Eskay Mining Corp — Audit Report / Information 2025

Jun 20, 2025

ESKAY MINING CORP.
FINANCIAL STATEMENTS
YEARS ENDED FEBRUARY 28, 2025
AND FEBRUARY 29, 2024
(EXPRESSED IN CANADIAN DOLLARS)

---

McGovern Hurley

Audit. Tax. Advisory.

Independent Auditor's Report

To the Shareholders of Eskay Mining Corporation

Opinion

We have audited the financial statements of Eskay Mining Corporation (the "Company"), which comprise the statements of financial position as at February 28, 2025 and February 29, 2024, and the statements of loss and comprehensive loss, statements of cash flows and statements of changes in shareholders' equity for the years then ended, and notes to the financial statements, including material accounting policy information.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at February 28, 2025 and February 29, 2024, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards ("IFRS").

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined that there were no key audit matters to communicate in our report.

251 Consumers Road, Suite 800

Toronto, Ontario

M2J 4R3

mcgovernhurley.com

t. 416-496-1234

---

McGovern Hurley

Other information

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

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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

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

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

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

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risks of not detecting a material misstatement resulting from fraud is

---

McGovern Hurley

higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

---

McGovern Hurley

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner of the audit resulting in this independent auditor's report is Nicole Louli.

McGovern Hurley LLP

McGovern Hurley LLP

Chartered Professional Accountants

Licensed Public Accountants

Toronto, Ontario

June 19, 2025

---

Eskay Mining Corp.
Statements of Financial Position
(Expressed in Canadian Dollars)

	As at February 28, 2025	As at February 29, 2024
ASSETS
Current assets
Cash and cash equivalents	$ 1,858,951	$ 2,839,947
Amounts receivable (note 8)	854,122	977,571
Prepaid expenses and other deposits (note 17)	40,941	25,530
Short term investments	100,000	-
Investment (note 11)	1,540,740	-
Total current assets	4,394,754	3,843,048
Non-current assets
Deposits (note 3)	99,503	99,503
Investment in associate (note 11)	-	1,896,156
Equipment (note 4)	170,920	213,649
Total assets	$ 4,665,177	$ 6,052,356
SHAREHOLDERS' EQUITY AND LIABILITIES
Current liabilities
Amounts payable and other liabilities (note 10 and 17)	$ 605,119	$ 302,167
Total current liabilities	605,119	302,167
Non-current liabilities
Provision for reclamation (note 9)	81,610	76,917
Total liabilities	686,729	379,084
Shareholders' equity
Share capital (note 12)	113,728,997	113,693,197
Reserves (notes 13 and 14)	13,512,756	14,728,845
Accumulated deficit	(123,263,305)	(122,748,770)
Total shareholders' equity	3,978,448	5,673,272
Total shareholders' equity and liabilities	$ 4,665,177	$ 6,052,356

Nature of operations and going concern (note 1)
Commitments and contingencies (note 18)
Subsequent events (note 21)

Approved on behalf of the Board of Directors:

"Hugh M. (Mac) Balkam", Director

"J. Gordon McMehen", Director

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

---

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

Eskay Mining Corp.

Statements of Loss and Comprehensive Loss

(Expressed in Canadian dollars)

	Year ended February 28, 2025	Year ended February 29, 2024
Operating expenses
Exploration and evaluation expenditures (note 3)	$ 386,703	$ 3,628,907
General and administrative (note 16)	1,378,815	2,158,026
Total operating expenses	(1,765,518)	(5,786,933)
Other items
Interest income	77,711	38,860
Gain on Seabridge loan termination	-	2,783,325
Amortization (note 4)	(42,729)	(38,879)
Sale of mineral claims	-	4,000,000
Change in fair value of investments (note 11)	(249,765)	-
Impairment of investment in associate (note 11)	-	(3,331,019)
Loss from investment in associate (note 11)	(105,651)	(461,142)
Gain on dilution of investment in associate (note 11)	-	(1,985)
Net loss and comprehensive loss for the year	$ (2,085,952)	$ (2,797,773)
Net loss per share - Basic and Diluted (note 15)	$ (0.01)	$ (0.02)
Weighted average number of common shares outstanding - Basic and diluted (note 15)	183,648,282	183,617,123

• 2 -

---

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

Eskay Mining Corp.

Statements of Cash Flows

(Expressed in Canadian Dollars)

	Year ended February 28, 2025	Year ended February 29, 2024
Operating activities
Net loss for the year	$ (2,085,952)	$ (2,797,773)
Adjustments for:
Share-based payments (note 13)	372,128	973,041
Gain on seabridge loan termination	-	(2,783,325)
Amortization (note 4)	42,729	38,879
Accretion (notes 9)	4,693	5,503
Change in fair value of investment	249,765	-
Loss from investment in associate (note 11)	105,651	461,142
Loss on dilution of investment in associate (note 11)	-	1,985
Impairment of investment in associate (note 11)	-	3,331,019
Changes in non-cash working capital items:
Amounts receivable	123,449	548,943
Prepaid expenses and other deposits	(15,411)	138,072
Amounts payable and other liabilities	302,952	(24,600)
Net cash used in operating activities	(899,996)	(107,114)
Investing activity
Purchase of equipment (note 4)	-	(77,513)
Investment in GIC (note 11)	(100,000)	-
Net cash used in investing activities	(100,000)	(77,513)
Financing activities
Proceeds from exercise of stock options	19,000	-
Net cash provided by financing activities	19,000	-
Net change in cash and cash equivalents	(980,996)	(184,627)
Cash and cash equivalents, beginning of year	2,839,947	3,024,574
Cash and cash equivalents, end of year	$ 1,858,951	$ 2,839,947
Cash and cash equivalents
Cash	$ 143,683	$ 2,725,973
GIC	$ 1,715,268	$ 113,974

• 3 -

---

Eskay Mining Corp.

Statements of Changes in Shareholders' Equity

(Expressed in Canadian Dollars)

Equity attributable to shareholders

	Share capital	Reserves	Accumulated deficit	Total
Balance, February 28, 2023	$113,693,197	$ 14,161,913	$ (120,357,106)	$ 7,498,004
Expiry of stock options	-	(31,081)	31,081	-
Expiry of warrants	-	(375,028)	375,028	-
Share-based payments (note 13)	-	973,041	-	973,041
Net loss for the year	-	-	(2,797,773)	(2,797,773)
Balance, February 29, 2024	$113,693,197	$ 14,728,845	$(122,748,770)	$ 5,673,272
Exercise of stock options (note 12(b)(i))	35,800	(16,800)	-	19,000
Expiry of stock options	-	(1,571,417)	1,571,417	-
Share-based payments (note 13)	-	372,128	-	372,128
Net loss for the year	-	-	(2,085,952)	(2,085,952)
Balance, February 28, 2025	$113,728,997	$ 13,512,756	$ (123,263,305)	$ 3,978,448

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

---

Eskay Mining Corp.

Notes to Financial Statements

Years Ended February 28, 2025 and February 29, 2024

(Expressed in Canadian Dollars)

1. Nature of operations and going concern

Eskay Mining Corp. (the "Company" or "Eskay") is a Canadian company incorporated in British Columbia and listed for trading on the TSX Venture Exchange ("TSXV"), the Frankfurt Stock Exchange and the OTCQB Venture Market in the United States. The Company is primarily engaged in the acquisition and exploration of mineral properties. The primary office is located at The Canadian Venture Building, 82 Richmond Street East, Toronto, Ontario, M5C 1P1.

These financial statements were approved by the board of directors on June 19, 2025.

These financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. The Company has incurred losses in prior periods, and had a net loss of $2,085,952 during the year ended February 28, 2025 (year ended February 29, 2024 - net loss of $2,797,773), has an accumulated deficit of $123,263,305 (February 29, 2024 - $122,748,770).

The Company's ability to continue to meet its obligations and carry out its planned exploration activities is uncertain and dependent upon the continued financial support of its shareholders and securing additional financing. While the Company has been successful in securing financing in the past, there is no assurance that it will be able to do so in the future. If the going concern assumption was not used, then the adjustments required to report the Company's assets and liabilities on a liquidation basis could be material to these financial statements.

Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of operations of such properties, these procedures do not guarantee the Company's title. Property title may be subject to social and government licensing requirements or regulations, unregistered prior agreements, unregistered claims, aboriginal claims, and non-compliance with regulatory and environmental requirements. The Company's mineral exploration property interests may also be subject to increases in taxes and royalties, renegotiation of contracts, and political uncertainty.

1. Material accounting policies

(a) Statement of compliance

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and interpretations issued by the IFRS Interpretations Committee ("IFRIC") of the IASB. The policies set out below have been consistently applied to all periods presented. These financial statements have been prepared on a historical cost basis, except for those instruments carried at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information.

• 5 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

2. Material accounting policies (continued)

(b) Cash and cash equivalents

Cash and cash equivalents are comprised of cash on hand and deposits with a maturity of three months or less from the date of acquisition. As at February 28, 2025, the Company held a redeemable GIC in the amount of $1,715,268 with a maturity date of March 21, 2025 (2024 - $nil). The interest rate at the date of investment was 4.5%. GIC's with a term of more than three months are presented in short-term investments.

(c) Investments in Associates

An associate is an entity over which the Company has significant influence but not control and is not a subsidiary or joint venture. Significant influence is presumed to exist where the Company has between 20% and 50% of the voting rights, but can also arise when the Company has power to be actively involved and influential in financial and operating policy decisions of the entity even though Company has less than 20% of voting rights.

The Company accounts for its investments in associates using the equity method. Under the equity method, the Company's investment in an associate is initially recognized at cost and subsequently increased or decreased to recognize the Company's share of profit and loss of the associate and for impairment losses after the initial recognition date. The Company's share of an associate's loss that are in excess of its investment are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. The Company's share of comprehensive income or losses attributable to shareholders of associates are recognized in comprehensive income during the period. The carrying amount of the Company's investments in associates also include any long-term debt interests which in substance form part of the Company's net investment. Distributions received from an associate are accounted for as a reduction in the carrying amount of the Company's investment.

(d) Exploration and evaluation expenditures

The Company expenses exploration and evaluation expenditures as incurred on exploration projects not commercially viable and technically feasible. Exploration and evaluation expenditures include acquisition costs of mineral properties, property option payments and evaluation activities.

Once a project has been established as commercially viable and technically feasible, related development expenditures are capitalized. This includes costs incurred in preparing the site for mining operations. Capitalization ceases when the mine is capable of commercial production, with the exception of development costs that give rise to a future benefit.

(e) Mining tax credits

Mining tax credits are recorded in the accounts when there is reasonable assurance that the Company has complied with, and will continue to comply with, all conditions needed to obtain the credits. These non-repayable mining tax credits are earned in respect of exploration costs incurred in British Columbia, Canada and are recorded as a reduction of the related exploration and evaluation expenditures.

(f) Decommissioning, restoration and similar liabilities

A legal or constructive obligation to incur restoration, rehabilitation and environmental costs may arise when environmental disturbance is caused by the exploration, development or ongoing production of an exploration property interest. Such costs arising from the decommissioning of a plant and other site preparation work, discounted to their net present value, are provided for as soon as the obligation to incur such costs arises. Discount rates using a pretax rate that reflect the time value of money are used to calculate the net present value. These costs are charged against profit or loss. The related liability is adjusted for each period for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation. Changes in estimates of decommissioning costs are accounted for as a change in the related liability and recognized in profit and loss. The periodic unwinding of the discount is recognized in operations as an accretion expense.

• 6 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

2. Material accounting policies (continued)

(g) Significant accounting judgments and estimates

The application of the Company's accounting policies in compliance with IFRS requires the Company's management to make certain judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. These estimates and assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the reporting date, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

(i) Assets' carrying values and impairment charges

In the determination of carrying values and impairment charges, management looks at the higher of recoverable amount or fair value less disposal costs in the case of assets and at objective evidence, significant or prolonged decline of fair value on financial assets indicating impairment. These determinations and their individual assumptions require that management make a decision based on the best available information at each reporting period.

(ii) Estimation of decommissioning and restoration costs and the timing of expenditure

The cost estimates are updated annually to reflect known developments, (e.g. revisions to cost estimates and to the estimated timing of decommissioning and restoration work), and are subject to review at regular intervals. Decommissioning, restoration and similar liabilities are estimated based on the Company's interpretation of current regulatory requirements, constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration or similar liabilities that may occur. Such estimates are subject to change based on changes in laws and regulations and negotiations with regulatory authorities.

(iii) Income, value added, withholding and other taxes

The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company's provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company's income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company's interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.

(iv) Share-based payments

Management determines costs for share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviours and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.

• 7 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

2. Material accounting policies (continued)

(g) Significant accounting judgments and estimates (continued)

(v) Investment in associate

Investments in associates are accounted for using the equity method, whereby the investment is carried in the statement of financial position at cost plus post-acquisition changes in the Company's share of the net assets of the investment. The Company's share of the results of operations of an associate is reflection in the profit and loss. An associate is an entity in which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not represent control or joint control over those decisions. Management reviews the relevant factors and makes considerations in determining whether significant influence exists in associates. Significant judgment is involved in the determination of significant influence.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

(h) Share-based payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value is measured at grant date and each tranche is recognized on a graded-vesting basis over the period in which the options vest. The offset to the recorded cost is to share-based payment reserve. Consideration received on the exercise of stock options is recorded as share capital and the related share-based payment reserve is transferred to share capital. Upon expiry, the recorded value is transferred to deficit.

At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in the statement of loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share-based payment reserve.

Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

(i) Loss per share

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares. The Company's diluted loss per share for the periods presented does not include the effect of stock options and warrants as they are anti-dilutive.

(j) Income taxes

Tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

• 8 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

2. Material accounting policies (continued)

(j) Income taxes (continued)

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(k) Impairment of non-financial assets

At each reporting date the carrying amounts of the Company's assets are reviewed to determine whether there is an indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less disposal costs and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in the profit or loss in the statements of loss and comprehensive loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

At the end of each reporting date, the Company assesses whether there is any indication that previously recognized impairment losses no longer exist. If such an indication exists, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss in the statement of loss.

(l) Share capital and common share purchase warrants

The Company periodically issues units to investors consisting of common shares and common share purchase warrants in private placements. These private placement warrants are equity instruments. Accordingly, gross proceeds received from the issuance of units are accounted for as an increase in share capital. No separate valuation (i.e. "bifurcation") of the private placement warrants is made for accounting purposes at the time of issuance or at any time thereafter.

Transaction costs directly attributable to the issuance of units are recognized as a decrease in share capital net of related income tax effects. Agent warrants are reflected as transaction costs at their estimated issue date fair value as determined using the Black-Scholes option-pricing model. When agent warrants expire unexercised, the balance is transferred to deficit.

• 9 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

2. Material accounting policies (continued)

(m) Flow-through shares

The Company has financed a portion of its exploration activities through the issue of flow-through shares, which offer a tax incentive to Canadian investors by transferring the tax deductibility of exploration expenditures from the Company to the investors.

Flow-through shares are reported at issue price. If the flow-through shares are issued at a premium to the market price of non-flow through or hard dollar shares at the date of announcement, such premium or excess proceeds is reported as a liability. The subsequent renunciation of such qualifying expenditures incurred by the Company in favour of the flow-through subscribers is reported as a reduction in the flow-through share liability and a corresponding amount as other income recorded in profit and loss.

Resource expenditure deductions for income tax purposes related to exploration and evaluation activities funded by flow-through share arrangements are renounced to investors in accordance with income tax legislation. The Company has indemnified the subscribers of flow-through share offerings against any tax related amounts that became payable by the shareholder as a result of the Company not meeting its commitments.

(n) Financial Instruments

Financial instruments of the Company consists of cash, investments, and accounts payable and other liabilities and Seabridge Loan.

All financial assets not classified at amortized cost or fair value through other comprehensive income ("FVOCI") are measured at FVTPL. On initial recognition, the Company can irrevocably designate a financial asset at fair value through profit or loss ("FVTPL") if doing so eliminates or significantly reduces an accounting mismatch.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated at FVTPL:

• It is held within a business model whose objective is to hold the financial asset to collect the contractual cash flows associated with the financial asset instead of selling the financial asset for a profit or loss;
• Its contractual terms give rise to cash flows that are solely payments of principal and interest.

Financial assets

Initial recognition and measurement

Non-derivative financial assets within the scope of IFRS 9 are classified and measured as "financial assets at fair value", as either FVTPL or FVOCI, and "financial assets at amortized costs", as appropriate. The Company determines the classification of financial assets at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows.

All financial assets are recognized initially at fair value plus, in the case of financial assets not at FVTPL, directly attributable transaction costs on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

• 10 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

1. Material accounting policies (continued)

(n) IFRS 9, Financial Instruments (continued)

Subsequent measurement – financial assets at amortized cost

After initial recognition, financial assets measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate ("EIR") method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in the statements of loss.

Subsequent measurement – financial assets at FVTPL

Financial assets measured at FVTPL include financial assets management intends to sell in the short term and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial assets measured at FVTPL are carried at fair value in the statements of financial position with changes in fair value recognized in the statements of loss. The Company's investments are classified as financial assets at FVTPL.

Subsequent measurement – financial assets at FVOCI

Financial assets measured at FVOCI are non-derivative financial assets that are not held for trading and the Company has made an irrevocable election at the time of initial recognition to measure the assets at FVOCI. The Company does not measure any financial assets at FVOCI.

After initial measurement, investments measured at FVOCI are subsequently measured at fair value with unrealized gains or losses recognized in other comprehensive income or loss in the statements of comprehensive loss. When the investment is sold, the cumulative gain or loss remains in accumulated other comprehensive income or loss and is not reclassified to profit or loss.

Derecognition

A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership.

Impairment of financial assets

The Company's only financial assets subject to impairment are other amounts receivable, which are measured at amortized cost. The Company has elected to apply the simplified approach to impairment as permitted by IFRS 9, which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, accounts receivable have been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized.

Financial liabilities

Initial recognition and measurement

Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL as is the case for held for trading or derivative instruments, or the Company has opted to measure the financial liability at FVTPL. The Company's financial liabilities include accounts payable and other liabilities and Seabridge Loan which are each measured at amortized cost. All financial liabilities are recognized initially at fair value.

Subsequent measurement – financial liabilities at amortized cost

After initial recognition, financial liabilities measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. The EIR amortization is included in the statements of loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires with any associated gain or loss recognized in the statements of loss.

• 11 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

2. Material accounting policies (continued)

(o) Equipment

Equipment is recorded at cost less accumulated depreciation. Depreciation is provided using the declining balance method using the following rates:

Exploration equipment
- 20%

At the end of each reporting period, the Company reviews the carrying amounts of its equipment to determine whether there is any indication that the equipment has suffered an impairment loss. Where such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. The recoverable amount is the higher of the equipment's fair value less cost to sell or its value in use.

(p) New accounting policies

During the year ended February 28, 2025, the Company adopted a number of amendments and improvements of existing standards. These included IAS 1 – Disclosure of Accounting Policies. These new standards and changes did not have any material impact on the Company's financial statements.

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after March 1, 2025. Many are not applicable or do not have a significant impact to the Company and have been excluded. Management is currently evaluating the impact of these pronouncements on the Company's financial statements.

Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)

In May 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments – Disclosures. The amendments clarify the derecognition of financial liabilities and introduces an accounting policy option to derecognize financial liabilities that are settled through an electronic payment system. The amendments also clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features and the treatment of non-recourse assets and contractually linked instruments (CLIs). Further, the amendments mandate additional disclosures in IFRS 7 for financial instruments with contingent features and equity instruments classified at FVOCI. The amendments are effective for annual periods starting on or after January 1, 2026. Retrospective application is required and early adoption is permitted.

Presentation and Disclosure in Financial Statements (IFRS 18)

In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting of financial performance. The new standards replaces IAS 1 Presentation of Financial Statements. IFRS 18 introduces new categories and required subtotals in the statement of profit and loss and also requires disclosure of management-defined performance measures. It also includes new requirements for the location, aggregation and disaggregation of financial information. The standard is effective for annual reporting periods beginning on or after January 1, 2027, including interim financial statements. Retrospective application is required and early adoption is permitted.

• 12 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

3. Exploration and evaluation expenditures

	Year ended February 28, 2025	Year ended February 29, 2024
ESKAY-Corey
Surveying, sampling and analysis	$ 71,604	$ 754,482
Geological and consulting	331,593	1,812,798
Camping procurement and expediting	100	656,063
Claims	1,069	29,067
Transportation	38,760	1,195,026
Accretion (note 9)	4,693	5,503
BC mining tax credit recovery	(61,116)	(824,032)
Total exploration and evaluation expenditures	$ 386,703	$ 3,628,907

ESKAY-Corey

The ESKAY-Corey property is comprised of the following:

St. Andrew (SIB)

Pursuant to an option agreement dated May 7, 2008 and amending option agreement dated January 17, 2013 with St. Andrew Goldfields Ltd., the Company earned an 80% interest in the SIB Property at Eskay Creek, British Columbia (the "Property") by expending an aggregate of $3.98 million on exploration of the Property and issuing further 265,000 common shares. On January 26, 2016, Kirkland Lake Gold Inc. ("Kirkland Lake") announced it completed the acquisition of St. Andrew. St. Andrew is a wholly-owned subsidiary of Kirkland Lake and continued to hold a 20% interest in the SIB Property. St. Andrew and the Company entered into an agreement with an effective date of November 25, 2016 for the further exploration and development of the Property. Pursuant to a Royalty Agreement dated March 8, 2021, the Company acquired the remaining 20% interest in SIB from Kirkland Lake, to hold a 100% working interest, in consideration for the granting of a 2% Net Smelter Returns Royalty on the SIB in favour of Kirkland Lake.

Corey claim

In September 1990, the Company acquired a 100% interest in mineral tenures located in the Skeena Mining Division, Province of British Columbia for $30,000 cash and a royalty of 5% of net profits from these claims to a maximum of $250,000.

These mineral exploration properties are located in northwestern British Columbia. The Company holds a 100% interest in these mineral tenures subject to a 2% net smelter royalty.

On July 7, 2023, the Company sold 5 mining claims in the Golden Triangle area of BC to Skeena Resources Limited ("Skeena") in consideration for aggregate cash payments of $4 million. The initial consideration of $2 million was paid to the Company on closing, a further $1 million was paid on October 31, 2023 and the final $1 million payment was paid on December 31, 2023. Eskay retains a 2% net smelter royalty ("Royalty") in the Claims. Skeena can purchase 50% of the Royalty at any time for $2 million. In addition, Eskay will not be required to pay any road use fees to Skeena for its use of the Eskay Creed Road for the five year period ending December 31, 2027, provided that its road use those years is consistent with its road use in 2022. Four of the claims are north and west of the Skeena Eskay Creek Project and one of the Claims is adjacent to the west side of the Skeena Eskay Creek Project.

Deposits and Exploration Advances

As at February 28, 2025, the Company had $99,503 (February 29, 2024 - $99,503) of deposits and exploration advances held by the provincial government of British Columbia. Such deposits were required by the B.C Ministry of Energy and Mines in order to permit the Company to conduct exploration and evaluation activities in that province.

• 13 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

4. Equipment

Cost
Balance, February 28, 2023	$ 224,497
Additions	77,513
Balance, February 29, 2024 and February 28, 2025	$ 302,010
Accumulated amortization
Balance, February 28, 2023	$ 49,482
Amortization	38,879
Balance, February 29, 2024	$ 88,361
Amortization	42,729
Balance, February 28, 2025	$ 131,090
Carrying amounts
At February 29, 2024	$ 213,649
At February 28, 2025	$ 170,920

5. Capital risk management

The Company manages its capital with the following objectives:

• to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and
• to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by management and the Board of Directors on an ongoing basis. As discussed in note 1, the Company's ability to continue to carry out its planned exploration activities is uncertain and dependent upon the continued financial support of its shareholders and securing additional financing.

The Company considers its capital to be shareholders' equity which comprises share capital, reserves and accumulated deficit, which at February 28, 2025, totaled $3,978,448 (February 29, 2024 - $5,673,272).

The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities. The forecast is updated based on activities related to its mineral exploration properties. Selected information is provided to the Board of Directors of the Company.

The Company's capital management objectives, policies and processes have remained unchanged during the year ended February 28, 2025 and February 29, 2024. The Company is not subject to any capital requirements imposed by a lending institution or regulatory body, other than Policy 2.5 of the TSXV which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months. As of February 28, 2025 and February 29, 2024, the Company believes that it is compliant with Policy 2.5.

• 14 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

6. Financial risk management

Financial risk

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate risk, foreign currency risk and commodity and equity price risk). Risk management is carried out by the Company's management team with guidance from the Audit Committee and Board of Directors. There have been no changes in the risks, objectives, policies and procedures of the Company during the years ended February 28, 2025 and February 29, 2024.

(i) Credit risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and amounts receivable. Cash is held with select major Canadian chartered banks, from which management believes the risk of loss to be minimal. Amounts receivable consist of sales taxes receivable from government authorities in Canada and other receivables. Management believes that the credit risk concentration with respect to amounts receivable is minimal.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company's liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flow primarily from its financing activities. As at February 28, 2025, the Company had cash and cash equivalents of $1,858,951 (February 29, 2024 - $2,839,947) to settle current liabilities of $605,119 (February 29, 2024 - $302,167). All of the Company's short-term financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. The Company regularly evaluates its cash position to ensure preservation and security of capital as well as liquidity. As discussed in note 1, the Company's ability to continually meet its obligations and carry out its planned exploration activities is uncertain and dependent upon the continued financial support of its shareholders and securing additional financing.

(iii) Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates and commodity and equity prices.

(a) Interest rate risk

The Company's overall exposure to the risk of changes in market interest rates relates primarily to its bank current account balances. At prevailing market interest rates, the impact on interest income is minimal.

(b) Foreign currency risk

The Company's functional and reporting currency is the Canadian dollar and major purchases are transacted in Canadian dollars. As a result, the Company's exposure to foreign currency risk is minimal.

(c) Commodity and equity price risk

The Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices as they relate to valuable minerals to determine the appropriate course of action to be taken by the Company.

Based on management's knowledge and experience of the financial markets, the Company does not believe it was exposed to any material movements in the underlying market risk variables during the year ended February 28, 2025.

• 15 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

6. Financial risk management (continued)

Financial risk (continued)

(iii) Market risk (continued)

(c) Commodity and equity price risk (continued)

The Company's investment is subject to fair value fluctuations. As at February 28, 2025, if the fair value of the marketable securities fluctuated by 10% all other factors held constant, net loss would have changed by approximately $154,000 (February 29, 2024 - $nil).

Sensitivity analysis

Based on management's knowledge and experience of the financial markets, the Company believes the following movements are reasonably possible over a twelve month period:

(i) Cash is subject to floating interest rates. The Company has no variable interest bearing debt and receives low interest rates on its cash balances. As such, the Company does not have significant interest rate risk.

(ii) The Company does not hold balances in foreign currencies to give rise to exposure to foreign exchange risk.

7. Categories of financial instruments

	February 28, 2025	February 29, 2024
Financial assets:
Amortized cost
Cash	$ 43,683	$ 2,625,973
Cash equivalents	$ 1,715,268	$ 113,974
Short-term investments	$ 100,000	$ 100,000
Financial assets at FVTPL - Investments	$ 1,540,740	$ -
Financial liabilities:
Amortized cost
Amounts payable and other liabilities	$ 605,119	$ 302,167

As of February 28, 2025 and February 29, 2024, the fair value of all of the Company's current financial instruments approximates the carrying value, due to their short-term nature.

The maturity analysis of financial liabilities as of February 28, 2025 is as follows:

	Less than 1 year	1-3 years	3-5 years	Greater than 5 years	Total
Accounts payable and accrued liabilities	$ 605,119	$ -	$ -	$ -	$ 605,119
Total	$ 605,119	$ -	$ -	$ -	$ 605,119

• 16 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

8. Amounts receivable

	February 28, 2025	February 29, 2024
Sales tax receivable	$ 51,348	$ 153,539
B.C. Mining tax credit receivable	802,774	824,032
	$ 854,122	$ 977,571

9. Provision for reclamation

The Company's provision for reclamation costs is based on management's estimated costs to dismantle and remove its facilities as well as an estimate of the future timing of the costs to be incurred. The following table presents the reconciliation of the beginning and ending aggregate carrying amount of the provision for closure and reclamation associated with the dismantling and removal of the Company's camp:

Balance at February 28, 2023	$ 71,414
Accretion	5,503
Balance at February 29, 2024	$ 76,917
Accretion	4,693
Balance at February 28, 2025	$ 81,610

The Company has estimated its total provision for reclamation to be $81,610 at February 28, 2025 (February 29, 2024 - $76,917) based on an estimated total future liability of approximately $131,152 and an inflation rate of 2.60% (February 29, 2024 - 2.6%) and a discount rate of 3.49% (February 29, 2024 - 3.49%).

10. Amounts payable and other liabilities

Amounts payable and other liabilities of the Company are principally comprised of amounts outstanding for purchases relating to exploration and evaluation expenditures and general operating and administrative activities:

	February 28, 2025	February 29, 2024
Accounts payable	$ 172,523	$ 211,791
Accruals and others	432,596	90,376
Total amounts payable and other liabilities	$ 605,119	$ 302,167

The following is an aged analysis of amounts payable and other liabilities:

	February 28, 2025	February 29, 2024
Less than 1 month	$ 448,654	$ 250,590
1 to 3 months	-	55,717
Greater than 3 months	156,465	(4,140)
Total amounts payable and other liabilities	$ 605,119	$ 302,167

• 17 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

11. Investments

Investment in Garibaldi Resources Corp

An associate is an entity over which the Company has significant influence, and is not a subsidiary or joint venture. Significant influence is presumed to exist when the Company has the power to be actively involved and influential in financial and operating policy decisions of the associate.

The Company accounts for its investment in an associate using the equity method. Under the equity method, the Company's investment in an associate is initially recognized at cost and subsequently increased or decreased to recognize the Company's share of profit and loss of the associate and for impairment losses after the initial recognition date. The Company's share of comprehensive earnings or losses of associates is recognized in comprehensive income (loss) during the period. Distributions received from an associate are accounted for as a reduction in the carrying amount of the Company's investment.

The Company no longer has representation on the board and therefore on December 1, 2024, management has assessed the Company no longer exerts significant influence resulting in the investment being reclassified as FVTPL.

For the year ended February 28, 2025, the Company recognized its share of Garibaldi Resources Corp. ("GGI") loss of $105,651 (year ended February 29, 2024 - $461,142), using the equity method.

As at February 28, 2025, the Company has a total ownership of 17.25%.

During the year ended February 29, 2024, GGI issued 100,000 shares resulting in a dilution of the Company's interest of 0.01% or $1,985.

During the year ended February 29, 2024, the Company recognized an impairment loss on its investment in GGI due to a prolonged decline in the fair value of the shares held. The investment was written down to its fair value of $1,896,156 based on the quoted market price of $0.08 on February 29, 2024.

The changes to the carrying amounts presented in the consolidated statement of financial position can be summarized as follows:

	As at February 28, 2025	As at February 29, 2024
Balance, beginning of year	$ 1,896,156	$ 5,690,302
Loss of significant influence of GGI	(1,790,505)	-
Impairment loss	-	(3,331,019)
Loss from investment in associate	(105,651)	(461,142)
Loss on dilution of investment in associate	-	(1,985)
Balance, end of year	$ -	$ 1,896,156

Based on the quoted market price at February 28, 2025, the fair value of the investment in GGI was $1,540,740 (February 29, 2024 - $1,896,156). An unrealized loss of $249,765 was recognized in the statement of loss for the year then ended (2024 - $nil).

Short term investments

The Company has a GIC in the amount of $100,000 (February 29, 2024 - $100,000) with an interest rate of prime minus 2.95% with a maturity date of May 8, 2026.

• 18 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

12. Share capital

a) Authorized share capital

The authorized share capital consists of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.

b) Common shares issued

As at February 28, 2025, the issued share capital amounted to $113,728,997 (February 29, 2024 - $113,693,197). Changes in issued share capital are as follows:

	Number of common shares	Amount
Balance, February 28, 2023 and February 29, 2024	183,617,123	$113,693,197
Balance, February 29, 2024	183,617,123	$113,693,197
Exercise of stock options (i)	200,000	35,800
Balance, February 28, 2025	183,817,123	$113,728,997

(i) During the year ended February 28, 2025, 200,000 stock options were exercised for $0.095 per share. A total value of $16,900 was transferred to share capital from reserves as a result of the exercise of these stock options.

13. Stock options

The following table reflects the continuity of stock options for the periods presented:

	Number of stock options	Weighted average exercise price ($)
Balance, February 28, 2023	11,455,000	1.37
Granted (i)(ii)	1,550,000	0.72
Expired	(20,000)	1.81
Balance, February 29, 2024	12,985,000	1.29
Exercised (note 12(b)(i))	(200,000)	0.10
Granted (iii)	1,500,000	0.31
Expired	(4,480,000)	0.40
Balance, February 28, 2025	9,805,000	1.57

(i) On March 20, 2023, the Company granted 1,250,000 stock options to officers, directors and consultants of Eskay at $0.66 per share for five years expiring March 20, 2028. 750,000 of these stock options were issued to related parties. These options vested immediately. These options have a grant date fair value of $738,971, estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 122% based on the Company's historical volatility; share price of $0.70; risk-free interest rate of 2.96% and an expected life of five years. During the year ended February 28, 2025, $nil (year ended February 29, 2024 - $738,971) was recorded as share-based payments.

• 19 -

---

Eskay Mining Corp.

Notes to Financial Statements

Years Ended February 28, 2025 and February 29, 2024

(Expressed in Canadian Dollars)

13. Stock options (continued)

(ii) On July 11, 2023, the Company granted 300,000 stock options to a consultant of Eskay at $0.95 per share for five years expiring July 11, 2028. These options vest on November 12, 2023. These options have a grant date fair value of $234,070, estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 121% based on the Company's historical volatility; share price of $0.93; risk-free interest rate of 3.95% and an expected life of five years. During the year ended February 28, 2025, $nil (year ended February 29, 2024 - $234,070) was recorded as share-based payments.

(iii) On March 22, 2024, the Company granted 1,500,000 stock options to officers of Eskay at $0.31 per share for five years expiring March 22, 2029. These options vest immediately. These options have a grant date fair value of $372,128, estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 110% based on the Company's historical volatility; share price of $0.31; risk-free interest rate of 3.48% and an expected life of five years. During the year ended February 28, 2025, $372,128 (year ended February 29, 2024 - $nil) was recorded as share-based payments.

The following table reflects the actual stock options issued and outstanding as of February 28, 2025:

Expiry Date	Exercise Price ($)	Weighted Average Remaining Contractual Life (years)	Number of Options Outstanding	Number of Options Vested (Exercisable)	Grant Date Fair value ($)
June 24, 2025	0.24	0.32	1,500,000	1,500,000	308,850
February 5, 2026	3.00	0.94	3,350,000	3,350,000	8,899,610
July 04, 2027	1.81	2.35	1,900,000	1,900,000	2,952,741
September 21, 2027	1.49	2.56	5,000	5,000	6,386
March 20, 2028	0.66	3.06	1,250,000	1,250,000	738,971
July 11, 2028	0.95	3.37	300,000	300,000	234,070
March 22, 2029	0.31	4.06	1,500,000	1,500,000	372,128
Total	1.57	1.94	9,805,000	9,805,000	13,512,756

The weighted average exercise price of the vested options as at February 28, 2025 is $1.57. The weighted average fair value of all grants in the year ended February 28, 2025 was $0.31 per share (February 29, 2024 – $0.63).

14. Warrants

The following table reflects the continuity of warrants for the periods presented:

	Number of warrants	Weighted average exercise price ($)
Balance, February 28, 2023	6,433,942	3.02
Expired	(4,211,719)	(2.82)
Balance, February 29, 2024	2,222,223	3.40
	Number of warrants	Weighted average exercise price ($)
Balance, February 29, 2024	2,222,223	3.40
Expired	(2,222,223)	(3.40)
Balance, February 28, 2025	-	-

As of February 28, 2025, the Company has no outstanding warrants (February 29, 2024 - 2,222,223).

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

15. Net loss per common share

	Year ended February 28, 2025	Year ended February 29, 2024
Weighted average number of common shares outstanding - Basic and diluted	183,648,282	183,617,123
Net loss per share
- Basic and diluted	$ (0.01)	$ (0.02)

The diluted loss per share for the year ended February 28, 2025 and February 29, 2024 excluded all outstanding options and warrants (if applicable) as they were anti-dilutive.

16. General and administrative

	Year ended February 28, 2025	Year ended February 29, 2024
Professional fees (note 17(ii) and (iii))	$ 166,391	$ 149,408
Reporting issuer costs	37,939	114,067
Office and general	160,009	213,707
Advertising and promotion	38,812	130,778
Management and consulting fees (note 17(i))	586,440	569,390
Interest and bank charges	17,096	7,635
Share-based payments (note 13)	372,128	973,041
	$ 1,378,815	$ 2,158,026

17. Related party balances and transactions

Related parties include the Board of Directors, officers, close family members and enterprises that are controlled by these individuals as well as certain persons performing similar functions.

Eskay entered into the following transactions with related parties:

(i) For the year ended February 28, 2025, the Company paid or accrued $583,440 in management and consulting fees to companies controlled by Marrelli Group of Companies, Balkam Partner, and Robert Myhill who are controlled by officers of the Company (year ended February 29, 2024 - $539,069). As at February 28, 2025, these officers have balances outstanding to them by the Company of $383,000 (February 29, 2024 - $10,264). These amounts are unsecured, non-interest bearing and due on demand.

• 21 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

17. Related party balances and transactions (continued)

(ii) For the year ended February 28, 2025, the Company paid or accrued $34,520 in professional fees (February 29, 2024 - $35,880) to Marrelli Group of Companies (defined as Marrelli Support Services Inc., Marrelli Trust Company Ltd., DSA Filing Services Ltd.) who is controlled by an officer of the Company. As at February 28, 2025, this Company is owed $554 (February 29, 2024 - $9,683). This amount is unsecured, non-interest bearing and due on demand.

(iii) During the year ended February 28, 2025, the Company paid professional fees and disbursements of $97,652 (February 29, 2024 - $117,350) to Gardiner Roberts LLP ("Gardiner"), a law firm of which William R. Johnstone, Corporate Secretary of the Company, is a partner. These services were for general corporate matters. As at February 28, 2025, Gardiner is owed $666 (February 29, 2024 - $970) and this amount is included in amounts due to related parties. These balances are unsecured, non-interest bearing, and due on demand.

(iv) As at February 28, 2025, included in prepaid expenses are $2,063 (February 29, 2024 - $2,063), for an advance to the CEO of the Company.

(v) See note 13(i)(ii)(iii).

As at February 28, 2025, Hugh Balkam, a director of the Company owns 16,883,345 common shares of the Company carrying approximately 9.18% of the voting rights attached to all common shares of the Company. As at February 28, 2025, directors and officers of the Company control an aggregate of 30,820,990 common shares of the Company or approximately 16.77% of the shares outstanding.

As at February 28, 2025, the Company is not aware of any arrangements that may at result in a change in control of the Company. To the knowledge of the Company, it is not directly or indirectly owned or controlled by another corporation, by any government or by any natural or legal person severally or jointly.

18. Commitments and contingencies

Environmental contingencies

The Company's exploration activities are subject to various federal, provincial and international laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

Management contracts

The Company is party to management contracts that require additional payments of up to $630,000 to be made upon the occurrence of certain events such as termination for any reason, other than for just cause. The Company is also party to management contracts that require additional payments of up to $2,760,000 to be made upon the occurrence of certain events such as a change of control. As the triggering event has not occurred, the contingent payments have not been reflected in these financial statements. Minimum amounts due within one year under these agreements are $630,000.

19. Segmented information

The Company's operations comprise a single reporting operating segment engaged in mineral exploration in Canada. As the operations comprise a single reporting segment, amounts disclosed in the financial statements also represent segment amounts. In order to determine reportable operating segments, the chief operating decision maker reviews various factors including geographical location, quantitative thresholds and managerial structure.

• 22 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

1. Income taxes

a) Provision for Income Taxes

Major items causing the Company's effective income tax rate to differ from the combined Canadian federal and provincial statutory rate of 26.5% (2024 - 26.5%) were as follows:

	Year Ended February 28, 2025	Year Ended February 29, 2024
Loss before income taxes	$ (2,085,952)	$ (2,797,773)
Expected income tax recovery based at statutory rate	(552,000)	(741,000)
Adjustment to expected income tax recovery;
Share based compensation	99,000	258,000
Expenses not deductible for tax purposes	1,000	1,000
Other	-	(1,021,000)
Change in benefit of tax assets not recognized	452,000	1,503,000
Deferred income tax provision (recovery)	$ -	$ -

b) Deferred Income Tax

Deferred income tax assets have not been recognized in respect of the following deductible temporary differences:

	February 28, 2025	February 29, 2024
Deductible Temporary Differences
Non-capital losses carry-forward	$ 16,445,000	$ 15,227,000
Share issue costs	46,000	68,000
Mineral exploration properties	26,517,000	26,407,000
Investments	9,241,000	8,886,000
Temporary differences	$ 52,249,000	$ 50,588,000

• 23 -

---

Eskay Mining Corp.
Notes to Financial Statements
Years Ended February 28, 2025 and February 29, 2024
(Expressed in Canadian Dollars)

1. Income taxes (continued)

b) Deferred Income Tax (continued)

At February 28, 2025, the Company has approximately $16,445,000 of non-capital losses in Canada which under certain circumstances can be used to reduce the taxable income of future years. The Canadian losses expire in the following periods:

2028	2,439,000
2029	2,485,000
2030	2,788,000
2032	185,000
2034	80,000
2035	80,000
2036	12,000
2037	8,000
2038	9,000
2039	5,000
2040	1,409,000
2041	950,000
2042	2,760,000
2043	668,000
2044	1,538,000
2045	1,029,000
	$ 16,445,000

Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can use the benefits.

1. Subsequent events

On May 13, 2025, the Company granted 600,000 stock options, exercisable at $0.26 per share until May 14, 2030, to two (2) consultants of the Company engaged to provide geological consulting services.

• 24 -