FORGE RESOURCES CORP.

CONSOLIDATED FINANCIAL STATEMENTS

For the years ended August 31, 2025 and 2024

(Expressed in Canadian dollars)

WDM CHARTERED PROFESSIONAL ACCOUNTANTS

Independent Auditor’s Report

To the Shareholders of:
FORGE RESOURCES CORP.

Opinion

We have audited the consolidated financial statements of Forge Resources Corp. (“the Company”), which comprise the consolidated statements of financial position as at August 31, 2025 and 2024 and the consolidated statements of loss and comprehensive loss, changes in shareholders’ (deficiency) equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present in all material respects, the financial position of the Company as at August 31, 2025 and 2024, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS Accounting Standards”) as issued by the International Accounting Standards Board (“IASB”).

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 Consolidated 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 consolidated financial statements in Canada, and 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.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the consolidated financial statements, which indicates that the Company incurred a net loss of $6,303,874 during the year ended August 31, 2025, and as of that date, had accumulated losses since inception of $25,100,433. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended August 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

Step Acquisition of Aion Mining Corp. and Accounting for Cross-Shareholdings

Key Audit Matter Description

During the year ended August 31, 2025, the Company completed a staged acquisition of Aion Mining Corp. (“Aion”), increasing its ownership interest from 46.07% to a controlling interest of 65.19% on February 19, 2025, and subsequently to 80.00% on May 29, 2025. As a result, Aion transitioned from an associate accounted for under IAS 28, Investments in Associates and Joint Ventures to a subsidiary consolidated under IFRS 10, Consolidated Financial Statements.

Management determined that the acquisition of control did not meet the definition of a business under IFRS 3, Business Combinations and was therefore accounted for as an asset acquisition. Significant judgment was required in assessing whether the acquired set of activities constituted a business, determining the appropriate accounting treatment for the step acquisition, measuring the

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INTEGRITY

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SUITE 420
1501 WEST BROADWAY
VANCOUVER, BRITISH COLUMBIA
CANADA V6J 4Z6

TEL: (604) 428-1866
FAX: (604) 428-0513
WWW.WDMCA.COM

WDM

identifiable net assets acquired, allocating the total cost of the asset acquisition, and determining the appropriate measurement of non-controlling interest (“NCI”).

In addition, as part of the staged acquisition, the Company issued its own common shares directly to Aion. Upon obtaining control, these shares represent cross-shareholdings within the consolidated group and are required to be eliminated and presented as treasury shares in accordance with IAS 32, Financial Instruments: Presentation. The identification, measurement, and elimination of these cross-shareholdings, including the related accumulated other comprehensive income (“OCI”), involved significant judgment and complex consolidation adjustments.

We considered this matter to be a key audit matter due to the materiality of the transactions, the complexity of the accounting considerations, and the significant judgments applied by management in determining the appropriate accounting treatment and related disclosures. Further disclosure regarding the step acquisition, consolidation, non-controlling interest, and treasury shares is included in Notes 6, 7 and 9 to the consolidated financial statements.

Audit Response

We responded to this matter by evaluating the appropriateness of management’s accounting for the staged acquisition of Aion, including the assessment of whether the acquisition met the definition of a business, the measurement of the identifiable net assets acquired, and the accounting for the step acquisition and subsequent ownership increase. Our audit work included, but was not limited to, the following:

Obtained an understanding of the step acquisition transactions and examined the relevant subscription agreements, amendments, and supporting documentation related to the acquisition of Aion.
Evaluated management’s assessment of whether the acquisition met the definition of a business under IFRS 3, including consideration of the inputs, processes, and outputs of Aion at the acquisition date.
Evaluated management’s determination of the total cost of the acquisition, including cash consideration, consideration shares, previously held interests, and transaction costs.
Assessed and reperformed the purchase price allocation to the identifiable assets acquired and liabilities assumed on a relative fair value basis.
Evaluated the reasonableness of management’s assumptions used in determining fair values, including the conclusion that the carrying amounts of certain assets and liabilities reasonably approximated their fair values.
Assessed the accounting treatment of the step acquisition from associate to subsidiary, including the measurement of the previously held interest and the recognition and measurement of non-controlling interest in accordance with IFRS 10.
Evaluated the accounting for the subsequent increase in ownership interest from 65.19% to 80.00%, including the recognition of changes in non-controlling interest as an equity transaction.
Assessed the identification and elimination of the Company’s own shares held by Aion upon consolidation and their presentation as treasury shares in accordance with IAS 32.
Assessed the appropriateness, accuracy, and completeness of the related disclosures in the consolidated financial statements.

Assessment of Indicators of Impairment of Exploration and Evaluation Assets

Key Audit Matter Description

The carrying value of exploration and evaluation assets amounted to $15,328,367 as at August 31, 2025. Exploration and evaluation assets are reviewed for an indication of impairment at each statement of financial position date or when a triggering event is identified. The determination of whether indicators of impairment exist requires the use of judgment by management. Factors which could trigger an impairment test (indicators of impairment) include, but are not limited to, (i) the period for which the Company has the right to explore in the specific area has expired or will expire in the near future, and is not expected to be renewed; (ii) substantive exploration and evaluation expenditures in a specific area is neither budgeted nor planned, and (iii) no commercially viable deposits have been discovered, and management has decided to discontinue such activities in the specific area.

We considered this a key audit matter due to the significance of the exploration and evaluation assets and the judgment made by management in their assessment of indicators of impairment related to exploration and evaluation assets; which resulted in a high degree of subjectivity in performing procedures related to the judgment applied by management.

WDM

Audit Response

We responded to this matter by evaluating management’s assessment of impairment indicators for the Company’s exploration and evaluation assets and assessing whether the related judgments were reasonable and consistent with the requirements of IFRS 6, Exploration for and Evaluation of Mineral Resources. Our audit procedures included, but were not limited to, the following:

Obtained and evaluated management’s assessment of impairment indicators for each property, including inquiry and discussion of the key facts and circumstances considered under IFRS 6.
Assessed whether management’s conclusions were consistent with available supporting evidence, including the Company’s stated exploration strategy and plans for each mineral property.
Verified the status of the mining claims with governmental registries.
Obtained confirmations from the property optionors and inspected the underlying supporting documentation to corroborate the good standing of the mineral property option agreements, including assessment of key terms, payment status, and work commitments.
Considered evidence obtained in other areas of the audit to assess the Company’s continued ability and plans to further develop the mineral properties.

Other Information

Management is responsible for the other information. The other information comprises Management’s Discussion and Analysis. Our opinion on the consolidated financial statements does not cover the other information and will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated 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 Consolidated Financial Statements

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

In preparing the consolidated 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 to 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 Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

WDM

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

Identify and assess the risks of material misstatement of the consolidated 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 risk of not detecting a material misstatement resulting from fraud is 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 consolidated 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 consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year 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 on the audit resulting in this independent auditor's report is Mike Kao.

WDM
Chartered Professional Accountants
Vancouver, B.C.
December 23, 2025

FORGE RESOURCES CORP.
Consolidated Statements of Financial Position
As at August 31, 2025 and 2024
(Expressed in Canadian dollars)

	Note	2025 $	2024 $
ASSETS
Current assets
Cash		380,068	344,036
Sales tax receivable		162,262	266,648
Exploration advances		264,666	66,017
Prepaid expenses and deposit		151,191	253,168
Total current assets		958,187	929,869
Non-current assets
Property and equipment	5	935,573	-
Exploration and evaluation assets	6	15,328,367	3,611,966
Investment in associate	7	-	2,777,150
Total non-current assets		16,263,940	6,389,116
TOTAL ASSETS		17,222,127	7,318,985
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities		751,345	113,824
Convertible debentures	8	522,875	-
Promissory notes payable	6	725,918	-
Due to related parties	11	1,090,282	51,907
Total current liabilities		3,090,420	165,731
SHAREHOLDERS’ EQUITY
Capital stock	9	32,674,698	22,263,858
Treasury shares	9	(4,595,751)	-
Reserves	9	7,931,408	3,793,528
Accumulated other comprehensive income (loss)		529,463	(50,602)
Deficit		(25,100,433)	(18,853,530)
Equity attributable to shareholders		11,439,385	7,153,254
Non-controlling interest		2,692,322	-
TOTAL SHAREHOLDERS’ EQUITY		14,131,707	7,153,254
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		17,222,127	7,318,985

Nature of operations and going concern (Note 1)
Subsequent events (Note 17)

Approved and authorized for issue on behalf of the Board of Directors:

“PJ Murphy”
Director

“Cole McClay”
Director

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

FORGE RESOURCES CORP.

Consolidated Statements of Loss and Comprehensive Loss

For the years ended August 31, 2025 and 2024

(Expressed in Canadian dollars)

	Note	2025 $	2024 $
EXPENSES
Consulting	11	749,493	348,824
Foreign exchange loss (gain)		84,302	(6,451)
Interest expense		22,763	-
Marketing		594,060	929,855
Office and administration		102,266	40,516
Professional fees	11	269,695	201,778
Rent		36,000	36,000
Stock-based compensation	9,11	4,327,032	1,338,995
Transfer agent and filing fees		63,206	62,233
		(6,248,817)	(2,951,750)
OTHER ITEMS
Loss on disposal of subsidiary		-	(3,714)
Loss on settlement of debt		-	(34,775)
Share of loss from associate	7	(55,057)	(135,002)
Net loss for the year from continuing operations		(6,303,874)	(3,125,241)
Income from discontinued operations		-	3,709
NET LOSS FOR THE YEAR		(6,303,874)	(3,125,532)
Other comprehensive income (loss):
Share of other comprehensive income (loss) from associate	7	79,761	(50,602)
Translation adjustment		(27,676)	-
NET LOSS AND COMPREHENSIVE LOSS FOR THE YEAR		(6,251,789)	(3,172,134)
NET LOSS ATTRIBUTED TO:
Shareholders of the Company		(6,246,903)	(3,125,532)
Non-controlling interest		(56,971)	-
		(6,303,874)	(3,125,532)
SHARE OF OTHER COMPREHENSIVE INCOME (LOSS) ATTRIBUTED TO:
Shareholders of the Company		71,215	(50,602)
Non-controlling interest		(19,130)	-
		52,085	(50,602)
Basic and diluted loss per share		(0.07)	(0.04)
Weighted average number of shares outstanding – basic and diluted		85,441,959	72,343,440

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

For the years ended August 31, 2025 and 2024

(Expressed in Canadian dollars)

FORGE RESOURCES CORP.
Consolidated Statements of Cash Flows

	2025	2024
	$	$
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the year	(6,303,874)	(3,121,532)
Item not involving cash:
Interest expense	22,763	-
Share of loss from associate	55,057	135,002
Stock-based compensation	4,327,032	1,338,995
Loss on settlement of debt	-	34,775
Loss on disposal of subsidiary	-	3,714
Changes in non-cash working capital:
Sales tax receivable	115,092	(236,656)
Prepaid expenses and deposits	101,977	(239,572)
Accounts payable and accrued liabilities	571,559	(430,368)
Due to related parties	295,364	(31,808)
Net cash used in operating activities	(815,030)	(2,547,450)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in associate	(3,006,079)	(1,500,000)
Exploration and evaluation assets	(1,848,101)	(3,009,439)
Exploration advances	(80,633)	(66,017)
Acquisition of property and equipment	(217,264)	-
Cash acquired on acquisition of control of Aion Mining Corp.	312,463	-
Cash relinquished on disposal of subsidiary	-	(3,714)
Net cash used in investing activities	(4,839,614)	(4,579,170)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common shares for cash	4,928,583	6,725,760
Share issuance costs	(107,509)	(598,663)
Exercise of warrants	659,800	1,218,013
Exercise of stock options	219,250	91,000
Net cash provided by financing activities	5,700,124	7,436,110
Effect on exchange rate change on cash	(9,448)	-
Change in cash	36,032	309,490
Cash, beginning of year	344,036	34,546
CASH, END OF YEAR	380,068	344,036

Supplemental Cash Flow Information (Note 15)

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

FORGE RESOURCES CORP.

Consolidated Statements of Changes in Shareholders' (Deficiency) Equity

For the years ended August 31, 2025 and 2024

(Expressed in Canadian dollars)

	Number of Shares	Capital Stock $	Treasury Shares $	Obligation to Issue Shares $	Reserves $	Accumulated Other Comprehensive Income (Loss) $	Deficit $	Non-controlling interest $	Total $
Balance as at August 31, 2023	61,548,436	12,572,811	-	6,500	2,418,074	-	(15,731,998)	-	(734,613)
Private placements - non flow-through shares	9,192,750	5,555,760	-	-	-	-	-	-	5,555,760
Private placements - flow through shares	3,167,500	1,101,250	-	-	68,750	-	-	-	1,170,000
Share issued for the investment in associate	3,111,186	1,462,755	-	-	-	-	-	-	1,462,755
Shares issued for the finders of exploration assets	100,000	52,000	-	(6,500)	-	-	-	-	45,500
Exercise of warrants	3,996,205	1,218,013	-	-	-	-	-	-	1,218,013
Exercise of stock options	350,000	170,319	-	-	(79,319)	-	-	-	91,000
Shares issued for finder's fees	200,000	96,000	-	-	-	-	-	-	96,000
Share issue cost - cash	-	(598,664)	-	-	-	-	-	-	(598,664)
Share issue cost - warrants	-	(143,028)	-	-	143,028	-	-	-	-
Stock-based compensation	-	-	-	-	1,242,995	-	-	-	1,242,995
Debt settlement	1,159,167	776,642	-	-	-	-	-	-	776,642
Other comprehensive loss	-	-	-	-	-	(50,602)	-	-	(50,602)
Net loss for the year	-	-	-	-	-	-	(3,121,532)	-	(3,121,532)
Balance as at August 31, 2024	82,825,244	22,263,858	-	-	3,793,528	(50,602)	(18,853,530)	-	7,153,254
Private placements - non flow-through shares	6,591,995	3,625,597	-	-	-	-	-	-	3,625,597
Private placements - flow-through shares	1,940,152	1,144,690	-	-	135,811	-	-	-	1,280,501
Shares issued for investment in subsidiary	2,873,564	3,160,920	-	-	-	-	-	4,794,521	7,955,441
Shares issued for additional interest in subsidiary	2,232,453	1,562,718	-	-	(250,589)	-	-	(2,026,098)	(713,969)
Shares issued for the finders of exploration assets	100,000	71,000	-	-	-	-	-	-	71,000
Exercise of warrants	1,595,000	674,265	-	-	(14,465)	-	-	-	659,800
Exercise of stock options	725,000	385,402	-	-	(166,152)	-	-	-	219,250
Shares issued for finder's fees	63,928	52,421	-	-	-	-	-	-	52,421
Share issue costs - cash	-	(107,509)	-	-	-	-	-	-	(107,509)
Share issue costs - common shares	-	(52,421)	-	-	-	-	-	-	(52,421)
Share issue costs - warrants	-	(106,243)	-	-	106,243	-	-	-	-
Stock-based compensation	-	-	-	-	4,327,032	-	-	-	4,327,032
Treasury shares	(5,941,350)	-	(4,595,751)	-	-	508,850	-	-	(4,086,901)
Other comprehensive income (loss)	-	-	-	-	-	71,215	-	(19,130)	52,085
Net loss for the year	-	-	-	-	-	-	(6,246,903)	(56,971)	(6,303,874)
Balance as at August 31, 2025	93,005,986	32,674,698	(4,595,751)	-	7,931,408	529,463	(25,100,433)	2,692,322	14,131,707

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

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

Forge Resources Corp. (the “Company”) was incorporated on August 21, 2014 under the Business Corporations Act of British Columbia. The head office of the Company is 1050 - 12471 Horseshoe Way, Richmond, BC, V7A 4X6. The registered and records office is Suite 700, 401 W Georgia St, Vancouver, BC, V6B 5A1. The common shares of the Company are listed on the Canadian Securities Exchange (“CSE”) under the symbol “FRG”, on the OTCQB under the symbol “FRGGF” and on the Frankfurt Stock Exchange (“FSE”) under the symbol “5YZ”.

The Company is in the business of the exploration and development of natural resource properties in Canada and Colombia.

During the year ended August 31, 2025, the Company earned a 80% interest in Aion Mining Corp. (“Aion”), a company that is developing the La Estrella coal project in Santander, Colombia (Note 6).

These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at August 31, 2025, the Company has not generated any revenues from operations, has a working capital deficiency of $2,132,233 (2024 - $764,138 working capital) and accumulated deficit of $25,100,433 (2024 - $18,853,530).

The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing. Management assesses that sufficient working capital will be obtained from external financing to meet the Company's liabilities and commitments as they become due, although there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.

If the going concern assumption is not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying value of assets and liabilities, the reported expenses, and the classifications used could be material.

These consolidated financial statements were approved by the Board of Directors of the Company on December 23, 2025.

2. BASIS OF PREPARATION

These consolidated financial statements have been prepared using accounting policies in accordance with International Financial Reporting Standards (“IFRS Accounting Standards”) issued by the International Accounting Standards Board (“IASB”). The material accounting policies applied in these consolidated financial statements are based on the IFRS Accounting Standards issued and effective as of August 31, 2025.

These consolidated financial statements include the accounts of the Company and the entities controlled by the Company, being 80% of Aion and its formerly wholly owned subsidiary, Benjamin Hill Mining Company SA de CV. A subsidiary is any entity controlled by the Company. Control exists when the Company has the power to govern the financial and operating policies of an entity; is exposed to variable returns in connection with its interest in the entity; and a linkage exists between this power and exposure to variable returns. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposal or loss of control. During the year ended August 31, 2025, the Company closed the acquisition of 60% of Aion on February 19, 2025 and acquired an additional 20% on May 29, 2025. The Company disposed of its former subsidiary, Benjamin Hill Mining Company SA de CV on February 19, 2024.

All intra-group transactions, balances, income and expenses are eliminated, in full, on consolidation.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

2. BASIS OF PREPARATION (CONTINUED)

These consolidated financial statements have been prepared on a historical cost basis, modified where applicable. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting.

The consolidated financial statements are presented in Canadian Dollars.

The functional currency is the currency of the primary economic environment in which the entity operates and is determined for each entity within the Company. The functional currency for the entities within the Company are: the Canadian dollar (the Company, Aion Mining Corp., and its former subsidiary, Benjamin Hill Mining Company SA de CV) and the Colombian Peso (Aion Mining Corp. (Colombia branch)).

3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the consolidated financial statements in conformity with IFRS Accounting Standards requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

a) Significant judgments

The preparation of the consolidated financial statements in conformity with IFRS Accounting Standards requires to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s financial statements include:

the assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty;
the existence of indicators of impairment of the Company’s exploration and evaluation assets;
the classification / allocation of expenditures as exploration and evaluation expenditures or operating expenses;
the determination of the functional currency of the parent company and its subsidiary; and
the assessment of the appropriate accounting treatment for the step acquisition of Aion, including whether the acquired set of activities constitutes a business, measurement of identifiable net assets acquired, allocation of the total cost of the acquisition, measurement of the non-controlling interest, and elimination and presentation of cross-shareholdings as treasury shares.

b) Significant estimates and assumptions

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income or loss in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.

Estimates and assumptions where there is significant risk of material adjustments to assets and liabilities in future accounting periods include the recoverability of the carrying value of exploration and evaluation assets, fair value measurements for financial instruments, the recoverability and measurement of deferred tax assets and provisions for restoration and environmental obligations.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

4. MATERIAL ACCOUNTING POLICY INFORMATION

a) Foreign Currency Translation

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of both the parent company and its former subsidiary. The Company’s former subsidiary is domiciled in Mexico and, when required, utilizes a mix of currencies in local transactions. As the former subsidiary did not generate its own cash inflows and is exclusively financed by the parent company in Canadian dollars, management has determined that its functional currency is also the Canadian dollar.

Transactions and balances:

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the statement of comprehensive loss in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognized in profit or loss in the statement of comprehensive loss.

b) Cash

Cash includes cash on hand, deposits held with financial institutions and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amount of cash and subject to an insignificant risk of change value.

c) Property and Equipment

Property and equipment is carried at cost, less accumulated depreciation and accumulated impairment losses.

The cost consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use, and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Depreciation is provided at rates calculated to write off the cost of equipment, less their estimated residual value, using the straight-line method, as follows:

Building	45 years
Equipment	5 years

The estimated useful lives, residual values, and depreciation method are reviewed at the end of each reporting period with the effect of any changes in estimate accounted for on a prospective basis.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

d) Exploration and Evaluation Assets

The Company’s exploration and evaluation assets consist of mineral rights acquired and exploration and evaluation expenditure capitalized in respect of projects that are at the exploration and evaluation stage.

No amortization charge is recognized in respect of exploration and evaluation assets. These assets are transferred to property and equipment upon the commencement of mine development.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

Exploration and evaluation expenditures in the relevant area of interest comprises costs which are directly attributable to:

Acquisition;
Surveying, geological, geochemical and geophysical;
Exploratory drilling;
Land maintenance;
Sampling; and
Assessing technical feasibility and commercial viability.

Exploration and evaluation expenditures related to an area of interest where the Company has tenure are capitalized as intangible assets and are initially recorded at cost less impairment.

Exploration and evaluation expenditures also includes the costs incurred in acquiring mineral rights, the entry premiums paid to gain access to areas of interest and amounts payable to third parties to acquire interests in existing projects. Capitalized costs, including general and administrative costs, are only allocated to the extent that those costs can be related directly to operational activities in the relevant area of interest.

Where the Company has entered into option agreements to acquire interests in mineral properties that require periodic share issuances, amounts un-issued are not recorded as liabilities since they are issuable entirely at the Company’s option. Option payments are recorded as mineral property costs when the payments are made and share issuances are recorded as mineral property costs using the fair market value of the Company’s common shares at the date of the issuance.

All capitalized exploration and evaluation expenditure is assessed for impairment if sufficient data exists to determine technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount. The following circumstances indicate that an entity should test exploration and evaluation assets for impairment:

The period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed;
Substantive expenditures on further exploration and evaluation of mineral resources in the specific area is neither budgeted nor planned;
Exploration and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Company has decided to discontinue such activities in the specific area; and
Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

In circumstances where a property is abandoned, the cumulative capitalized costs relating to the property are written off in the period.

e) Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5. Under the equity method, an investment in an associate or a joint venture is recognised initially in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Company’s share of the profit or loss and other comprehensive income or loss of the associate. When the Company’s share of losses of an associate exceeds the Company’s interest in that associate (which includes any long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate. On acquisition of the investment in an associate, any excess of the cost of the investment over the Company’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.

If there is objective evidence that the Company’s net investment in an associate is impaired, the requirements of IAS 36 Impairment of Assets are applied to determine whether it is necessary to recognise any impairment loss with respect to the Company’s investment. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint venture. When the Company retains an interest in the former associate and the retained interest is a financial asset, the Company measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with IFRS 9. The difference between the carrying amount of the associate at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal of the associate. In addition, the Company accounts for all amounts previously recognised in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the associate is disposed of. When the Company reduces its ownership interest in an associate but the Company continues to use the equity method, the Company reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When the Company transacts with an associate, profits and losses resulting from the transactions with the associate are recognised in the Company’s consolidated financial statements only to the extent of interests in the associate that are not related to the Company. The Company applies IFRS 9, including the impairment requirements, to long-term interests in an associate to which the equity method is not applied and which form part of the net investment in the investee. Furthermore, in applying IFRS 9 to long-term interests, the Company does not take into account adjustments to their carrying amount required by IAS 28 Investments in Associates and Joint Ventures (i.e. adjustments to the carrying amount of long-term interests arising from the allocation of losses of the investee or assessment of impairment in accordance with IAS 28).

f) Impairment of Non-Financial Assets

At the end of each reporting period, the carrying amounts of the Company’s assets are reviewed to determine whether there is any 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 costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax 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 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.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that 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.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

g) Financial Instruments

The following is the Company’s accounting policy for financial instruments under IFRS 9:

(i) Classification

The Company classifies its financial instruments in the following categories: at fair value through profit or loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL.

For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

(ii) Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statements of loss and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of loss and comprehensive loss in the period in which they arise.

Debt investments at FVTOCI

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in Other Comprehensive Income (“OCI”). On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Equity investments at FVTOCI

These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.

(iii) Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the statements of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

(iv) Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and / or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

Gains and losses on derecognition are generally recognized in profit or loss.

h) Provisions

Provisions are recorded when a present legal or constructive obligation exists as a result of past events where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation estimated at the end of each reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount receivable can be measured reliably.

i) Unit offerings

Common shares are classified as equity. Proceeds from unit placements are allocated between shares and warrants issued using the residual method. The residual method first allocates fair value to the component with the best evidence of fair value and then the residual value, if any, to the less easily measurable component. The fair value of the common shares, measured on date of issue, was determined to be the component with the best evidence of fair value. The balance, if any, was allocated to the attached warrants. Costs directly identifiable with share capital financing are charged against share capital. Share issuance costs incurred in advance of share subscriptions are recorded as deferred assets. Share issuance costs related to uncompleted share subscriptions are charged to operations in the period they are incurred.

j) Reserves

Reserves relate to share-based payment reserve, which represent the fair value of stock options or warrants until such time that the share-based instruments are exercised, at which time the corresponding amount will be transferred to share capital.

k) Flow-through shares

The issuance of flow-through shares is accounted for similarly to the issuance of a compound financial instrument. The liability component represents the premium paid for the tax benefit to the investors. Proceeds from the issuance of shares and warrants by flow-through private placements are first allocated between shares and warrants issued and a liability account using the residual method. Proceeds are first allocated to shares according to the quoted price of existing shares at the time of issuance and then the fair value of the warrants calculated based on Black Scholes Pricing Model and any residual in the proceeds is allocated to the liability. Upon renunciation of the flow through expenditures, the liability component is derecognized in the statement of loss and comprehensive loss and a deferred income tax liability is recognized for the taxable temporary difference created at the Company's applicable tax rate which is expected to apply in the year the deferred income tax liability will be settled. Any difference between the amount of the liability component derecognized and deferred income tax liability recognized is recorded in the statement of loss and comprehensive loss.

l) Stock-based compensation

The Company may grant stock options to buy common shares of the Company to directors, officers, employees and consultants. The board of directors grants such options for periods of up to five years, with vesting periods determined at its sole discretion.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

The fair value of the options is measured at grant date, using the Black-Scholes Option Pricing Model, and is recognized over the vesting period that the employees earn the options. The fair value is recognized as an expense with a corresponding increase in equity. The amount recognized as expense is adjusted to reflect the number of share options expected to vest.

Where the terms of a stock option is modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional expense is recognized for any modification which increases the total fair value of the stock-based compensation arrangement or is otherwise beneficial to the employee as measured at the date of modification over the remaining vesting period.

Upon expiration/cancellation of options and warrants, the fair value measured at grant date remain in reserves.

m) 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 does not adjust the loss attributable to common shareholders or the weight average number of common shares outstanding when the effect is anti-dilutive.

n) Income Taxes

Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is provided using the asset and liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the financial position reporting date applicable to the period of expected realization or settlement. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

o) Non-Controlling Interest

Non-controlling interest in the Company’s residual ownership interest in a controlled subsidiary is classified as a separate component of equity. On initial recognition, non-controlling interest is measured at the fair value of the non-controlling entity’s contribution into the related subsidiary. Subsequent to the original transaction date, adjustments are made to the carrying amount of non-controlling interest for the non-controlling interest’s share of changes to the subsidiary’s equity.

q) Accounting pronouncements not yet adopted

IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation and disaggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. Management has no plans for early adoption and will evaluate the impact on its financial statement presentation closer to the effective date.

FORGE RESOURCES CORP.
Notes to the Consolidated Financial Statements
For the years ended August 31, 2025 and 2024
(Expressed in Canadian Dollars)

PROPERTY AND EQUIPMENT

	Land $	Building $	Equipment $	Total $
Balance – August 31, 2023 and 2024	-	-	-	-
Cost
Acquisition of Aion Mining Corp.	670,146	44,206	15,348	729,700
Additions	-	160,545	56,719	217,264
	670,146	204,751	72,067	946,964
Accumulated Depreciation
Depreciation	-	-	(3,998)	(3,998)
	670,146	204,751	68,079	942,976
Foreign exchange movement	(7,143)	(561)	301	(7,403)
Balance – August 31, 2025	663,003	204,190	68,380	935,573

EXPLORATION AND EVALUATION ASSETS

	Alotta Property, Yukon, Canada $	La Estrella Property, Colombia $	Total $
Balance – August 31, 2023	557,027	-	557,027
Acquisition costs:	95,500	-	95,500
Exploration costs:
Consulting fees	72,000	-	72,000
Drilling	2,911,870	-	2,911,870
Office, miscellaneous and travel	5,594	-	5,594
	3,641,991	-	3,641,991
Cost recoveries	(30,025)	-	(30,025)
Balance – August 31, 2024	3,611,966	-	3,611,966
Acquisition costs:
Acquisition of 60% of Aion Mining Corp.	-	5,313,848	5,313,848
Other acquisition costs	171,000	1,964,318	2,135,318
Exploration costs:
Construction	-	565,603	565,603
Consulting fees	72,000	163,191	235,191
Depreciation	-	3,988	3,988
Drilling	1,794,178	431,273	2,225,451
Office, miscellaneous and travel	3,212	516,239	519,451
Salaries and benefits	-	498,946	498,946
Taxes and other	-	182,828	182,828
	5,652,356	9,640,244	11,680,624
Foreign exchange movement	-	35,777	35,777
Balance – August 31, 2025	5,652,356	9,676,011	15,328,367

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Alotta Property, Yukon, Canada

During the year ended August 31, 2023, the Company entered into an option agreement (the “Agreement”) with Strategic Metals Ltd. for an option right to earn an undivided 60% joint venture interest in the Alotta project located in the Whitehorse mining district, Yukon.

The option may be exercised by making cash payments in aggregate of $500,000 within five years of the execution of the agreement as follows:

(i) $25,000 upon execution of this agreement by all parties (paid);
(ii) $25,000 on or before July 1, 2023 (paid);
(iii) $50,000 on or before January 17, 2024 (paid);
(iv) $100,000 on or before January 17, 2025 (paid);
(v) $100,000 on or before January 17, 2026;
(vi) $100,000 on or before January 17, 2027; and
(vii) $100,000 on or before January 17, 2028.

The Company must also incur aggregate expenditures of $11,000,000 over five years, as follows:

(viii) $500,000 on or before December 31, 2023 (incurred);
(ix) $1,500,000 on or before December 31, 2024 (incurred);
(x) $2,500,000 on or before December 31, 2025 (incurred);
(xi) $3,000,000 on or before December 31, 2026; and
(xii) $3,500,000 on or before December 31, 2027.

In connection with the agreement, the Company has entered into a finder’s fee agreement with a third party for up to 300,000 common shares of the Company, in installment amounts due concurrent with cash payments payable under the option agreement during the first three years of the term of the agreement as detailed below (issued 100,000 common shares during the year ended August 31, 2024, which 50,000 was due at August 31, 2023 and accrued at a fair value of $6,500 as an obligation to issue shares, Note 9).

(i) 25,000 upon execution of this agreement by all parties (issued);
(ii) 25,000 on or before July 1, 2023 (issued);
(iii) 50,000 on or before January 17, 2024 (issued);
(iv) 100,000 on or before January 17, 2025 (issued);
(v) 100,000 on or before January 17, 2026;

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

La Estrella Property, Colombia

During the year ended August 31, 2025, the Company earned a 60% interest in the La Estrella Project.

The acquisition of the 60% interest in the La Estrella Project was treated as an asset acquisition. The fair value of the assets acquired and liabilities assumed as at date of acquisition were as follows:

Consideration	$
Cash payments	4,506,079
Value of 5,984,750 common shares issued	4,623,675
Adjustments to carrying value of investment in associate	(160,900)
Transaction costs	11,488
Total consideration value:	8,980,342
Net assets acquired
---	---
Cash	312,463
Sales tax receivable	10,706
Marketable securities – shares of Forge Resources Corp.	6,561,225
Exploration advances	118,016
Exploration and evaluation assets	7,628,146
Property and equipment	729,700
Accounts payable	(65,962)
Convertible loans	(537,231)
Advances from Forge Resources Corp.	(250,000)
Due to related parties	(732,200)
Net assets acquired:	13,774,863
Non-controlling interest	(4,794,521)
	8,980,342

During the year ended August 31, 2025, the Company acquired a further interest in Aion to bring the Company's total interest to 80%. In consideration, the Company issued 2,232,453 common shares of the Company at a fair value of $1,562,717 and paid $713,966 through the issuance of an unsecured interest-bearing promissory note to each shareholder; each promissory note bears interest at a rate of 6.5% calculated annually and mature on the earlier of the following: the two-year anniversary of the promissory note; or the completion date of one or more hard-dollar financings by the company for aggregate gross proceeds of at least $3,000,000. During the year ended August 31, 2025, the Company recorded $11,952 of interest expense in relation to the promissory notes. As at August 31, 2025, the promissory notes including accrued interest totaled $725,918 (2024 - $nil).

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

On October 4, 2022, Aion entered into an option agreement to acquire an undivided and unencumbered 100% interest in mining concessions comprised of 1,040 hectares and known as the La Estrella property located in Santander, Columbia.

Pursuant to the Option Agreement, in order to acquire its interest, Aion must make cash payments totalling US$2,000,000 in accordance with the following payment schedule to the Optionor:

1) US$100,000 upon Completion of Key Tasks(1) date (paid);
2) US$100,000 on or before 90 days following Completion of Key Tasks (paid);
3) US$100,000 on or before 180 days following Completion of Key Tasks (paid);
4) US$100,000 on or before 270 days following Completion of Key Tasks (paid);
5) US$100,000 on or before the first anniversary following Completion of Key Tasks (paid);
6) US$125,000 on or before 90 days following the first anniversary of the Completion of Key Tasks (paid);
7) US$125,000 on or before 180 days following the first anniversary of the Completion of Key Tasks (paid);
8) US$125,000 on or before 270 days following the first anniversary of the Completion of Key Tasks (paid);
9) US$125,000 on or before the second anniversary of the Completion of Key Tasks (paid);
10) US$250,000 on or before 90 days following the second anniversary of the Completion of Key Tasks (paid);
11) US$250,000 on or before 180 days following the second anniversary of the Completion of Key Tasks(2);
12) US$250,000 on or before 270 days following the first anniversary of the Completion of Key Tasks; and
13) US$250,000 on or before the third anniversary of the Completion of Key Tasks.
(1) Completion of key tasks includes the execution of a Letter of Interest with the owner of the surface rights and necessary filings with the mining authority.
(2) On February 26, 2025, the Company and the Optionor entered into a further extension agreement for the remaining future payments into nine equal monthly installments payable from June 11, 2025 through February 11, 2026. Any payments outstanding from February 11, 2025 onward accrue interest at 5% per annum, with all accrued interest due alongside the final installment on February 11, 2026.

As of August 31, 2025, a total of US$1,438,371 payment was made towards the acquisition of the 100% interest of La Estrella Property.

7. INVESTMENT IN AION MINING CORP.

On February 19, 2025, the Company earned a 65.19% economic and voting interest in Aion Mining Corp. The Company previously held a 46.07% economic and voting interest in Aion which was recorded as an investment in associate to February 19, 2025.

Details of material associate

Name of associate	Principal activity	Place of incorporation and principal place of business	Proportion of ownership interest and voting rights held by the Company
			February 19, 2025	August 31, 2024
Aion Mining Corp.	Mineral Exploration	British Columbia, Canada Branch office in Bogota, Colombia	65.19%	46.07%

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

7. INVESTMENT IN AION MINING CORP. (CONTINUED)

The following table is a reconciliation of the carrying value of the investment in Aion:

	$
Balance, August 31, 2023	-
Share consideration	1,462,755
Cash consideration	1,500,000
Adjustments to carrying value	(185,605)
Balance, August 31, 2024	2,777,150
Share consideration	3,160,920
Cash consideration	3,006,079
Adjustments to carrying value to February 19, 2025	24,705
Transaction costs	11,488
	8,980,342
Allocated to the acquisition of 65.19% of Aion (Note 6)	(8,980,342)
Balance, August 31, 2025	-

Step acquisition of Aion

On December 13, 2023, the Company signed a definitive agreement with Aion to complete the Company's acquisition of a 24.26% economic interest in Aion. Pursuant to the agreement, the Company acquired common shares of Aion representing a 24.26% economic interest. In consideration, the Company provided Aion with the following: $500,000 in cash on closing (paid); and 1,602,565 common shares of the Company at a fair value of $633,013 (issued).

On April 15, 2024, the Company acquired common shares of Aion to bring the total ownership to a 46.07% economic and voting interest. In consideration, the Company provided Aion with the following: $1,000,000 in cash on closing (paid); and 1,508,621 common shares of the Company at a fair value of $829,742 (issued).

The Company was also granted a right of first refusal for two years, allowing it to purchase common shares in Aion to offset any further issuances by Aion of securities, to allow the Company the opportunity to maintain its economic and voting interest.

Aion is a non-arm's length party to the Company by reason of sharing a common director, Cole McClay.

As at August 31, 2024, the Company determined that it exercised significant influence over Aion and accounted for this investment using the equity method of accounting.

On February 19, 2025, the Company acquired common shares of Aion to bring the total ownership to a 65.19% economic and voting interest. In consideration, the Company provided Aion with the following: $3,006,079 in cash on closing (paid); and 2,873,564 common shares of the Company at a fair value of $3,160,920 (issued). As a result, the Company obtained control of Aion and Aion became a subsidiary of the Company effective February 19, 2025.

On May 29, 2025, the Company acquired additional common shares of Aion, increasing its ownership interest to 80% economic and voting interest. In consideration, the Company provided Aion with the following: 2,232,453 common shares of the Company at a fair value of $1,562,718 (issued) and paid $713,966 through the issuance of an unsecured interest-bearing promissory note (Note 6).

During the year ended August 31, 2025 and prior to the acquisition of controlling interest in Aion, the Company recorded its proportionate share of Aion's net loss of $55,057 (2024 - $135,002) and comprehensive income of $79,761 (2024 - $50,602 comprehensive loss) on the consolidated statements of loss and comprehensive loss.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

8. CONVERTIBLE DEBENTURES

During the year ended August 31, 2023, Aion entered into unsecured loan agreements (the "Convertible Loan Agreements") with related parties. The key terms of the Convertible Loan Agreements are as follows:

Issue Date	Maturity Date	Principal Amount $	Annual Interest Rate
September 1, 2022	December 31, 2024*	70,000	5.00%
September 2, 2022	September 2, 2024**	42,000	6.50%
December 6, 2022	December 6, 2024**	490,990	6.50%
		602,990

*Aion converted the debenture in the principal amount of $70,000 and outstanding interest of $8,170 at the conversion rate of $0.23 per share by issuing 339,869 common shares of Aion.

**Aion signed extension agreements with the lenders whereby the term of the debentures in the principal amounts of $42,000 and $490,990 were extended for an additional year up to June 6, 2025, on the same terms and conditions.

a. Aion shall pay the lenders the principal amount including accrued interest on or before the maturity dates. Aion may from time to time repay all or any part of the indebtedness without bonus or penalty.
b. Interest shall accrue on a daily basis and calculated from the date on which Aion receives the funding pursuant to the loan agreement.
c. At any time and from time to time, the lender has the right to convert any or all outstanding principal and interest into fully paid and non-assessable common shares of Aion at a conversion price of $0.23 per common share.

For financial reporting purposes, the debentures were separated into liability and equity components. Fair value of the liability component is first determined by discounting the face value and coupon interest to the present value of the inception date of the debentures. The effective interest rates for the liability components is 15%. The equity component related to the common shares conversion feature is then estimated by subtracting the fair value of the liability component from the gross proceeds of the debenture.

	$
Balances, August 23, 2023 and 2024	-
Additions on acquisition of Aion Mining Corp.	537,231
Interest expense adjustment	(14,356)
Balances, August 31, 2025	522,875

9. CAPITAL STOCK

a) Authorized

Unlimited common and preferred shares without par value.

b) Share issuance details

Share capital transactions during the year ended August 31, 2025 were as follows:

Issued 1,595,000 common shares from the exercise of warrants for proceeds of $659,800 and transferred a fair value of $14,465 from reserves to share capital in relation to the exercise.
Issued 725,000 common shares from the exercise of stock options for proceeds of $219,250 and transferred a fair value of $166,152 from reserves to share capital in relation to the exercise.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

9. CAPITAL STOCK (CONTINUED)

Closed a non-brokered private placement comprising of 6,591,995 at $0.55 per unit for proceeds of $3,625,597. Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to acquire an additional common share of the Company at a price of $0.70 per share for a period of five years from the date of issuance. The Company paid finder’s fees of $22,000 cash, issued 103,928 finder’s warrants valued at $75,165 at an exercise price of $0.55 per share for a period of five years from the date of issuance, 63,928 shares valued at $52,421, and $19,036 of additional cash share issuance costs in relation to the financing.
Closed a non-brokered private placement comprising of 1,940,152 flow-through units (“FT Unit”) at $0.66 per FT Unit for proceeds of $1,280,500. Each FT Unit consists of one flow-through common share and one non-flow-through share purchase warrant (“NFT Warrant”). Each NFT Warrant entitles the holder to acquire an additional non-flow-through common share of the Company at a price of $1.00 per share for a year of two years from the date of issuance. The Company issued 90,909 finder’s warrants exercisable at $0.66 for a period of two years valued at $31,078, paid $60,000 of cash share issuance costs in relation to the financing, recorded a value of $135,811 to reserves in relation to the warrants and paid $6,473 of additional share issuance costs in relation to the financing.
Issued 100,000 common shares at a fair value of $71,000 in connection with finder’s fee agreement for the Company’s Alotta property (Note 6).
Issued 5,106,017 shares at a fair value of $4,723,638 for further acquisition in mining interest (Note 7).

Share capital transactions during the year ended August 31, 2024 were as follows:

Issued 3,996,205 common shares from the exercise of warrants for proceeds of $1,218,013.
Issued 350,000 common shares from the exercise of stock options for proceeds of $91,000 and transferred a fair value of $79,319 from reserves to share capital in relation to the exercise.
Closed a non-brokered private placement comprising of 2,480,000 flow-through units (“FT Unit”) at $0.25 per FT Unit for proceeds of $620,000 and 840,000 non-flow-through units (“NFT Unit”) at $0.25 per NFT Unit for proceeds of $210,000. Each FT Unit consists of one flow-through common share and one non-flow-through share purchase warrant (“NFT Warrant”). Each NFT Warrant entitles the holder to acquire an additional non-flow-through common share of the Company at a price of $0.28 per share for a period of three years from the date of issuance. Each NFT Unit consists of one common share and one NFT Warrant which will enable the holder to purchase one common share of the Company at a price of $0.28 per share for a period of three years from the date of issuance. The Company paid $18,919 of cash share issuance costs in relation to the financing.
Issued 1,159,167 common shares with a fair value of $776,642 to settle debt totalling $741,868 for a loss on settlement of debt in the amount of $34,775.
Closed a private placement comprising of 8,352,750 units at $0.64 per unit for proceeds of $5,345,760. Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to acquire an additional common share of the Company at a price of $0.80 per share for a period of three years from the date of issuance. Upon closing of the private placement, the Company paid to the agent a cash commission of $305,746 and issued 500,727 non-transferrable compensation warrants exercisable at $0.64 for two years from the closing date at a fair value of $135,136 calculated using the Black Scholes Pricing Model. Each compensation warrant consists of one common share and one share purchase warrant of the Company. Each warrant entitles the holder to acquire an additional common share of the Company at a price of $0.80 per share for a period of three years from the date of issuance of the compensation warrants. The Company paid an additional $243,999 in cash share issuance costs in relation to the financing.
Issued 100,000 common shares at a fair value of $52,000 in connection with finder’s fee agreement for the Company’s Alotta property (Note 6) of which $6,500 was recorded as an obligation to issue shares during the year ended August 31, 2023.
Issued 200,000 common shares at a fair value of $96,000 in connection with a finder’s fee agreement.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

9. CAPITAL STOCK (CONTINUED)

Issued 3,111,186 shares at a fair value of $1,462,755 for an investment in associate (Note 7).
Closed a non-brokered private placement comprising of 687,500 flow-through units (“FT Unit”) at $0.80 per FT Unit for proceeds of $550,000. Each FT Unit consists of one flow-through common share and one non-flow-through share purchase warrant (“NFT Warrant”). Each NFT Warrant entitles the holder to acquire an additional non-flow-through common share of the Company at a price of $1.10 per share for a period of one year from the date of issuance. The Company paid $30,000 of cash share issuance costs in relation to the financing and 37,500 finder’s warrant under the same terms at a fair value of $7,892 calculated using the Black Scholes Pricing Model.

c) Treasury shares

On December 13, 2023, the Company and Aion entered into a subscription agreement to acquire 20% interest in Aion. Pursuant to the agreement, Aion received 1,602,565 common shares of the Company at a price of $0.39 per share, for a total aggregate value of $633,013.

On April 15, 2024, the Company and Aion entered into a subscription agreement to acquire an additional 20% interest in Aion. Pursuant to the agreement, Aion received 1,508,621 common shares of the Company at a price of $0.55 per share, for a total aggregate value of $829,742.

On February 19, 2025, the Company and Aion entered into a subscription agreement to acquire an additional 20% interest in Aion. Pursuant to the agreement, Aion received 2,873,564 common shares of the Company at a price of $1.10 per share, for a total aggregate value of $3,160,920.

As at February 19, 2025 (the acquisition date), Aion had previously sold 20,000 shares of the Company. The remaining shares of 5,964,750 were valued at $6,561,225 on February 19, 2025.

As at August 31, 2025, Aion sold an additional 28,400 shares of the Company for proceeds of $26,545 and acquired an additional 5,000 shares at a cost of $4,060.

Upon obtaining control of Aion on February 19, 2025, common shares of the Company held by Aion represent reciprocal shareholdings. In the consolidated financial statements, these shares are accounted for as treasury shares in accordance with IFRS Accounting Standards and are presented as a deduction from equity at cost. As at August 31, 2025, Aion held 5,941,350 shares of the Company with total costs of $4,595,751.

d) Stock options

The Company’s plan allows the directors to grant stock options to directors, officers, employees and consultants to purchase up to a total of 10% of the issued and outstanding common shares. No stock option granted under the plan is transferable by the optionee other than by will or the laws of descent and distribution, and each stock option is exercisable during the lifetime of the optionee only by such optionee.

A summary of the Company’s outstanding share purchase options and the changes during the year are presented below:

	Number of Options	Weighted Average Exercise Price ($)
Balance – August 31, 2023	5,299,210	0.50
Granted	4,790,000	0.29
Cancelled/expired	(1,575,105)	0.53
Exercised	(350,000)	0.26
Balance – August 31, 2024	8,164,105	0.40
Granted	7,075,000	0.69
Exercised	(725,000)	0.30
Cancelled/expired	(1,319,105)	0.43
Balance – August 31, 2025	13,195,000	0.56

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

CAPITAL STOCK (CONTINUED)

Number of Options outstanding	Exercise Price ($)	Expiry Date	Number of options exercisable
800,000*	0.26	November 1, 2025	800,000
1,550,000	0.59	February 18, 2026	1,550,000
40,000	0.64	May 31, 2026	40,000
980,000	0.44	February 21, 2027	980,000
400,000	0.56	June 2, 2027	400,000
500,000	0.62	June 25, 2027	500,000
2,150,000	0.26	November 1, 2028	2,150,000
375,000	0.53	January 22, 2029	375,000
350,000	0.64	May 31, 2029	350,000
2,400,000	0.48	September 4, 2029	2,400,000
3,150,000	0.89	February 10, 2030	3,150,000
500,000	0.71	June 10, 2030	500,000
13,195,000			13,195,000

Subsequent to August 31, 2025, 800,000 options were exercised for proceeds of $208,000.

e) Stock-based compensation

During the year ended August 31, 2025, the Company granted 2,500,000 stock options at an exercise price of $0.48 per share, 3,175,000 stock options at an exercise price of $0.89 per share, 200,000 stock options at an exercise price of $0.56 per share, 500,000 stock options at an exercise price of $0.71 per share, 500,000 stock options at an exercise price of $0.62 per share, and 200,000 stock options at an exercise price of $0.56 per share. The total stock-based compensation recognized on stock options granted during the year ended August 31, 2025 was $4,327,032.

During the year ended August 31, 2024, the Company granted 4,790,000 stock options at a weighted average exercise price of $0.29 per share. The total stock-based compensation recognized on stock options granted during the year ended August 31, 2024 was $1,242,995.

The weighted average fair value of each stock option granted during the year ended August 31, 2025 was $0.53 (year ended August 31, 2024 - $0.21), calculated using the Black-Scholes Option Pricing Model on the grant date using the following weighted average assumptions:

	Year ended August 31, 2025	Year ended August 31, 2024
Risk-free interest rate	2.23%	4.12%
Expected life of option	3.72 years	3.87 years
Expected dividend yield	0%	0%
Expected stock price volatility	103.66%	129.94%

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

9. CAPITAL STOCK (CONTINUED)

f) Share purchase warrants

A summary of the Company’s outstanding share purchase warrants and the changes during the year are presented below:

	Number of Warrants	Weighted Average Exercise Price ($)
Outstanding – August 31, 2023	8,530,706	0.38
Issued	12,360,250	0.68
Expired	(3,906,135)	0.50
Exercised	(3,996,205)	0.30
Outstanding – August 31, 2024	12,988,616	0.65
Granted	8,532,147	0.77
Exercised	(1,575,000)	0.41
Expired	(1,020,866)	0.81
Outstanding – August 31, 2025	18,924,897	0.72
Expiry Date	Number of Warrants	Exercise Price ($)
---	---	---
November 1, 2026	2,555,000	0.28
March 26, 2027	7,837,750	0.80
June 5, 2027	1,940,152	1.00
February 3, 2030	6,591,995	0.70
	18,924,897

g) Finder’s Warrants

A summary of the Company’s outstanding finder’s warrants and the changes during the year are presented below:

	Number of Warrants	Weighted Average Exercise Price ($)
Outstanding – August 31, 2023		-
Issued	538,227	0.67
Outstanding – August 31, 2024	538,227	0.67
Issued	194,837	0.60
Exercised	(20,000)	0.55
Expired/cancelled	(37,500)	1.10
Outstanding – August 31, 2025	675,564	0.63

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

9. CAPITAL STOCK (CONTINUED)

g) Finder's Warrants (continued)

Expiry Date	Number of Warrants	Exercise Price ($)
March 26, 2026*	500,727	0.64
June 5, 2027	90,909	0.66
February 3, 2030	83,928	0.55
	675,564

*477,728 of the warrants are compensation warrants which consist of one common share and one share purchase warrant of the Company. Each warrant entitles the holder to acquire an additional common share of the Company at a price of $0.80 per share until March 26, 2027.

During the year ended August 31, 2025, the Company recognized $106,243 (2024 - $143,028) in share issuance costs for $194,837 (2024 - $538,227) finder's warrants issued in the year.

The weighted average fair value of the warrant granted during the year ended August 31, 2025 and the year ended August 31, 2024 was calculated using the Black-Scholes Option Pricing Model on the grant date using the following weighted average assumptions:

	Year ended August 31, 2025	Year ended August 31, 2024
Risk-free interest rate	3.90%	4.15%
Expected life of option	2.49 years	1.93 years
Expected dividend yield	0%	0%
Expected stock price volatility	134.16%	134.37%

10. FLOW-THROUGH SHARE PREMIUM LIABILITY

During the year ended August 31, 2025 and 2024, the Company issued a tranche of flow-through shares and estimated the value of the flow-through premium associated with those shares to be $Nil.

The Company is obligated to incur the qualifying expenditures by December 31, 2025. As at August 31, 2025, the Company satisfied its flow-through obligations.

11. RELATED PARTY TRANSACTIONS

During the year ended August 31, 2025, the Company incurred $180,000 (2024 - $124,000) in consulting fees from a company controlled by the COO and director of the Company. As at August 31, 2025, $239,413 (2024 - $18,257) was owing to the COO, director and his company.

During the year ended August 31, 2025, the Company issued a promissory note to its COO and director, who is also a director and shareholder of Aion, in connection with the acquisition of 80% interest in Aion (Note 7). The promissory note had a principal amount of $61,682 and accrued interest of $1,033, both amounts were outstanding as at August 31, 2025.

During the year ended August 31, 2025, the Company incurred professional fees of $60,000 (2024 - $60,000) to a firm where an officer of the Company is a partner. As at August 31, 2025, $31,500 (2024 - $5,250) was owing to this firm.

During the year ended August 31, 2025, the Company incurred exploration and evaluation expenses of $72,000 (2024 - $72,000) from a company controlled by the president of the Company. As at August 31, 2025, $67,700 (2024 - $28,400) was owing to this company.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

11. RELATED PARTY TRANSACTIONS (CONTINUED)

During the year ended August 31, 2025, the Company incurred consulting fees of $79,243 (2024 - $nil) to the VP Finance of the Company. As at August 31, 2025, $143,242 (2024 - $nil) was owing to the VP Finance of the Company.

During the year ended August 31, 2025, the Company incurred consulting fees of $135,000 (2024 - $nil) to the CEO and Director of the Company. As at August 31, 2025, $63,711 (2024 - $nil) was owing to the CEO and Director of the Company.

During the year ended August 31, 2025, the Company incurred consulting fees of $84,094 (2024 - $nil) to the CEO and Director of Aion. As at August 31, 2025, $238,950 (2024 - $nil) was owing to the CEO and Director of Aion.

As at August 31, 2025, $226,517 (2024 - $nil) was owing to the County Manager of Aion and $79,249 (2024 - $nil) was owing to a former director of Aion.

During the year ended August 31, 2025, the Company granted stock options to key management members valued at $2,394,071 (2024 - $589,229).

12. SEGMENTED INFORMATION

The Company operates in one reportable operating segment, being the acquisition, exploration and development of exploration and evaluation assets. The location of the Company’s exploration and evaluation assets are disclosed in Note 6.

13. MANAGEMENT OF CAPITAL

The Company defines its capital as all components of shareholders’ equity. The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern.

In order to maintain its capital structure, the Company, is dependent on equity funding and when necessary, raises capital through the issuance of equity instruments, primarily comprised of common shares. The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will make changes to its capital structure as deemed appropriate under the specific circumstances.

The Company is not subject to any externally imposed capital requirements or debt covenants, and does not presently utilize any quantitative measures to monitor its capital. There were no changes to the Company’s approach to managing capital during the year.

14. FINANCIAL INSTRUMENTS AND RISKS

Fair Value

The Company’s financial instruments consist of cash, accounts payable, convertible debentures, promissory notes and due to related parties. The fair value of all financial instruments approximate their carrying values. Cash is classified as fair value through profit and loss. Accounts payable, convertible debentures, promissory notes and due to related parties are classified as amortized cost.

The Company’s financial instrument is exposed to a number of risks that are summarized below:

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due or can do so only at excessive cost. The Company is exposed to the risk that it may not have sufficient liquid assets to meet its commitments associated with these financial liabilities.

The Company’s approach to managing liquidity is to ensure that it will always have sufficient cash to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Company’s reputation. To the extent that the Company does not believe it has sufficient liquidity to meet these obligations, management will consider securing additional funds through equity transactions. The Company manages its liquidity risk by continuously monitoring cash flow requirements relating to its anticipated exploration and evaluation activities as well as general overhead requirements. Liquidity risk is assessed as high.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

14. FINANCIAL INSTRUMENTS AND RISKS (CONTINUED)

Credit Risk

Credit risk is the risk of loss associated with a counter party’s inability to fulfill its payment obligations. The Company’s credit risk is primarily attributable to its cash balances and amounts due from former director. The Company manages its credit risk on bank deposits by holding deposits in high credit quality banking institutions in Canada.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As the Company’s cash is currently held in non-interest bearing bank account, management considers the interest rate risk to be minimal. The Company is not exposed to interest rate fluctuations.

Commodity Price Risk

The ability of the Company to finance the exploration and development of its properties and the future profitability of the Company is directly related to the market price of the primary minerals identified in its mineral properties. Mineral prices fluctuate on a daily basis and are affected by a number of factors beyond the Company’s control. A sustained, significant decline in the prices of the primary minerals or in the share prices of junior mineral exploration companies in general, could have a negative impact on the Company’s ability to raise additional capital. Sensitivity to commodity price risk is remote since the Company has not established any reserves or production.

Foreign Exchange Risk

Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the foreign currency exchange rates. The Company’s 80% owned Colombian subsidiary is exposed to currency risk as it incurs expenditures that are denominated in the Colombian Peso. The Company’s former Mexican subsidiary was exposed to currency risk as it incurred expenditures that were denominated in Mexican Pesos and United States Dollars while its functional currency is the Canadian Dollar. The Company does not hedge its exposure to fluctuations in foreign exchange rates.

A 5% change in the foreign exchange rate would not have a material impact to the Company’s net loss.

15. SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash investing and financing activities during the year ended August 31, 2025:

Issued 5,106,017 shares at a fair value of $4,723,638 for further acquisition in mining interest (Note 6).
Issued 100,000 common shares at a fair value of $71,000 in connection with finder’s fee agreement for the Company’s Alotta property (Note 6).
Issued 63,928 common shares at a fair value of $52,421 and 194,837 finder’s warrants at a fair value of $106,242 for finder’s fees in connection with a private placement.
Transferred a fair value of $166,152 from reserves to share capital on the exercise of stock options and $14,465 on the exercise of warrants
Included $401,202 in exploration and evaluation assets, which relate to accounts payable and accrued liabilities.

Non-cash investing and financing activities during the year ended August 31, 2024:

Issued 3,111,186 shares at a fair value of $1,462,755 for an investment in associate.
Issued 100,000 shares at a fair value of $52,000 for an exploration and evaluation asset of which $6,500 was previously recorded as an obligation to issue shares.
Issued 200,000 shares at a fair value of $96,000 for finder’s fees, recorded to stock-based compensation.
Transferred a fair value of $79,319 from reserves to share capital on the exercise of stock options.
Issued 538,227 finder’s warrants at a fair value of $143,028.
Recorded a fair value of $68,750 in the reserves related to the issuance of 687,500 warrants included in the flow-through units issuance closed on June 28, 2024.

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

16. INCOME TAX

A reconciliation of the expected income recovery to the actual income tax recovery is as follows:

	2025	2024
	$	$
Net loss and comprehensive loss for the year	(6,251,789)	(3,172,134)
Statutory tax rate	27%	27%
Expected income tax recovery	(1,688,000)	(856,000)
Non-deductible expenditures and non-taxable revenues	1,175,000	3,114,000
Unrecognized deferred tax (liabilities) assets	585,000	(2,096,000)
Share issue costs	(72,000)	(162,000)
Deferred income tax recovery	-	-

The Company has the following deductible temporary differences for which no deferred tax asset (liability) has been recognized:

	2025	2024
	$	$
Capital assets	15,000	-
Non-capital losses	2,527,000	1,616,000
Exploration and evaluation assets	(524,000)	423,000
Financing fees	190,000	136,000
	2,208,000	2,175,000

As at August 31, 2025, the Company has exploration and development expenditures of $5,674,000 (2024 - $2,950,000) in Canada and $2,663,000 (2024 - $nil) in Colombia, the non-capital losses of $9,359,000 (2024 - $6,234,000) in Canada and $nil (2024 - $nil) in Colombia that may be applied against future taxable income for Canadian and Colombian income tax purposes.

As at August 31, 2025, the Company had the following deductible temporary differences in respect of which no deferred tax asset was recognized:

Expiry	Tax Losses $	Resource Pools $	Financing Fees $	Capital Assets $
One to five years	-	-	704,000	-
After five years	9,359,000	-	-	-
No expiry date	-	8,337,000	-	875,000
	9,359,000	8,337,000	704,000	875,000

FORGE RESOURCES CORP.

Notes to the Consolidated Financial Statements

For the years ended August 31, 2025 and 2024

(Expressed in Canadian Dollars)

17. SUBSEQUENT EVENTS

Subsequent to August 31, 2025, the Company:

Closed the first tranche of a non-brokered private placement comprising of 1,409,093 flow-through units (“FT Unit”) at a price of $0.55 per FT Unit for aggregate gross proceeds of $775,001. Each FT Unit consists of one flow-through common share and one transferrable non-flow-through common share purchase warrant ("NFT Warrant"). Each NFT Warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.70 for a period of 36 months from the date of issuance. The Company paid finder’s fees consisting of a cash commission of $39,900 in relation to the financing and issued 72,545 finder’s warrants exercisable for a period of 36 months from the closing of the private placement at a price of $0.55 per share.
Closed the second tranche of a non-brokered private placement comprising of 909,092 flow-through units (“FT Unit”) at a price of $0.55 per FT Unit for aggregate gross proceeds of $500,001. Each FT Unit consists of one flow-through common share in the capital of the Company and one-half of one transferrable non-flow-through common share purchase warrant ("NFT Warrant"). Each NFT Warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.70 for a period of 36 months from the date of issuance. The Company paid finder’s fees to one finder consisting of a cash commission of $35,000 and 63,636 warrants exercisable for a period of 36 months from the closing of the private placement at a price of $0.55 per share.
Granted 500,000 stock options at an exercise price of $0.51 expiring September 30, 2027, 500,000 stock options at an exercise price of $0.74 expiring October 15, 2027, and 750,000 stock options at an exercise price of $0.74 expiring October 30, 2030.
Aion sold 1,955,000 of its shares of the Company for total proceeds of $884,238.

AI assistant

Forge Resources Corp. — Audit Report / Information 2025

47274_rns_2025-12-24_aa206bbe-f287-498f-9077-dd8772a704da.pdf

FORGE RESOURCES CORP.

Independent Auditor’s Report

Opinion

Basis for Opinion

Material Uncertainty Related to Going Concern

Key Audit Matters

Step Acquisition of Aion Mining Corp. and Accounting for Cross-Shareholdings

Key Audit Matter Description

SERVICE

INTEGRITY

TRUST

Audit Response

Assessment of Indicators of Impairment of Exploration and Evaluation Assets

Key Audit Matter Description

Audit Response

Other Information

Responsibilities of Management and those Charged with Governance for the Consolidated Financial Statements

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

FORGE RESOURCES CORP.

FORGE RESOURCES CORP.

1. NATURE OF OPERATIONS AND GOING CONCERN

2. BASIS OF PREPARATION

2. BASIS OF PREPARATION (CONTINUED)

3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

a) Significant judgments

b) Significant estimates and assumptions

4. MATERIAL ACCOUNTING POLICY INFORMATION

a) Foreign Currency Translation

Transactions and balances:

b) Cash

c) Property and Equipment

d) Exploration and Evaluation Assets

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

e) Investments in associates

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

f) Impairment of Non-Financial Assets

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

g) Financial Instruments

(i) Classification

(ii) Measurement

(iii) Impairment of financial assets at amortized cost

(iv) Derecognition

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

Financial liabilities

h) Provisions

i) Unit offerings

j) Reserves

k) Flow-through shares

l) Stock-based compensation

4. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)

m) Loss Per Share

n) Income Taxes

o) Non-Controlling Interest

q) Accounting pronouncements not yet adopted

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

Alotta Property, Yukon, Canada

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

La Estrella Property, Colombia

6. EXPLORATION AND EVALUATION ASSETS (CONTINUED)

7. INVESTMENT IN AION MINING CORP.

7. INVESTMENT IN AION MINING CORP. (CONTINUED)

Step acquisition of Aion

8. CONVERTIBLE DEBENTURES

9. CAPITAL STOCK

9. CAPITAL STOCK (CONTINUED)

9. CAPITAL STOCK (CONTINUED)

c) Treasury shares

d) Stock options

9. CAPITAL STOCK (CONTINUED)

f) Share purchase warrants

g) Finder’s Warrants

9. CAPITAL STOCK (CONTINUED)

10. FLOW-THROUGH SHARE PREMIUM LIABILITY

11. RELATED PARTY TRANSACTIONS

11. RELATED PARTY TRANSACTIONS (CONTINUED)

12. SEGMENTED INFORMATION

13. MANAGEMENT OF CAPITAL

Forge Resources Corp. Audit Report / Information 2025