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Excellon Resources Inc. — Management Reports 2025
Nov 20, 2025
43137_rns_2025-11-19_49570fb7-9ce3-4038-b929-0022d345f877.pdf
Management Reports
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
Excellon Resources Inc. (the "Company" or "Excellon") has prepared this Management's Discussion and Analysis of Financial Results ("MD&A") for the three and nine-month periods ended September 30, 2025 in accordance with the requirements of National Instrument 51-102 ("NI 51-102").
This MD&A contains information as at November 18, 2025 and provides information on the operations of the Company for the three and nine-month periods ended September 30, 2025 and 2024 and subsequent to the period end, and should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2024 and 2023, which have been filed under Excellon's profile on SEDAR+ (www.sedarplus.ca). The audited consolidated financial statements for the years ended December 31, 2024 and 2023 have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). All figures in this MD&A are in thousands of United States dollars ($'000) unless otherwise noted.
BUSINESS AND STRATEGIC PRIORITIES 2
KEY DEVELOPMENTS 2
ASSET SUMMARY 2
OUTLOOK 2
FINANCIAL REVIEW 4
COMMON SHARE DATA AS AT NOVEMBER 18, 2025 5
LIQUIDITY AND CAPITAL RESOURCES 6
CONTINGENCIES 8
ACCOUNTING POLICIES AND INTERNAL CONTROLS 9
BUSINESS ENVIRONMENT AND RISKS 10
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
BUSINESS AND STRATEGIC PRIORITIES
Excellon's vision is to realize opportunities through the acquisition and advancement of quality precious and base metal assets, leveraging an experienced management team for the benefit of its employees, communities and shareholders. The Company is focused on the potential restart of the Mallay Silver Mine in Peru. Excellon also holds a portfolio of exploration-stage projects, including the Tres Cerros Gold/Silver Exploration Property in Peru; Kilgore, an advanced gold project in Idaho, and Silver City, a high-grade epithermal silver district in Saxony, Germany, providing additional growth upside.
The common shares of Excellon trade on the Toronto Venture Stock Exchange (the "TSXV") under the symbol "EXN", the OTC in the United States under the symbol "EXNRF", and on the Frankfurt Stock Exchange under the symbol "E4X2".
KEY DEVELOPMENTS
- Secured Financing: Completed a C$12 million LIFE private placement of common shares on September 9, 2025 and closed a US$7.5 million Glencore pre-export finance facility, providing flexible funding for the Mallay Mine restart, Tres Cerros exploration and general working capital.
- Mine Rehabilitation and Restart Plan: Completed Phase One underground rehabilitation on the 4,090 and 4,150 levels (over 2,800 metres of access rehabilitated), positioning Mallay for a staged ramp-up to the 600 tonnes per day nameplate mill capacity by the second quarter of 2026.
- Resource Update: Advanced remodeling of historical drilling and planned near-mine and district drilling at Isguiz and Shafra, with an updated NI 43-101 mineral resource estimate for Mallay targeted for the fourth quarter of 2025.
- Restart Ready: All key mining and environmental permits remain in good standing and, including the Glencore facility, Excellon ended the quarter with over US$17.5 million (or C$24 million) of cash and facilities available to fund restart activities and growth drilling.
ASSET SUMMARY
Refer to the Company's Annual Information Form ("AIF") for a detailed overview of the Company's exploration projects, including mineral resource estimates, and the Company's website for an overview of the Mallay Silver Mine and the Tres Cerros Gold/Silver Exploration Property in Peru.
OUTLOOK
Mallay Mine – Transitioning to Production
The Company mobilized a mining contractor in July 2025 and has now completed Phase One rehabilitation on the 4,090 and 4,150 levels at Mallay. Work in the quarter and subsequent to quarter-end focused on safely re-establishing access, services and dewatering to support definition drilling and restart planning from existing infrastructure.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
- Completion of NI 43-101 Mineral Resource Estimate (Q4 2025 target): Remodeling of historical drilling data is well advanced, with publication of an updated mineral resource estimate for Mallay targeted for the fourth quarter of 2025.
- Definition Drilling and Restart Planning: Underground definition drilling from the 4,090 level is expected to commence in the fourth quarter of 2025, with the objective of delineating an initial inventory to support a staged restart and ramp-up to the 600 tonnes per day nameplate mill capacity by the second quarter of 2026.
- Isguiz Extension and Shafra Exploration: A 40-hole (approximately 13,000 metre) program at Isguiz and a 6-hole (approximately 3,500 metre) initial program at Shafra are planned to commence in late 2025, with first drill results anticipated in early 2026 and the potential to extend mine life beyond the historical resource footprint.
- Production Restart: Subject to successful definition drilling and mine planning, Excellon aims to initiate a staged restart of mining from the 4,090 level during 2026, with a focus on capital efficiency, disciplined execution and near-term cash flow generation.
- In-Mine and Near-Mine Exploration Drilling: Underground drilling at Mallay will be sequenced with ramp-up activities to test down-dip and along-strike extensions of Clavos 2, 3 and 6 and the broader Isguiz vein system, while refining stope designs and supporting mine scheduling.
- District Exploration Update: At Tres Cerros, the Company advanced targeting and permitting for follow-up work on gold-silver anomalies identified in historical sampling, with the objective of defining satellite feed within trucking distance of the Mallay mill over the medium term.
Kilgore Project, Idaho
Kilgore is an advanced exploration-stage project located in Clark County, Idaho. A preliminary economic assessment was completed on Kilgore in 2019 that demonstrated potential as a low-cost, open pit, heap-leach mining operation. The Company acquired Kilgore for approximately US$20 million in 2020 at a time when the average gold price was approximately US$1,600/oz.
Silver City Project, Optionality in Germany
Silver City, in the heart of the "Ore Mountains of Germany", is comprised of four mineral licences totalling 340 km². Excellon has invested approximately C$8 million in exploration expenditures including over 22,000 metres of drilling over 2021 and 2022. Excellon believes this is an opportune time to be exploring for minerals in Europe. The European framework for minerals investment is rapidly changing to support domestic supply security and new "Saxon Raw Materials Strategy" was recently published supporting the importance of promoting a local mining industry.
Excellon will continue to assess the market for spin-out of the project. Priorities with a spin-out are to raise sufficient capital to adequately fund the next exploration campaign and a valuation that justifies return on historical exploration capital. As the holding costs for Silver City are exceptionally low relative to other exploration jurisdictions globally, Excellon has the benefit of optionality and timing to successfully deliver the project into the capital markets.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
FINANCIAL REVIEW
Summary of Quarterly Financial Results
Financial statement highlights for the quarter ended September 30, 2025, and the last eight quarters are as follows:
| Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | |
|---|---|---|---|---|---|---|---|---|
| (in $000's) | $ | $ | $ | $ | $ | $ | $ | $ |
| Expenses: | ||||||||
| C&M and wind down expenses | - | - | - | - | - | - | - | (33) |
| General and administrative | (805) | (436) | (580) | (751) | (606) | (721) | (474) | (552) |
| Exploration and holding expense | (174) | (35) | (17) | (40) | (154) | (44) | (43) | (134) |
| Other income (expense) | 122 | (25) | (13) | (3) | 280 | (235) | (720) | (1,148) |
| Gain on deconsolidation | - | - | - | - | - | 8,288 | - | - |
| Reclassification of CTA | - | - | - | - | - | (7,622) | - | - |
| Impairment loss | - | - | - | - | - | - | - | (48) |
| Net finance expense | (374) | (480) | (349) | (577) | (295) | (336) | (1,235) | (1,630) |
| Income tax recovery | - | - | - | - | - | - | - | - |
| Net loss | (1,231) | (976) | (959) | (1,317) | (775) | (670) | (2,472) | (3,545) |
| Net loss per share, basic | (0.00) | (0.01) | (0.01) | (0.01) | (0.01) | (0.01) | (0.04) | (0.08) |
The following is a discussion of the material variances between the three and nine-month periods ended September 30, 2025 and 2024.
| Q3 2025 | Q3 2024 | 9-mos 2025 | 9-mos 2024 | |
|---|---|---|---|---|
| Net loss | (1,231) | (775) | (3,166) | (3,917) |
Net loss increased by $0.5 million in Q3 2025 over Q3 2024, primarily driven by a $0.2 million increase in general and administrative costs, a $0.2 million decrease in other income and a $0.1 million increase in finance expenses relative to the comparative period.
Net loss for the nine months ended September 30, 2025 decreased by $0.8 million relative to the comparative period, primarily driven by a $0.8 million variance in other income and expenses, which included a non-cash loss on Debenture Restructuring of $0.8 million in Q1 2024, a $0.7 million decrease in financing expenses following the restructuring of the convertible debentures effective on March 28, 2024, partially offset by the net gain on deconsolidation of the Mexican subsidiary in Q2 2024 ($0.7 million).
| Exploration and holding expenses | 174 | 154 | 226 | 241 |
|---|---|---|---|---|
No material variance in exploration and holding expenses between these periods.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
| Q3 2025 | Q3 2024 | 9-mos 2025 | 9-mos 2024 | |
|---|---|---|---|---|
| General and administrative expense | 805 | 606 | 1,821 | 1,801 |
General and administrative expense, include personnel costs, office, overhead, corporate development, legal, public company costs, share-based payments and amortization, and increased $0.2 million in Q3 2025 relative to the comparative period, driven primarily by a $0.5 million increase in salaries, consultant and professional fees, partially offset by a $0.1 million reduction in stock-based compensation and $0.1 million reduction in corporate development and legal expenses. For the nine month period ended September 30, 2025, general and administrative expenses were consistent with the comparative period on an aggregate basis.
| Other (income) expense | (122) | (280) | (84) | 675 |
|---|---|---|---|---|
Other (income) expense includes realized and unrealized foreign exchange gains and losses, unrealized gains and losses on marketable securities and warrants, interest income and other non-routine income or expenses, if any.
Other income decreased by $0.2 million in Q3 2025 over Q3 2024, primarily driven by $0.3 million in debt settlement gains recorded in Q3 2024, while the $0.8 million decrease in other expenses for the nine-month period was primarily driven by the non-cash loss on Debenture Restructuring of $0.8 million in Q1 2024.
| Finance expense | 374 | 295 | 1,203 | 1,866 |
|---|---|---|---|---|
Net finance expense includes primarily interest on the convertible debentures using the effective interest rate method. Effective March 28, 2024, the Company restructured the convertible debentures reducing the principal amount by $10.4 million. As a result, debenture finance expenses decreased by $0.8 million for the nine months ended September 30, 2025, relative to the comparative period. The $0.1 million increase in net finance expenses in Q3 2025 primarily reflects the accretion of the Mallay rehabilitation provision post acquisition in Q2 2025.
COMMON SHARE DATA AS AT NOVEMBER 18, 2025
| Common shares issued and outstanding | 334,077,413 |
|---|---|
| Stock options | 5,762,500 |
| DSUs | 6,587,931 |
| RSUs | 1,271,000 |
| Warrants ($0.27, expiry April and May 2026) | 7,393,842 |
| Warrants ($0.15, expiry Dec 2026) | 9,750,000 |
| Warrants ($0.15, expiry May 2028) | 25,849,738 |
| Fully diluted common shares (1) | 390,692,424 |
(1) Conversion of all outstanding convertible debentures would result in the issuance of an additional 59,980,000 common shares of the Company.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
LIQUIDITY AND CAPITAL RESOURCES
The condensed consolidated financial statements are prepared on a going concern basis, which assumes 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 business. Refer to Note 2 of the condensed consolidated financial statements for discussion of the material uncertainties which may cast significant doubt on the Company's ability to realize its assets and discharge its liabilities in the normal course of business.
| September 30, 2025 | December 31, 2024 | |
|---|---|---|
| Cash and cash equivalents | 10,063 | 1,362 |
Cash and cash equivalents increased by $8.7 million at September 30, 2025 relative to December 31, 2024, primarily driven by net proceeds of $5.1 million from the May 2025 private placement and $8.0 million from the September private placement. The Company invested $1.9 million in upfront funding and transaction costs related to the Mallay Acquisition and $1.8 million on the Mallay Project in 2025. Other uses of cash in 2025 included general and administrative costs and working capital. The Company intends to use the net proceeds of the financings for exploration and development activities at the Mallay Mine and the Tres Cerros Exploration Property, working capital and general corporate purposes. As of the date of this MD&A, the Company is using the funds as intended.
| Working capital (deficit) | 2,687 | (3,864) |
|---|---|---|
Working capital, defined as current assets less current liabilities, improved by $6.5 million at September 30, 2025 relative to December 31, 2024. Current liabilities increased by $5.0 million driven primarily by $3.6 million in convertible debentures which are now classified as current, while current assets increased by $11.5 million reflecting primarily the net proceeds from the private placement financings and the VAT recoverable acquired from Minera CRC.
In addition to cash and working capital, the Company has secured a pre-export finance loan facility of up to US$7.5 million with Glencore plc (the "Glencore Facility") to fund the restart of the Mallay Mine. The Glencore Facility is structured as a secured pre-export loan, with an initial tranche of up to US$5.0 million and an optional additional US$2.5 million available until March 2026, bearing interest at SOFR plus 5% and providing a six-month grace period on principal following initial drawdown. As at September 30, 2025, no amounts had been drawn under the Glencore Facility, which remains available to support underground development, mill upgrades and working capital at Mallay.
The convertible debentures do not include any financial covenants related to working capital and the Company has the option to pay the interest on the convertible debentures in Common Shares.
| September 30, 2025 | September 30, 2024 | |
|---|---|---|
| Investing activities | (3,630) | 7 |
The Company invested $1.9 million in upfront funding and transaction costs related to the Mallay Acquisition and $1.8 million on the Mallay Project in 2025.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
| September 30, 2025 | September 30, 2024 | |
|---|---|---|
| Financing activities | 14,002 | 855 |
The 2025 financing activities include $13.1 million in proceeds from the private placements, net of transaction costs, as well as $0.9 million in proceeds from the exercise of warrants in Q3 2025. The Company also established the US$7.5 million Glencore Facility to fund the Mallay restart, which remained undrawn at September 30, 2025.
Financial instruments
All financial assets and financial liabilities, other than derivatives, are initially recognized at the fair value of consideration paid or received, net of transaction costs, as appropriate, and subsequently carried at fair value or amortized cost. The carrying values of trade and other payables and other current assets approximate their fair value, unless otherwise noted.
The Company's financial results are sensitive to changes in foreign exchange and interest rates, and the Company may periodically consider hedging such exposure. The Company's Board of Directors together with executive management has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company may address its price-related exposure to foreign exchange through the use of options, futures, forwards and derivative contracts.
The Peruvian Sol ("PEN"), Mexican peso ("MXN"), Canadian dollar ("CAD"), Euro ("Euro") and US dollars ("USD") are the functional currencies of the Company, with currency exposures arising from transactions and balances in currencies other than the functional currencies. The fluctuation of the USD in relation to the PEN, CAD, MXN and the Euro impacts the reported financial performance of the Company.
Contractual obligations
The following table summarizes contractual obligations including payments due for each of the next five years and thereafter:
| $ 000 | |||||
|---|---|---|---|---|---|
| Total | Less than one year | 1 – 3 years | 4 – 5 years | After 5 years | |
| Payables and accruals | 4,723 | 4,723 | - | - | - |
| Promissory note | 1,250 | 1,250 | - | - | - |
| Convertible debentures – principal (USD) | 4,668 | - | 4,668 | - | - |
| Convertible debentures – 6.50% interest (1) | 234 | 234 | - | - | - |
| Total: | 10,875 | 6,207 | 4,668 | - | - |
(1) Convertible debenture interest can be paid in Common Shares at the election of the Company, at a 10% interest rate.
Commitments
The Company's projects are at varying stages of exploration and development advancement. The Company budgets expenditures on an annual basis and does not commit to long-term drilling contracts. Exploration expenditures may be
EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
highly variable depending on ongoing results and a host of other factors, including available funds, permitting status, and changes in local or geopolitical risks.
In Idaho, commitments relate to annual claim fees associated with the Company's mineral claims. There are no annual fees associated with exploration licences in Saxony, Germany. The commitments outlined below may vary depending on operational and/or exploration results or geopolitical conditions, which may lead the Company to expand or relinquish all or part of a project.
The following table summarizes the Company's significant unrecognized commitments as of the date of this MD&A (in thousands of US dollars):
| $ 000 | ||||||
|---|---|---|---|---|---|---|
| Project | Type | Total | Less than one year | 1 – 3 years | 4 – 5 years | After 5 years(1) |
| Kilgore | Fees | 640 | 128 | 256 | 256 | - |
| Mallay and Tres Cerros | Fees | 225 | 45 | 90 | 90 | - |
| Tres Cerros | Exploration (2) | 7,500 | 1,000 | 6,500 | - | - |
(1) Concession and claim fees continue until the relinquishment or expiration of the applicable concessions or claims.
(2) Qualifying expenditures at Tres Cerros under the Back-in Right agreement with Adar.
CONTINGENCIES
Contingencies can be either possible assets or possible liabilities arising from past events which, by their nature, will only be resolved when one or more future events not within the Company's control occur or fail to occur. The assessment of such contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings or regulatory or government actions that may negatively impact our business or operations, the Company with assistance from its legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims or actions.
Legal proceedings
The Company is involved in legal proceedings and business disputes from time to time arising from the normal course of business. Management, after consultation with legal counsel, believes that the outcome of these proceedings will not have a material impact on the Company's condensed consolidated financial position, results of operations or liquidity.
On April 21, 2025, the Company announced that it had received a statement of claim in which it has been named as a defendant in an action commenced by Javier Martinez Lomas in the Ontario Superior Court of Justice, related to prior litigation against a former indirect Mexican subsidiary of Excellon. The plaintiff is seeking, among other things, damages in the amount of approximately US$23 million. The claim arises from a prior dispute in Mexico involving a former subsidiary of Excellon that operated independently under Mexican law. The matter was fully litigated in the Mexican courts, where due process was followed, and the matter was believed to be resolved. The Company believes that the lawsuit is an opportunistic attempt to relitigate a dispute that has already been addressed under Mexican law. Excellon believes that the claims in the action are without merit, and will take all appropriate steps to defend the action and dismiss the claim. Management believes the probability of outflow related to this matter is remote.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
ACCOUNTING POLICIES AND INTERNAL CONTROLS
Disclosure Controls & Procedures and Internal Control Over Financial Reporting
Disclosure controls and procedures ("DC&P") are designed to provide reasonable assurance that all relevant information is gathered and reported to management, including the President & CEO and CFO, on a timely basis so that appropriate decisions can be made regarding public disclosure.
Internal control over financial reporting ("ICFR") means a process designed by or under the supervision of the President & CEO and CFO, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Management use the criteria set forth in Internal Control – Integrated Framework (2013) ("COSO 2013") issued by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of the Company's ICFR.
The internal controls are not expected to prevent and detect all misstatements due to error or fraud.
As a venture issuer, the Company is not required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings to certify the design and evaluation of DC&P and ICFR. However, Management relies on existing controls and procedures to provide reasonable assurance that material information relating to the Company is made known to them on a timely basis and that financial reporting is reliable and prepared in accordance with IFRS.
Accounting policy, estimates and judgements
Accounting standards issued but not yet effective
The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Significant accounting estimates and judgements
The Company's significant accounting policies are described in Note 4 to the consolidated financial statements for the year ended December 31, 2024. The preparation of the consolidated financial statements require management to make estimates, assumptions and judgements that may have a significant impact on the consolidated financial statements. These estimates, assumptions and judgements are continuously evaluated and are based on management's experience and expectations of future events that are believed to be reasonable under the circumstances, however actual outcomes can differ. Revisions to accounting estimates are recognized in the period in which the estimates are revised.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
BUSINESS ENVIRONMENT AND RISKS
Risks and uncertainties
The Company's business entails exposure to certain risks, including but not limited to: metal price risk; foreign exchange risk since the Company reports in United States dollars but operates in jurisdictions that use other currencies; the inherent risk of uncertainties in estimating Mineral Resources; political risk associated with operating in foreign jurisdictions; environmental risks; surface rights and access; enforcement of legal rights; and risks associated with labour relations issues. The current or future operations of Excellon are or will be governed by and subject to federal, state and municipal laws and regulations regarding mineral taxation, mineral royalties and other governmental charges. Any change to the mineral taxation and royalty regimes in the jurisdictions in which Excellon plans to operate could have an adverse financial impact on the Company's planned operations and the overall financial results of the Company, the extent of which cannot be predicted. For additional discussion of risk factors refer to the Company's AIF which is available under the Company's profile on SEDAR+.
ADDITIONAL SOURCES OF INFORMATION
Additional disclosures pertaining to the Company, including its AIF, audited and unaudited interim financial statements, management information circular, material change reports, news releases and other information, are available under Excellon's profile on SEDAR+ or on the Company's website (www.excellonresources.com).
CAUTIONARY STATEMENTS ON FORWARD-LOOKING STATEMENTS AND OTHER MATTERS
Forward-Looking Statements
All statements, other than statements of historical fact, contained or incorporated by reference in this Management's Discussion & Analysis of Financial Results for the three months ended March 31, 2025 and the accompanying financial statements for the same period (together, the "Q3 2025 Financial Disclosure") constitute "forward-looking statements" and "forward looking information" (collectively, "forward-looking statements") within the meaning of applicable Canadian and United States securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as: "advancing", "aim", "alternatives", "believes", "considering", "contemplated", "contingencies", "continuing", "could", "demonstrated", "development", "de-risking", "discovery", "early-stage", "evaluate", "expected", "exploration", "estimate", "focus", "further", "future", "goals", "indicate", "initial", "intends", "investigate", "may", "model", "monitor", "near-term", "new", "observation", "ongoing", "opportunities", "option", "outlook", "pending", "pipeline", "plan", "potential", "priorities", "program", "project", "proposed", "proposition", "prospective", "prospecting", "provide", "provision", "re-assaying", "reassessing", "relogging", "review", "risk", "samples", "seeking", "should", "strategic", "studies", "subject to", "survey", "target", "test", "timelines", "trend", "uncertainties", "viability", "vision", "will" and "would", or variations of such words, and similar such words, expressions or statements that certain actions, events or results can, could, may, should, will (or not) be achieved, happen, occur, provide, result or support in the future or which, by their nature, refer to future events. In some cases, forward-looking information may be stated in the present tense, such as in respect of current matters that may be continuing, or that may have a future impact or effect. Forward-looking statements include statements regarding opportunities, outlook and strategic alternatives (including any form, aspect, value or other impacts thereof); advancing a portfolio of assets; mineralization, mineralized area or footprint, or mineral deposits (including potential, grade, further definition or expansion or extension, continuation, openness and location); mineral resource estimates
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
(including tonnes, grade, and any expansion, increase, conversion or reclassification thereof; see also below in these Cautionary Statements under "Mineral Resources", "U.S. Readers" and "Preliminary Economic Assessments (or PEAs)"); exploration programs and activities (including prospectivity or potential (and any increase thereof), targets and assessments or interpretations of drilling and results thereof to date); any other acquisition and other strategic opportunities; closure and reclamation (including activities, expenditures, costs and provisions, and timing thereof); pending or ongoing regulatory, administrative, litigation or other legal proceedings, and provisions therefor, and assessments and outcomes thereof (including the drilling contractor claim and lien in respect of the Kilgore Project) or recourse thereunder; compliance with and maintenance and effects of controls, policies, procedures, processes and systems of the Company; Excellon's vision (including the realization of opportunities, the means thereof and basis therefor); and any benefits or any other implications of any of the foregoing; and future impacts of Covid-19 and actions taken to mitigate such. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct, and any forward-looking statements by the Company are not guarantees of future actions, results or performance. Forward-looking statements are based on assumptions, estimates, expectations and opinions, which are considered reasonable and represent best judgment based on available facts, as of the date such statements are made. If such assumptions, estimates, expectations and opinions prove to be incorrect, actual and future results may be materially different than expressed or implied in the forward-looking statements. The estimates, expectations and opinions referenced or contained in the 2024 Financial Disclosure, which may prove to be incorrect, are subject to a number of assumptions which include those set forth or referenced in the 2024 Financial Disclosure, the Company's Management's Discussion and Analysis, and accompanying financial statements, for the year ended December 31, 2024 (collectively, the "FYE 2024 Financial Disclosure"), the Company's AIF, the current technical reports for the Company's projects (collectively, the "Technical Reports") and the Company's other applicable public disclosure (collectively, "Company Disclosure"), all available under the Company's profile on SEDAR+ (www.sedarplus.ca) and/or on its website at www.excellonresources.com. Forward-looking statements are inherently subject to known and unknown risks, uncertainties, contingencies and other factors which may cause the actual plans, results, performance or achievements of the Company to differ materially from any future results, plans, performance or achievements expressed or implied by the forward-looking statements. Such risks, uncertainties, contingencies and other factors include, among others, that the project infrastructure requirements and anticipated processing methods, risks related to partnership or other joint operations; actual results of current exploration activities; variations in mineral resources, mineral production, grades or recovery rates or optimization efforts and sales; the ability to obtain on a timely basis, and maintain, necessary permits and other approvals; delays in obtaining financing or in the completion of development or construction activities; uninsured risks, including pollution, cave ins or hazards for which insurance cannot be obtained; regulatory changes; defects in title; availability or integration of personnel, materials and equipment; inability to recruit or retain management and key personnel; performance of facilities, equipment and processes relative to specifications and expectations; unanticipated environmental impacts on operations; market prices; production, construction and technological risks related to Excellon; capital requirements and operating risks associated with the operations or an expansion of the operations of Excellon; dilution due to any future acquisitions or other transactions; fluctuations in gold, silver, lead, zinc and other precious metal prices and currency exchange rates; inability to successfully complete new development projects, planned expansions or other projects within the timelines anticipated; adverse changes to market, political and general economic conditions or laws, rules and regulations applicable to Excellon; changes in project parameters; the possibility of project cost overruns or unanticipated costs and expenses; accidents, labour disputes, community and stakeholder protests and other risks of the mining industry; risk of an undiscovered defect in title or other adverse claim; and the "Risk Factors" in the Company's AIF, and the risks, uncertainties, contingencies and other factors identified in the 2024 Financial Disclosure, the Technical Reports and other applicable Company Disclosure. The
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
foregoing list of risks, uncertainties, contingencies and other factors is not exhaustive; readers should consult the more complete discussion of the Company's business, financial condition and prospects that is provided in the Company's AIF and the other aforementioned Company Disclosure. Although Excellon has attempted to identify important factors that could cause plans, actions, events or results to differ materially from those described in forward-looking statements in the 2024 Financial Disclosure and the other Company Disclosure referenced herein, there may be other factors that cause plans, actions, events or results not to be as anticipated, estimated or intended. There is no assurance that such statements will prove to be accurate as actual plans, results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements in the 2024 Financial Disclosure, nor in the documents incorporated by reference herein. Readers are cautioned not to place undue reliance on forward-looking statements. The forward-looking statements referenced or contained in the 2024 Financial Disclosure are expressly qualified by these Cautionary Statements, together with those below, as well as the Cautionary Statements in the Company's AIF, the Technical Reports and other applicable Company Disclosure. Forward-looking statements contained herein are made as of the date of the 2024 Financial Disclosure (or as otherwise expressly specified) and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable laws.
Mineral Resources
Until mineral deposits are actually mined and processed, mineral resources must be considered as estimates only. Mineral resource estimates that are not classified as mineral reserves do not have demonstrated economic viability. The estimation of mineral resources is inherently uncertain, involves subjective judgement about many relevant factors and may be materially affected by, among other things, environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant risks, uncertainties, contingencies and other factors described in the foregoing Cautionary Statements on Forward-Looking Statements. The quantity and grade of reported "inferred" mineral resource estimates are uncertain in nature and there has been insufficient exploration to define "inferred" mineral resource estimates as an "indicated" or "measured" mineral resource and it is uncertain if further exploration will result in upgrading "inferred" mineral resource estimates to an "indicated" or "measured" mineral resource category. The accuracy of any mineral resource estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation, which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that may ultimately prove to be inaccurate. The quantity and grade of an "inferred" mineral resource estimates are uncertain in nature and there has been insufficient exploration to define "inferred" mineral resource estimates as an "indicated" or "measured" mineral resource and it is uncertain if further exploration will result in upgrading "inferred" mineral resource estimates to an "indicated" or "measured" mineral resource category. Mineral resource estimates may have to be re-estimated based on, among other things: (i) fluctuations in mineral prices; (ii) results of drilling and development; (iii) results of geological and structural modeling including stope design; (iv) metallurgical testing and other testing; (v) proposed mining operations including dilution; and (vi) the possible failure to receive and/or maintain required permits, licences and other approvals. It cannot be assumed that all or any part of a "inferred", "indicated" or "measured" mineral resource estimate will ever be upgraded to a higher category including a mineral reserve.
The mineral resource estimates referenced in the 2024 Financial Disclosure were estimated, categorized and reported using standards and definitions using the CIM Standards in accordance with NI 43-101 of the CSA, which governs the public disclosure of scientific and technical information concerning mineral projects by Canadian issuers such as Excellon.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
The mineral resource estimates disclosed and/or referenced in the 2024 Financial Disclosure were reported in accordance with National Instrument 43-101 of the Canadian Securities Administrators ("NI 43-101") using Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards for Mineral Resources and Mineral Reserves (the "CIM Standards") and applying the CIM's Mineral Resources and Mineral Reserves Best Practices guidelines (as applicable). For additional discussion of the Company's mineral resource estimates at the Company's projects, as well as an overall more detailed discussion of such projects, the reader should refer to the Company's AIF and the applicable Technical Reports.
U.S. Readers
The terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" as disclosed by the Company are Canadian mining terms defined in the CIM Standards (collectively, the "CIM Definitions") in accordance with NI 43-101. NI 43-101 establishes standards for all public disclosure that a Canadian issuer makes of scientific and technical information concerning mineral projects. These Canadian standards differ from the requirements of the SEC applicable to United States domestic and certain foreign reporting companies under Subpart 1300 of Regulation S-K ("S-K 1300"). Accordingly, information describing mineral resource estimates for the Company's projects, may not be comparable to similar information publicly reported in accordance with the applicable requirements of the SEC, and so there can be no assurance that any mineral resource estimate for the Company's projects would be the same had the estimates been prepared per the SEC's reporting and disclosure requirements under applicable United States federal securities laws, and the rules and regulations thereunder, including but not limited to S-K 1300. Further, there is no assurance that any mineral resource or mineral reserve estimate that the Company may report under NI 43-101 would be the same had the Company prepared such estimates under S-K 1300.
The 2024 Financial Disclosure may also contain information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. The Company advises United States investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company's properties.
Preliminary Economic Assessments (or PEAs)
A PEA, is only a conceptual study of the potential viability of the subject project's mineral resource estimates, and the economic and technical viability of the project and its estimated mineral resources has not been demonstrated. A PEA is preliminary in nature and provides only an initial, high-level review of the subject project's potential and design options; there is no certainty that a PEA will be realized. The conceptual LOM plan and economic model in a PEA include numerous assumptions and mineral resource estimates including inferred mineral resource estimates. Inferred mineral resource estimates are considered to be too speculative geologically to have any economic considerations applied to such estimates. Under NI 43-101, estimates of inferred mineral resources may not form the basis of feasibility studies, prefeasibility studies or other economic studies, except in prescribed cases, such as in a preliminary economic assessment under certain circumstances. There is no guarantee that inferred mineral resource estimates will be converted to indicated or measured mineral resources, or that indicated or measured mineral resources can be converted to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability, and as such there is no guarantee the economics described in any PEA, will be achieved. Mineral resource estimates may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant risks, uncertainties and other factors, as more particularly described in the foregoing other Cautionary Statements of this MD&A.
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EXCELLON RESOURCES
Management's Discussion & Analysis of Financial Results
For the three and nine-month periods ended September 30, 2025
Qualified Persons
Mr. Steven L. Park, M.Sc., C.P.G., an independent consulting geologist and a Qualified Person as defined in NI 43-101 (a "QP"), reviewed and approved the scientific and technical information related to the Tres Cerros Project in this MD&A. Mr. Paul Keller, P. Eng., QP, reviewed, verified and approved the scientific and technical information related to the Kilgore and Silver City Projects contained in this MD&A.
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