias. This sub-interval coincides closely with a low-resistivity MT geophysical anomaly and highlights the potential to further expand mineral resources to the south.
The hole was lost at a depth of 695.1 m before testing the deeper low-resistivity MT geophysical anomaly.
ELID040 (Figure 9)
ELID040 was drilled to a depth of 531.9 m at a dip of -45^{o} towards an azimuth of 175^{o}. The hole was drilled south of holes ELID036 and ELID039 and was designed to (1) infill within the current pit shell to potentially improve overall Cu--Mo--Ag grades, (2) extend mineralization south of the pit shell without materially increasing the strip ratio, and (3) test the margin of the large, low-resistivity MT geophysical anomaly observed south of the current pit shell.
Starting at a depth of 39.6 m, the hole intersected 115.0 m grading 0.37% Cu, 0.02% Mo, and 3.53 g/t Ag, associated with a phreatic breccia composed of heterolithic fragments in a rock flour matrix, with minor intervals of intrusive breccia and biotitic hornfels. This interval is followed by calcsilicate hornfels interbedded with skarn and minor biotitic hornfels. Mineralization within the phreatic breccia occurs both within the fragments and the matrix as disseminations, patches, and locally as massive sulphide replacement. Within the calcsilicate hornfels and skarn, mineralization occurs as C-type veins forming along the structural foliation, disseminations, and locally as replacement patches.
The hole also intersected 55.3 m grading 0.29% Cu, 0.02% Mo, and 4.83 g/t Ag, starting at 242.6 m depth associated with a second sequence of foliated calcsilicate hornfels interbedded with biotitic hornfels. Mineralization in this interval is characterized by similar C-type veins developed along the structural foliation, disseminations, and locally as replacement patches.
ELID041 (Figure 10)
ELID041 was completed to a depth of 1,232.2 m at a dip of -80^{o} towards an azimuth of 5^{o}. The hole was completed on the northeastern side of the deposit, approximately 200 m east of hole ELID025 and was designed to (1) infill within the existing pit-shell to potentially expand the Higher-Grade Resource, and (2) extend the mineralization outside the pit-shell to 1000 m along the eastern side of Zone-1.
The hole returned 903.7 m grading 0.31% Cu, 0.02% Mo, and 2.22 g/t Ag from bedrock surface at 29.8 m depth, including 707.7 m of 0.33% Cu, 0.03% Mo, and 2.41 g/t Ag, and including 495.2 m of 0.35% Cu, 0.03% Mo, and 2.78 g/t Ag. These results extended porphyry Cu--Mo--Ag mineralization by more than 400 m beyond the current pit shell, highlighting potential for resource expansion in this area of the deposit.
The hole intersected a sequence of predominately biotitic hornfels interlayered with lesser biotitic sandstones and minor biotitic volcanoclastic sandstones extending from bedrock surface at 29.8 m to 538.4 m depth, transitioning to predominately biotitic volcanoclastic sandstones which continue to the EOH at 1,232.2 m. In the upper part of the hole, the units are overprinted by weak to moderate phyllic alteration with local silica replacement becoming strongly phyllic altered at depth within the biotitic volcanoclastic sandstones.
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
These rocks are cut by multiple generations of porphyry related stockworks including barren quartz veins, A- and B-type veins later cut by C-type veins as the main source of Cu mineralization which occurs along the structural foliation as strings and in open-space filling.
Figure 4. Zone 1 showing the $\mathrm{CuEq}^2$ (\%) geochemistry along the drill hole traces and the surface projection of the Mineral Resource at a greater than $0.2\%$ Cu cutoff. Drill holes from the 2025-2026 Phase 3 drilling program are labeled with geological sections along the hole for Figures 5 to 10.
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Figure 5. An east-west oriented geological cross section along northing 259900E containing drill hole ELID036 superimposed on the interpreted geology and the Mineral Resource at a greater than a $0.2\%$ Cu cutoff. The section also shows the length-weighted assay intervals of $\mathrm{CuEq}^2$ geochemistry along the drill hole traces.
Figure 6. An east-west oriented geological cross section along northing 8835325N containing drill hole ELID037 superimposed on the interpreted geology and the Mineral Resource at a greater than a $0.2\%$ Cu cutoff. The section shows the length-weighted assay intervals of $\mathrm{CuEq}^2$ geochemistry along the drill hole traces.
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Figure 7. An east-west oriented geological cross section along northing 8835015N containing drill hole ELID038 superimposed on the interpreted geology and the Mineral Resource at a greater than a $0.2\%$ Cu cutoff. The section shows the length-weighted assay intervals of $\mathrm{CuEq}^2$ geochemistry along the drill hole traces.
Figure 8. An east-west oriented geological cross section along northing 260065E containing drill hole ELID039 superimposed on the interpreted geology and the Mineral Resource at a greater than a $0.2\%$ Cu cutoff. The section shows the length-weighted assay intervals of $\mathrm{CuEq}^2$ geochemistry along the drill hole traces.
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Figure 9. An east-west oriented geological cross section along northing 260000E containing drill hole ELID040 superimposed on the interpreted geology and the Mineral Resource at a greater than a $0.2\%$ Cu cutoff. The section shows the length-weighted assay intervals of $\mathrm{CuEq}^2$ geochemistry along the drill hole traces.
Figure 10. An east-west oriented geological cross section along northing 260280E containing drill hole ELID041 superimposed on the interpreted geology and the Mineral Resource at a greater than a $0.2\%$ Cu cutoff. The section shows the length-weighted assay intervals of $\mathrm{CuEq}^2$ geochemistry along the drill hole traces.
MT Geophysical Survey
The Company completed a large-scale MT geophysical survey at Elida, targeting mineralization outside and beneath the current pit-constrained Mineral Resource. MT is a passive geophysical method that measures natural variations in the Earth's electromagnetic fields to detect changes in subsurface resistivity. In porphyry Cu exploration, MT is particularly effective for imaging the large-scale geological structures that control
porphyry emplacement as well as the associated hydrothermal alteration and Cu-sulfide mineralization as low-resistivity zones. Widely used throughout the Andes, MT has contributed to the discovery of several deep-seated porphyry systems that exceed 1,000 m depth.
Based on a total of 123 MT stations collected over a 5 km by 6 km survey area, a high-resolution, three-dimensional (“3D”) resistivity model of the subsurface was generated to depths exceeding 3,000 m. The MT 3D resistivity model outlined a 1,000 m long east-west trending high-resistivity anomaly running through the centre of the Elida deposit which correlates well with the Elida porphyry intrusive complex intruding predominately potassic-altered volcano-sedimentary host-rocks. This high-resistivity anomaly is straddled by several large low-resistivity anomalies that correlate with intensely hydrothermally altered volcano-sedimentary host-rocks cut by narrow early to late mineral porphyry fingers and dykes. The Cu-Mo-Ag mineralization shows a strong correlation with the high-resistivity anomaly, with higher-grade Cu-mineralization occurring along the transition from high to low resistivity. This transition likely maps the emplacement of the Elida porphyry intrusive complex into the altered volcano-sedimentary host rocks. A large untested low-resistivity anomaly also occurs to the north outside the mapped 2.5 km by 2.5 km phyllic alteration footprint of the Elida deposit. Outcrop exposures are poor, but preliminary mapping suggests the phyllic alteration extends to the north into this area (Figure 11).
The 3D resistivity model enhances the Company's understanding of the structural controls and geometry of the Elida porphyry system including potential relationships between host rocks and porphyry intrusions, hydrothermal alteration zones and sulphide mineralization. The Company intends to use the 3D resistivity model to further identify and prioritize drill targets extending outside and below the current Mineral Resource at Zone 1 and to explore for potential new zones of Cu-Mo-Ag mineralization within the mapped 2.5 km by 2.5 km phyllic alteration footprint of the porphyry system. Several of these MT anomalies also extend beyond the mapped alteration footprint suggesting the potential for currently unrecognized extensions to the known system and/or additional porphyry centres on the property.
Future Work
The Phase 3 drilling program recommenced on September 3rd, 2025, with plans to complete an additional 7,000 m of diamond drilling (refer to news release -- September 3, 2025 https://www.e29copper.com/news/2025/element-29-continues-potential-resource-expansion-drilling-at-its-elida-porphyry-cu-mo-ag-deposit-in-per). This program is designed to potentially expand the existing Mineral Resource and enhance the overall Cu-Mo-Ag grades. The Drill Program will test the potential for resource expansion beyond the current pit shell to depths exceeding 1,000 m, while infill drilling to strengthen confidence in the existing Mineral Resource and enhance the overall Cu-Mo-Ag grades. In addition, exploration drilling outside the Mineral Resource will be supported by the 3D resistivity model derived from the MT geophysical survey.
The Phase 3 drilling program continues under the existing PIA Drill Permit with two drill rigs currently operating on site. The drilling program is being carried out under the existing FTA environmental certificate, which is scheduled to expire in Q2 2026. The Company plans to complete an additional 5,000 m of drilling before the end of 2026 under the upgraded PIA Drill Permit and DIA environmental certificate, increasing the number of allowable drilling platforms from 20 to 40 with an additional 5-year term.
As part of the requirements for the upgraded PIA, the Company announced on June 4^{th}, 2025, the signing of a renewed Access Agreement with the host community for an additional 5-year term, expiring on April 30^{th}, 2030. Additionally, the Company announced the receipt of the new DIA environmental certificate on January 7^{th}, 2026. The Company is still required to complete the Prior Consultation process or receive an exemption and is in the process of preparing the Collective Impacts Report, to be submitted to MINEM in Q2 2026.
Preliminary metallurgical test work is also planned for 2026 to better understand overall Cu-Mo-Ag concentrate recoveries and potential presence of deleterious elements across key ore types within the Elida deposit. To minimize oxidation, selected sample rejects from geochemical analysis of cut drill core have been stored in nitrogen-sealed bags as part of this planning process.
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Figure 11: Location map showing the planned 2025 diamond drilling program at Elida. The proposed drill holes are highlighted in green superimposed on the surface projection of the Mineral Resource (outlined in white) and a 2D level slice of the 3D MT resistivity model at -400 m below topographic surface. The map also shows the location of the porphyry intrusions and the surface projections
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of historical drill holes (black traces). The locations of the 2D section A-A' in Figure 12 is also shown.
Figure 12: A 2D section (looking north) along drill hole ELID037 (Section 8835325N) plotted over the 3D MT resistivity model, drill hole traces showing length-weighted $\mathrm{CuEq}^2$ (\%) grades, and the outline of the Mineral Resources with pit-shell.
Notes:
- Mineral Resource Estimate information is available in "NI 43-101 Technical Report, Mineral Resource Estimation of the Elida Porphyry Copper Project in Peru" dated September 20, 2022 and prepared in accordance with Form 43-101F1 by Marc Jutras, P.Eng., M.A.Sc., Ginto Consulting Inc., a Qualified Person as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects, who is independent of Element 29 Resources Inc..
Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability and may be materially affected by geology, environment, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
The CIM definitions were followed for the classification of Inferred Mineral Resources. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as an Indicated Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.
Mineral Resources are reported using a US$/CAN$ exchange rate of 0.75 and constrained within an open pit shell optimized with the Lerchs-Grossman algorithm to constrain the Mineral Resources with the following estimated parameters: Cu price of US$3.46/lb, US$2.00/t mining cost, US$5.00/t processing cost, US$1.40/t G+A, 87% Cu recovery, and 45" pit slope. - The CuEq grades are calculated using $\text{CuEq} = \text{Cu}\% \times 0.85 + [\text{Mo}\% \times 4.2578] + [\text{Ag g/t} \times 0.0074]$ utilizing metal recoveries of $\text{Cu} = 85\%$ , $\text{Mo} = 65\%$ , and $\text{Ag} = 65\%$ and metal prices of $\text{Cu} = \text{US}\$ 4.56/\text{lb}$ , $\text{Mo} = \text{US}\$ 29.87/\text{lb}$ and $\text{Ag} = \text{US}\$ 35.50/\text{oz}$ based on a 2-year average of daily spot prices (from January 16, 2024, to January 15, 2026). The spot price of $\text{Mo}$ is derived from Molybdenum Bar, 99.9% minimum purity, China converted to US$/lbs.
- Intervals are downhole drilled core lengths. Drilling data to date is insufficient to determine true width of mineralization. Assay values are uncut.
FLOR DE COBRE CU-MO PROJECT
Flor de Cobre is located $35\mathrm{km}$ southeast of Arequipa and straddles the border between the Departments of Arequipa and Moquegua, the Provinces of Arequipa and General Sanchez Cerro, and the Districts of Polobaya and La Capilla. The property is accessible along paved and maintained unpaved roads from Arequipa and is situated at a modest elevation of $\sim 2,700\mathrm{m}$ with excellent infrastructure for mine development (Figure 13).
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Flor de Cobre is comprised of eleven mining concessions for a total of 2,535.36 ha and which are 100% owned by the Company's Peruvian subsidiary Candelaria Resources S.A.C. (Figure 15). The project is in the Southern Peru Copper Belt, which is host to numerous porphyry Cu deposits, including the Cerro Verde Cu-Mo mine operated by Freeport-McMoRan; the Cuajone and Toquepala Cu-Mo mines operated by Southern Copper; and the Quellaveco Cu-Mo mine operated by Anglo American. Flor de Cobre is located 5 km northwest of the Chapi Mine and 26 km southeast of the Cerro Verde Mine (Figure 14).
Figure 13: Location map for the Flor de Cobre, Paka and Pahuay Projects. The light green tone is the approximate position of the Paleocene Magmatic Arc and the Southern Peru Copper Belt, which hosts major porphyry copper deposits in the region.
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Figure 14: Regional setting and infrastructure for the Flor de Cobre Project.
Figure 15: Flor de Cobre property concession map.
Atravesado Target Development
Atravesado is a large porphyry Cu-Mo target located within the Company's 100% owned Flor de Cobre concessions. The target is defined by anomalous surface rock Cu-Mo geochemistry, surface IP resistivity and chargeability geophysical anomalies, and corresponding geological indicators within an area of approximately 1.5 km x 2.0 km (Figure 16).
A field mapping program was undertaken in September 2023 where information on rock types, hydrothermal alteration, mineralization, and vein densities were collected. The field work outlined widespread Cu-oxide mineralization associated with a leached capping zone atop phyllic-overprinted potassic-altered Jurassic-Cretaceous-aged Yura Group sediments. Increased densities of A-type veins within the potassic alteration zone correlate with enhanced Cu-oxide mineralization and elevated surface rock Cu-Mo geochemistry, resulting from the remobilization of Cu from weathered primary sulphide mineralization. The intense potassic alteration footprint and associated Cu mineralization, along with the identification of several narrow potassic-altered quartz-monzonite porphyry dikes at surface, suggest the potential for a deeper, untested early-mineral porphyry intrusion as part of a larger multi-phase porphyry intrusive complex. This is further supported by the 3D inversion model of the ground IP geophysics.
The Company recently took possession of drill core from three (3) historical diamond drill holes completed by Anglo American in 2007 along the perimeter of the Atravesado porphyry Cu-Mo target where quartz veinlet densities are relatively low. The Company plans to complete more geological mapping and sampling as well as detailed logging of these historical drill holes to integrate into the geological model prior to drilling.
The Company received the approval of the DIA environmental permit for Atravesado in Q4 2023. This allows the Company to drill from a maximum of 40 drilling platforms over a period of up to 5 years. A Collective Impacts Report was submitted to MINEM on March 2024 and the Company received notice on October 21^{st}, 2024, that it had been exempted from the Prior Consultation process. Upon completing the surface access agreement with the host community, all requirements for MINEM to issue the Drill Permit will be met, with plans to conduct an initial drilling program in Q4 2026.
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Figure 16: The Flor de Cobre project showing the locations of the Candelaria and Atravesado target areas. The continuous colour overlay shows chargeability response at $250\mathrm{m}$ depth. The black dashed line delimits moderate resistivity response at the same depth. Anomalous outcrop geochemistry, quartz veinlet development, and minor late porphyry dikes coincide with the moderate resistivity zone.
PAHUAY PORPHYRY-SKARN CU-(MO-AG) PROJECT
The Pahuay Cu project consists of 1200 ha and is $100\%$ owned by the Company (Figure 17), subject to a $2\%$ net smelter royalty return to Globetrotters Resource Group Inc. The property is located $270~\mathrm{km}$ south of Lima (Figure 13) within the eastern margin of the Coastal Batholith along the probable northwest projection of the Paleocene Southern Peru Copper Belt and is approximately $15~\mathrm{km}$ north of the Cerro Lindo polymetallic (Zn, Pb, Cu, Au, and Ag) mine controlled by Nexa Resources Peru SA. Paleocene porphyry intrusions are emplaced into Cretaceous volcaniclastic rocks, siliciclastic sediments and limestones developing a $1.7 \times 2.8~\mathrm{km}$ Cu mineralized hydrothermal alteration zone. The mineralized area contains magnetite-garnet skarn formed in the limestones and phyllic alteration of the volcaniclastic units. Cu mineralization in the skarn consists of Cu oxides, chalcopyrite and semi-massive magnetite. The central parts of the skarn system are anomalous in Cu and Mo. Outcrop samples returned assays up to $4.4\%$ Cu and $0.05\%$ Mo and the distal areas (Zn, Cu and Ag) returned assays up to $6.5\%$ Zn. The project has not been drill-tested and is scheduled for preliminary geological mapping, rock sampling and geophysical surveys to help develop the drill targets (Figure 18).
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Figure 17: Pahuay porphyry Cu-Mo skarn concession location map.
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Figure 18: The Pahuay porphyry Cu-Mo skarn system showing the hydrothermal alteration footprint of a phyllic overprinting potassic altered porphyry Cu-Mo system with skarn alteration and anomalous Cu-Mo rock geochemistry in outcrop samples.
PAKA PORPHYRY-SKARN CU-ZN-(AU-AG) PROJECT
The Paka copper project (previously referred to as the Muñaorjo project) consists of 2,500 ha of titled concession and is $100\%$ owned by Element 29 (Figure 19), subject to a $2\%$ net smelter return royalty with Globetrotters. The project is located in southern Perú and is road accessible from the capital city, Lima via the Pan American Highway, approximately $610~\mathrm{km}$ southeast to the coastal city of Chala, followed by $75~\mathrm{km}$ inland along a network of paved and gravel roads (Figure 13).
The Paka porphyry-skarn Cu-Zn-(Au-Ag) system is situated near the eastern margins of the Peruvian Coastal Batholith and hosted within Cretaceous limestones sequences which are intruded by diorite to granodiorite plutons of the Coastal Batholith. The hydrothermal system is spatially associated with the Tertiary magmatic arc and is interpreted to be Paleocene in age, potentially representing the northwestern continuation of the Southern Peru Copper Belt, which hosts several large porphyry copper deposits including Cerro Verde (Freeport-McMoRan-Buenaventura), Cuajone (Southern Copper), and Quellaveco (Anglo American) (Figure 13).
The Paka prospect comprises a large porphyry-skarn hydrothermal system defined by an alteration footprint greater than $2\mathrm{km}$ by $1\mathrm{km}$ , exposed along the crest of a broad anticline within thick limestone sequences and locally concealed beneath post-mineral volcanic cover (Figure 20). Along the northwestern margin of the alteration footprint, a $480\mathrm{m}$ by $280\mathrm{m}$ skarn-marble zone is exposed at surface and hosts strongly anomalous Cu, Zn, Au, and Ag rock geochemistry. Mineralization is characterized by dense quartz-limonite stockwork veining hosted within skarn, calc-silicate marble, and recrystallized limestones. Surface veining
commonly displays goethite--hematite with associated green copper oxides formed through supergene processes. Locally, pyrite and chalcopyrite are preserved as disseminations and within narrow veinlets.
A total of 121 rock grab samples were collected across the property, of which 62 samples returned grades greater than 0.01% Cu, including 48 samples exceeding 0.2% Cu and up to 4.03% Cu. Higher-grade copper values are concentrated within the skarn--marble zone and diminish outward from the core of the showing (Figure ??). The alteration and mineralization remain open to the northwest and west beneath post mineral cover consisting of unaltered Miocene dacites, rhyolites, and volcanic tuffs.
Peripheral areas northeast of the skarn--marble zone exhibit propylitic alteration developed within dioritic phases of the Coastal Batholith, characterized by chlorite--epidote--magnetite assemblages, suggesting distal alteration halos surrounding a deeper interpreted porphyry centre at Paka.
Paka prospect is interpreted as a large Cu--Zn--(Au--Ag) bearing porphyry--skarn system preserved at a relatively high level of erosion, where the causative porphyry intrusions are not yet exposed at surface. Further geological mapping and a planned deep-seeking IP--Resistivity geophysical survey are planned to better delineate porphyry-related alteration and mineralization at depth and beneath post-mineral volcanic cover to the west and northwest.
The Company announced the receipt of the DIA environmental certificate on February 27^{th}, 2026 and is currently fulfilling the remaining requirements for the PIA Drill Permit application, including the completion of the Collective Impacts Report to seek an exemption from the Prior Consultation process.
A drone photogrammetry survey was conducted as part of the baseline study, serving as a field reference and used to produce a digital terrain model for the project. More detailed geological mapping and geochemical sampling were carried out in Q1 2025 alongside a ground magnetometer geophysical survey, covering a total of 68 line-km. Further geological mapping, outcrop sampling, as well as magnetometer and IP geophysical surveys are planned for 2026.
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Figure 19: The Paka porphyry Cu-Au skarn project concessions location map.
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Figure 20: The Paka porphyry Cu-Au skarn project showing the outline of the porphyry Cu-Au skarn related hydrothermal alteration and highly anomalous Cu rock geochemistry in outcrop samples.
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
FINANCIAL INFORMATION
EXPLORATION AND EVALUATION ASSET EXPENDITURES
Expenditures for the three month period ended March 31, 2026 were as follows:
| Flor de Cobre | Elida | Pahuay and Paka | Total | |
|---|---|---|---|---|
| Balance at December 31, 2025 | $ 82,829 | $ 16,262,123 | $ 103,531 | $ 16,448,483 |
| Additions: | ||||
| Drilling | - | 589,978 | - | 589,978 |
| Geological and mapping | 161 | 35,648 | - | 35,809 |
| Geophysics and geochemistry | - | 96,100 | - | 96,100 |
| Permitting, concessions and taxes | 115 | 317,278 | 20,601 | 337,994 |
| Community, health, safety and environment | - | 760 | - | 760 |
| Geology salaries | - | - | 1,053 | 1,053 |
| Property maintenance and administration | 8,053 | 94,384 | - | 102,437 |
| Total additions for the period | 8,329 | 1,134,148 | 21,654 | 1,164,131 |
| Balance at March 31, 2026 | $ 91,158 | $ 17,396,271 | $ 125,185 | $ 17,612,614 |
Expenditures for the year ended December 31, 2025 were as follows:
| Flor de Cobre | Elida | Pahuay and Paka | Total | |
|---|---|---|---|---|
| Balance at December 31, 2024 | $ 1 | $ 11,909,193 | $ 1 | $ 11,909,195 |
| Additions: | ||||
| Drilling | 471 | 2,509,846 | 8,894 | 2,519,211 |
| Geological and mapping | 8,661 | - | 24,202 | 32,863 |
| Geophysics and geochemistry | - | 390,135 | 3,428 | 393,563 |
| Permitting, concessions and taxes | 31,408 | 479,697 | 55,682 | 566,787 |
| Community, health, safety and environment | - | 145,136 | 8,244 | 153,380 |
| Geology salaries | 189 | 115,228 | 1,047 | 116,464 |
| Property maintenance and administration | 42,099 | 712,888 | 2,033 | 757,020 |
| Total additions for the year | 82,828 | 4,352,930 | 103,530 | 4,539,288 |
| Balance at December 31, 2025 | $ 82,829 | $ 16,262,123 | $ 103,531 | $ 16,448,483 |
Title to exploration and evaluation assets involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing and evaluation assets and, to the best of its knowledge, title to the exploration and evaluation assets remains in good standing.
Elida Copper Project
The Company owns 100% of the Elida copper project, subject to a 2% Net Smelter Return ("NSR") to Globetrotters. The property is located in Peru.
Expenditures were related to drilling, administration and support costs for the current drilling program.
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Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Flor de Cobre Copper Project
The Company owns a 100% interest of the Flor de Cobre copper project. Globetrotters retains a 2% net smelter royalty ("NSR") on certain Flor de Cobre claims except for concessions acquired after the Company's initial public offering. The property is located in Peru.
Pahuay and Paka Copper Projects
The Company owns 100% of the Pahuay and Paka Copper projects, subject to a 2% NSR to Globetrotters. The properties are located in Peru.
SUMMARY OF CONSOLIDATED FINANCIAL OPERATING RESULTS
Operating Results
The Company's operating results for the three month periods ended March 31, 2026 and 2025 were:
| 2026 | 2025 | |
|---|---|---|
| General and administrative expenses | ||
| Administration and office | $ 15,424 | $ 10,683 |
| Corporate development | 32,839 | 34,434 |
| Investor relations | 182,081 | 152,840 |
| Personnel costs | 136,575 | 115,945 |
| Professional fees | 5,184 | 3,540 |
| Filing fees | 20,024 | 20,047 |
| Foreign exchange gain | (25,318) | (172,976) |
| Share-based compensation | 71,716 | 532,151 |
| Depreciation | 9,434 | 20,036 |
| Finance expenses | 2,655 | 5,065 |
| Operating loss | 450,614 | 721,765 |
| Interest income | (36,436) | (15) |
| Loss and comprehensive loss for the period | $ 414,178 | $ 721,750 |
Administration and office expenses in Q1 2026 were higher than in Q1 2025 due to increased corporate activities in 2026.
Corporate development expenses in Q1 2026 were comparable to Q1 2025 and are related to professional services to explore strategic initiatives.
Investor relations expenses in Q1 2026 were higher than in Q1 2025 due to increased marketing initiatives and timing of investor relation activities.
Personnel costs and professional fees in Q1 2026 were higher than in Q1 2025 due to inflationary increases.
Filing fees in Q1 2026 were comparable to Q1 2025.
Share-based compensation expenses in Q1 2026 were lower compared to Q1 2025 due to the timing of equity-based compensation vesting.
Depreciation charges are related to the Vancouver office lease and fixed assets in Peru.
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Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Quarterly Financial Data
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | |
|---|---|---|---|---|
| Administration and office | $ 15,424 | $ 12,273 | $ 7,071 | $ 10,462 |
| Corporate development | 32,839 | 43,837 | 21,838 | 28,020 |
| Investor relations | 182,081 | 221,335 | 100,431 | 172,352 |
| Personnel costs | 136,575 | 105,175 | 121,759 | 118,635 |
| Professional fees | 5,184 | 14,160 | 2,621 | 80,360 |
| Filing fees | 20,024 | 34,401 | 29,714 | 27,901 |
| Foreign exchange (gain) loss | (25,318) | 58,005 | (72,248) | 56,389 |
| Share-based compensation | 71,716 | 183,286 | 208,186 | 231,272 |
| Depreciation | 9,434 | 9,677 | 10,171 | 14,819 |
| Other | 2,655 | 2,952 | 807 | 4,841 |
| Operating loss | $ 450,614 | $ 685,101 | $ 430,350 | $ 745,051 |
| Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
| --- | --- | --- | --- | --- |
| Administration and office | $ 10,683 | $ 102,429 | $ 10,298 | $ 8,367 |
| Corporate development | 34,434 | 34,560 | 33,742 | 33,578 |
| Investor relations | 152,840 | 128,484 | 214,102 | 55,149 |
| Personnel costs | 115,945 | 117,621 | 74,970 | 102,333 |
| Professional fees | 3,540 | 5,207 | 10,574 | 18,290 |
| Filing fees | 20,047 | 20,075 | 25,397 | 20,268 |
| Foreign exchange (gain) loss | (172,976) | (3,255) | 41,511 | (3,052) |
| Share-based compensation | 532,151 | 131,137 | 472,757 | - |
| Depreciation | 20,036 | 11,168 | 10,976 | 29,327 |
| Other | 5,065 | 2,001 | 2,434 | 1,924 |
| Operating loss | $ 721,765 | $ 549,427 | $ 896,761 | $ 266,184 |
Overall costs, excluding share-based compensation and foreign exchange gain / loss, have been consistent since Q2 2024.
Corporate development expenses were for professional services to explore strategic initiatives and fluctuates based on strategies pursued.
Investor relations expenses were related to marketing activities to increase the Company's exposure in the capital markets and fluctuate based on timing of activities.
Personnel costs have been consistent.
Professional fees are related to legal, tax and audit services and fluctuate based on the timing of expenditures and services required.
Share based compensation was directly related to the granting and/or vesting of equity-based compensation in the quarter.
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Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
LIQUIDITY AND CAPITAL RESOURCES
| Three months ended March 31 | ||
|---|---|---|
| 2026 | 2025 | |
| Cash flows used in operating activities before working capital movements | $ (330,744) | $ (175,504) |
| Increase in receivables and prepaid expenses | (32,680) | (16,642) |
| Increase (decrease) in accounts payable and accrued liabilities | 10,828 | (279,356) |
| Decrease in deposits | - | 19,966 |
| Cash flows used in operating activities after working capital movements | (352,596) | (451,536) |
| Cash flows used in investing activities | (2,391,164) | (256,969) |
| Cash flows from financing activities | 106,845 | 812,880 |
| (Decrease) increase in cash and cash equivalents | (2,636,915) | 104,375 |
| Cash and cash equivalents - beginning of the period | 7,572,828 | 1,189,987 |
| Cash and cash equivalents - end of the period | $ 4,935,913 | $ 1,294,362 |
Cash outflows after changes in non-cash working capital items in Q1 2026 was lower compared to Q1 2025 due to higher accounts payable payments in 2025.
Cash outflows used in investing activities in Q1 2026 was higher compared to Q1 2025 due to increased payments related to drilling activity at Elida in 2026.
Cash flows from financing activities in Q1 2026 was lower compared to Q1 2025 due to greater warrant exercises in 2025.
Contractual Obligations
As at March 31, 2026, the Company had the following contractual obligation outstanding:
| Total | Less than 1 year | 1 -3 years | 3-5 year | More than 5 years | |
|---|---|---|---|---|---|
| Lease commitment | $ 75,737 | $ 34,620 | $ 41,117 | $ - | $ - |
SHAREHOLDERS' EQUITY
The Company's authorized share capital consists of unlimited common shares without par value. At March 31, 2026, the Company had 155,713,476 shares issued and outstanding (December 31, 2025 – 155,508,476) and nil common shares held in escrow (December 31, 2025 – nil). At the date of this MD&A, the Company had 188,697,567 shares issued and outstanding.
On April 22, 2026, the Company closed a non-brokered private placement and issued 32,245,269 common shares of the Company at a price of $1.10 per share for aggregate gross proceeds of $35,469,796. The Company paid an aggregate cash finder's fees totaling $630,000.
Share Options
The Company provides share-based compensation to its directors, officers, employees, and consultants through grants of share options.
The Company has adopted a stock option plan (the "Plan"), as amended, to grant options to directors, officers, employees and consultants to acquire up to 10% of the issued and outstanding shares of the Company. Vesting is determined at the discretion of the Board of Directors (the "Board").
Under the Plan, an option holder may elect to terminate an option, in whole or in part and, in lieu of receiving shares to which the terminated option relates (the "Designated Shares"), receive the number of shares,
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Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
disregarding fractions, which, when multiplied by the weighted average trading price of the shares on the TSX-V during the five trading days immediately preceding the day of termination (the "Fair Value" per share) of the Designated Shares, has a total dollar value equal to the number of Designated Shares multiplied by the difference between the Fair Value and the exercise price per share of the Designated Shares.
The Company uses the Black-Scholes option pricing model to determine the fair value of share options granted.
The Company uses historical data to estimate option exercise, forfeiture, and employee termination within the valuation model. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the share options. Since the Company has not paid and does not anticipate paying dividends on its common shares, the expected dividend yield is assumed to be zero. Companies are required to utilize an estimated forfeiture rate when calculating the share-based compensation expense for the reporting period. Based on the best estimate, management applied the estimated forfeiture rate of nil in determining the share-based compensation expense recorded in profit or loss.
As at the date of this MD&A, the Company had 13,420,000 stock options outstanding.
The following is a summary of share options outstanding as at the date of this MD&A:
| Number of share options | Number of share options vested | Exercise price per share option $ | Expiry date |
|---|---|---|---|
| 900,000 | 900,000 | 0.57 | March 1, 2027 |
| 4,650,000 | 4,650,000 | 0.255 | September 24, 2029 |
| 100,000 | 100,000 | 0.255 | October 1, 2029 |
| 2,370,000 | 2,370,000 | 0.49 | February 10, 2030 |
| 400,000 | 200,000 | 0.52 | May 21, 2030 |
| 100,000 | 75,000 | 0.54 | July 9, 2030 |
| 3,900,000 | 1,950,000 | 1.35 | April 23, 2031 |
| 1,000,000 | - | 1.35 | April 30, 2031 |
| 13,420,000 | 10,245,000 |
Share Purchase Warrants
As at the date of this MD&A, the following share purchase warrants were outstanding:
| Number of share purchase warrants | Exercise price per share purchase warrant $ | Expiry date |
|---|---|---|
| 12,918,984 | 0.50 | August 29, 2027 |
| 6,249,500 | 0.70 | August 19, 2028 |
| 19,168,484 |
Deferred Share Units ("DSU")
DSUs are granted to the Company's directors as a part of compensation under the terms of the Company's deferred share units plan (the "DSU Plan"). Each DSU entitles the participant to receive the value of one common share of the Company (a "Common Share"). The maximum number of awards of DSU's and all other security-based compensation arrangements shall not exceed 5.0 million of the Company's common shares.
Participants are entitled to the value of the Common Share upon termination of their service. In accordance to the DSU Plan, upon each vesting date the Company shall decide, at its sole discretion, whether participants receive (a) the issuance of Common Shares equal to the number of DSUs vesting, or (b) a cash payment equal to the number of vested DSUs multiplied by the fair market value of a Common Share, calculated as the volume weighted average trading price of the Company's Common Shares on the TSX-V calculated by dividing the total value by the total volume of such Common Shares traded for the five trading days immediately preceding such payment date; or (c) a combination of (a) and (b).
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Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
On the grant date of DSUs, the Company determines whether it has a present obligation to settle in cash. If the Company has a present obligation to settle in cash, the DSUs are accounted for as liabilities, with the fair value remeasured at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. The Company has a present obligation to settle in cash if the Company has a past practice or a stated policy of settling in cash, or generally settles in cash whenever the counterparty asks for cash settlement. If no such obligation exists, DSUs are accounted for as equity settled share-based payments and are valued using the share price of the Common Share on grant date. Since the Company controls the settlement, the DSU's are considered equity settled.
As at the date of this MD&A, the following DSUs were outstanding:
| Number of DSUs | |
|---|---|
| Outstanding – December 31, 2025 | 525,000 |
| Granted | 428,750 |
| Outstanding | 953,750 |
Restricted Share Units ("RSU")
RSUs are granted to the Company's directors, officers, employees and consultants as a part of compensation under the terms of the Company's restricted share units plan (the "RSU Plan"). Each RSU entitles the participant to receive the value of one Common Share. The maximum number of awards of RSU's and all other security based compensation arrangements shall not exceed 5.0 million of the Company's common shares.
The number of RSUs awarded and underlying vesting conditions are determined by the Board of Directors in its discretion. In accordance with the RSU Plan, upon each vesting date the Company shall decide, at its sole discretion, whether participants receive (a) the issuance of Common Shares equal to the number of RSUs vesting, or (b) a cash payment equal to the number of vested RSUs multiplied by the fair market value of a Common Share, calculated as the volume weighted average trading price of the Company's Common Shares on the TSX-V calculated by dividing the total value by the total volume of such Common Shares traded for the five trading days immediately preceding such payment date; or (c) a combination of (a) and (b).
On the grant date of RSUs, the Company determines whether it has a present obligation to settle in cash. If the Company has a present obligation to settle in cash, the RSUs are accounted for as liabilities, with the fair value remeasured at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. The Company has a present obligation to settle in cash if the Company has a past practice or a stated policy of settling in cash, or generally settles in cash whenever the counterparty asks for cash settlement. If no such obligation exists, RSUs are accounted for as equity settled share-based payments and are valued using the share price of the Common Share on grant date. Since the Company controls the settlement, the RSU's are considered equity settled.
As at the date of this MD&A, the following RSUs were outstanding:
| Number of RSUs | |
|---|---|
| Outstanding – December 31, 2025 | 314,334 |
| Redeemed | (41,999) |
| Outstanding | 272,335 |
OTHER DISCLOSURES
Off-Balance Sheet Arrangements
The Company had no material off-balance sheet arrangements as at the date of this MD&A.
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Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
Related Party Transactions
The Company's related parties include key management personnel and directors. 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 members of the Board of Directors and corporate officers, including the Company's Chief Executive Officer, Chief Financial Officer, Chief Technical Officer, and Corporate Secretary.
Direct remuneration paid to the Company's directors and key management personnel during the three month periods ended March 31 was as follows:
| 2026 | 2025 | |
|---|---|---|
| Consulting fees – personnel costs | 150,428 | 158,309 |
| Directors' fees – personnel costs | 38,972 | 24,000 |
| Share-based compensation | 41,630 | 427,607 |
| $ 231,030 | $ 609,916 |
As at March 31, 2026, included in accounts payable and accrued liabilities was an amount of $143,600 (December 31, 2025 - $19,399) due to the Company's related parties.
Financial instruments
i) Fair value classification of financial instruments
The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices). Level 3 inputs are for the assets or liabilities that are not based on observable market data (unobservable inputs).
The Company's financial instruments consist of cash and cash equivalents, receivables, deposits, accounts payable and accrued liabilities and lease liability.
The carrying values of these financial instruments approximate their fair value due to their short terms to maturity. Lease liability approximates its fair value as it has been discounted with an interest rate comparable to current market rates..
The following table summarizes the classification and carrying values of the Company's financial instruments at March 31, 2026:
| FVTPL | Amortized cost (financial assets) | Amortized cost (financial liabilities) | Total | |
|---|---|---|---|---|
| Financial assets | ||||
| Cash and cash equivalents | $ - | $ 4,935,913 | $ - | $ 4,935,913 |
| Receivables | - | 13,381 | - | 13,381 |
| Deposit | - | 5,519 | - | 5,519 |
| Total financial assets | $ - | $ 4,954,813 | $ - | $ 4,954,813 |
| Financial liabilities | ||||
| Accounts payable and accrued liabilities | $ - | $ - | $ 209,010 | $ 209,010 |
| Lease liability | - | - | 68,955 | 68,955 |
| Total financial liabilities | $ - | $ - | $ 277,965 | $ 277,965 |
Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
CRITICAL ACCOUNTING ESTIMATES AND POLICIES
Use of Estimates and Judgements
The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from management's best estimates as additional information becomes available.
Measurement of the Company's assets and liabilities is subject to risks and uncertainties, including those related to reserve and resource estimates; title to mineral properties; future commodity prices; costs of future production; future costs of restoration provisions; changes in government legislation and regulations; future income tax amounts; the availability of financing; and various operational factors. The Company's estimates identified as being critical are substantially unchanged from those disclosed in the MD&A for the year ended December 31, 2025.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for designing internal control over financial reporting, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. No change in the Company's internal control over financial reporting occurred during the period beginning on January 1, 2026 and ended on March 31, 2026 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
FORWARD LOOKING STATEMENTS
This MD&A contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, "forward-looking statements"), which reflect management's expectations regarding the Company's future growth, results from operations (including, without limitation, statements about the Company's opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company's available cash resources and other statements about future events or results), performance (both operational and financial) and business prospects, future business plans and opportunities. Wherever possible, words such as "predicts", "projects", "targets", "plans", "expects", "does not expect", "budget", "scheduled", "estimates", "forecasts", "anticipate" or "does not anticipate", "believe", "intend" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to:
- the Flor de Cobre and Elida Projects (as such term is defined herein) and the Company's planned and future exploration on the Flor de Cobre and Elida Projects;
- the Company's goals regarding exploration and potential development of its projects;
- the Company's future business plans;
- expectations regarding the ability to raise further capital;
- the market price of copper;
- expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations;
- the ability to obtain and/or maintain any required permits, licenses or other necessary approvals for the exploration or development of its mineral properties;
- government regulation of mineral exploration and development operations in Peru;
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Q1 2026 MD&A (expressed in Canadian Dollars, except where otherwise noted)
- the Company's compensation policy and practices;
- the Company's expected reliance on key management personnel, advisors and consultants;
- plans regarding future composition of the Board; and
- effects of the novel coronavirus ("COVID-19") outbreak as a global pandemic.
Forward-looking statements are not a guarantee of future performance and is based upon a number of estimates and assumptions of management in light of management's experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this MD&A including, without limitation, assumptions about:
- the ability to raise any necessary additional capital on reasonable terms to advance exploration and development of the Company's mineral properties;
- future prices of copper and other metal prices;
- the timing and results of exploration and drilling programs;
- the demand for, and price of copper;
- that general business and economic conditions will not change in a material adverse manner;
- the Company's ability to procure equipment and operating supplies in sufficient quantities and on a timely basis;
- the geology of the Flor de Cobre Project as described in the Flor de Cobre Technical Report (as such term is defined herein);
- the geology of the Elida Project as described in the Elida Technical Report (as such term is defined herein);
- the accuracy of budgeted exploration and development costs and expenditures;
- future currency exchange rates and interest rates;
- operating conditions being favourable such that the Company is able to operate in a safe, efficient and effective manner;
- the Company's ability to attract and retain skilled personnel;
- political and regulatory stability;
- the receipt of governmental, regulatory and third-party approvals, licenses and permits on favourable terms;
- obtaining required approvals, licenses and permits on favourable terms and any required renewals of the same;
- requirements under applicable laws;
- sustained labour stability; stability in financial and capital goods markets;
- expectations regarding the level of disruption to exploration at the Flor de Cobre and Elida Projects as a result of COVID 19; and
- availability of equipment.
Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation:
- the Company may fail to find a commercially viable deposit at any of its mineral properties;
- there are no resources or mineral reserves on any of the properties in which the Company has an interest;
- the Company's plans may be adversely affected by the Company's reliance on historical data compiled by previous parties involved with its mineral properties;
- mineral exploration and development are inherently risky;
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- the mineral exploration industry is intensely competitive;
- additional financing may not be available to the Company when required or, if available, the terms of such financing may not be favourable to the Company;
- fluctuations in the demand for copper;
- the Company may not be able to identify, negotiate or finance any future acquisitions successfully, or to integrate such acquisitions with its current business;
- the Company's exploration activities are dependent upon the grant of appropriate licenses, concessions, leases, permits and regulatory consents, which may be withdrawn or not granted;
- the Company's operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations;
- there is no guarantee that title to the properties in which the Company has a material interest will not be challenged or impugned;
- the Company faces various risks associated with mining exploration that are not insurable or may be the subject of insurance which is not commercially feasible for the Company;
- public health crises such as the COVID-19 pandemic may adversely impact the Company's business;
- the volatility of global capital markets over the past several years has generally made the raising of capital more difficult;
- compliance with environmental regulations can be costly;
- social and environmental activism can negatively impact exploration, development and mining activities;
- risks associated with political instability and changes to the regulations governing the Company's business operations.
- the success of the Company is largely dependent on the performance of its directors and officers;
- the Company and/or its directors and officers may be subject to a variety of legal proceedings, the results of which may have a material adverse effect on the Company's business;
- the Company may be adversely affected if potential conflicts of interests involving its directors and officers are not resolved in favour of the Company;
- the Company's future profitability may depend upon the world market prices of copper;
- if securities or industry analysts do not publish research or publish inaccurate or unfavourable research about the Company's business, the price and trading volume of the Common Shares could decline;
- there is no existing public market for the Common Shares and an active and liquid one may never develop, which could impact the liquidity of the Unit shares;
- the Common Shares may be subject to significant price volatility;
- dilution from future equity financing could negatively impact holders of Common Shares;
- the Company may not use the funds available to it in the manner described in the Prospectus;
- on becoming a reporting issuer, the Company will be subject to costly reporting requirements;
- failure to adequately meet infrastructure requirements could have a material adverse effect on the Company's business;
- the Company's projects now or in the future may be adversely affected by risks outside the control of the Company;
- the Company is subject to various risks associated with climate change; and
- other factors discussed under "Risks and Uncertainties".
Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, conditions, results, performance or
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achievements to differ from those anticipated, estimated or intended. See "Risks and Uncertainties" for a discussion of certain factors investors should carefully consider before deciding to invest in the securities of the Company.
The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking statements contained herein. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements.
Forward-looking statements contained herein are made as of the date of this MD&A and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as and to the extent required by applicable securities laws.
SCIENTIFIC AND TECHNICAL INFORMATION
Richard Osmond (P. Geo.), the President and CEO of the Company and a Qualified Person as defined by NI 43-101, has approved the scientific and technical disclosure in this MD&A.
Cautionary Note to United States Investors - Canadian Disclosure Standards in Mineral Resources and Mineral Reserves
The terms "mineral reserve", "Proven mineral reserve" and "Probable mineral reserve" are Canadian mining terms as defined in accordance with NI 43-101 under the guidelines set out in the CIM Definition Standards - For Mineral Resources and Mineral Reserves, adopted by the CIM Council on May 10, 2014, as may be amended from time to time by the CIM.
The definitions of Proven and Probable reserves used in NI 43-101 differ from the definitions in the SEC Industry Guide 7. Under SEC Industry Guide 7 standards, a "final" or "bankable" feasibility study is required to report reserves, the three year history average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.
In addition, the terms "mineral resource", "Measured mineral resource", "Indicated mineral resource" and "Inferred mineral resource" are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred mineral resources may not form the basis of feasibility or prefeasibility studies, except in rare cases.
Accordingly, information contained in this MD&A containing descriptions of E29's mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.
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