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Element79 Gold Corp. Management Reports 2025
47979_rns_2025-12-29_b3c83a25-6b91-4b4e-a2f1-05733b629eaf.pdf
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ELEMENT79
GOLD CORP
Management’s Discussion and Analysis
Element79 Gold Corp.
For the year ended August 31, 2025 and 2024
(Expressed in Canadian dollars)
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
This Management’s Discussion and Analysis (“MD&A”) provides a detailed analysis of the business of Element79 Gold Corp. (“Element79” or the “Company”). This MD&A should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year ended August 31, 2025, and August 31, 2024 (“Financial Statements”), which have been prepared under International Financial Reporting Standards (“IFRS”).
All financial information in this MD&A has been prepared in accordance with IFRS. All dollar amounts included therein and in the following MD&A are in Canadian dollars, the reporting and functional currency of the Company, except where noted. This MD&A contains information up to and including December 24, 2025 (the “Report Date”).
DESCRIPTION OF BUSINESS
The Company was incorporated under the Company Act (British Columbia) on February 27, 2020. Element79 is an exploration stage company engaged in the acquisition, exploration and development of mineral properties in Peru, USA and Canada. Element79 is focused on gold, silver and associated metals and committed to maximizing shareholder value through responsible mining practices and sustainable development of its projects. Element79’s Peruvian properties are under Force Majeure due to significant difficulties in advancing the project. Element79’s main focus is to retain and advance development at the Elephant project in Nevada and the Gold Mountain Project, a drill-ready asset also located in Nevada.
Element79 holds an option to acquire a 100% interest in the Dale Property, 105 unpatented mining claims located approximately 100 km southwest of Timmins, Ontario, and is advancing through the plan of arrangement spin-out process. The Investment in Dale Property is under contract to sale as per the arrangement and merger agreement, as amended, dated January 10, 2025.
The Company is listed on the Canadian Stock Exchange (“CSE”) with the trading symbol ELEM, on the OTC and OTCQB with a trading symbol of ELMGF and on the Frankfurt Stock Exchange with the trading symbol 7YS. The address of the Company’s corporate office and principal place of business is Suite 1100, 1111 Melville Street, Vancouver B.C., V6E 3V6.
Unless the context suggests otherwise, references to the “Company” or “we”, “us”, “our” or similar terms refer to Element79 Gold Corp.
FORWARD-LOOKING STATEMENTS
This report may contain forward-looking statements. The words “expect,” “anticipate,” “estimate,” “may,” “will,” “should,” “intend,” “believe,” “target,” “budget,” “plan,” “projection” and similar expressions are intended to identify such forward-looking statements. Information concerning mineral reserve and mineral resource estimates also may be considered forward-looking statements, as such information constitutes a prediction of what mineralization might be found to be present during operations, or if and when an undeveloped project is actually developed.
Forward-looking statements involve a number of known and unknown risks and uncertainties including statements regarding the outlook of Element79’s business and results of operations. By their nature, these risks and uncertainties could cause actual results, performance and achievements to differ materially from those indicated. Such factors include, without limitation, risks inherent in mineral exploration, changes in commodity prices, geological and metallurgical assumptions (including with respect to size, grade and recoverability of mineral resources and mineral reserves), the Company’s history of operating losses and uncertainty of future profitability, uncertainty of access to additional capital, environmental risks. In making the forward-looking statements in this MD&A, the Company has applied material assumptions, including without limitation, the assumption that any additional financing needed will be available on reasonable terms.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Additional factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, weak commodity prices and general metal price volatility; the state of the global economy and economic and political events, including the deterioration of the global capital markets, affecting supply and demand; and securing and the nature of regulatory permits and approvals and the costs of complying with environmental, health and safety laws and regulations. The Company cannot assure investors that any of these assumptions will prove to be correct.
Element79 disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as is required by applicable securities regulations. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date the statements were made, and are also advised to consider such forward-looking statements while considering the risk factors set forth in this MD&A.
CORPORATE OVERVIEW
As at the Report Date, the Company underwent the following changes in directors, officers and advisors:
- In September 2025, Zara Kanji resigned as Director and AC chair due to other commitments and Mohammad Fazil appointed as Director and AC Chair of the Company. Mr. Fazil has been active in venture capital for over 35 years. He was employed by boutique investment dealers in Canada as a finance professional focusing on funding junior listed issuers on the TSX and TSX Venture exchange.
- In July 2025, Mr. Michael Smith appointed as Director and Vice President, Corporate Development. Mr. Smith brings over 15 years of diverse business leadership experience across business development, capital raising, public company operations, and investor relations. He has held executive and board-level roles with several CSE-listed companies and is the Founder of Lions Bridge Capital, a boutique advisory firm supporting startups and growth-stage businesses. His expertise spans capital raising, mergers and acquisitions, regulatory compliance, and corporate messaging—skills directly aligned with the Companies objectives as it accelerates exploration and development across its Nevada portfolio, including the Gold Mountain and Elephant projects.
- In August 2025, Mr. James Tworek elected to step down from the role as the CEO and continue to support the Company as a Director and Mr. Smith was appointed as the CEO.
- In August 31, 2025, Neil Pettigrew resigned as Director and QP. The Company is grateful for Mr. Pettigrew's investment of expertise and help applied through the Company's history from inception.
- In August 2025, Kim Kirkland appointed as QP and stepped down from the role of COO. As outlined below, Kim Kirkland's is a seasoned mining veteran.
- In September 2024, Mr. Antonios Maragakis resigned as Director due to other professional commitments.
- In September 2024, Mr. George Tumur resigned as Director due to other professional commitment.
- In September 2024, Appointment of Mr. Kevin Arias to the advisory board. Mr. Kevin has over two decades of experience across industries such as mining, energy, and corporate finance. His strong background in business development, investor relations, securities and corporate communications combined with a proven track record in raising over CAD $100 million since 2008, positions him as a valuable addition to the Element79 team.
- In August 2024, the Company appointment of Mr. Warren Levy to the advisory board, Mr. Warren brings a wealth of experience in sustainability and natural resources operations and profound understanding of the challenges associated with the industry Throughout his career, Mr. Levy has demonstrated a remarkable ability to cultivate high-performance teams across diverse cultural landscapes. His strategic guidance has propelled the expansion of numerous companies in sectors spanning petroleum, mining, and high-tech industries, particularly in Latin America and Asia. Author of multiple publications, Mr. Levy has contributed to the discourse on energy
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
and natural resource development in Latin America, offering insightful perspectives on energy policy and the pivotal role of sustainable development in poverty reduction.
- In November 2023, Kim Kirkland replaced Mr. Maragakis as COO. Mr. Kirkland is a seasoned mining veteran with a track record spanning senior executive and lead engineering roles at some of the world's biggest mining companies, with a core focus on operating mines in Nevada and Peru. Kim has been intimately involved in Element79 Gold's project and strategic development processes since joining the Company in March 2022, making him the ideal candidate to lead Element79 Gold Corp's operations into the future. His extensive knowledge of the Company's projects, commitment to safety, and dedication to sustainable practices align perfectly with the Company's corporate values.
- In September 2023, the Company appointed Ms. Tammy Gillis as its new CFO, effective the beginning of the business day of September 18, 2023. Ms. Gillis brings a wealth of experience and expertise to the role, further strengthening Element79's commitment to financial excellence and growth.
Ms. Gillis is a CPA, CMA with over 20 years' experience in the public markets bringing a comprehensive background in finance, reporting and regulatory requirements for junior exploration, manufacturing, biotechnology, and technology industries. Ms. Gillis has been part of teams that have completed several financings, grant applications and acquisition transactions. Ms. Gillis started her career working at a corporate and securities law firm. Ms. Gillis previously served as Corporate Accountant for an international manufacturing company that had revenue in excess of $120 million and as Chief Financial Officer for a technology company with patented cathode materials used in lithium-ion batteries that successfully built a pilot plant with the assistant of over $4 million in government grants. Ms. Gillis has served as an officer for several TSX-V and CSE listed issuers.
- In September 2023, Mr. Shane Williams resigned from the Board of Directors. Mr. Williams departed from his position on Element79's Board of Directors to focus on personal endeavors and increasing professional commitments but will remain an advisor to the Company.
- In September 2023, Ms. Heidi Gutte resigned as Chief Financial Officer (CFO) as part of a leadership change, and continued to support the Company in a consultancy role to ensure a smooth transition.
In November 2023, the Company completed a consolidation of the authorized and issued common shares of the Company (the "Common Shares"), on the basis of a one (1) post-consolidated Common Share for each ten (10) pre-consolidation Common Shares (the "Consolidation"). No fractional Common Shares being issued upon the Consolidation. In the event a holder of Common Shares would otherwise be entitled to receive a fractional Common Share in connection with the Consolidation, the number of Common Shares to be received by such shareholder was rounded down to the next whole number if that fractional Common Share is less than one half (1/2) of a Common Share, and was rounded up to the next whole number of Common Shares if that fractional Common Share is equal to or greater than one half (1/2) of a Common Share. Effective at the opening of markets on November 8, 2023, the Common Shares commenced trading on the CSE on a post-Consolidation basis under the existing ticker "ELEM". The new CUSIP number will be 28619A200 and the new ISIN number will be CA28619A2002. Outstanding stock options and warrants were adjusted by the Consolidation ratio. All Common Shares and per common share amounts in this MD&A have been retroactively restated to reflect the Consolidation.
PROJECT OVERVIEW
All technical aspects of the Company for this MD&A report have been reviewed and approved by Kim Kirkland, a Director of the Company and Qualified Person ("QP") under National Instrument ("NI") 43-101. A breakdown of material components of exploration and evaluation assets can be found in the Financial Statements.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Gold Mountain Project, Nevada
On July 31, 2025, the Company entered into an asset purchase agreement with an arms-length vendor ("Vendor") to acquire a 100% interest in 34 unpatented lode mining claims of Gold Mountain Project. The Gold Mountain Project is a strategically located gold asset in Lander County, Nevada, USA. As consideration for the acquisition, the Company issued 100,000,000 common shares to the Vendor. The acquisition was accounted as an asset acquisition under IFRS 3.
In further consideration for the acquired assets, the Company shall, following the closing of the next equity financing, pay an aggregate of US$137,485.85 (CAD $188,933) to the vendor in cash as payment for outstanding consulting invoices, reimbursable expenses, and other prepaid fees.
Notwithstanding the sale and transfer of the Gold Mountain project as contemplated herein, the Vendor hereby reserves and retains, for itself and its successors and assigns, a perpetual 3% Net Smelter Return royalty (the "NSR Royalty") on all Minerals that are mined, extracted, produced, or otherwise recovered from the Gold Mountain project.
In August 2025, the Company engaged Rangefront Mining Services ("Rangefront") to prepare a NI 43-101 technical report. The Rangefront principal geologist and QP conducted a comprehensive site visit to the Gold Mountain project during the week of July 28, 2025. The fieldwork included inspection of historic adits, surface sampling zones, geological structures, and claim boundaries in and around the Long Peak Stock intrusion that underlies the project. The site visit is a critical step in validating data integrity and supports the development of the pending NI 43-101 property of merit report.
Highlights from the report include:
- Historic drilling by Placer Dome (2005) returned intercepts of:
- 7.62m grading 0.48 g/t Au
- 10.67m grading 0.99 g/t Au
- Figures 11-14 of the report outline 2023 surface sampling of 116 rock samples, confirming high-grade Au-Ag-Pb mineralization associated with structurally controlled zones and lower-grade porphyry-style mineralization linked to the Long Peak Stock.
- The project lies just 0.5 miles south of the historic Dewitt Mine, which produced high-grade gold and silver ores from the 1930s–1950s.
- A Bureau of Land Management (BLM) Notice of Intent (NOI) has been approved, permitting up to 21 drill pads and associated roads.
- A fully costed exploration program totaling US$800,000 has been recommended, including detailed mapping, geophysics, and 8,000 feet of RC drilling to test high priority targets.
Nevada Portfolio
On December 17, 2021, the Company closed on an asset purchase agreement acquiring the flagship Maverick Springs project and 15 additional projects that comprise the Battle Mountain portfolio, located in the gold mining regions of northeastern Nevada. 1316524 B.C. Ltd. ("Goldco"), a wholly owned subsidiary of the Company, had previously entered into the asset purchase agreement with Clover Nevada LLC ("Clover"), a wholly owned subsidiary of Waterton Precious Metals Fund II Cayman LP ("Waterton"), and Maverick Springs Mining Company LLC ("Maverick"), a wholly owned subsidiary of Clover, to acquire 100% of their rights, titles and interests in and to the Maverick Springs project and the Battle Mountain portfolio.
Pursuant to the asset purchase agreement, the Company paid $2,000,284 and issued 509,573 common shares of the Company to the vendors. Additionally, the Company issued a Contingent Value Right ("CVR") to Waterton Nevada Splitter LLC ("Splitter LLC"), a subsidiary of Waterton.
Pursuant to the CVR, Splitter LLC is entitled to receive the following:
(i) Cash payment of $2,000,000 payable on the earlier of the occurrence of commercial production and the date that is 12 months following the closing of the asset purchase agreement. During the year ended August 31, 2023, the Company worked with Waterton to create an alternate structure of the CVR. As part of the terms of the updated
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
payment agreement, the final $2,000,000 milestone payment due will be converted into a two-year, zero-coupon debt facility with convertibility options priced at $0.15 and a 10% default interest rate. Prepayment by the Company is possible with a 60-day advance notice and paid at a 10% premium to the principal amount remaining.
(ii) Second payment of $284, in cash or common shares of the Company, on the date that is 18 months following the closing of the asset purchase agreement (prepaid by the Company concurrently with closing).
(iii) Security interest in Maverick Springs and the Battle Mountain portfolio, to be released upon completion of the payment under the CVR.
Splitter LLC entered into a voting support and lock-up agreement, pursuant to which it agreed to:
(i) vote all shares of the Company it holds in accordance with the recommendations of the Company’s management;
(ii) retain 50% of the common shares of the Company issued to it pursuant to the asset purchase agreement for at least six months and the remaining 50% for at least 12 months after closing of the option agreement; and
(iii) grant the Company a right of first offer in relation to the sale of any common shares of the Company held by Splitter LLC.
The Maverick Springs project is subject to a total NSR royalty of 7.4%, including 1.5% payable to Maverix Metals Inc. The Company expects to renegotiate the various NSR royalties in order to create an economically viable path forward to the benefit of all parties.
The asset purchase agreement as it relates to the Battle Mountain portfolio and all 15 of its projects is made on an as-is, where-is basis, and accordingly does not disclose any NSR royalties or other royalties payable to any other party.
The Maverick Springs Project
The Maverick Springs Project (“Maverick Springs”) consists of approximately 4,800 acres across 247 unpatented claims that straddle the border of Elko County and White Pine County, proximal to the Carlin Trend, a belt of gold deposits approximately 5 miles wide and 40 miles long that is one of the world's richest gold mining districts, having produced more gold than any other mining district in the US. Maverick Springs is accessible year-round via gravel road, with a network of drill roads spread throughout its claims. Nearby electrical power can be sourced from the eastern Nevada grid system to the northwest. The claims at Maverick Springs were first staked in 1986, with several exploration programs conducted from 1987 to 2004, including a total of 195 drill holes totaling 47,000 metres.
During the year ended August 31, 2023, the Company and Sun Silver Limited (formerly Green Power Minerals Pty Ltd. (“Sun Silver”) entered into an option agreement, as amended, pursuant to which the Company granted Sun Silver an option to purchase the Maverick Springs Project for an option fee of $66,000 (paid). During the year ended August 31, 2023, the Maverick Springs Project was reclassified from exploration and evaluation assets to assets held for sale.
During the year ended August 31, 2024, Sun Silver exercised its option to purchase the Maverick Springs Project by paying the Company $4,400,000 less fees paid to third parties totaling $190,872 and issuing 3,500,000 ordinary shares in Sun Silver with a value of $633,780. The Company recognized a gain on sale of the Maverick Springs Project totaling $3,366,868.
The Battle Mountain Portfolio
The Battle Mountain Portfolio is comprised primarily of early-stage projects. While drilling has been completed at some projects, such as Elder Creek (155 holes) and Clover (104 holes), many have only surface sampling and geophysical surveys completed. Of particular note are the Elephant, Elder Creek and North Mill Creek which are interpreted to lie along the northwest trending fault that hosts the high-grade Pipeline deposit, which is included in Nevada Gold's Cortez Mine.
Prior to selling certain projects and surrounding several properties, the Battle Mountain Portfolio was originally comprised of 15 separate projects that total over 44,478 acres across 2,203 unpatented claims in five counties: Elko County, Eureka County, Humboldt County, Lander County, and Nye County. Most of the Battle Mountain Portfolio is located within the
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Battle Mountain Trend, with several projects close to globally reputable gold deposits including Nevada Gold's Cortez Mine.
Clover and West Whistler: Two Battle Mountain Trend properties with strategic merit for exploration and resource development in the near term.
- Clover: 169 non-contiguous, unpatented claims covering 3,063 acres in Elko County, Nevada, within the Midas Mining District, approximately 16 miles West of Hecla Mining Company’s Midas Mine.
- West Whistler: covers 103 contiguous, unpatented claims located 9 miles NW of the town of Eureka, NV, in the Southeastern end of the Battle Mountain Trend near several gold deposits including Barrick's Cortez Mine.
During the year ended August 31, 2024, management did not renew its interest in West Whistler project in Eureka County, Nevada and $601,746 of acquisition cost and exploration cost were written off. In January 2025, the Company received a notice from the United States Department of the Interior Bureau of Land Management (“BLM”) stating that various claims, known as the Clover project, had been forfeited and that the claims have been staked by a third party. As a result, the Company wrote off the carrying value of the Clover project totalling $971,005 as at August 31, 2024.
During the year ended August 31, 2023, the Company started discussions with third parties regarding the sale of certain Battle Mountain portfolio projects. As a result, the Elephant, Elder Creek and North Mill Creek projects totaling 226 claims were reclassified from exploration and evaluation assets to assets available for sale.
Claims listed as assets available for sale:
- The North Mill Creek Project: comprised of 6 unpatented claims located at the margins of the Goat Window in Lander County, Nevada.
- The Elder Creek Project: comprised of 23 unpatented claims, which cover the historic Elder Creek open-pit mine in Lander County, Nevada.
- The Elephant Project: comprised of 197 claims located at the foot of the mine dumps at Nevada Gold Mines' Phoenix operation.
During the year ended August 31, 2024, Valdo Mineral Ltd. letter of intent, as amended, expired. During the year ended August 31, 2025, the Company entered into an agreement to sell 100% interest in the Elephant, Elder Creek and North Mill Creek projects to 1472886 BC Ltd (“1472886”) in exchange of a cash consideration of USD 45,200 and an aggregate of 5,000,000 common shares of 1472886 at a deemed price of C$0.10 per share, for a total consideration of CAD $500,000 and US $45,200. During the year ended August 31, 2025, the agreement expired.
During the year ended August 31, 2025, the Company abandoned its North Mill Creek claims and the Elder Creek claims staked By NQ Holdings, where the Company received US$14,000 in settlement to disclaim all right, title and interest. Further, the Company renew 197 claims of its Elephant Project until August 2026 for further exploration.
Subsequent to the year ended August 31, 2025, the Company engaged Rangefront to complete a NI 43-101 technical report on its Elephant Project to further solidify its growing Nevada-focused exploration portfolio. The Report, authored by Steven L. McMillin, MSc, CPG, of Rangefront Mining Services, provides an integrated assessment of geology, geophysics, and the compilation and analysis of historical exploration data. Historical exploration on the property has identified multiple gold-bearing structures, surface sampling anomalies, and drill intercepts that indicate strong potential for both high-grade and bulk tonnage gold mineralization. Previous work identified scattered mineralization in widely spaced holes that, when mineralized, suggest the presence of a larger system at depth. The current report outlines that additional drilling is warranted to evaluate skarn- and porphyry-style gold-copper mineralization.
Key Highlights from the Report:
- The Elephant Project sits on the east-central flank of the Battle Mountain District, with year round access and established infrastructure.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
- Approximately 3,740 acres (1,514 ha) across 187 unpatented lode claims
Historical Work:
32 drill holes totaling 11,868 m (38,937 ft) with 27 holes reaching bedrock
- Widespread base-metals anomalous and localized high-grade Au within skarn/hornfels near intrusive dikes.
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Notable Intervals (historic):
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EL04-P3: 1.5 m @ 14.5 g/t Au, plus 1.5 m @ 1.735 g/t Au. o P-3C: 6.2 ft @ 7.70 g/t Au, plus multiple intervals between 0.59–1.60 g/t Au over 1–20 m.
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These intercepts occur within broader halos of base-metal enrichment (Cu, Pb, Zn), consistent with skarn/porphyry systems. (True widths unknown; all intercepts are historical and reported in the Report.)
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Geophysics-Driven Targets:
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IP-Resistivity survey defines coherent chargeability anomalies interpreted as sulfides at depth, aligned with intrusive trends.
- Airborne magnetics show magnetite-destructive alteration consistent with porphyry systems.
- Priority drill intervals are outlined along four IP lines.
Figure 1: Proposed drill targets
This Report further highlights the potential of the Elephant Project, supporting the Company's intention to advance a Systematic exploration program aimed at expanding on past work and unlocking the project's full potential in a district that already hosts tier-one operations. With high-grade gold intervals reported in historical core and geophysical signatures consistent with sulfide mineralization, our focus is on smart meters that test the heart of this system.
Next Steps:
- Legacy Core Program: Re-log, photograph, and digitize historical core; implement QA/QC check assays and petrography.
- Geophysics Integration: Complete a property-wide ground/drone magnetics survey and extend IP coverage over remaining claims; merge historical gravity data with public datasets.
- 3D Geologic Model: Build an integrated model combining structural, geochemical, and geophysical data to rank targets.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
- Drilling: Test IP chargeability corridors and the interpreted north-northeast intrusive trend, stepping into Section 12 where multi-element grades are highest.
Reclamation deposit
As at August 31, 2025, the reclamation deposit in the amount of $15,188 (August 31, 2024 - $11,764) is related to Battle Mountain portfolio projects and Maverick Springs project.
Dale Property
The Dale Property (the "Property" or "Dale Property") is located approximately 100 km southwest of Timmins, Ontario, in the Porcupine Mining District, Dale Township. The claims are centered over the southern arm of Horwood Lake towards the south boundary of Dale Township. Access to all sides of the property is gained by a series of logging roads that can be entered from Highways 101, 144 and 129. Access to the north from Highway 101 traveling south onto the Kukatush forest road to the east part of the Property which also accesses a boat landing for the north part of Horwood Lake. The Property can be accessed year-round by air using a float plane with skis or a combination of trucks, boat, all-terrain vehicle or snow machine. Exploration work could be carried out year-round.
The geographic coordinates of the main mineral occurrence within the Property, are 47° 54' 21" North latitude by 82° 18' 57" West longitude, or UTM NAD83 Zone 17 T 5306600 m North by 401600 m East. The Property is comprised of 90 unpatented single cell and boundary cell mining claims totaling approximately 1,980.50 hectares. The claims, in the Dale Township, are currently 100% owned by Jean Marc Gaudreau.
The Company entered into a property option agreement, as amended, with Jean Marc Gaudreau ("Optionor") to acquire a 100% right, title and interest in and to 90 mineral claims located in Ontario, Canada subject to a Net Smelter Return ("NSR") royalty.
Pursuant to the property option agreement, as amended; in order to exercise the option, the Company must complete the following requirements:
a) Make aggregate cash payments of $126,000 as follows:
(i) $12,000 within 30 days of the date of the option agreement (paid)
(ii) $15,000 on or before December 23, 2023 (paid)
(iii) $48,000 on or before December 31, 2023 (paid)
(iv) $51,000 on or before December 31, 2024 (Paid)
b) Make aggregate share payments totaling $129,000 calculated at the price of the volume weighted average price ("VWAP") of the 10 trading days prior to the issuance date:
(i) $30,000 on or before December 31, 2021 (issued 3,030 common shares)
(ii) $33,000 on or before December 31, 2022 (issued 21,680 common shares)
(iii) $36,000 on or before December 31, 2023 (issued 390,000 Synergy common shares including 30,000 as bonus shares)
(iv) $93,000 in Synergy common shares on or before December 31, 2024 (issued 930,000 Synergy common shares)*
*Synergy, the Optionor and the assignees shall exchange the above $129,000 of shares for $129,000 of cash, so long as the transfer of Title as outlined in section 2.7 is fulfilled, on or before December 31, 2025. On June 15, 2025, Synergy assigned its rights and obligation with respect to $129,000 payment to third party as per the Notice of Assignment.
c) Execute and deliver to the Optionor on the date Company went public (delivered), the NSR Royalty granting the Optionor a 0.5% NSR royalty, subject to the right of the Company to re-purchase 100% of the NSR royalty for a total consideration of $525,000 at any time.
A pre-existing 1% NSR royalty to the benefit of Keystone Associates Inc. existed on the property prior to this agreement and is additional to the 0.5% NSR royalty required as part of Element79's option to purchase.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
In 2020, in addition to the option agreement, the Company paid a finder’s fee by issuance of 8,000 common shares of the Company valued at $1,600 to a third party.
During the year ended August 31, 2023, Element79 increased the size of its existing 1,735 hectare property by staking an additional 245.5 hectares directly adjacent to the Western and North-Western borders of its existing claims, bringing the total land package to 1,980.5 hectares.
On July 17, 2023, the Company approved the transfer of all rights and data related to the Project to its subsidiary, Synergy Metals Corp. (“Synergy”). The Company plans to spin out and sell Synergy through a plan of arrangement. As a result, the Project with a cost of $327,800 was reclassified from exploration and evaluation assets to assets available for sale.
On January 10, 2025, the Company entered into an arrangement agreement and merger agreement, as amended with Synergy, Synergy’s wholly owned subsidiary, 1515041 BC Ltd. (“Synergy SubCo”) and 1425957 BC Ltd (“142”).
Arrangement
On July 17, 2023, the Company transferred all rights and data related to the Project to Synergy in exchange of 2,000,000 Class “A” common voting shares in the capital of Synergy.
In anticipation of the reverse takeover of Synergy by 142 under the merger agreement, the arrangement agreement has been entered by the Company, whereby 1,000,000 of the 2,000,000 Synergy shares held by the Company will be distributed to the shareholders of the Company on a pro-rata basis (the "Spin-Out Arrangement"). In consideration for administrative support provided by the Company in connection with the arrangement transaction and Synergy's proposed subsequent application to list on the Canadian Securities Exchange and pursuant to the arrangement agreement, Synergy will issue an additional 10,000 Synergy shares to the Company, which will also be distributed to the Company Shareholders as part of the Spin-Out Arrangement. The Spin-Out Arrangement will be a court ordered arrangement under the Business Corporations Act (British Columbia), and will be subject to approval by the Company Shareholders, as well as the British Columbia Supreme Court. It is anticipated that the Company will publish and distribute an information circular in respect of the meeting of the Company Shareholders to be held to vote on the Spin-Out Arrangement.
The Company currently holds approximately 60.24% of the Synergy shares, excluding the 10,000 Synergy shares to be issued to the Company under the arrangement agreement, and following the completion of the proposed Spin-Out Arrangement the Company is anticipated to hold approximately 30.03% of the Synergy shares, while the Company Shareholders will hold approximately 30.33% of the Synergy shares.
Merger
Subsequent to the Spin-Out Arrangement, Synergy proposes to acquire all of the issued and outstanding common shares in the capital of 142 ("142 Shares") in exchange for an equivalent number of Synergy shares by way of a three cornered amalgamation whereby Synergy and 142 will amalgamate under the provisions of the Business Corporations Act (British Columbia) (the "Amalgamation") to continue as one corporation pursuant to the terms of the merger agreement. As consideration for the 142 Shares, shareholders of the 142 Shares ("142 Shareholders") will receive, pursuant to the merger agreement, one Synergy Share for each 142 Share held.
Following completion of the Amalgamation under the merger agreement, the issued and outstanding Synergy shares will be held (i) approximately 86.35% by the former 142 Shareholders (excluding participants in the Concurrent Financing (defined herein)), (ii) approximately 4.02% by the Company Shareholders, (iii) approximately 3.98% by the Company (iv) approximately 5.25% by other existing holders of Synergy shares, and (v) 0.40% by participants in the Concurrent Financing. As such, the Amalgamation will constitute a reverse take over of Synergy by 142. Holders of warrants to purchase 142 Shares ("142 Warrants") will also receive one replacement warrant to purchase a Synergy Share for each 142 Warrant held. There are currently 21,000,000 142 Warrants outstanding.
The Amalgamation will be subject to approval by the 142 Shareholders, as well as Synergy (being the sole shareholder of Synergy SubCo). The Amalgamation's closing will also be subject to 142's completion of a private placement of 100,000 142 Shares at a price of $0.10 per 142 Share for gross proceeds of a minimum of $10,000, or an amount otherwise
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
agreed by Synergy and 142 (the "Concurrent Financing"). Upon completion of the Amalgamation, Synergy intends to make an application that the Synergy shares be listed and posted for trading on the Canadian Securities Exchange.
The Company is expected to hold 1,000,000 Synergy shares after the Amalgamation, all of which will be subject to escrow on the same terms of as insiders of Synergy after the Amalgamation.
Together, the Spin-Out Arrangement and the Amalgamation are intended to effect a reorganization of the Company's current business into two separate corporate entities. The Company will maintain its business as a gold exploration Company with the objective of exploring and ultimately developing gold projects in Peru and the USA, while Synergy will be an exploration Company focused on the Project.
In December 2025, The Company entered into an amendment agreement to extend the completion of the transaction contemplated by the arrangement agreement and merger agreement to April 30, 2026.
Exploration
Element79 and historic operator Placer Dome Canada Limited have previously identified auriferous anomalies predominantly hosted in quartz veining and shear zones—the recently completed work plan aimed to expand upon these promising discoveries and confirm their continuity.
2023 Prospecting Program
The prospecting, light stripping, washing, and sampling program was initially slated for a minimum of seven days, with possible extension dependent on field results. Following the initial work period, our dedicated team on the ground made additional progress, identifying new structures of interest and expressing a strong desire to continue some of the work, resulting in an additional week of exploration work.
Notable achievements include:
- Sampling in the iron carbonate zone, revealing consistent low-grade gold values.
- Resampling at various locations and conducting hand-stripping to expose and sample areas with gold concentrations exceeding 0.5g/t Including up to 1.1 g/t
- Highly anomalous Molybdenum up to 0.3% associated with two gold samples which returned >1 g/t suggests some similarities to the world class Hemlo Gold mine.
- Identification of new areas of interest for future exploration.
- Channel cuts taken in the main gold-bearing zone.
- Completion of LIDAR image surveys.
- Opening up existing forest roads for future exploration, enhancing accessibility.
The team also met with SGS Canada Inc. ("SGS"), who provided support and recommendations for the current program and outlined the upcoming update to the NI43-101. Notably, SGS made the recommendation to proceed with whole rock analysis to include silver, as this is a good association with the current type of deposit models that have potentially been identified.
Actlabs in Timmins, Ontario, has been responsible for the assays.
Summer 2023 Dale Program Prospecting Results
| Sample No. | Easting | Northing | Au g/t | Ag g/t | Mo g/t |
|---|---|---|---|---|---|
| DALE 07/23/23-01 | 400355 | 5306477 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-02 | 400339 | 5306455 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-03 | 400339 | 5306445 | 0.046 | < 0.2 | 1 |
| DALE 07/23/23-04 | 401631 | 5306037 | 0.229 | < 0.2 | 7 |
| DALE 07/23/23-05 | 401952 | 5306073 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-06 | 402020 | 5306134 | 0.055 | < 0.2 | < 1 |
| DALE 07/23/23-07 | 402034 | 5306147 | 0.083 | 0.2 | 12 |
| DALE 07/23/23-08 | 400154 | 5306992 | 0.083 | < 0.2 | < 1 |
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
| Sample No. | Easting | Northing | Au g/t | Ag g/t | Mo g/t |
|---|---|---|---|---|---|
| DALE 07/23/23-09 | 400111 | 5306784 | < 0.005 | 0.5 | < 1 |
| DALE 07/23/23-10 | 400257 | 5306513 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-11 | 400253 | 5306512 | < 0.005 | 0.3 | < 1 |
| DALE 07/23/23-12 | 400252 | 5306506 | < 0.005 | < 0.2 | 3 |
| DALE 07/23/23-13 | 400181 | 5306292 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-14 | 400061 | 5306227 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-15 | 400023 | 5306255 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-16 | 400023 | 5306162 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-17 | 400333 | 5306378 | < 0.005 | < 0.2 | < 1 |
| DALE 07/23/23-18a | 400321 | 5306374 | < 0.005 | < 0.2 | < 1 |
| DALE 07/28/23-19a | 400333 | 5306353 | < 0.005 | < 0.2 | 2 |
| DALE 07/29/23-18b | 400402 | 5306455 | < 0.005 | < 0.2 | < 1 |
| DALE 07/29/23-19b | 400381 | 5306426 | < 0.005 | < 0.2 | < 1 |
| DALE 07/29/23-20 | 400421 | 5306458 | 0.187 | 0.5 | 5 |
| DALE 07/29/23-21 | 401615 | 5306655 | 1.120 | 3.4 | 3170 |
| DALE 07/29/23-22 | 401615 | 5306655 | 1.100 | 2 | 795 |
| DALE 07/29/23-23 | 401527 | 5306630 | < 0.005 | < 0.2 | 2 |
| DALE 07/29/23-24 | 400388 | 5306551 | < 0.005 | < 0.2 | 1 |
| DALE 07/29/23-25 | 400410 | 5306551 | < 0.005 | < 0.2 | < 1 |
| DALE 07/29/23-26 | 400423 | 5306537 | 0.007 | < 0.2 | < 1 |
| DALE 07/29/23-27 | 400738 | 5306718 | < 0.005 | 1.2 | < 1 |
| DALE 07/29/23-28 | 400715 | 5306726 | 0.683 | 1.8 | < 1 |
| DALE 07/30/23-CC01 | 400962 | 5306718 | 0.135 | 0.2 | < 1 |
Peruvian Properties
On June 28, 2022, the Company acquired all of the issued and outstanding common shares of Calipuy Resources Inc. ("Calipuy"), a private B.C. corporation, which, through its subsidiaries, holds a 100-per-cent interest in the past producing Lucero mine, one of the highest-grade underground mines in Peru's history at grades averaging 19.0 grams per tonne gold equivalent (14.0 g/t gold and 373 g/t silver). Operations were suspended in 2005 at Lucero due to the persistence of low gold and silver prices at the time. On June 27, 2025, the Company announced it had issued Force Majeure Notice to Condor to temporarily suspend payment obligations under the Lucero project agreement due to significant difficulties in advancing the project due to the conflicts with the local community and delay of relevant governmental authorities to act on necessary legislation and policies.
The purchase price included the issuance of 1,916,548 common shares of the company and 383,309 performance bonus warrants. Each performance bonus warrant is exercisable into one common share of the Company at an exercise price of $20.00 per share expiring on the earlier of (i) three years from the exercise eligibility date, subject to achievement of bonus performance target that is tied to producing a minimum production target of 9,000 tons of ore yielding a minimum of 1,500 oz gold within a 30-day production period, and (ii) five years from the date of issuance of the performance warrants.
Element79 may accelerate the expiry of the performance bonus warrants if its common shares have a closing price greater than $35.00 per share for a period of 10 consecutive trading days on the exchange at any time after closing. An aggregate of 1,297,150 consideration shares and 259,429 performance bonus warrants were subject to a lock-up agreement, whereby 50% were released on December 28, 2022 and the remaining 50% were released on June 28, 2023.
The acquisition was a related-party transaction pursuant to Multilateral Instrument 61-101 (Protection of Minority Shareholders in Special Transactions). Antonios Maragakis, who was the chief executive officer and a director of Calipuy, is also a director and former chief operating officer of the Company. Mr. Maragakis disclosed his interest in the acquisition to the board of directors of each of the Company and Calipuy and has abstained from voting on approval of the agreement and the acquisition. In addition, Shane Williams, a director of the Company at the time of the acquisition, was also a director of Calipuy. Prior to closing, neither Mr. Maragakis, nor Mr. Williams held any common shares of the Company,
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
and following closing, their beneficial direct and indirect shareholdings increased to 97,688 common shares and 292,509 common shares, respectively. The acquisition and agreement were reviewed and considered by the disinterested members of the board of directors of the Company with Mr. Maragakis recusing himself for discussions relating to the same, and the disinterested members of the board unanimously approved entry into the agreement and completion of the acquisition on the terms of the agreement. The Company believes that the acquisition provides an opportunity to advance the property and deliver value to Element79 shareholders. A special committee was not formed for the purpose of reviewing the acquisition, and an independent valuation was not obtained in connection with closing. Each of Mr. Maragakis and Mr. Williams have terminated any and all compensation agreements with Calipuy, and waived any entitlement to severance or change of control payments by Calipuy that would have otherwise been triggered as a result of the acquisition.
The acquisition of Calipuy included Minera Machacala S.A.C. ("Machacala"), a Peruvian entity that owns the Machacala mine project in the Department of La Libertad of Peru and Compania Minera SFJ S.A.C. ("SFJ"), a Peruvian entity that owns the Urumalqui project in the Department of La Libertad of Peru.
On February 18, 2023, in a mutual agreement with certain contractors and related parties (counterparties), the Company terminated the acquisition agreements for Machacala and SFJ and will return 121,030 of its Element79 common shares to treasury and return all shares of Minera and SFJ, to their former owners. 87,683 common shares were returned during the year ended August 31, 2024.
The termination of Machacala and SFJ includes the termination its interest in the Machacala mine project and Urumalqui project. The Company feels that relinquishing ownership of the Machacala mine project and Urumalqui project is both a prudent financial decision and provides greater focus on developing higher-value-generating core projects within its portfolio. The return to treasury of the shares represents the purchase shares issued as part of the original acquisition.
As a result of the termination, the Company reduced the balance on its exploration and evaluation assets by $3,234,756, including recognizing an impairment loss of $229,850, reduced the balance on the provisions liabilities by $3,107,673, reduced the net liabilities of Minera Machacala S.A.C. and Compania Minera SFJ S.A.C on the termination date, and recognized the treasury stock to be cancelled at its fair value of $114,978.
The termination of the Machacala and Urumalqui purchase agreements was a related party transaction pursuant to Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions. Antonios Maragakis, who was the CEO and a director of Calipuy prior to its purchase by Element79 Gold, is also a director and the chief operating officer of the Company. Mr. Maragakis has disclosed his interest in the termination to the board of directors of each of the Company and Calipuy, and abstained from voting on termination of the agreement.
Acquisition of Minas Lucero Del Sur S.A.C. ("MLDS")
On December 21, 2020 (the "MLDS Closing Date"), the Company's subsidiary Calipuy completed a share purchase agreement (the "MLDS Agreement") with Condor Resources Inc. ("Condor") to acquire all issued and outstanding shares of MLDS (the "MLDS Shares") which owns certain rights, titles and interests in and to the Lucero mine project in the District of Chacas in Peru.
Pursuant to the MLDS Agreement, as amended, the Company is obligated to make the following payments (the "MLDS Cash Payment") to Condor:
- On the MLDS Closing Date US$90,000 (paid - Cdn$115,704);
- On or before June 21, 2022 US$75,000 (paid - Cdn$97,688);
- On or before January 31, 2023 US$100,000 (paid - Cdn$133,500)*;
- On or before March 31, 2023 US$200,000 (paid - Cdn$269,900)*
- On or before December 21, 2023 US$500,000 (paid as outlined below)*; and
- On or before June 30, 2025 US$1,100,000**.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
As consideration for the agreement to reschedule the third payment into two payments, Element79 issued 25,000 shares valued at $40,000 to Condor on December 21, 2022. All other terms of the sale of Minas Lucero del Sur remain unchanged.
On December 19, 2023, the Company and Condor have agreed to reschedule the U$500,000 payment due on or before December 31, 2023, into two tranches. Twenty-five percent of the payment (US$125,000) will be satisfied now by the issuance of common shares of Element79 (issued). The balance of US$375,000 is due on or before March 31, 2024. As consideration for the rescheduled payments, Element79 will issue a bonus of US$12,500 to Condor, payable in Element79 shares (issued).
On April 5, 2024, the Company and Condor agreed to further restructure the US$375,000 payment as follows:
- US$100,000 (paid – Cdn$136,500)
- US$85,000 (US$75,000 plus US$10,000 bonus) will be satisfied by the issuance of units comprising of one common share and one warrant convertible for one common share of the Company at 0.35 for two years. (499,413 units issued with a value of $114,865)
- US$200,000 to be paid on or before the closing of Element79’s sale of their Maverick Springs project, which sale is expected to close before the end of June 2024. (paid – Cdn$272,042)
- In consideration of the restructure, Element79 will pay an additional US$20,000 on or before the closing of Element79’s sale of their Maverick Springs project, which sale is expected to close before the end of June 2024. (paid – Cdn$27,204)
On December 18, 2024 the Company and Condor have agreed to reschedule the US$1,000,000 payment due on or before December 31, 2024 to $1,100,000 due on or before June 30, 2025 (“Subject payment”). As security to the subject payment, the Company pledges 1,750,000 shares of Sun Silver Limited in favor of Condor until May 6, 2025. As the Force Majeure is in effect, the Company is renegotiating all the past and future contract terms with Condor.
In addition to the MLDS Cash Payment, the Company will make an additional cash payment of US$1,535,000 (the “MLDS Final Cash Payment”) to Condor on or before December 31, 2026 in an amount equal to the additional amount required to make the total aggregate amount of the MLDS Cash Payment and the MLDS Final Cash Payment to be US$3,600,000* unless:
(i) The Company accelerates the MLDS Cash Payment and all such MLDS Cash Payment are made within thirty-six (36) months of the MLDS Closing Date in which case the MLDS Final Cash Payment shall be an amount equal to the additional amount required to make the total aggregate amount of the MLDS Cash Payment and the MLDS Final Cash Payment to be US$3,000,000;
(ii) Subject to (i), the price of gold averages not less than US$2,500 per ounce during the 30 days prior to the payment date of the MLDS Final Cash Payment, in which case the MLDS Final Cash Payment shall be an amount equal to the additional amount required to make the total aggregate amount of the MLDS Cash Payment and the MLDS Final Cash Payment to be US$4,000,000; or
(iii) Subject to (i), the price of gold averages not less than US$3,000 per ounce during the 30 days prior to the payment date of the MLDS Final Cash Payment, in which case the MLDS Final Cash Payment shall be an amount equal to the additional amount required to make the total aggregate amount of the MLDS Cash Payment and the MLDS Final Cash Payment to be US$6,000,000.
- collectively the “MLDS Subsequent Cash Payment”
Using a risk-adjusted discount rate of 12%, the fair value of the MLDS Subsequent Cash Payment was calculated as $2,362,861 and recorded the provision at the MLDS Closing Date, which will be accreted to the face value during the term of the MLDS Subsequent Cash Payment. As at August 31, 2025, the book value of MLDS Subsequent Cash Payment has been accreted to $3,298,091 (August 31, 2024 - $2,873,604).
Pursuant to the MLDS Agreement, until the MLDS Subsequent Cash Payment is settled and subsequent to the Company receiving the first $550,000 proceeds from the future financings, Condor has the right but not the obligation to convert all
14
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
or part of the outstanding MLDS Subsequent Cash Payment into the Company's common shares at a discounted price of 20% of the price offered in the future financing.
In addition, in connection with the acquisition of MLDS, the Company and Condor entered into a share pledge agreement (the "MLDS SP Agreement"). Pursuant to the MLDS SP Agreement, the MLDS Shares are pledged to Condor as collateral for the MLDS.
In May 31, 2025, the Company issued Force Majeure Notice to Condor to temporarily suspend payment obligations under the Lucero project agreement until the sooner of the end of the Force Majeure Event or twenty-four months from the date of notice. At this time, the Company is uncertain as to when the Force Majeure event will cease. The decision was taken considering significant difficulties in advancing the Lucero project due to the conflicts with the local community and significant delays of relevant governmental authorities to act on necessary legislation and policies.
Lucero mine project
Formerly operated as the Shila mine from 1989 to 2005, Lucero consists of 10,805 hectares located in the Shila range of southern Peru, which contains several historic high-grade gold-silver mines. Lucero consistently delivered high grades during 16 years of operations, and between 1998 and 2004, reported production averaging approximately 18,800 ounces of gold and 435,000 ounces of silver per year at grades of 19.0 g/t AuEq (14.0 g/t Au and 373 g/t Ag), with recoveries at the ore processing facility averaging 94.5 % for gold and 85.5 % for silver.
A 0.5-per-cent NSR (net smelter royalty) is retained by Sandstorm Gold Ltd., one of the largest gold royalty companies in the world.
A NI 43-101 report, dated Sept 4, 2021, prepared for Calipuy (now a wholly owned subsidiary of Element79) on the Lucero mine project by Mining Plus is now available on the Company website. Samples collected by the QP of the report returned up to 116.8 g/t AuEq (78.7 g/t Au and 2,856 g/t Ag). Due to a lack of historical data, the project does not host any resources. However, access to the historic workings is available, and the QP of the report states Lucero is underexplored and has significant exploration potential for extension of known veins and to discover additional veins.
Lucero is one of many low-sulphidation epithermal Au-Ag deposits hosted in tertiary volcanics of the central Andes cordillera of southern Peru. The project hosts 74 recognized epithermal veins, 14 of which have been partially exploited. High-grade bonanza-style direct shipping ore was mined in the past from low- to intermediate-sulphidation quartz-carbonate massive sulphide veins. Prospecting by previous operator Condor Resources Inc. from 2012 to 2020 identified the high-sulphidation epithermal alteration zone with structures that returned peak sample values of 80.1 g/t AuEq (33.4 g/t Au and 3,500 g/t Ag). This alteration zone, measuring approximately 1,300 metres by 1,400 metres, exhibited no evidence of prior sampling or drilling, and is believed to host potential for a bulk-tonnage disseminated gold-silver deposit.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Figure 2. Lucero Project showing major historic mining areas
During a local assembly held on Sunday, September 3, 2023, the Community of Chachas, Castilla Province, Arequipa Region, approved the issuance of a permit to Minas Lucero del Sur S.A.C. ("Minas Lucero"), a wholly-owned subsidiary of the Company. The resolution was endorsed by a majority of qualified community members present at the local assembly. The permit allows the Company to conduct superficial mining exploration activities, including geological mapping and selective sampling, for a duration of four months, commencing from September 1, 2023, through December 31, 2023.
Monthly work plans were designed, and the Company is focusing on re-creating the "lost" historical data sets of both above-ground and underground mapping, sampling and trenching. This activity will create the data required to generate drill targets and provide much of the information towards PEA/PFS studies in 2024. Ore Discovery LLC, with a local branch of their operations in Lima, has been engaged as the Company's core geological service contractor to carry out the geological mapping and sampling works onsite.
This work is a critical step to our greater development plan leading up to restarting production at Lucero, where we will be building out a data set through sampling, mapping, targeting trenching and drilling locations both above ground and underground. While mapping will be across the whole property, trenching and drill site targeting will focus on the Apacheta, Pillune and Sando Alcalde areas of the property, where the past production came from and is therefore of highest interest. We will also be setting our sights on the Andrea area, where we intend to begin work on a previously untouched vein system, alongside the Chachas community's artisanal miners.
As part of the agreement reached during the local assembly on September 3, 2023, Minas Lucero has undertaken to contribute to the community's infrastructure development by providing 3,000 meters of 4-inch piping in two deliveries, for the channeling of La Jochá in Ticlla. These commitments are integral to securing the necessary permits for further exploration, with the goal of potential bulk sampling and revenue generation in upcoming years.
The Company's management team and contractors were present in the Chachas community on October 6-8, 2023 for meetings and a formal donation ceremony, where the delivery of the piping to the Community of Chachas, Peru. This initiative underscores the Company's commitment to nurturing positive relationships with local communities while upholding the highest standards of environmental and ethical responsibility in its exploration endeavors. The piping will play a vital role in redirecting water at La Jochá in Ticlla, a critical infrastructure project with far-reaching benefits for the entire community.
In addition to the piping donation, the Company is actively engaged with the Community of Chachas in the development of a comprehensive plan for sustainable exploration and development at the Lucero project. This strategic plan prioritizes the minimization of environmental impact while maximizing the advantages to the local community.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
The Company has partnered with UMA ("UMA"), a prominent Peruvian Non-Governmental Organization based in Lima. UMA helps communities across Peru develop through a focus on environmental education, with a drive to understand social and economic scenarios of developing communities to help create solutions to their unique social-environmental challenges. Together, Element79 and UMA aim to develop a comprehensive education program that will create a baseline of knowledge and perception of the mining industry as well as social, environmental and economical topics tailored for the Chachas community and surrounding areas.
The Company is dedicated to conducting environmentally responsible and sustainable exploration activities, emphasizing the importance of collaboration with the local community for mutual benefit. The Company is enthusiastic about its role within the Community of Chachas and eagerly anticipates further cooperative efforts to build a brighter, more sustainable future for all parties involved. The Company has set up an official field office in Chachas, Arequipa as of February, 2024, to facilitate its ongoing community relations as well as increasing level of field work ramping up to ore operations later in the year.
In 2023, the field work focused on surface mapping (1/2,500 scale) as well as surface and underground sampling at the Apacheta and Sando Alcalde areas. Despite adverse weather conditions affecting surface work, underground work at Sando Alcalde commenced on September 21, 2023, following authorization from the Community of Chachas, RRCC. The achievements include:
- Mine Workings Mapping: 1,400 linear metres covered, representing 40% more than the initial target schedule.
- Surface Geological Mapping (1:2,500 scale): A total of 360 hectares were mapped, contributing to a cumulative total of more than 400 hectares.
- Field Stations: 98 established, with a cumulative total of 279.
- Samples Collected: A total of 111 samples have been collected and sent to Certimin Laboratory (33 surface, 64 underground, and 14 QA/QC).
Recent work in November 2023, focused on mapping and surface and underground sampling at the Apacheta area. The following progress has been made:
- Underground Mapping: 4 adits, 2,505 linear meters (358m/day).
- Sampling: 200 samples collected (28 samples per day), including 26 QA/QC samples.
Further field work was completed at the Lucero mine project, with the total 2023 work program re-generating unavailable historical mapping and data sets, including a significant volume of channel samples along the adits and veins where past production, and current artisanal production is coming from. The latest underground mapping and channel sampling efforts have revealed additional insights and accessible historical working, originally estimated at just 2.5 km. Recent work documented, a spanning network of 8.9 km of workings, with 85% now meticulously mapped and sampled. To date a total of 19 adits have been mapped, with 10 additional adits remaining for underground mapping. In addition to discovery of significantly more accessible working, work done between October 2023 and December 2023 yielded significant insight into Lucero mine project gold-silver mineralization as outlined below:
- Mineralization conforms to the intermediate sulfidation epithermal style, characterized by gold-silver veins with associated lead and zinc sulphides.
- Subvertical structures, hosted with dacite tuffs are the primary controls of the mineralized veins, with an average vein width of 0.40m.
- Within the Apacheta zone, mineralization remains open at depth and towards the northwest.
- Two structures exhibiting significant exploration potential for gold-silver mineralization have been identified: the Promesa vein and the Pillune sector.
17
Element79 Gold Corp.
Management's Discussion and Analysis of Financial Results
For the year ended August 31, 2025 and 2024
- Notably, the Pillune sector appears hosts a well-defined ore shoot, highlighting its substantial mineralization potential.
The Company received additional results from the most recent underground and surface sampling of its flagship Lucero property. Among a total of 97 samples were sent for assays, 56 of which returned greater than $0.1\mathrm{g / t}$ gold (up to $8.55\mathrm{g / t}$ gold and $523\mathrm{g / t}$ silver) which are shown in Table 5. Several samples also were also rich in base metals (up to $23.7\%$ lead and $9.9\%$ zinc) All Samples were sent for To CERTIMIN S.A. Laboratories, Lima, Peru for analysis. Standards and duplicates were inserted every 10th samples.
Table 5. Samples returning $> {0.1}\mathrm{\;g}/\mathrm{t}$ gold from the fall 2023 sampling program, $\mathrm{C}$ (channel sample), $\mathrm{G}$ (grab sample), $\mathrm{S}$ (surface), $\mathrm{U}$ (underground).
| Sample | Type | Origin | WGS84 Z18S Easting | WGS84 Z18S Northing | length (m) | Au g/t | Ag g/t | Cu % | Pb % | Zn % |
|---|---|---|---|---|---|---|---|---|---|---|
| 2101 | C | S | 803,491 | 8,296,553 | 0.80 | 0.30 | 1.2 | 0.0 | 0.0 | 0.0 |
| 2103 | C | S | 803,493 | 8,296,666 | 1.00 | 0.53 | 8.9 | 0.0 | 0.0 | 0.0 |
| 2104 | C | S | 803,658 | 8,296,620 | 0.30 | 0.15 | 0.7 | 0.0 | 0.0 | 0.0 |
| 2108 | C | S | 803,700 | 8,296,468 | 0.60 | 0.12 | 1.9 | 0.0 | 0.0 | 0.0 |
| 2109 | C | S | 803,700 | 8,296,469 | 0.50 | 0.30 | 6.2 | 0.0 | 0.0 | 0.0 |
| 2113 | C | S | 803,730 | 8,296,446 | 1.00 | 0.25 | 40.1 | 0.0 | 0.0 | 0.0 |
| 2117 | C | S | 803,481 | 8,296,736 | 1.10 | 0.12 | 3.8 | 0.0 | 0.1 | 0.0 |
| 2119 | C | S | 803,457 | 8,296,803 | 0.50 | 0.58 | 2.6 | 0.0 | 0.0 | 0.0 |
| 2120 | C | S | 803,456 | 8,296,803 | 0.60 | 1.57 | 9.1 | 0.0 | 0.0 | 0.1 |
| 2123 | C | S | 803,399 | 8,296,787 | 0.50 | 2.77 | 9.7 | 0.0 | 0.0 | 0.0 |
| 2124 | C | S | 803,399 | 8,296,788 | 0.80 | 0.27 | 5.1 | 0.0 | 0.0 | 0.1 |
| 2125 | C | S | 803,298 | 8,297,044 | 0.35 | 1.70 | 57.7 | 0.0 | 0.1 | 0.1 |
| 2126 | C | S | 803,298 | 8,297,043 | 0.60 | 6.22 | 33.0 | 0.0 | 0.1 | 0.1 |
| 2127 | C | S | 803,189 | 8,297,146 | 0.35 | 5.01 | 138.0 | 0.0 | 0.1 | 0.0 |
| 2128 | C | S | 803,303 | 8,296,978 | 0.80 | 0.27 | 17.4 | 0.0 | 0.1 | 0.1 |
| 2129 | C | S | 803,257 | 8,297,133 | 0.40 | 1.75 | 84.1 | 0.0 | 0.0 | 0.1 |
| 2130 | C | S | 803,256 | 8,297,133 | 0.85 | 0.65 | 42.6 | 0.0 | 0.0 | 0.1 |
| 2134 | C | S | 803,594 | 8,297,072 | 0.60 | 0.18 | 26.2 | 0.0 | 0.4 | 0.1 |
| 2139 | G | U | 801,951 | 8,294,338 | N/A | 6.96 | 81.4 | 0.1 | 0.4 | 0.8 |
| 2140 | G | U | 801,929 | 8,294,348 | N/A | 1.06 | 23.1 | 0.0 | 0.7 | 1.2 |
| 2141 | C | U | 801,882 | 8,294,362 | 0.30 | 0.12 | 5.5 | 0.0 | 0.0 | 0.1 |
| 2143 | C | U | 801,832 | 8,294,389 | 0.30 | 0.90 | 29.1 | 0.0 | 0.1 | 0.3 |
| 2145 | G | U | 801,809 | 8,294,390 | N/A | 8.55 | 523.0 | 0.0 | 0.4 | 0.2 |
| 2149 | C | U | 801,824 | 8,294,392 | 0.45 | 6.19 | 97.0 | 0.1 | 0.4 | 0.4 |
| 2150 | C | U | 802,276 | 8,293,072 | 0.90 | 0.14 | 40.1 | 0.1 | 2.1 | 1.3 |
| 2152 | C | U | 802,297 | 8,293,075 | 0.30 | 2.11 | 48.5 | 0.0 | 1.6 | 3.6 |
| 2154 | C | U | 802,297 | 8,293,075 | 0.50 | 0.11 | 6.3 | 0.0 | 0.3 | 0.8 |
| 2156 | C | U | 802,374 | 8,293,117 | 0.90 | 0.18 | 6.6 | 0.1 | 0.2 | 0.4 |
| 2157 | C | U | 802,382 | 8,293,119 | 1.50 | 0.16 | 13.7 | 0.1 | 0.3 | 2.2 |
| 2159 | C | U | 802,412 | 8,293,119 | 0.40 | 0.16 | 22.7 | 0.0 | 2.7 | 1.6 |
| 2160 | C | U | 802,439 | 8,293,126 | 0.80 | 0.10 | 34.1 | 0.2 | 2.3 | 2.7 |
| 2162 | G | U | 802,498 | 8,293,150 | N/A | 0.60 | 5.0 | 0.0 | 0.1 | 0.2 |
| 2163 | C | U | 802,520 | 8,293,161 | 0.65 | 0.24 | 7.2 | 0.0 | 0.5 | 1.0 |
| 2165 | C | U | 802,542 | 8,293,167 | 0.30 | 0.11 | 2.9 | 0.0 | 0.2 | 0.2 |
| 2166 | C | U | 802,596 | 8,293,176 | 0.55 | 0.29 | 2.4 | 0.0 | 0.1 | 0.2 |
| 2167 | C | U | 802,595 | 8,293,175 | 0.60 | 0.20 | 23.5 | 0.0 | 2.9 | 2.2 |
| 2169 | C | U | 802,327 | 8,293,090 | 0.55 | 0.27 | 4.3 | 0.0 | 0.0 | 0.1 |
| 2171 | C | U | 802,327 | 8,293,091 | 0.50 | 0.43 | 29.4 | 0.0 | 0.6 | 0.7 |
Element79 Gold Corp.
Management's Discussion and Analysis of Financial Results
For the year ended August 31, 2025 and 2024
| Sample | Type | Origin | WGS84 Z18S Easting | WGS84 Z18S Northing | length (m) | Au g/t | Ag g/t | Cu % | Pb % | Zn % |
|---|---|---|---|---|---|---|---|---|---|---|
| 2173 | C | U | 802,367 | 8,293,108 | 0.45 | 0.37 | 14.7 | 0.0 | 0.6 | 0.3 |
| 2175 | C | U | 802,385 | 8,293,111 | 0.90 | 0.32 | 69.0 | 0.6 | 3.8 | 2.6 |
| 2176 | C | U | 802,405 | 8,293,113 | 0.35 | 1.22 | 60.8 | 0.2 | 3.7 | 2.7 |
| 2178 | C | U | 802,424 | 8,293,116 | 0.55 | 0.17 | 5.8 | 0.0 | 0.2 | 0.3 |
| 2179 | C | U | 802,424 | 8,293,115 | 0.40 | 0.49 | 210.0 | 0.3 | 23.7 | 9.9 |
| 2181 | C | U | 802,424 | 8,293,115 | 0.70 | 0.16 | 35.3 | 0.1 | 0.1 | 1.0 |
| 2182 | C | U | 802,453 | 8,293,126 | 0.75 | 0.17 | 7.8 | 0.0 | 0.2 | 0.2 |
| 2183 | C | U | 802,510 | 8,293,155 | 0.80 | 0.25 | 6.6 | 0.0 | 0.2 | 0.5 |
| 2184 | C | U | 802,509 | 8,293,156 | 0.50 | 0.65 | 30.5 | 0.1 | 1.8 | 6.1 |
| 2185 | C | U | 802,629 | 8,293,181 | 0.40 | 0.12 | 5.7 | 0.1 | 0.1 | 0.3 |
| 2187 | C | U | 802,676 | 8,293,176 | 0.55 | 0.54 | 10.6 | 0.0 | 0.4 | 0.8 |
| 2188 | C | U | 802,676 | 8,293,176 | 0.35 | 0.27 | 15.9 | 0.1 | 1.6 | 0.6 |
| 2189 | C | U | 802,331 | 8,293,090 | 2.00 | 0.40 | 12.9 | 0.0 | 0.5 | 0.3 |
| 2200 | C | U | 802,361 | 8,293,107 | 0.40 | 0.19 | 3.3 | 0.0 | 0.3 | 0.4 |
| 2202 | C | U | 802,371 | 8,293,108 | 0.70 | 0.12 | 5.1 | 0.0 | 0.1 | 0.1 |
| 2203 | C | U | 802,371 | 8,293,107 | 0.65 | 0.11 | 9.1 | 0.0 | 0.9 | 0.2 |
| 2206 | C | U | 802,375 | 8,293,108 | 1.60 | 0.16 | 2.4 | 0.0 | 0.1 | 0.2 |
| 2209 | C | U | 802,383 | 8,293,111 | 0.30 | 0.13 | 23.0 | 0.1 | 0.6 | 0.8 |
This data will help the Company develop geological models and both underground and surface-level drilling targets, which the Company intends to form the 2024 drilling campaign that is expected to feed a minimum 200tpd mine plan. Subsequent quarters are expecting ore extraction and continued drilling for resources, estimate mine development, along with completion of a preliminary economic assessment (PEA), laying the foundation for the construction of on-site process facilities to improve mid-term economics and unlock resource size.
The Element79 team has a clear vision for the future. Our short-term goal involves bulk sampling and sales to local mills to gain additional knowledge of the deposit as well as generate revenue. The Company completed a non-binding letter of intent ("LOI") with a regional processing mill ("RPM") that paves the way for the sale of ore from the Lucero property. This marks a pivotal moment in the Company's journey and aligns directly with its cash-flow generation strategy for 2024.
Under the terms of the LOI, Element79 and RPM have outlined several key points:
Bulk Sampling Program: A pilot bulk sampling program ("Pilot Program") is set to commence in mid-2024, aiming to extract a minimum quantity of ore over a 12-month period, to be shipped to RPM for processing.
Definitive Agreement: The parties are committed to negotiating a definitive agreement approximately 90 days before the Pilot Program's start.
Quantity: The Company will deliver an average of 200 tons per day of ore to RPM under the Pilot Program.
Right of First Refusal: RPM has the exclusive right of first refusal to buy the ore produced by the Company during the Pilot Program.
Purchase Price: The purchase price per metric ton of ore will be determined per delivery, after sampling and testing by RPM, based on industry standards and the LME (London Metal Exchange) pm price of the day.
Delivery Schedule: Specific delivery schedules will be mutually agreed upon in advance, ensuring smooth coordination with Orcopampa's operations.
Quality Control: Rigorous quality control mechanisms will be established to meet agreed-upon specifications.
19
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Another component of the LOI is that RPM has granted the Company access to valuable historical information from its archives, allowing Element79 to benefit from a more comprehensive understanding of the property, and therefore a greater potential for more effective and efficient mine planning. This knowledge will assist in developing an efficient bulk tonnage extraction and toll processing plan.
Assay results from additional underground sampling received in May 2024, includes samples up to $98\mathrm{g / t}$ gold and 2,034 g/t silver (sample 2508) at its flagship Lucero property, Peru.
Key Highlights:
Significant Mineral Endowment: Total of 455 underground channel samples have been collected from this recent phase, representing nearly $600\mathrm{kg}$ (620kg) of mineralization and $650\mathrm{kg}$ of wall rock, underwent comprehensive analysis by our partners at Ore Discovery and unveiled significant exploration potential. Results in 115 samples returned substantial values in gold (Au) (ranging from $1.0\mathrm{g / t}$ to $98.1\mathrm{g / t}$ ), silver (Ag) (ranging from $0.7\mathrm{g / t}$ to $3,026\mathrm{g / t}$ ), lead (Pb) (as high as $2.0\%$ ) and zinc (Zn) (up to $3.5\%$ ), indicating the robust potential of Lucero's mineral endowment.
High-Grade Mineralization: Among these, 17 samples exhibited gold values surpassing $10\mathrm{g / t}$ , with 8 samples exceeding $20\mathrm{g / t}$ , and 51 samples boasting silver values exceeding $100\mathrm{g / t}$ Ag. Of particular significance are 15 high-grade samples with values ranging from $12.65\mathrm{g / t}$ to an impressive $98.1\mathrm{g / t}$ of Au, and remarkable silver values of $62.1\mathrm{g / t}$ to $3,026\mathrm{g / t}$ and up $3.24\%$ Zn. These findings reaffirm the potential for exceptional high-grade mineralization.
Geochemistry total Statistics: Total of 455 samples, $58\%$ has grades over $0.1\mathrm{g / t}$ Au; $26\%$ has grades over $1\mathrm{g / t}$ Au; and $9\%$ has grades over $5\mathrm{g / t}$ Au. Notably most of grades below $0.1\mathrm{g / t}$ Au correspond to wall rock (foot or hanging wall).
Table 6. Channel Sample gold grade statistics
| Grade From g/t | Grade To g/t | Count | % |
|---|---|---|---|
| < 0.1 | 0.1 | 191 | 42 |
| 0.1 | 0.5 | 103 | 23 |
| 0.5 | 1 | 46 | 10 |
| 1 | 5 | 76 | 17 |
| 5 | 10 | 22 | 5 |
| 10 | 20 | 9 | 2 |
| 20 | 100 | 8 | 2 |
Table 7. Samples returning $> {5.0}\mathrm{\;g}/\mathrm{t}$ gold from underground channel sampling.
| Sample | Type | Origin | WGS84 Z18S Easting | WGS84 Z18S Northing | length (m) | Au g/t | Ag g/t | Cu % | Pb % | Zn % |
|---|---|---|---|---|---|---|---|---|---|---|
| 2215 | C | UG | 803,281 | 8,296,986 | 0.70 | 17.6 | 415 | 0.01 | 0.06 | 0.06 |
| 2221 | C | UG | 803,272 | 8,297,031 | 0.30 | 6.3 | 276 | 0.13 | 0.21 | 0.49 |
| 2242 | C | UG | 803,118 | 8,297,214 | 0.30 | 40.3 | 444 | 0.07 | 0.81 | 1.88 |
| 2250 | C | UG | 803,071 | 8,297,228 | 0.30 | 35.2 | 545 | 0.03 | 0.31 | 0.38 |
| 2272 | C | UG | 803,150 | 8,297,286 | 0.36 | 5.8 | 158 | 0.01 | 0.02 | 0.03 |
| 2281 | C | UG | 803,162 | 8,297,338 | 0.35 | 7.1 | 546 | 0.04 | 0.11 | 0.06 |
| 2283 | C | UG | 803,151 | 8,297,341 | 0.32 | 6.6 | 433 | 0.03 | 0.08 | 0.06 |
| 2288 | C | UG | 803,112 | 8,297,333 | 0.30 | 19.8 | 3026 | 0.08 | 1.01 | 1.88 |
| 2290 | C | UG | 803,085 | 8,297,352 | 0.35 | 6.3 | 800 | 0.04 | 0.31 | 0.27 |
| 2291 | C | UG | 803,085 | 8,297,352 | 0.53 | 12.6 | 1333 | 0.03 | 0.14 | 0.07 |
| 2305 | C | UG | 803,130 | 8,297,269 | 0.30 | 8.2 | 416 | 0.03 | 0.03 | 0.15 |
| 2344 | C | UG | 803,478 | 8,296,734 | 0.67 | 6.9 | 253 | 0.03 | 0.04 | 0.11 |
| 2346 | C | UG | 803,478 | 8,296,734 | 0.83 | 6.5 | 315 | 0.01 | 0.10 | 0.07 |
| 2375 | C | UG | 803,467 | 8,296,406 | 0.85 | 18.6 | 161 | 0.20 | 0.18 | 0.18 |
| 2388 | C | UG | 803,654 | 8,296,885 | 0.33 | 7.3 | 78 | 0.01 | 0.50 | 0.94 |
| 2409 | C | UG | 803,458 | 8,296,776 | 0.30 | 5.3 | 15 | 0.04 | 0.40 | 0.38 |
| 2414 | C | UG | 803,476 | 8,296,734 | 0.50 | 8.4 | 9 | 0.02 | 0.03 | 0.12 |
Element79 Gold Corp.
Management's Discussion and Analysis of Financial Results
For the year ended August 31, 2025 and 2024
| Sample | Type | Origin | WGS84 Z18S Easting | WGS84 Z18S Northing | length (m) | Au g/t | Ag g/t | Cu % | Pb % | Zn % |
|---|---|---|---|---|---|---|---|---|---|---|
| 2422 | C | UG | 803,442 | 8,296,786 | 0.42 | 6.4 | 98 | 0.13 | 0.66 | 0.77 |
| 2430 | C | UG | 803,373 | 8,296,859 | 0.60 | 9.2 | 117 | 0.01 | 0.16 | 0.16 |
| 2432 | C | UG | 803,364 | 8,296,868 | 0.30 | 44.9 | 79 | 0.25 | 1.55 | 3.24 |
| 2474 | C | UG | 802,644 | 8,295,266 | 0.35 | 8.0 | 255 | 0.01 | 0.03 | 0.08 |
| 2475 | C | UG | 802,670 | 8,295,257 | 0.77 | 37.8 | 309 | 0.01 | 0.03 | 0.08 |
| 2478 | C | UG | 802,680 | 8,295,258 | 0.30 | 7.5 | 394 | 0.01 | 0.15 | 0.04 |
| 2493 | C | UG | 802,678 | 8,295,271 | 0.30 | 5.7 | 415 | 0.02 | 0.07 | 0.11 |
| 2508 | C | UG | 803,524 | 8,296,755 | 0.67 | 98.1 | 2034 | 0.24 | 0.78 | 0.85 |
| 2522 | C | UG | 803,472 | 8,296,786 | 0.37 | 9.4 | 573 | 0.04 | 0.09 | 0.12 |
| 2540 | C | UG | 803,110 | 8,297,320 | 0.30 | 10.2 | 497 | 0.03 | 0.24 | 0.06 |
| 2543 | C | UG | 803,094 | 8,297,334 | 0.30 | 9.9 | 750 | 0.03 | 0.20 | 0.23 |
| 2564 | C | UG | 803,047 | 8,297,327 | 0.35 | 45.8 | 2473 | 0.08 | 0.47 | 1.09 |
| 2576 | C | UG | 803,232 | 8,297,187 | 0.67 | 16.6 | 599 | 0.02 | 0.41 | 0.64 |
| 2580 | C | UG | 803,189 | 8,297,234 | 0.45 | 5.9 | 375 | 0.03 | 0.17 | 0.25 |
| 2591 | C | UG | 803,346 | 8,296,917 | 0.40 | 54.3 | 1203 | 0.56 | 2.03 | 1.55 |
| 2623 | C | UG | 803,484 | 8,297,035 | 0.45 | 9.7 | 39 | 0.00 | 0.39 | 0.92 |
| 2638 | C | UG | 803,348 | 8,296,904 | 0.35 | 5.2 | 11 | 0.02 | 0.03 | 0.07 |
| 2641 | C | UG | 803,391 | 8,296,867 | 0.32 | 18.8 | 211 | 0.15 | 0.88 | 1.68 |
| 2646 | C | UG | 803,417 | 8,296,781 | 0.37 | 10.4 | 132 | 0.04 | 0.37 | 0.94 |
| 2649 | C | UG | 803,520 | 8,296,831 | 0.72 | 7.2 | 1 | 0.00 | 0.01 | 0.02 |
| 2665 | C | UG | 803,625 | 8,296,851 | 0.30 | 18.9 | 199 | 0.05 | 0.19 | 0.30 |
| 2733 | C | UG | 803,604 | 8,296,902 | 0.30 | 29.2 | 1095 | 0.01 | 0.47 | 1.15 |
Lucero del Sur 28 Property
On May 17, 2023, the Company submitted the winning bid for the coveted area covering the Roxana vein and referred to as Lucero del Sur 28. Encompassing 1,200 hectares, the Lucero del Sur 28 property is located immediately to the east of the Lucero mine project in the Shila range of southern Peru. The Company has subsequently forfeited these claims.
Roxana Vein
Historical information obtained from a regional processing mill indicates the Roxana vein outcrops over a strike length of approximately 100m, with varying widths between 0.20 and 0.50 meters. The vein is dominated by white to hyaline quartz) and altered rock clasts, with lesser amounts limonite patinas, hematite, pyrite, and jarosite. Certain sections feature lenses with argentiferous galena, chalcopyrite, malachite, and azurite. Informal workers have worked at strike lengths of approximately 50m and depth of 5m, extracting over 12,000 tonnes of ore yielding grades of 12.5 g/t Au and 1.2 oz/t Ag.
Tocracancha Prospect
Previously work on this prospect near the Roxana vein identified several west-northwest trending veins exhibiting strike lengths from 200 meters to nearly 1,200 meters with widths spanning from 0.5 to 2.0 meters. The observed mineralogy predominantly consists of predominantly hyaline quartz, gray silica microveins, baryte, and calcite, with traces of galena, sphalerite, as well as oxides of iron and manganese.
Since acquiring the Lucero mineral rights in mid-2022, the Company has actively engaged with the Chachas community to secure support critical for project success. On October 6, 2024, the Company received over 75% approval from the community for its operational initiatives. This approval paves the way for the negotiation of a 5-year revolving surface rights access agreement. The formal request for surface rights was received and officially recognized by the Chachas administration on October 18, 2024, with contract negotiations expected to be finalized in upcoming years.
In September 2024, the Company entered into an Letter of Intent ("LOI") with S.M.R.L PLAZA 16 ("Palaza") as a significant progress to restart the Lucero mine and concentrate its focus in the Arequipa, Peru region. As per the terms of the LOI, the Company will have access to exclusive right to purchase and process approximately 1.3 million tons of tailings currently controlled by Palaza. These tailings, a byproduct of previous mining activities at the Shila and Paola
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Mines, present a valuable resource for reprocessing for commercial benefit. Also, the tailings project stands to become a stronger foothold for the Company's mining operations in the region immediately surrounding the Lucero mine.
Element79 Gold will purchase the tailings from Palaza for a competitive price of USD $10 per ton, plus VAT (18%), with a base case of $10 per metric ton at USD 2,200 per ounce of gold, subject to increases based on the market value of gold at the time that batches are purchased. Also, the Company will make an initial non-refundable deposit of USD $25,000, followed by a comprehensive due diligence period of 75 days. This thorough evaluation will ensure the viability and profitability of the reprocessing project. Upon completion of Due Diligence, an additional USD $50,000 deposit will be required to proceed, in conjunction with the completion of the Definitive Agreement.
In addition to the purchase price, for all tailings processed, the Company will pay Palaza a 1% royalty based on the London Metals Exchange (LME) spot price of gold.
In May 31, 2025, the Company issued a force majeure notice to Condor which has temporarily suspend all payment obligations under the Lucero project agreement. The Company has been unable to access the Lucero project and perform exploration or commercial mining operation. Accordingly, during the year ended August 31, 2025, the Company has written off $12,682,526 (August 31, 2024 - $Nil) of acquisition costs and exploration expenses.
PROPOSED TRANSACTION
Snowbird Property
During the year ended August 31, 2021, Element79 signed a binding letter of intent (the "LOI") to acquire 100% of the issued and outstanding shares in Plutus Gold, after it has satisfied all obligations to exercise its option agreement with Gitennes Exploration Ltd. to acquire a 100% interest in the Snowbird High-Grade Gold Project.
Element79's intent is to acquire 100% interest in Plutus Gold for a $200,000 cash payment, and 8,000,000 common shares of Element79.
The Snowbird High-Grade Gold Project consists of 2,726 hectares across ten mineral claims located in Central British Columbia approximately 20 kilometers west of Fort St. James. The claims sit at low elevation with access via dirt roads that allows them to be drilled year-round.
While Element79's due diligence review remains ongoing, it has progressed sufficiently that the Company has opted to finance Plutus Gold's Drill Program via a drawable 1 facility up to Cdn$1,100,000 in order to facilitate the fulfillment of Plutus Gold's final obligations remaining under the option agreement between Plutus Gold and Gitennes Exploration Ltd. Element79 continues to review the property in addition to exploring alternate acquisition terms with regards to the current market conditions.
Synergy Spin-Out Arrangements
On January 10, 2025, the Company entered into an arrangement agreement and merger agreement with Synergy, Synergy SubCo and 142. As per the arrangement, the Company will distribute 1,000,000 out of 2,000,000 Synergy shares to the shareholders of the Company on a pro-rata basis (the "Spin-Out Arrangement") and it will receive an additional 10,000 Synergy shares which will also be distributed to the Company shareholders. After the arrangement, the Company will maintain its business as a gold exploration Company developing gold projects in Nevada and Peru, while Synergy will be an exploration Company focused on the Dale Property. In December 2025, The Company entered into an amendment agreement to extend the completion of the transaction contemplated by the Arrangement Agreement and Merger Agreement to April 30, 2026.
FUTURE PLANS
Element79's focus is on advancing the drill programs and project toward resource development on its Elephant Project and Gold Mountain Project with the intent of building long-term value for our shareholders. The Company's option to
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
acquire a 100% interest in the Dale Property is advancing through the plan of arrangement spin-out process through until April 2026.
SELECTED ANNUAL INFORMATION
Unless otherwise noted, all currency amounts are stated in Canadian dollars. The following table summarizes selected financial data for Element79 Gold Corp. The information set forth below should be read in conjunction with the consolidated financial statements for the year ended August 31, 2025, prepared in accordance with IFRS, and related notes.
| August 31, 2025 | August 31, 2024 | August 31, 2023 | |
|---|---|---|---|
| $ | $ | $ | |
| Net loss | 16,268,682 | 4,409,358 | 14,335,291 |
| Operating expenses | 3,771,306 | 3,056,013 | 4,187,894 |
| Comprehensive loss per share | 0.15 | 0.09 | 1.45 |
| Total assets | 7,044,320 | 15,325,816 | 17,046,691 |
| Total liabilities | 4,928,563 | 4,214,489 | 10,591,607 |
| Total non-current financial liability | - | 1,524,800 | 4,214,736 |
| Quarter ended August 31, 2025 | Quarter ended May 31, 2025 | Quarter ended February 28, 2024 | |
| --- | --- | --- | --- |
| $ | $ | $ | |
| Total revenues | - | - | - |
| Operating expenses | (474,249) | (651,999) | (542,338) |
| Net profit/(loss) | 205,094 | (13,532,503) | (1,008,813) |
| Net loss per share – Basic & fully diluted | 0.00 | 0.13 | (0.01) |
| Total assets | 7,044,320 | 3,168,336 | 15,866,882 |
| Quarter ended August 31, 2024 | Quarter ended May 31, 2024 | Quarter ended February 29, 2024 | |
| --- | --- | --- | --- |
| $ | $ | $ | |
| Total revenues | - | - | - |
| Operating expenses | (242,188) | (1,902,920) | (450,501) |
| Net profit/(loss) | 681,348 | (3,555,254) | (858,667) |
| Net loss per share – Basic & fully diluted | 0.01 | (0.05) | (0.03) |
| Total assets | 15,325,816 | 19,207,753 | 19,558,849 |
Over the past eight quarters, net loss ranged from a high of $13,532,503 in the current quarter to a profit of $205,094 in the last quarter of the fiscal year ended in 2025.
Significant expenses during the quarter ended November 30, 2023 include advisory fees of $48,249, investor relations and marketing fees of $55,151, management and director fees of $109,025, consulting fees of $190,370, professional fees of $43,546, office expenses of $8,129, interest expense of $51,002, and non-cash accretion expense of $165,154. Net loss was primary lower due to no exploration and evaluations assets meeting the impairment test.
Significant expenses during the quarter ended February 29, 2024 include consulting fees of $131,916, investor relations and marketing fees of $123,010, management and director fees of $83,725, professional fees of $35,138, office expenses of $11,439, interest expense of $32,329, loss on settlement of debt of $242,750 and non-cash accretion expense of $133,282. Net loss was slightly higher than previous quarter primarily due to a loss on the shares issued for debt settlement.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Significant expenses during the quarter ended May 31, 2024 include consulting fees of $837,153, investor relations and marketing fees of $300,863, management and director fees of $653,503, professional fees of $84,824, loss on settlement of debt of $4,465,900, non-cash accretion expense of $202,953 and gain on sale of mineral property interest of $3,366,868. Net loss significantly higher than previous quarters of 2024 primarily due to a loss on the shares issued for debt settlement.
Significant expenses during the quarter ended August 31, 2024 include investor relations and marketing fees of $211,956, management and director fees of $232,480, professional fees of $112,873, loss on impairment of mineral property interest of $1,572,751, loss on impairment of asset held for sale of $1,305,825, non-cash accretion expense of $203,412 and interest expense of $11,222. Net loss significantly reduced in this quarter mainly because of gain on revaluation of investment of $1,475,656.
Significant expenses during the quarter ended November 30, 2024 include share based compensation $926,981, Advisory fee of $227,855, consulting fees of $263,110, financing fees of $178,103, investor relation and marketing of $166,115 and management fees of $173,571. The net loss is higher during current period mainly due to stock options issuance to directors, officers and consultants.
Significant expenses during the quarter ended February 28, 2025 include professional fees of $62,114, investor relations and marketing fees of $139,491, management and director fees of $24,000, consulting fees of $82,896, office expenses of $26,007, exploration costs of $7,300, non-cash accretion expense of $66,250, unrealized loss on revaluation of investment of $523,035.
Significant expenses during the quarter ended May 31, 2025, include loss on impairment of exploration and evaluation asset of $12,690,525 due to Force Majeure, professional fees of $161,168, investor relations and marketing fees of $68,635, management and director fees of $219,064, consulting fees of $129,879, office expenses of $34,800, exploration costs of $12,125 and non-cash accretion expense of $64,821.
Significant expenses during the quarter ended August 31, 2025, professional fees of $123,360, investor relations and marketing fees of $139,701, management and director fees of $170,599, financing fees of $121,730, office expenses of $32,606, exploration costs of $10,677 and non-cash accretion expense of $185,285. Significant income includes realized gain on sale of investment $813,394.
RESULTS OF OPERATIONS
A breakdown of material components of general and administrative expenses can be found in the Financial Statements. The Company incurred a net loss and comprehensive loss of $16,268,682 (August 31, 2024 - $4,409,358) for the Year ended August 31, 2025. The increase in the net loss and comprehensive loss for the year ended August 31, 2025, was primarily due to the loss on impairment of exploration and evaluation asset and share-based compensation. Details of material expenses are as follows:
- Professional fees of $393,010 (August 31, 2024 - $276,381) higher compared to the previous year due to higher audit fees for previous year and legal fee related to spin-out process. Professional fees are mainly related to general corporate legal, and audit and accounting fees.
- Management fees of $696,851 (August 31, 2024 - $948,391) reduced due to lower fees charged by the CFO to support the Company. During the previous year, the Company also paid $108,000 and US$150,000 to the CEO and COO of the Company due to revision of their consulting agreement due to change of control.
- Director fees of $94,120 (August 31, 2024 - $130,342) lower in current year due to resignation of directors.
- Investor relations and marketing of $513,942 (August 31, 2024 - $690,980) decreased by $177,038 primarily due to termination of IR consulting agreements during the current fiscal year.
- Accretion expense of $380,870 (August 31, 2024 - $704,801) decreased significantly due to repayment of convertible note agreement for the final milestone payment in previous year related to the Nevada gold portfolio acquisition.
- Gain on settlement of debt of $210,836 (August 31, 2024 - $2,150,607 loss) decreased by $2,361,443, lower in current year due to reduced debt settlements agreed with various vendors.
24
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
- Advisory fees of $225,000 (August 31, 2024 - $70,524) increased during the current year due to engagement of vendors for sourcing of investors, sourcing of projects for further growth, guidance on current project development and management, geology and marketing help.
- Consulting fees of $498,858 (August 31, 2024 - $819,340) significantly lower compared to previous year due to termination and expiry of consulting agreements.
- Financing fees of $308,528 (August 31, 2024 - $Nil) mainly relates to the value of 1,542,971 shares issued as per the convertible loan agreement and legal fees related to the recent financing.
- Share based compensation of $792,389 (August 31, 2024 - $Nil) higher during the current year mainly due to fair value of 8,085,533 stock options issued to directors, officers and consultants.
- Unrealized loss on revaluation investment of $706,914 (August 31, 2024 - $1,476,636 gain) relates to the revaluation loss on investment in shares of Sun Silver Limited during the current year.
- Loss on impairment of exploration and evaluation assets of $12,682,526 (August 31, 2024 - $1,572,751) relates to the impairment of Lucero Project, Peru due to Force Majeure and uncertainty on timing in getting access to the property. In previous year the loss on impairment was related to the Battle Mountain Project in Nevada, USA.
- Realized gain on sale of investment of $1,098,517 (August 31, 2024 - $Nil) increased in current year and it relates to the gain on sale of investment in Sun Silver shares.
The Company had a net gain and comprehensive gain of $205,094 (August 31, 2024 - $681,378) for the three-month period ended August 31, 2025. The decrease in the net gain and comprehensive gain for the three-month period ended August 31, 2025 was primarily due to higher unrealized gain on revaluation of investment and higher gain on settlement of debts in previous year period compare to the current period. Details of material expenses are as follows:
- Professional fees of $123,360 (August 31, 2024 - $112,873) higher compared to the previous period due to legal fee related to spin-out process. Professional fees are mainly related to general corporate legal, and audit and accounting fees.
- Management fees of $148,599 (August 31, 2024 - $202,138) reduced due to lower fees charged by the CFO to support the Company.
- Director fees of $22,000 (August 31, 2024 - $30,342) lower in current period due to resignation of directors.
- Investor relations and marketing of $139,701 (August 31, 2024 - $211,956) decreased by $72,255 primarily due to the termination or expiry of IR agreements in current period.
- Accretion expense of $185,285 (August 31, 2024 - $203,412) decreased by $18,127 due to repayment of convertible note agreement for the final milestone payment for the Nevada gold portfolio acquisition.
- Gain on settlement of debt of $21,061 (August 31, 2024 - $2,558,043) decreased by $2,536,982, lower in current year period due to reduced debt settlements agreed with various vendors.
- Interest expense of $29,116 (August 31, 2024 - $11,222) increase of $17,894 due to the additional loans received to fund Spin out process in Synergy.
- Unrealized loss on revaluation investment of $407,557 (August 31, 2024 - $1,475,656 gain) relates to the revaluation gain on investment in shares of Sun Silver Limited during the current and previous period.
- Gain on impairment of exploration and evaluation assets of $7,999 (August 31, 2024 - $1,572,751 loss). In previous period, the loss on impairment relates to the impairment West Whistler and Clover Project in Nevada.
- Realized gain on sale of investment of $813,394 (August 31, 2024 - $Nil) increased in current period and it relates to the realized gain on sale of investment in Sun Silver shares.
LIQUIDITY AND CAPITAL RESOURCES
From time to time the Company works to raise additional capital through private placements and other forms of equity financing. Its ability to fund exploration projects is dependent upon its ability to obtain sufficient funding for operations and is ultimately dependent on the recoverability of the amounts capitalized to mineral exploration properties. The
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Company has not yet determined whether its mineral properties contain mineral reserves that are economically recoverable, and accordingly, the success of any further exploration or development prospects cannot be assured. Because the Company is not yet a producer, the primary source of future funds is through the sale of additional equity capital and optioning of resource properties.
There is no assurance that the Company will be successful in raising sufficient capital to meet its obligations. If it is not successful in raising sufficient capital, it may have to curtail or otherwise limit operations. These material uncertainties cast significant doubt upon the Company's ability to continue as a going concern.
During the year ended August 31, 2024, the Company entered into an agreement with a third-party whereby the Company received a loan of US$40,000 repayable on or before July 15, 2024. Pursuant to the agreement, the Company shall pay daily interest of $0.50% per day and US$1,000 for the first 15 days and an additional US$4,000 for day 16 to 30. During the year ended August 31, 2024, the Company repaid the principal amount in full. As of August 31, 2025, the outstanding interest payable is US$7,800 ($10,719) (August 31, 2024 - $Nil).
During the year ended August 31, 2024, the Company, through its subsidiary, Synergy, entered into a loan agreement with a third-party whereby the third-party loaned $200,000 to Synergy for startup capital, marketing fees, legal fees, listing fees and exploration of the Dale Property for the purposes of preparing for an amalgamation between the Synergy and the third-party. The loan shall be subject to an interest rate of 14% per annum. In the event that either Synergy or the third-party are no longer working towards the proposed amalgamation then the entire loan amount, together with any accrued interest, and any outstanding fees or charges, shall become due on demand at the third-party's discretion. As per the amendment and restated loan agreement dated October 13, 2025, the loan is repayable in demand.
During the year ended August 31, 2025, Synergy received a subsequent loan of $89,832 from the third-party on the same terms and conditions of the original loan agreement. As at August 31, 2025, the loan payable amount consists of $289,832 (August 31, 2024 - $200,000) principal and $65,040 accrued interest (August 31, 2024 - $27,462) and is presented as liabilities held for sale.
During the year ended August 31, 2025, the Company entered into a loan agreement with a third-party whereby the Company received US$50,000 repayable on or before December 1, 2024 ("Maturity Date"). Pursuant to the agreement, the Company must pay a fee of US$50,000 in common shares of the Company payable during the next capital raise (the "Fee"). Effective December 2, 2024, if the loan is not repaid by the Maturity Date, the third-party will be granted a 0.15% NSR on the Lucero mine project and the unpaid balance will accrue 12% per annum interest. The interest will be payable in common shares of the Company. The Company shall have the right to buy back the 0.15% NSR at any time for a price of $150,000. During the year ended August 31, 2025, the Company issued 519,231 units at $0.13 per share in connection with the Fee and repaid the loan amount along with the accrued interest. The company is renegotiating the terms of NSR and expected to finalize in next financial year.
During the year ended August 31, 2025, the Company entered into a loan agreement with a third-party whereby the Company received US$37,955 (CAD $53,000) repayable on or before May 31, 2025 and secured with the Company's assets until the loan is repaid. Pursuant to the agreement, the Company must pay a fee of US$37,955 in common shares of the Company payable during the next capital raise (the "Fee"). On November 14, 2024, the Company issued 530,000 units at $0.10 per share in connection with the Fee. Additionally, the company received $77,180 short-term loan from the third party. During the year ended August 31, 2025, the Company repaid the loan in full.
During the year ended August 31, 2025, the Company entered into an agreement, as amended, with a third-party whereby the Company received $41,145 repayable on or before June 30, 2025. Pursuant to the agreement, the Company shall pay a fee of $8,229, and an additional fee of US$49,374 payable in common shares of the Company during the next capital raise (the "Fee"). The Company is also liable to pay additional fees of $2,000 per month commencing December 1, 2024. On November 14, 2024, the Company issued 493,740 units at $0.10 per share in connection with the Fee. During the year ended August 31, 2025, the Company repaid the loan in full along with the accrued interest.
During the year ended August 31, 2025, the Company received $25,000 from a third-party and repaid by issuing 193,077 shares at $0.13 per share which includes accrued interest of $100.
26
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
During the year ended August 31, 2025, the Company entered into 1 month loan agreement of US$315,000 with an arm's length lender. The loan bears no interest; however, it is issued at a discount of US$15,000. On May 11, 2025, the Company repaid the loan of US$315,000 (CAD $439,529) by the transfer of 808,862 Sun Silver shares. In connection with the settlement of this loan, the Company recognized a loss of $1,943.
As at August 31, 2025, the Company had $192,038 (August 31, 2024 - $3,216) in cash and working capital deficiency of $2,188,572 (August 31, 2024 - $1,896,027).
| | August 31, 2025
$ | August 31, 2024
$ |
| --- | --- | --- |
| Operating activities | (1,538,446) | (2,485,914) |
| Investing activities | 783,999 | 1,561,840 |
| Financing activities | 943,269 | 918,400 |
Operating Activities
Operating activities generated a net cash outflow of $1,538,446 (August 31, 2024 – $2,485,914). The decrease in use of cash is due to reduced payments to prepaids, payments for consulting, management fees and investor relations and marketing related to previous year.
Investing Activities
The Cash inflow of $783,999 includes proceeds from sale of investment Sun Silver shares of $1,290,989 during the current year, partially offset by payments of $506,990 related to exploration and evaluation assets. During the previous year, the inflow of $1,561,840 from investing activities primarily relates to the sale proceeds from the Maverick Project, Nevada, of $2,044,537, payment of $62,501 on exploration programs on the Dale property and payment of $420,196 related to the expenditure on mineral properties in Nevada, USA and Peru respectively.
Financing Activities
The cash inflow relates to money received from private placement financing and loan payable. During the previous year, financing activities cash inflow relates to the private placements, share subscriptions received in advance and cash outflow relates to the repayment of loans and interest paid.
As at the Report Date, the Company:
Closed a private placement and issued 3,976,500 units at $0.10 for a gross consideration of $397,650 of which $328,900 was received and $68,750 was share subscription receivable as at August 31, 2025, as the shares were issued in error.
Issued 1,025,000 shares for service of $133,250 and 153,846 shares for exploration and evaluation expenditures amounting to $14,615 as part of the service agreements.
The Company issued 1,023,740 units valued at $102,374 for fees paid pursuant to a loan agreements and recognized the full amount as financing charges. As part of the units, the Company issued 1,023,740 warrants. Each warrant is exercisable for one common share at a price of $0.15 per common share for two years from the date of issuance. Using the residual valuation method, the Company allocated $93,469 to share capital and $8,905 was allocated to contributed surplus as the fair value of the warrants. Additionally, the Company issued 519,231 shares valued at $67,500 for fees pursuant to a loan agreement and recognized the full amount as financing charges.
Entered into debt settlement agreements with various vendors to settle debt of $801,365 and issued 6,164,344 common shares valued at $588,586 resulting in a gain on settlement of debt of $212,779.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
RELATED PARTY TRANSACTIONS
Key management personnel compensation
As at the Report Date, the Company’s key management personnel consist of the following directors:
- James Tworek
- Mohammad Fazil
- Warren Levy
- Kim Kirkland
And management:
- Michael Smith – CEO
- Tammy Gillis – CFO
- Monita Faris – Secretary
Key management personnel include persons having the authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Board of Directors and corporate officers.
The remuneration of key management personnel for the year ended August 31, 2025 and August 31, 2024 is as follows:
| August 31, 2025 | August 31, 2024 | |
|---|---|---|
| Professional fees | $ 26,808 | $ 46,302 |
| Consulting fees | 35,000 | 80,000 |
| Director and management fees | 784,508 | 1,078,733 |
| Share-based compensation | 496,402 | - |
| Total | 1,342,718 | 1,205,035 |
Consulting fees consist of $35,000 (August 31, 2024 - $Nil) paid to a Company controlled by the Secretary, Monita Faris. In previous year, consulting fees consist of $Nil (August 31, 2024 - $80,000) paid to a Company controlled by the Director, Neil Pettigrew.
Director and management fees consist of $238,322 (August 31, 2024 - $352,000) paid to a Company controlled by the former CEO, $55,500 (August 31, 2024 - $57,000) paid to the CFO, Tammy Gillis, $420,224 (August 31, 2024 - $565,515) paid to the Company controlled by the former COO, Kim Kirkland, $24,000 (August 31, 2024 - $24,000) paid to a Company controlled by the former Chair of the Audit Committee, $Nil (August 31, 2024 - $24,000) paid to a former director, George Tumor, $22,000 (August 31, 2024 - $30,000) paid to former Director, Neil Pettigrew, $24,462 (August 31, 2024 - $342) paid to a director, Warren Levy, $Nil (August 31, 2024 - $24,000) paid to a former director, Antonios Maragakis and $Nil (August 31, 2024 - $1,875) paid to former CFO, Heidi Gutte.
Accounting fees presented as part of professional fees consist of $26,808 (August 31, 2024 - $46,302) to a Company controlled by the former Chair of the Audit Committee and $Nil (August 31, 2024 - $10,000) to the CFO.
On October 4, 2024, the Company granted 5,090,000 stock options with an exercise price of $0.15 within 5 years from the date of issue to the former and current directors and officers of the Company valued at $496,402 (August 31, 2024 - $Nil) as below.
Element79 Gold Corp.
Management's Discussion and Analysis of Financial Results
For the year ended August 31, 2025 and 2024
During the year ended August 31, 2025, the Company granted below stock options to its directors and officers.
| August 31, 2025 | August 31, 2024 | |||
|---|---|---|---|---|
| Options Granted | Expense for the year (Vested) | Options Granted | Expense for the year (Vested) | |
| $ | $ | |||
| James Twork, Director and Former CEO | 2,250,000 | 219,431 | - | - |
| Kim Kirkland, QP and Former COO | 1,500,000 | 146,287 | - | - |
| Tammy Gillis, CFO | 350,000 | 34,134 | - | - |
| Zara Kanji, Former Director* | 50,000 | 4,876 | - | - |
| Neil Pettigrew, Former Director* | 390,000 | 38,035 | - | - |
| Warren Levy, Director | 550,000 | 53,639 | - | - |
| Total | 5,090,000 | 496,402 | - | - |
*Expired unexercised subsequent to the year ended August 31, 2025
As at August 31, 2025, a total amount of $194,173 (August 31, 2024 - $286,679) was due to key management personnel. This amount is non-interest bearing and due on demand.
| August 31, 2025 | August 31, 2024 | |
|---|---|---|
| $ | $ | |
| Due to a Company controlled by the CEO | 1,792 | - |
| Due to a Company controlled by the former CEO | 90,321 | 19,374 |
| Due to the spouse of the former CEO | - | 9,617 |
| Due to the CFO | 255 | 11,045 |
| Due to a Company controlled by the former COO | 45,522 | 115,118 |
| Due to Companies controlled by former directors | 43,824 | 101,525 |
| Due to Company controlled by company secretary | 2,000 | - |
| Due to companies controlled by a director | 10,459 | 30,000 |
| Total | 194,173 | 286,679 |
As at August 31, 2025, the Company is also liable to pay the management fees in shares of $67,815 (August 31, 2024 - $40,000) to the former CEO, $253,256 (August 31, 2024 - $101,183) to the former COO and $10,500 (August 31, 2024 - $Nil) to the CFO.
Other related party transactions
As of August 31, 2025, $Nil (August 31, 2024 - $200) was prepaid to the Director for services.
On September 8, 2023, in connection with the non-brokered financing of 145 corporate note units, Neil Pettigrew and George Tumur collectively participated in 120 units whereby the Company issued collectively 240,000 share purchase warrants to Neil Pettigrew and George Tumur with an exercise price of $0.50 per warrant. Each share purchase warrant is exercisable into one common share of the Company at an exercise price of $0.50 per share expiring on the earlier of (i) September 8, 2026 and (ii) in the event that the volume weighted average price (VWAP) of the common shares equals or exceeds $1.20 per share on the CSE for ten consecutive trading days after the date that is four months and one day from September 8, 2023.
During the year ended August 31, 2025, the Company entered into debt settlement agreement with various former and current related parties to settle and aggregate debt of $69,507 (August 31, 2024 - $1,117,854) an issued 534,668 (August 31, 2024 - 9,293,541) common shares valued at $53,767 (August 31, 2024 - $2,330,206), resulting in a gain on settlement of debt of $15,740 (August 31, 2024 - $1,212,352 loss). Also, during the year ended August 31, 2025, the Company issued 1,025,000 shares at a price of $0.13 for the management fees payable of $32,000 to the former CEO and $101,250 to the former COO for their services.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
OFF-BALANCE SHEET ARRANGEMENTS
In 2020, The Company entered into a non-revolving Equity Drawdown Facility (the "Facility"), as amended, that allows the Company to utilize funding for an aggregate amount of $10,000,000. The Company can draw down funds from the Facility from time to time during the three-year term at the Company's discretion by providing a notice ("Drawdown Notice") to the investor Crescita Capital LLC ("Investor"), and in return for each drawdown notice, the Company will allot and issue fully paid shares to the Investor in form of a "Private Placement".
During the year ended August 31, 2025, the Company issued Nil common shares (August 31, 2024 – 9,006,956 common shares).
During the year ended August 31, 2024, the Facility expired resulting in the carrying amount of the deferred financing charges to be $Nil as at August 31, 2024. As at August 31, 2023, the carrying amount of the deferred financing charges was $423,538 and the share subscriptions received in advance total $965,500.
On February 10, 2025, the Company entered into an investment and advisory agreement (the "Crescita Facility") with Crescita, that allows the Company to utilize funding for an aggregate amount of $5,000,000. The Company can draw down funds from the Crescita Facility through Equity Drawdown or Note Drawdown from time to time during the three-year term at the Company's discretion by providing a notice to the Crescita, and in return for each equity Drawdown Notice, the Company will allot and issue fully paid shares to the Investor in form of a private placement. The Note Drawdown will bear interest at 15% per annum calculated monthly.
During the year ended August 31, 2025, the Company paid an 8% commission and initial consulting fees ("financing fees") by issued 10,062,500 common shares with a value of $402,500 and issued 2,939,965 share purchase warrants. Each warrant is exercisable at $0.05 until February 7, 2030. The warrants were valued at $88,964 using the Black-Scholes model (2.75% risk-free rate, 138.49% volatility, 0% dividend yield, 5-year term). These financing fees were recorded as deferred financing charges and are amortized as share issue costs or financing fees based on drawdowns. During the year ended August 31, 2025, the Company amortized $28,014 of deferred financing charges to the financing fees. As of August 31, 2025, the deferred financing charge was $463,450 (August 31, 2024 - $Nil).
During the year ended August 31, 2025, the Company received $285,000 loan through Note Drawdown (August 31, 2024 - $Nil) from the Crescita Facility. As of August 31, 2025, the outstanding amount of the loan was $310,771 including $25,771 as accrued interest. (August 31, 2024 - $Nil). As of August 31, 2025, the Company have $4,715,000 available to drawdown from the Crescita Facility.
ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE
A number of new standards, and amendments to standards and interpretations are effective for the year ended August 31, 2025. Furthermore, a number of new standards, and amendments to standards and interpretations, are not yet effective for the year ended August 31, 2025, and have not been early adopted in preparing the consolidated financial statements. These new standards, and amendments to standards and interpretations are either not applicable or are not expected to have a significant impact on the Company's consolidated financial statements.
OUTSTANDING SHARE DATA
As at the Report Date, the Company had 207,373,844 (August 31, 2025 - 208,061,344) common shares issued and outstanding.
As at the Report Date, the Company had 14,163,144 (August 31, 2025 - 14,163,144) share purchase warrants outstanding.
As at the Report Date, the Company had 7,435,833 (August 31, 2025- 7,898,033) stock options outstanding.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
CAPITAL MANAGEMENT
The Company's objectives when managing capital are to maintain an appropriate capital base in order to:
(i) Advance the Company's corporate strategies to create long-term value for its stakeholders;
(ii) Sustain the Company's operations and growth throughout metals and materials cycles; and
(iii) Ensure compliance with the covenants of any applicable credit facility and other financing facilities used from time to time.
The Company monitors its capital and capital structure on an ongoing basis to ensure it is sufficient to achieve the Company's short-term and long-term strategic objectives. Management primarily funds the Company's exploration by issuing share capital, rather than using other capital sources that require fixed repayments of principal and interest. Management closely monitors its cash balance. The balance of cash as at August 31, 2025, was $192,038 (August 31, 2024 - $3,216).
There are presently no formal capital requirements with which the Company has not complied.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is appropriate. There were no changes to capital management during the year ended August 31, 2025.
FINANCIAL INSTRUMENTS
The Company is exposed to various financial instrument risks and assesses the impact and likelihood of this exposure. These risks include liquidity, credit, foreign exchange rate and interest rate. Where material, these risks are reviewed and monitored by the Board of Directors.
Credit risk
Credit risk is the risk of an unexpected loss if a customer or third-party to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its cash. The Company limits exposure to credit risk by maintaining its cash with large financial institutions. The Company does not have cash that is invested in asset-backed commercial paper.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages liquidity risk by maintaining adequate cash and restricted cash balances. The Company continuously monitors both actual and forecasted cash flows and matches the maturity profile of financial assets and liabilities.
Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, commodity and equity prices.
Interest rate risk
Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company does not have any borrowings that bear variable interest rates. Interest rate risk is limited to potential decreases on the interest rate offered on cash held with chartered Canadian financial institutions. This risk is considered minimal.
Foreign currency risk
The Company may be exposed to currency risk by incurring certain expenditures in currencies other than the Canadian dollar. The Company does not use derivative instruments to reduce its currency risk.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Commodity price risk
Commodity price risk is the risk that future cash flows will fluctuate as a result of changes in commodity prices, affecting results of operations and cash generated from operating activities. Such prices may also affect the value of exploration and development properties and the level of spending for future activities.
Equity price risk
Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market.
As at August 31, 2025, the Company had a cash balance of $192,038 (August 31, 2024 – $3,216) and amounts receivable of $41,978 (August 31, 2024 – $60,522) to settle current liabilities due in twelve months or less of $3,142,070 (August 31, 2024 – $2,689,689) and carry out its planned exploration program in the coming year. Management seeks additional financing through the issuance of equity instruments and loan and promissory notes to continue its operations.
There can be no assurance it will be able to do so. As at August 31, 2025, the Company has access to $4,715,000 through its equity drawdown facility.
INTERNAL CONTROLS OVER FINANCIAL REPORTING
Management has designed internal controls 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. The design of the Company’s internal control over financial reporting was assessed as of the Report Date. Based on this assessment, it was determined that certain weaknesses existed in internal controls over financial reporting. As indicative of many small companies, the lack of segregation of duties and effective risk assessment were identified as areas where weaknesses existed. The existence of these weaknesses is to be compensated for by senior management monitoring, which exists. Management will continue to monitor very closely all financial activities of the Company and increase the level of supervision in key areas. It is important to note that this issue would also require the Company to hire additional personnel in order to provide greater segregation of duties. Since there is insufficient work at this time to warrant the additional costs, management has chosen to disclose the potential risk in its filings and proceed with increased personnel only when the budgets and work load will enable the action. The Company has attempted to mitigate these weaknesses, through a combination of extensive and detailed review by management of the financial reports, and the integrity and reputation of senior accounting personnel.
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
Information provided in this MD&A, including the financial statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future value for certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the accompanying financial statements. Management maintains a system of internal controls to provide reasonable assurances that the Company’s assets are safeguarded and to facilitate the preparation of relevant and timely information.
RISK FACTORS
The mineral industry involves significant risks. In addition to the risk factors described elsewhere in this MD&A, the risk factors that should be taken into account in considering Element79’s business include, but are not limited to, those set out below. Any one or more of these risks could have a material adverse effect on the future prospects of the Company and the value of its securities.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Limited operating history
The Company has a limited history of operations and is considered a start-up company. As such, the Company is subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. There is no assurance that the Company will be successful in achieving a return on shareholders' investment and the likelihood of the Company's success must be considered remote in light of its early stage of operations.
Current Global Financial Condition
Current global financial conditions have been subject to increased volatility and turmoil. These factors may affect Element79's ability to obtain equity financing in the future or, if obtained, to do so on terms favourable to the Company. If these increased levels of volatility and market turmoil continue, the Company's operations as well as the trading price of its common shares could be adversely affected.
Industry and Mineral Exploration Risk
Mineral exploration is highly speculative in nature, involves many risks and frequently is non-productive. There is no assurance that the Company's exploration efforts will be successful. At present, Element79's projects do not contain any proven or probable reserves. Success in establishing reserves is a result of a number of factors, including the quality of the project itself. Substantial expenditures are required to establish reserves or resources through drilling, to develop metallurgical processes, and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Because of these uncertainties, no assurance can be given that planned exploration programs will result in the establishment of mineral resources or reserves.
The Company may be subject to risks that could not reasonably be predicted in advance. Events such as labour disputes, environmental issues, natural disasters or estimation errors are prime examples of industry related risks. Element79 attempts to balance these risks through insurance programs where required and ongoing risk assessments conducted by its technical team.
Commodity Prices
Element79 is in the business of exploring for base and precious metals, the market prices of which can fluctuate widely. Metal prices ultimately depend on demand in the end markets for which metals are used. Demand is affected by numerous factors beyond the Company's control, including the overall state of the economy, general level of industrial production, interest rates, the rate of inflation, and the stability of exchange rates, any of which can cause significant fluctuations in metals prices. Such external economic factors are in turn influenced by changes in international investment patterns, monetary systems and political developments. The price of metals has fluctuated widely in recent years and there are no assurances as to what will be the future prices of base and precious metals. In the course of its current operations, the Company does not enter into price hedging programs.
Environmental
Exploration projects and operations are subject to the environmental laws and applicable regulations of the jurisdiction in which Element79 operates. Environmental standards continue to evolve and the trend is to a longer, more complete and rigid process. The Company reviews environmental matters on an ongoing basis. If and when appropriate, the Company will make appropriate provisions in its financial statements for any potential environmental liability.
Reliance upon Key Personnel
The Company is dependent upon a number of key management and operational personnel, including the services of certain key employees. Its ability to manage activities, and hence its success, will depend in large part on the efforts of these individuals. During times when metals prices are strong, the Company faces intense competition for qualified personnel, and there can be no assurance that Element79 will be able to attract and retain such personnel at any time. Element79
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
does not maintain "key person" life insurance. Accordingly, the loss of the services of one or more of such key management personnel could have a material adverse effect on the Company.
Insurance
Element79's insurance will not cover all the potential risks associated with its operations. In addition, although certain risks are insurable, it might be unable to maintain insurance to cover these risks at economically feasible premiums. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration is not generally available to Element79 or to other companies in the mining industry on acceptable terms. The Company might also become subject to liability for pollution or other hazards that may not be insured against or that it may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.
Requirements to Obtain Government Permits
Government approvals and permits are currently required in connection with Element79's exploration activities, and further approvals and permits may be required in the future. The duration and success of the Company's efforts to obtain permits are contingent upon many variables outside of its control. Obtaining government permits may increase costs and cause delays depending on the nature of the activity to be permitted and the interpretation of applicable requirements implemented by the permitting authority. There can be no assurance that all necessary permits will be obtained and if obtained, that the costs involved will not exceed Element79's estimates or that it will be able to maintain such permits. To the extent such approvals are required and not obtained or maintained, the Company may be prohibited from proceeding with planned exploration or development of mineral properties.
Joint Ventures
From time to time Element79 may enter into one or more joint ventures. Any failure of a joint venture partner to meet its obligations could have a material adverse effect on such joint ventures. In addition, the Company might be unable to exert influence over strategic decisions made in connection with properties that are involved in such joint ventures.
Exploration Risks
The exploration for and development of mineral deposits involves significant risks. Few properties that are explored are ultimately developed into producing mines. Whether a mineral deposit will be commercially viable depends on a number of factors, including: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices, which are highly cyclical; and government regulation, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. Even if the Company identifies and acquires an economically viable ore body, several years may elapse from the initial stages of development until production. As a result, it cannot be assured that Element79's exploration or development efforts will yield new mineral reserves or will result in any new commercial mining operations.
Mineral Property Title Risk
The acquisition of title to mineral properties is a very detailed and time-consuming process. Title to mineral concessions may be disputed. Although the Company believes it has taken reasonable measures to ensure proper title to its properties, there is no guarantee that title to any of the properties will not be challenged or impaired. Third parties may have valid claims underlying portions of Element79's interests, including prior unregistered liens, agreements, transfers or claims, including aboriginal land claims, and title may be affected by, among other things, undetected defects or unforeseen changes to the boundaries of Element79's properties by governmental authorities. As a result, the Company may be constrained in its ability to operate its properties or unable to enforce its rights with respect to its properties. An impairment to or defect in the title to the Company's properties could have a material adverse effect on its business, financial condition or results of operations. In addition, such claims, whether or not valid, would involve additional cost and expense to defend or settle.
Element79 Gold Corp. Management's Discussion and Analysis of Financial Results For the year ended August 31, 2025 and 2024
Potential for Conflicts of Interest
Certain of the Company’s directors and officers may also serve as directors or officers of other companies involved in natural resource exploration and development or other businesses and consequently there exists the possibility for such directors and officers to be in a position of conflict. Element79 expects that any decision made by any of such directors and officers involving Element79 will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of Element79 and its shareholders, but there can be no assurance in this regard. In addition, each of the directors is required to declare and refrain from voting on any matters in which such director may have a conflict of interest or which are governed by the procedures set forth in applicable law.
APPROVAL
The Board of Directors of the Company has approved the disclosure contained in this MD&A.
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