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Fredonia Mining Inc. Management Reports 2026
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Management Reports
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Fredonia Mining Inc.
FREDONIA MINING INC.
Management’s Discussion & Analysis
For the Year ended September 30, 2025
This Management Discussion and Analysis (“MD&A”) provides relevant information on the operations and financial condition of Fredonia Mining Inc. (“Fredonia” or the “Company”) for the year ended September 30, 2025. This MD&A should be read in conjunction with the audited consolidated financial statements for the years ended September 30, 2025 and 2024 prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. All dollar values are expressed in US dollars, unless otherwise indicated. The Fredonia Board of Directors approved both this MD&A and the audited consolidated financial statements for the years ended September 30, 2025 and 2024 on January 28, 2026.
This MD&A provides information that the management of Fredonia believes is important to assess and understand the results of operations and financial condition of the Company. Our objective is to present readers with a view of Fredonia from management’s perspective by interpreting the material trends and activities that affect the operating results, liquidity, and financial position of Fredonia. All monetary amounts unless otherwise specified are expressed in US dollars. This discussion contains forward looking information that is qualified by reference to, and should be read in conjunction, with the “Caution Regarding Forward Looking Statements” below.
Caution Regarding Forward Looking Statements
Readers are cautioned that actual results may differ materially from the results projected in any “forward-looking” statements included in the foregoing report, which involve a number of risks or uncertainties. This MD&A contains “forward-looking statements” and “forward-looking information” within the meaning of the applicable Canadian securities legislation. Forward-looking statements are not historical facts and include statements regarding the Company’s planned development activities, anticipated future profitability, losses, revenues, expected future expenditures, the Company’s intention to raise new financing, sufficiency of working capital for continued operations and other statements regarding anticipated future events and the Company’s anticipated future performance.
Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “continue”, “anticipates” or “does not anticipate”, or “believes” or a variation of such words and phrases that state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All forward-looking statements are based on our beliefs and assumptions based on information available at the time the assumption was made. While Fredonia considers its assumptions to be reasonable and appropriate based on the current information available, there is a risk that they may not be accurate. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievement of Fredonia to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to the integration of acquisitions, foreign exchange controls, government regulations, metal prices, title disputes, environmental matters and all risks generally associated with the exploration and exploitation of mineral resources.
Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Fredonia does not undertake to update any forward-looking statements that are incorporated by reference herein, except as required by law.
Business Overview
Fredonia Mining Inc. (the “Company”) is a mining extraction company incorporated under the Business Corporations Act (Alberta) on September 19, 2012, under the name Richmond Road Capital Corporation (“RRCC”). On June 24, 2021, the Company completed a transaction (the “Transaction”) whereby RRCC acquired all of the outstanding shares of Fredonia Management Limited, a private corporation registered under the laws of the territory of the British Virgin Islands with mining assets in the country of Argentina. The Transaction constituted a reverse asset acquisition in accordance with IFRS, whereby the shareholders of Fredonia Management Limited took control of RRCC. Following the completion of the Transaction, the Company changed its name from Richmond Road Capital Corporation to Fredonia Mining Inc. References within this MD&A to the “Company” for periods, dates and/or transactions prior to the Transaction are in reference to Fredonia Management Limited, as the corporate entity of interest pre-Transaction.
Alternatively, references within this MD&A to the "Company" for periods, dates and/or transactions subsequent to the Transaction are in reference to Fredonia Mining Inc., as the corporate entity of interest post-Transaction. The comparative periods reflected in this MD&A are those of Fredonia Management Limited. The Company is a publicly-traded company with its shares listed on the TSX Venture Exchange ("TSXV"). The Company operates from its primary office in Toronto, Ontario, Canada. Its registered head office is located at 82 Richmond St. East, Toronto, Ontario, M5C 1P1, Canada.
The Company, directly or indirectly, owns a 100% interest in certain license areas, all within the Deseado Massif geological region in the Province of Santa Cruz, Argentina. The Company's only material property is the advanced El Dorado-Monserrat Project. The Company also owns the El Aguila, Hornia (Petrificados), and Anita properties.
The Company has not yet established whether its mineral properties contain resources or reserves that are economically recoverable. The recovery of amounts capitalized as mineral properties is dependent upon the discovery of economically recoverable resources or reserves, the ability of the Company to arrange appropriate financing to complete the development of properties, and upon future profitable production, or alternatively, upon the Company's ability to dispose of its interests on an advantageous basis, all of which are uncertain.
The Company's future performance depends on, among other things, its ability to discover and develop ore reserves at commercially recoverable quantities, the prevailing market price of commodities it produces, the Company's ability to secure required financing, and in the event ore reserves are found in economically recoverable quantities, the Company's ability to secure operating and environmental permits to commence and maintain mining operations.
Mineral Properties
El Dorado-Monserrat Project:
The El Dorado-Monserrat Project is located in an area of low rolling hills in the Deseado Massif of Santa Cruz Province, close to a number of known mines and prospects. Santa Cruz Province is part of the region of Patagonia which has the Andes Mountains to the west and the Atlantic coast to the east. In general, the area is very sparsely populated, and a large proportion of employment is in sheep farming which is managed from widely scattered ranches called "estancias".
The nearest major centres to the Fredonia licences are Puerto Deseado (population 10,000), Puerto San Julian (population 6,000), Caleta Olivia (population 36,000) and Comodoro Rivadavia (population 140,000) to the northeast, Gobernador Gregores in the southwest. Río Gallegos (population 79,000), the capital of Santa Cruz Province, lies to the south of the project areas. These major centres can provide basic goods and services, and the national power grid serves these centres. Comodoro Rivadavia and Río Gallegos are serviced with national airports. A well-maintained concrete airstrip is located at Puerto Deseado, serviced via small to mid-size charter aircraft. Workers are readily available from the surrounding area.
The drilling data collected by the Company and the historical drilling, trenching and other data collected by previous operators has been reviewed by competent geological advisory professionals ("Qualified Persons") who have concluded that the El Dorado-Monserrat Project is a Property of Merit with clear potential for low sulphidation epithermal vein style gold-silver mineralisation. The El Dorado-Monserrat Project is strategically located near to the major Cerro Vanguardia gold mine and is underlain by significant amounts of Chon Aike Formation rhyolitic volcanic rocks and by Bajo Pobre Formation. These formations are the principal host to mineralisation in the Deseado Massif.
There is significant potential and the drilling, trenching and surface exploration conducted on the other prospects by prior operators are adequate to demonstrate the overall potential of the El Dorado-Monserrat Project. Additional exploration, including surface sampling, trenching, re-assaying of available drill core and additional drilling will be required to fully assess the potential of the prospects in the area. In addition, a thorough review of historical data is recommended.
EDM Project comprise two mineralized trends with multiple drilling targets. The mineralization targets are open along strike and at depth and shown realistic upside to be a multimillion ounce project.
> Northern Monserrat sector: comprises an area 3.5 km long and 3.2 km wide, and contain a series of targets including Monserrat West, Bajo Pedernal, Main Vein, Abanico, Entrevero I and II, Gladys and Monserrat East, among others, including drill holes that intercepted: 6.0 m @ 14.43 g/t Au Eq. at Main Veins; 2.4 m @ 18.05 g/t Au Eq. at Monserrat West; 4.0 m @ 2.42 g/t Au Eq. at Bajo Pedernal.
Monserrat West: is located on a northwest dilate in a 1.6 km corridor that contains the mineralized zones expressed as veining and brecciation with a north to north-northeast attitude, dipping 55° to 75° to the east. The mineralized structure is open in both directions and at depth.
The sparse surface expression is characterized by a silica cap, secondary oxidation, leaching, breccia and residual quartz textures. The relative anomalous of pathfinder elements (As, Sb) over anomalous gold values at surface is considered a significant vector to the depth potential.
Interpretation of historical drilling suggests that the mineralized zones are characterized by argillic alteration with veins composed of variably barite, calcite, pyrite, sphalerite, galena, secondary silver minerals, iron oxides, limonite, and clays, and a second silica-rich alteration, (silicification) which is further interpreted as the predominant event for the gold mineralization.
In the central sector of Monserrat Oeste, drill holes outline a main mineralized feeder approximately 200 meters long x 200 meters deep, dipping 65° to the south. Average intercepts range between 0.5 and 5.00 m (apparent width), with grades up to 13.50 g/t Au and 7,000 ppm Ag plus base metals.
The recent drilling program evaluated the southern sector of Monserrat Oeste, intersecting 6m of hydrothermal breccias with light/dark gray quartz with abundant sulfides.
Bajo Pedernal: the Bajo Perdernal system has very little surface expression (jasperoidal veins) and occupied is an area 1 km wide by 2 km long, covered by modern deposits, where chalcedonia and barite float are present. under the covers, barite and quartz veins with significant mineralization demonstrates continuity between Main Vein and Monserrat Oeste, in the 1 km width of the subparallel vein field with high gold-silver grade.
The structure remains unexplored and on the basis of geological / structural setting, ground geochemistry and drill information potentially gold bearing system.
Main Vein: The Main Vein System comprises an extensive quartz and barite veins extending in a north-south direction which carries significant gold and silver values. The total strike length of the Main Vein and Abanico areas, from trench intercepts in the south-southwest to drill hole intercepts in the north-northeast, is approximately 2.8 km and mineralised zones vary in thickness from less than 1 m to over 10 m. The veins occupy a north-striking, sinistral shear zone. In the south, the system swells to around 1 km in width, hosted by andesitic Bajo Pobre formation rocks. At surface, continuous veins up to 3.5 m thick form in dilational jogs in this area.
The veins consist mainly of multistage quartz, with isolated breccias composed of hydrothermally altered wallrock and vein fragments cemented by fine-grained quartz. Base metals are present in very low concentrations (<0.15%) and neither base metal sulfides nor their weathering products have been observed in outcrop, though minor veins with galena and sphalerite correlate with high gold values in drill core.
A three line IP survey conducted in 2012 to the north of the Main Veins identified the interpreted extension of the mineralised structure under the quaternary basalt over 1.5 km north of the most northern drill hole at Main Veins.
There are several other significant areas of identified Au-Ag anomalous with varying levels of exploration which Fredonia will evaluate and consider for drilling.
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Abanico: major conjugate splays occurs off the north-south system, with strong veining trending in a southeasterly direction. Between the splays and the main system, dilatant structures have been developed and extensive breccia zones occur, with potential for large tonnage, low grade mineralisation.
Entrevero I and II: Further south, in the Abanico area, two additionally objectives are present.
1- A horsetail structure develops off a main vein that strikes N20° and dips from subvertical to 65°E. The NW vein splay shows strikes from N330° to N300° with dips from subvertical to 70° to the NE.
2- A fault jog develops from the main structure with a N350° strike, and NW-WNW sigmoid veins. The host rock is an andesite belonging to Bajo Pobre Formation, exhibiting argillic alteration in the footwall (to the west), and strong oxidation towards the hanging wall (to the east). The N-S veins are mainly composed of barite, while the NW-WNW veins vary from microcrystalline to coarse quartz, with sulphides: pyrite + chalcopyrite + acanthite + hematite + iron oxide + manganese oxide. The horsetail and the fault jogs are configured from a NW dextral shear, with a NE-SW maximum stress.
Gladys: a structure dominated by a quartz vein located 1.5km southeast of Main Veins. It is controlled by a Dacitic Dyke, intruded on the andesitic lavas. The strike is N300/80°W and the thickness is up to 2.4m. three pulses are identified: hydrothermal breccia with hematite cement, barite vein, and black vein of sulphides. One drill hole of 210m depth was drilled in Q3 of 2022, that intercept 3,0 m of vein from 86 meters with 16.9 ppm Silver.
Monserrat Est: located 3km at the East of Main Veins, the structure is emplaced in a right-hand NW structural corridor as shown by friction mirrors and veinlet distribution, with two preferential structures (N300° to N330° and N350° to N20°) and dipping from -90° to 65° to the east. In the north, the predominant host rock corresponds to lavas and agglomerates mafic units, with a general trend N80°/15° to the south. In the centre-south, it changes to dacitic tuffs with sub-horizontal lamination.
In the southern sector, the host rock is a subvolcanic dacitic dome. The hydrothermal fills have thicknesses from a few cm to 40 cm, accompanied by silicification up to 10m, with argillic alteration extending up to 30 meters towards both walls. The pervasive silicification is intense while the filling of the breccias and veins is opal-chalcedony, translucent quartz and grey silica veins and veinlets with scarce mineralization in pyrite boxworks, filling to jarosite and patches of copper colour. Changes in azimuth and host rock control the size of the veins and the extent of pervasive alteration; while changes in the erosive level, control the phases of hydrothermal filling and mineralization.
> Southern Mineralized Corridor: comprises Herradura Hill, Beethoven, Pamela and Geiserites targets, including drill holes that intercepted: • 8.00 m @ 6.00 g/t Au Eq.; 3.00 m @ 12.65 g/t Au Eq.; 84.00 m @ 0.84 g/t Au Eq., including 0.50 m @ 4.80 g/t Au Eq.; 0.97 m @ 5.49 g/t Au Eq., and 1.00 m @ 4.46 g/t Au Eq. At Herradura Hill.
Beethoven: this prospect is in the southeastern part of the project area, where a series of at least 5 major subvertical quartz vein zones trend in a south-southeasterly direction along a strike length of at least 4 km within a zone about 2 km wide. Smaller veins occur between the major structures. The veins appear to have developed in response to dextral shearing and extend across the extreme southwestern corner of the project licence. They are hosted in ignimbrites and exhibit areas of focused hydrothermal alteration. The vein zones comprise multiple quartz structures up to 3 m wide containing chalcedonic and crystalline quartz, occasionally exhibiting well developed colloform banding and carbonate replacement textures. Barite is also present, together with small amounts of pyrite, arsenopyrite, jarosite and sericite.
La Herradura: low sulphidation deposit located in a mar-diatreme complex, just in the contact between andesitic volcanic rocks and dacitic dikes and domes inside a transtensive tectonic environment. The outcropping area of the diatreme is 1,100m x 180m and its depth is unknown. This body is a dacitic matrix breccia, with chalcedonic veins fragments, andesitic bombs, juvenile dacitic magma fragments and xenoliths from the host volcanic rock. The maar is inferred base on the surge deposits and the lapilli tuff ring.
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Gold mineralization is located in veins, hydrothermal breccias and stockworks of uncertain azimuth. These structures are syngenetic and epigenetic.
Mineralized hydrothermal breccias and veins were formed during and after the maar-diatreme stages, related to volcanic activity at La Herradura. Explosive phreatic breccias were followed by in-situ hydraulic breccias, and then by major veins as the system returned to steady-state geothermal conditions.
The anomalous, potentially ore grade, gold-silver intersections confirm and expand the area of interest identified by historic drilling and demonstrate wide low-grade Au-Ag intersections and ‘included’ higher grade zones.
The drill holes at La Herradura were drilled to target both the roughly east west mineralised trend including the central diatreme at La Herradura ‘hill’ and to expand the gold anomalous identified in the historic drilling which extends over 1,100m to depths of >200m. The current drill programmes have added potentially 300m of strike to the mineralised complex. The system remains open in all directions and Fredonia believes more drilling is warranted.
Pamela: group of structures located 3 km at the west of La Herradura. Two outcropping structures of up to 40 m length, and less than 0.5 m in thickness. Both structures are hosted in Chon Aike Formation and are composed of a fine, massive, light to dark grey quartz, with iron oxides (limonites and hematite) accompanied by minor barite, with main orientations N 60° E and EW. No fresh sulphides have been observed on surface however the intense oxidation observed may indicate the occurrence of sulphides at depth. Quartz floats are aligned along strike approximately 100m arranged in the same orientation of the outcrops.
Geiserites: just 700 meters north of La Herradura Hill, a geothermal field with evidence of paleo-thermal upwellings, requires a structural interpretation, to know its relationship with La Herradura Hill, and the potential towards depth. The orientation of the Sinter zone is considered very significant as this orientation is usually post mineralisation. The identification of another prospective zone in this trend further emphasises the potential of the area.
Exploration Programs:
During the first quarter of 2024, Fredonia worked on data compilation and digitization and data reinterpretation of drilling campaign results. New cross sections were made for Cerro Herradura and for Main Vein targets. Likewise, new hypotheses of the deposit model were developed mainly in the Southern Corridor, defining low sulfidation mineralization related to acid dome complexes. These works open new exploration scenarios and a new approach for the next drilling targets.
In the fourth quarter of 2022, Fredonia completed phase 3 of drilling which included, 12 drill holes for a total of 2,955.00 meters of DDH; Six drill holes at Herradura Hill, four drill holes at Bajo Pedernal, and two drill holes at the northern extension of the Main Vein.
During the reporting period over 2,319 samples (including standards, blanks, duplicates and check assay) were submitted for gold fire assays and multi-element inductively coupled plasma (ICP) to an independent certified laboratory, these were predominantly comprised of drill core samples.
The Phase 3 drilling program allowed:
- Increased mineral resources at Herradura Hill
- Defined a new exploration model at Northern Monserrat Sector
- Discovered four additional Ore-Shoots at Bajo Pedernal
- Discovered North extension at Main Veins
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The drill statistics for Phase 3 drilling is tabulated below:
| Hole ID | Target | Phase | Fasting | Northing | Altitude | Azimuth | Din | EOH |
|---|---|---|---|---|---|---|---|---|
| HDDH045 | Herradura Hill | III | 2531990 | 4632843 | 188 | 17 | -60 | 269,00 |
| HDDH046 | Herradura Hill | III | 2532061 | 4632731 | 179 | 17 | -45 | 284,00 |
| HDDH047 | Herradura Hill | III | 2532243 | 4632687 | 192 | 17 | -45 | 380,00 |
| HDDH048 | Herradura Hill | III | 2532364 | 4632755 | 206 | 17 | -50 | 335,00 |
| HDDH049 | Herradura Hill | III | 2532455 | 4632728 | 194 | 17 | -55 | 272,00 |
| HDDH050 | Herradura Hill | III | 2532169 | 4632779 | 210 | 17 | -60 | 272,00 |
| MVDDH077 | Mein Vein | III | 2529555 | 4639429 | 110 | -45 | 56,00 | |
| BPDDH01 | Bajo Pedernal | III | 2529054 | 4637900 | 223 | 279 | -45 | 200,00 |
| BPDDH02 | Bajo Pedernal | III | 2528900 | 4637900 | 214 | 279 | -45 | 221,00 |
| BPDDH03 | Bajo Pedernal | III | 2528750 | 4637900 | 211 | 279 | -45 | 302,00 |
| BPDDH04 | Bajo Pedernal | III | 2528450 | 4637900 | 214 | 279 | -45 | 302,00 |
| MVDDH078 | Main Vein | III | 2529538 | 4639184 | 201 | 79 | -60 | 62,00 |
Significant drill holes intercepts are tabulated below:
| Hole ID | From | To | Interval (*) | Au Eq g/t(**) | Au g/t | Ag g/t |
|---|---|---|---|---|---|---|
| HDDH045 | 38,5 | 39,25 | 0,75 | 2,11 | 1,97 | 10,24 |
| HDDH045 | 55 | 60 | 5 | 0,61 | 0,57 | 3,50 |
| HDDH045 | 159 | 243 | 84 | 0,82 | 0,38 | 32,74 |
| including | 167 | 167,5 | 0,5 | 4,8 | 0,71 | 307,1 |
| and | 175,9 | 176,87 | 0,97 | 5,49 | 4,34 | 86,08 |
| and | 226 | 227 | 1 | 4,46 | 1,79 | 200,5 |
| HDDH046 | 92 | 93 | 1 | 1,39 | 0,11 | 96,26 |
| HDDH047 | 83 | 84 | 1 | 4,58 | 3,14 | 107,98 |
| HDDH047 | 91 | 91,55 | 0,55 | 2,02 | 1,9 | 8,76 |
| HDDH047 | 99 | 107 | 8 | 0,5 | 0,45 | 3,92 |
| HDDH047 | 142 | 148 | 6 | 1,36 | 0,9 | 34,74 |
| HDDH047 | 269 | 277 | 8 | 6 | 5,26 | 55,65 |
| including | 274 | 277 | 3 | 12,65 | 11,77 | 66,12 |
| HDDH047 | 285,2 | 288,5 | 3,3 | 1,79 | 1,73 | 3,88 |
| including | 286,6 | 287,3 | 0,7 | 4,92 | 4,81 | 8,04 |
| HDDH048 | 62 | 71 | 9 | 0,63 | 0,57 | 4,63 |
| Hole ID | From | To | Interval (*) | Au Eq g/t(**) | Au g/t | Ag g/t |
|---|---|---|---|---|---|---|
| including | 67 | 70 | 3 | 1,6 | 1,47 | 9,99 |
| HDDH048 | 113 | 116,4 | 3,4 | 1,97 | 1,51 | 34,65 |
| HDDH048 | 149 | 161 | 12 | 1,1 | 0,89 | 15,89 |
| including | 149 | 149,4 | 0,4 | 5,04 | 4,81 | 17,07 |
| and | 155,5 | 156 | 0,5 | 5,19 | 5,07 | 8,64 |
| HDDH048 | 186 | 191 | 5 | 1,07 | 0,52 | 41,67 |
| including | 187 | 190 | 3 | 1,54 | 0,76 | 58,22 |
| HDDH048 | 220,6 | 230,2 | 9,6 | 1,04 | 0,76 | 21,16 |
| including | 224 | 224,6 | 0,6 | 4,27 | 3,67 | 44,75 |
| and | 229 | 230,2 | 1,2 | 3,42 | 3,26 | 12,21 |
| HDDH048 | 233 | 233,4 | 0,4 | 2,77 | 2,6 | 12,59 |
| HDDH049 | 42 | 47,6 | 5,6 | 2,26 | 1,92 | 25,92 |
| including | 45,2 | 47 | 1,8 | 4,66 | 4,19 | 35,06 |
| HDDH049 | 253,65 | 254,4 | 0,75 | 1,03 | 0,91 | 8,8 |
| HDDH050 | 39 | 40 | 1 | 3,67 | 3,37 | 22,21 |
| HDDH050 | 54 | 62 | 8 | 1,7 | 1,35 | 26,3 |
| including | 60 | 62 | 2 | 4,81 | 3,78 | 77,32 |
| HDDH050 | 71 | 72 | 1 | 1,26 | 1,02 | 17,99 |
| HDDH050 | 81 | 88 | 7 | 1,51 | 0,62 | 66,54 |
| including | 86,1 | 88 | 1,9 | 3,42 | 1,54 | 141,23 |
| BPDDH001 | 92,5 | 93,1 | 0,6 | 6,18 | 5,98 | 14,91 |
| BPDDH001 | 106 | 106,5 | 0,5 | 1,39 | 0,43 | 72,28 |
| BPDDH002 | 126,7 | 127 | 0,3 | 3,04 | 0,14 | 217,18 |
| BPDDH003 | 79,5 | 80 | 0,5 | 1,39 | 0,02 | 102,69 |
| BPDDH003 | 214 | 214,5 | 0,5 | 1,04 | 0,3 | 55,73 |
| BPDDH004 | 246 | 247 | 1 | 2,87 | 0,02 | 213,55 |
| MVDDH077 | 25 | 28 | 3 | 1,41 | 1,24 | 12,62 |
| including | 25 | 26 | 1 | 3,24 | 3,02 | 16,65 |
| MVDDH078 | 4,5 | 8,5 | 4 | 1,66 | 0,81 | 63,81 |
| including | 4,5 | 5 | 0,5 | 3,18 | 0,73 | 184,05 |
| and | 7 | 8,5 | 1,5 | 2,56 | 1,79 | 58,3 |
| MVDDH078 | 18,5 | 22,5 | 4 | 1,49 | 0,9 | 43,98 |
| including | 19,5 | 20,5 | 1 | 2,46 | 1,78 | 51,5 |
() Reported interval lengths are down-hole widths and not true widths.
(*) Gold equivalent ("Au Eq.") is calculated using metal prices of US$ 1,800/oz for Au and US$ 24/oz for Ag. The equation used is: Au Eq g/t = Au g/t + (Ag g/t + 75).
Au Eq assumes Au recovery of $90\%$ . The limited metallurgical studies by Fredonia (selective Bottle rolls from Main Veins material) have indicated high ( $>90\%$ ) recovery of gold in oxide material. The Cerro Vanguardia mine to the east of EDM with similar mineralization reports recoveries in the high $90\%$ for Au.
Previously Phases 1 and 2 of drilling developed during 2021-2022, consisted of 23 drill holes for a total of 5,407.10 meters of DDH. Six drill holes at Monserrat West, sixteen drill holes at Herradura Hill, and one drill hole at Gladys.
During Phases 1 and 2 drilling program over 4,289 samples (including standards, blanks and duplicates) were submitted for gold fire assays and multi-element inductively coupled plasma (ICP) to an independent certified laboratory, these were predominantly (3,991) comprised of drill core samples.
The previously Phase 1 and 2 drilling program allowed:
Increased the mineral resources under de Silica Cap at Monserrat West
Confirmed Historical Drills at Herradura Hill
Defined a new exploration model at Herradura Hill
Increased mineral resources at Herradura Hill
Scouting Drilling at Gladys
The drill statistics for Phase 1 and 2 drilling is tabulated below.
| Hole ID | Target | Phase | Easting | Northing | Altitude | Azimuth | Dip | EOH |
|---|---|---|---|---|---|---|---|---|
| MODDH001 | Monserrat West | I | 2528490 | 4638590 | 220 | 270 | -55 | 347,5 |
| MODDH002 | Monserrat West | I | 2528484 | 4638163 | 218 | 270 | -55 | 323,5 |
| MODDH003 | Monserrat West | I | 2528458 | 4638065 | 202 | 270 | -50 | 296,5 |
| MODDH004 | Monserrat West | I | 2528600 | 4637900 | 206 | 275 | -55 | 281,3 |
| HDDH029 | Herradura Hill | I | 2532502 | 4632911 | 193 | 188 | -60 | 221,0 |
| HDDH030 | Herradura Hill | I | 2532450 | 4633063 | 178 | 188 | -60 | 344,5 |
| HDDH031 | Herradura Hill | I | 2532231 | 4632990 | 189 | 188 | -60 | 246,5 |
| HDDH032 | Herradura Hill | I | 2531732 | 4632994 | 194 | 188 | -60 | 302,5 |
| HDDH033 | Herradura Hill | I | 2532201 | 4632873 | 213 | 188 | -60 | 230,5 |
| HDDH034 | Herradura Hill | I | 2532105 | 4632877 | 213 | 188 | -60 | 238,50 |
| MODDH005 | Monserrat West | I | 2528534 | 4638595 | 194 | 270 | -55 | 311,00 |
| MODDH006 | Monserrat West | I | 2528414 | 4637989 | 219 | 270 | -55 | 281,00 |
| HDDH035 | Herradura Hill | II | 2532104 | 4632889 | 202 | 8 | -45 | 175 |
| HDDH036 | Herradura Hill | II | 2532272 | 4632780 | 217 | 10 | -45 | 250,00 |
| HDDH037 | Herradura Hill | II | 2532089 | 4632829 | 200 | 10 | -45 | 278,50 |
| HDDH038 | Herradura Hill | II | 2532252 | 4632729 | 209 | 10 | -50 | 338,50 |
| HDDH039 | Herradura Hill | II | 2532252 | 4632728 | 209 | 190 | -70 | 200,00 |
| HDDH040 | Herradura Hill | II | 2532380 | 4632820 | 226 | 10 | -60 | 305,00 |
| HDDH041 | Herradura Hill | II | 2532468 | 4632796 | 201 | 8 | -60 | 292,80 |
| HDDH042 | Herradura Hill | II | 2531906 | 4632716 | 171 | 180 | -60 | 152,00 |
Significant drill holes intercepts are tabulated below:
| Hole ID | Target | Phase | Easting | Northing | Altitude | Azimuth |
|---|---|---|---|---|---|---|
| HDDH029 | 53 | 74 | 21 | - | 0,61 | 9,40 |
| HDDH029 | 125 | 132 | 7 | - | 0,61 | 1,20 |
| HDDH031 | 161 | 198 | 37 | - | 1,04 | 26,10 |
| HDDH033 | 71 | 91 | 20 | - | 0,57 | 7,00 |
| HDDH034 | 83 | 90,5 | 7,5 | - | 0,52 | 4,82 |
| including | 84 | 84,5 | 0,5 | - | 5,90 | 19,91 |
| MODDH001 | 168 | 169 | 1 | 4,96 | 4,81 | 52,70 |
| MODDH001 | 174,3 | 176,7 | 2,4 | 18,05 | 0,18 | 1491,00 |
| including | 176,2 | 176,7 | 0,5 | 84,79 | 0,38 | 7037,40 |
| MODDH002 | 72,1 | 72,45 | 0,35 | 2,71 | 0,08 | 219,90 |
| MODDH002 | 302 | 303,4 | 1,4 | 1,55 | 1,38 | 25,40 |
| MODDH004 | 87 | 91 | 4 | 2,42 | 0,51 | 163,00 |
| including | 87 | 87,5 | 0,5 | 9,86 | 2,15 | 660,40 |
| MODDH005 | 91 | 92 | 1 | 2,48 | 0,01 | 206,10 |
| HDDH035 | 99,7 | 101 | 1,3 | 2,09 | 1,93 | 13,62 |
| HDDH035 | 120 | 120,5 | 0,5 | 3,71 | 3,28 | 37,59 |
| HDDH036 | 66,8 | 105 | 38,2 | 0,42 | 0,34 | 6,76 |
| including | 77,7 | 78,2 | 0,5 | 3,78 | 3,55 | 19,81 |
| HDDH036 | 180,6 | 181,2 | 0,6 | 2,23 | 1,65 | 50,99 |
| HDDH036 | 220,4 | 221,5 | 1,1 | 3,27 | 2,52 | 65,37 |
| HDDH036 | 224 | 225 | 1 | 5,39 | 4,89 | 43,40 |
| including | 224 | 224,5 | 0,5 | 9,40 | 8,54 | 75,61 |
| HDDH037 | 162 | 176,5 | 14,5 | 1,06 | 0,91 | 12,69 |
| including | 163,1 | 164,2 | 1,1 | 2,29 | 1,91 | 33,16 |
| and | 166 | 166,5 | 0,5 | 8,33 | 7,57 | 66,19 |
| and | 176 | 176,5 | 0,5 | 6,94 | 6,26 | 59,39 |
| HDDH037 | 189 | 190 | 1 | 1,98 | 1,73 | 21,59 |
| HDDH038 | 34 | 55 | 21 | 0,99 | 0,91 | 7,43 |
| including | 42 | 42,6 | 0,6 | 4,70 | 4,53 | 14,53 |
| and | 51,5 | 54 | 2,5 | 3,01 | 2,91 | 8,42 |
| Hole ID | Target | Phase | Easting | Northing | Altitude | Azimuth |
|---|---|---|---|---|---|---|
| HDDH038 | 92 | 124,15 | 32,15 | 0,91 | 0,81 | 8,83 |
| including | 101 | 102 | 1 | 2,27 | 2,10 | 14,70 |
| and | 114 | 114,5 | 0,5 | 7,24 | 6,49 | 65,29 |
| and | 116 | 116,64 | 0,64 | 13,61 | 12,83 | 68,39 |
| and | 123,6 | 124,15 | 0,55 | 2,22 | 2,12 | 9,04 |
| HDDH038 | 216 | 260 | 44 | 0,85 | 0,73 | 10,62 |
| including | 234,5 | 235,1 | 0,6 | 6,34 | 5,85 | 42,88 |
| and | 244,8 | 246,5 | 1,7 | 5,26 | 4,35 | 79,95 |
| and | 248 | 249,3 | 1,3 | 2,98 | 2,93 | 4,76 |
| HDDH038 | 251 | 251,5 | 0,5 | 4,93 | 4,87 | 5,33 |
| HDDH039 | 107,5 | 108 | 0,5 | 1,58 | 1,52 | 5,61 |
| HDDH040 | 99 | 104,5 | 5,5 | 0,87 | 0,59 | 24,53 |
| HDDH040 | 131,5 | 164,6 | 33,1 | 0,45 | 0,35 | 9,21 |
| including | 157 | 157,5 | 0,5 | 4,20 | 3,68 | 45,49 |
| HDDH040 | 168,8 | 191 | 22,2 | 1,75 | 1,58 | 14,72 |
| including | 174 | 175 | 1 | 9,79 | 9,53 | 22,39 |
| and | 177,3 | 178 | 0,7 | 9,19 | 8,75 | 38,14 |
| and | 180 | 180,65 | 0,65 | 5,57 | 4,69 | 77,30 |
| and | 184 | 187 | 3 | 3,80 | 3,43 | 32,60 |
| HDDH040 | 198 | 200 | 2 | 3,75 | 2,72 | 90,36 |
| HDDH040 | 207 | 212 | 5 | 0,78 | 0,75 | 2,65 |
| including | 209 | 210 | 1 | 3,04 | 2,96 | 7,16 |
| HDDH040 | 219,5 | 227 | 7,5 | 0,49 | 0,45 | 3,23 |
| including | 226 | 227 | 1 | 2,54 | 2,44 | 8,66 |
| HDDH040 | 255 | 262 | 7 | 1,91 | 1,88 | 2,57 |
| including | 255,5 | 255,9 | 0,4 | 26,70 | 26,47 | 20,16 |
| HDDH041 | 40,5 | 63,7 | 23,2 | 0,35 | 0,29 | 5,18 |
| including | 59,9 | 60,8 | 0,9 | 1,62 | 1,52 | 9,01 |
| HDDH041 | 98,5 | 99,2 | 0,7 | 3,25 | 3,01 | 20,70 |
| HDDH041 | 103,4 | 110,6 | 7,2 | 0,41 | 0,37 | 3,80 |
| including | 110 | 110,6 | 0,6 | 2,70 | 2,57 | 11,11 |
| HDDH041 | 116,8 | 121 | 4,2 | 0,75 | 0,70 | 3,99 |
| HDDH043 | 161,6 | 163,4 | 1,8 | 0,37 | 0,30 | 5,83 |
| HDDH044 | 60,5 | 62,5 | 2 | 0,53 | 0,49 | 3,28 |
El Aguila Project:
On September 15, 2016 an Arm’s length purchase agreement (the “Winki Agreement”) between the Company and Winki Sociedad Anonima wherein the Company agrees to acquire the following properties - Winki: “Winki II”, “Petrificados”, “Aguila I” and “Aguila II”, in the Province of Santa Cruz, Argentina (collectively, the “El Aguila Project”) for the sum of $1,400,000.00, and 1% of the net profit interest of the Company during the production/exploitation phases of the project (the “Royalty”).
On November 11, 2016, the Company and an arm’s length party who is a 50% participant under the Winki Agreement (the “Partner”) reached an agreement to jointly participate in the development of Fredonia Management on the basis of a partnership in equal parts. Under this agreement, the Company provided its structure and know-how in the mining industry, as well as access to the capital market and the Partner agreed to accept 50% of the share capital of the Company in exchange for their rights under the Winki Agreement to receive half of the purchase proceeds and half of the Royalty from the purchase and sale of the Aguila Project.
On January 24, 2022, Fredonia Mining paid US$150,000 in cash and issued 2,200,000 common shares to the other participant at Winki to satisfy the outstanding portion of the Purchase. The vendor retained 0.5% Net Profit Interest.
El Aguila is currently owned 100% by Fredonia Mining Inc or its subsidiaries.
The El Aguila project is located in the eastern sector of the Deseado Massif and comprises three licence blocks that cover 9,124ha. The project is located 70 kilometres northeast of Cerro Vanguardia mine and 45 kilometres west of Cerro Moro.
The geological interpretation of the Aguila project area is a ‘failed’ caldera environment. Structures define both ring fractures at the margins of the caldera striking as well as radial fractures hosting gold silver mineralisation within the ring structure. The North-west orientation is strike-slip faults with dextral movements, and North-south fractures are tensional. Post-mineral event East-north-east striking fault system displaces part of the vein-like mineralized structures.
El Aguila has distinct styles of mineralisation from classic low sulphidation epithermal quartz veining hosting gold-silver as well as stockwork and breccias (draped around a felsic dome complex) and a new exploration target represented by veins in sandstone.
Drilling on the project is scout exploration style and is neither advanced nor grid style systematic. However, based on the geochemical data generated to date and the interpretation of geology hosting the identified mineralisation, of the five main sectors identified to date, Aguila Main is considered the most prospective. The Company conducted a limited diamond drilling programme of 2,428 meters for 11 holes throughout the project, focusing on Aguila Main.
Hornia Project (previously Petrificados):
The oldest rocks in the property are andesitic flows, volcanic breccias and tuffs from the Bajo Pobre Formation, exposed in the southern part of the area. This unit is overlaid and partially in fault contact with coarse grained-partially welded rhyolitic crystal tuff, from the Chon Aike Formation exposed along the western side of the property. This unit is covered and partially inter-fingered with layered fine-grained ash fall tuffs and volcanoclastic sediments assigned to La Matilde Formation (both belonging to Bahía Laura Group), largely exposed in the western and northern portions of the property. These are the three most prospective formations in the Deseado.
Alteration and mineralization coincides primarily with strongly silicified N°30-N°60 west-trending tabular structures. The silicified zones contain veins, veinlets, stockworks and hydrothermal breccias hosted in welded rhyolitic tuffs. Veins and breccias show a variety of textures indicatives of multiple episodes of brecciation and silica deposition, including carbonate replacement textures and massive to banded veins with chalcedony, jasper and fine grained saccharoidal white to grey silica, interpreted as being formed at shallow depths within the hydrothermal system.
Gold mineralisation is associated with anomalous values of ‘pathfinder’ elements. Arsenic (As), mercury (Hg),
13
antimony (Sb), these are typical vectors to epithermal gold mineralisation.
The Company intends to undertake a thorough review of the historical data before embarking on a project wide exploration programme of surface reconnaissance and geophysics prior to an anticipated scout exploration drill programme.
Review of Financial Results
The following tables set forth selected financial information with respect to the Company's audited consolidated financial statements for the year ended September 30, 2025 and 2024. The following should be read in conjunction with the said financial statements and related notes that are included elsewhere in this Filing Statement.
Selected Financial Information
| | September 30, 2025
(Audited) | September 30, 2024
(Audited) |
| --- | --- | --- |
| | $ | $ |
| Other Comprehensive (Loss)/Income | (18,367) | (22,690) |
| Net loss | (1,180,148) | (1,125,406) |
| Basic and diluted loss per share | (0.026) | (0.030) |
Statement of Financial Position
| As at September 30, 2025 | As at September 30, 2024 | |
|---|---|---|
| Assets | ||
| Current assets | 354,106 | 1,191,758 |
| Property, plant and equipment | 4,806 | 4,962 |
| Total Assets | 358,912 | 1,196,720 |
| Liabilities | ||
| Current liabilities | 966,492 | 1,099,531 |
| Shareholders' equity (deficit) | (607,580) | 97,189 |
| Total liabilities and shareholders' equity (deficit) | 358,912 | 1,196,720 |
Results of Operations
The Company reported a net loss of $1,180,148 during the year ended September 30, 2025, compared to net loss of $1,125,406 during the year ended September 30, 2024. The net loss for the fiscal year was primarily on account of gains realized on the exchange of US dollar contributions to the Argentine subsidiaries for Argentine pesos through third-party financial markets in contrast to the Argentina national posted currency rates. The difference between the official bank rate and the market rate obtained resulted in gains of $31,944 for the year ended September 30, 2025. This was offset by $459,893 of exploration expenses and $1,265,683 of general and administrative expenses incurred in the year primarily consisting of salaries and wages, professional fees and administrative and office expenses.
Summary of Quarterly Results
The following table sets out selected quarterly financial information of the Company and is derived from unaudited quarterly financial data prepared by management in accordance with IFRS:
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | |
|---|---|---|---|---|
| Net loss | (153,533) | (289,915) | (265,847) | (470,853) |
| Comprehensive loss | (153,609) | (289,915) | (265,847) | (489,144) |
| Net loss per share (basic & diluted): | ||||
| Net loss | (0.003) | (0.006) | (0.006) | (0.010) |
| Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
| --- | --- | --- | --- | --- |
| Net loss | (322,501) | (229,190) | (260,497) | (313,218) |
| Comprehensive loss | (329,170) | (237,002) | (269,644) | (312,280) |
| Net loss per share (basic & diluted): | ||||
| Net loss | (0.008) | (0.006) | (0.007) | (0.009) |
Over the past eight quarters, fluctuations in net losses on a quarter-over-quarter basis have been impacted by factors such as G&A expenses, finance expenses, share-based compensation expense, gains on currency exchange and fluctuations in exchange rates.
The results of the Company consist primarily of G&A expenses which over the 2025 fiscal year, have seen a steady decrease quarter over quarter. The reduction in these expenses has been offset by gains on currency exchange (see Results of Operations section above for details) for the year ended September 30, 2025. This has resulted in the Company having net loss or lower net losses quarter over quarter.
Financing Activities
No activity during the year ended September 30, 2025.
Liquidity and Capital Resources
As of September 30, 2025, the Company had cash of $147,888 and a negative working capital of ($612,386).
The Company's objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and to maintain a flexible capital structure that optimizes the costs of capital within a framework of acceptable risk. In the management of capital, the Company includes the components of shareholders' equity as well as cash. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may issue new shares, issue debt, acquire or dispose of assets or adjust the amount of cash. The Company is dependent on the capital markets as its primary source of operating working capital and the Company's capital resources are largely determined by its ability to compete for investor support of its projects.
The consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At September 30, 2025, the Company had accumulated losses of $17,243,339 and expects to incur further losses in the development of its business. The continuation of the Company is dependent upon obtaining necessary financing to meet its ongoing operational levels of exploration and corporate overhead. These event and condition indicate a material uncertainty that may cast significant doubt upon the Company's ability to continue as a going concern. Additional funds will be required to enable the Company to continue its operations and there can be no assurance that financing will be available on terms which are acceptable to the Company.
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Related Party Transactions
During the years ended September 30, 2025 and 2024, the Company incurred the following related party transactions:
i. Transactions:
a) Salaries and benefits to key management personnel for the year ended September 30, 2025 are $122,849 (2024: $197,085) and are included as part of payroll expenses on the consolidated statement of loss
b) Professional services charged by key management personnel and directors for the year ended September 30, 2025 were $366,593 (2024: $203,637) and are included as part of professional fees on the consolidated statement of loss.
c) Rent expense incurred for the year ended September 30, 2025 charged by a company controlled by Directors of the company were $32,000 (2024: $21,500).
ii. Year-end balances:
a) As at September 30, 2025, trade and other payables included $52,000 (September 30, 2024 - $52,000) payable to a company related to a director for payments made on behalf of the Company.
b) As at September 30, 2025, trade and other payables included $nil (September 30, 2024 - $nil) payable to a company related to a director in relation to the rent of the administrative office.
c) As at September 30, 2025, trade and other payable included $29,318 (September 30, 2024 - $29,318) payable to a consulting firm for services provided by the Company’s former CFO.
d) As at September 30, 2025, trade and other payables included $229,179 (September 30, 2024 - $389,673) payable to directors and key management.
All amounts owing to related parties are non-interest bearing and due on demand.
During the year ended September 30, 2025, directors and management forgave debt amount owing by the Company for $432,816 (C$613,171) recorded in other income in the consolidated statements of loss.
Compensation of Key Management
The Company has determined that key management personnel consist of its managers, officers and directors. In addition to salaries and fees paid to key management personnel, these groups also participate in the stock option plan. The total compensation expense, including salaries, fees and stock-based compensation relating to key management personnel for the years ended September 30, 2025 and 2024, was as follows:
| 2025 | 2024 | |
|---|---|---|
| Salary, fees and other benefits | 366,593 | 400,722 |
| Share-based compensation | 432,932 | - |
| 799,525 | 400,722 |
Financial Instruments
The Company’s financial instruments consist of cash, and accounts payable and accrued liabilities. Unless otherwise noted, management’s is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The Company’s cash is recorded at its fair value, and the fair values of these accounts payable and accrued liabilities, and loans from related parties approximate their carrying values due to their short-term nature.
17
Critical Judgments and Estimates
The following are the critical judgments that management has made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognized in these consolidated financial statements:
i) Impairment of property, plant and equipment
Judgments are required to assess when impairment indicators, or reversal indicators, exist and impairment testing is required. In determining the recoverable amount of assets, in the absence of quoted market prices, impairment tests are based on estimates of reserves, production rates, future precious metals prices, future costs, discount rates, market value of land and other relevant assumptions.
ii) Income taxes
Judgments are made by management to determine the likelihood of whether deferred income tax assets at the end of the reporting period will be realized from future taxable earnings. To the extent that assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognized in respect of deferred tax assets as well as the amounts recognized in profit or loss in the period in which the change occurs.
Key sources of estimation uncertainty
The following are the key assumptions concerning the sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing adjustments to the carrying amounts of assets and liabilities.
i) Share-based payments
All equity-settled, share-based awards issued by the Company are recorded at fair value using the Black-Scholes option-pricing model. In assessing the fair value of equity-based compensation, estimates have to be made regarding the expected volatility in share price, option life, dividend yield, risk-free rate and estimated forfeitures at the initial grant date.
ii) Tax provisions
Tax provisions are based on enacted or substantively enacted laws. Changes in those laws could affect amounts recognized in profit or loss both in the period of change, which would include any impact on cumulative provisions, and in future periods. Deferred tax assets (if any) are recognized only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those deferred tax assets are likely to reverse.
iii) Determination of functional currency
As the Company has entities in multiple jurisdictions, the determination of functional currency involves certain judgements in establishing the primary economic environment in which these entities operate. In Argentina, the transactions may be denominated in Argentine pesos or USD. The functional currency is determined by the currency, being presently USD, wherein management's judgement the majority of the operating expenditures are denominated in.
iv) Estimation of restoration, rehabilitation and environmental obligations and timing of expenditure
Restoration, rehabilitation and similar liabilities are estimated based on the Company's interpretation of current regulatory requirements, constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of restoration, rehabilitation or similar liabilities that may occur. Such estimates are subject to change based on changes in laws and regulations and negotiations with regulatory authorities.
18
Determination of fair values
A number of the Company’s accounting policies and disclosures require the determination of fair value for financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the methods below. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
Property, plant and equipment
The fair value of property, plant and equipment recognized in a business combination and in assessing the recoverable value for impairment testing, is based on market values. The market value of property, plant and equipment is the estimated amount for which the assets could be exchanged on the acquisition date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The market value of precious metals interests included in property, plant and equipment is estimated with reference to the discounted cash flows expected to be derived from precious metals production based on externally prepared reserve reports. The risk-adjusted discount rate is specific to the asset with reference to general market conditions.
Financial assets and liabilities
The fair value of financial assets and liabilities is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date, except for marketable securities which are fair valued based on quoted trading prices.
Stock options
The fair value of employee stock options is measured using a Black-Scholes option pricing model. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility), weighted average expected life of the instruments (based on historical experience and general option and warrant behaviour), expected dividends, expected forfeiture rate and the risk-free interest rate (based on government bonds).
Off-Balance Sheet Arrangements
The Company has not entered into any off-balance sheet arrangements such as guarantee contracts, contingent interests in assets transferred to unconsolidated entities or derivative financial obligations.
Commitments and Contingencies
The Company’s exploration and evaluation activities are subject to laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company believes its activities are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.
Management’s Report on Internal Control over Financial Reporting
In connection with National Instrument 52-109 - Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52-109”) adopted by each of the securities commissions across Canada, the Chief Executive Officer and Chief Financial Officer of the Company are required to file a Venture Issuer Basic Certificate with respect to the financial information contained in the unaudited interim financial statements and the audited annual financial statements and respective accompanying Management’s Discussion and Analysis. The Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109.
19
Company Outlook
Other than as disclosed in this MD&A, the Company does not anticipate incurring any other material capital expenditures.
Assuming that the Company has expended its exploration expenses in accordance with the recommendations of the technical report on the El Dorado-Monserrat Project, the Company will have achieved one of its material stated business objectives which is to determine whether El Dorado-Monserrat Project contains mineralized deposits and whether the results warrant the Company carrying out further work on the El Dorado-Monserrat Project.
If a further work program is recommended on the El Dorado-Monserrat Project, the Company may be required to raise additional funding to carry out additional exploration programs on its El Dorado-Monserrat project. In addition, should the opportunity to acquire other mineral exploration properties be presented to the Company, whether located in Argentina or elsewhere, then the Company would have to determine the appropriate method of acquiring those properties. In the event that common shares could not be used to acquire the said properties, then the Company may have to look to raise further capital.
Outstanding Securities
The Company has one class of shares outstanding, being ordinary shares. As of the date of this MD&A, 47,185,301 common shares were issued and outstanding.
The following options are outstanding at September 30, 2025:
| Number of Options | Exercise Price C$ | Expiry Date |
|---|---|---|
| 1,950,000 | 0.85 | July 27, 2026 |
| 50,000 | 0.55 | September 16, 2027 |
| 550,000 | 0.60 | February 3, 2028 |
| 1,020,000 | 0.40 | December 24, 2029 |
| 985,000 | 0.40 | August 6, 2030 |
| 4,555,000 |
The following warrants are outstanding at September 30, 2025:
| Number of Warrants | Exercise Price C$ | Expiry Date |
|---|---|---|
| 1,755,448 | 0.50 | February 16, 2026 |
| 4,818,398 | 1.40 | April 27, 2027 |
| 6,666,667 | 0.30 | September 27, 2027 |
| 13,240,513 |
Subsequent Events
1) On December 17, 2025, the Company announced intention to amend price of previously issued warrants and implement early warrant exercise incentive program as follows:
The Company currently has three series of warrants outstanding, as described in the table below.
| Effective Number of Warrants Outstanding* | Effective Exercise Price* | Issue Date | Expiry Date |
|---|---|---|---|
| 4,818,398 | $1.40 | April 27, 2022 | April 27, 2027 |
| 1,755,448 | $0.50 | February 16, 2024 | February 16, 2026 |
| 6,666,667 | $0.30 | September 26, 2024 | September 27, 2027 |
Important Note about Presentation of Effective Number of Warrants herein:
*The Company’s outstanding common shares (“Common Shares”) were consolidated on a five old for one new basis on November 12, 2024 (the “Consolidation”), resulting in corresponding adjustments to the exercise price and the exchange ratio of outstanding warrants, but not the number of outstanding warrants. As a result with respect to each series of warrants that are outstanding, five warrants are required to be exercised and a payment of five times the original exercise price is required to be made to acquire one Common Share. For simplicity with respect to presenting the number of shares issuable on the exercise of warrants and to match the Company’s continuous disclosure, the number of warrants and exercise prices in this news release are presented on an “effective” basis, as if the number of warrants was also adjusted to reflect the Consolidation. The Company’s warrant registers and any notice of adjustment sent to warrant holders in connection with the consolidation reflect the effective number of warrants presented in this release multiplied by five and a correspondingly adjusted exchange ratio. The number of warrants presented herein may not total exactly in terms of numbers or percentages due to rounding.
Proposed Exercise Price Reduction for $1.40 Warrants
On April 27, 2022, the Company completed a private placement of 22,683,750 units at a price of $0.28 per unit, with each unit consisting of one Common Share and one Common Share purchase warrant exercisable at a price of $0.28 ($1.40 on a post-consolidation basis) until April 27, 2027 (the “$1.40 Warrants”). 4,818,932 $1.40 Warrants are outstanding on an effective basis as at the date thereof. To encourage their eventual exercise, the Company proposes to reduce the exercise price of the $1.40 Warrants to $0.45. As the applicable “market price” of the Common Shares (as determined in accordance with the policies of the TSX Venture Exchange (“TSXV”)) at the time of issuance of the $1.40 Warrants was greater than the proposed amended exercise price of $0.45, TSXV requires that the term of the reduced $1.40 Warrants also be amended to include an accelerated expiry clause such that the exercise period of the $1.40 Warrants will be reduced to 30 days if, for any ten consecutive trading days during the unexpired term of the $1.40 Warrants the closing trading price of the Common Shares is $0.57 or more (being approximately 25% more than the reduced exercise price), with such reduced exercise period to begin no more than seven calendar days after the tenth such trading day. The Company will seek the consent of relevant warrantholders for the amendment to the term in accordance with the warrant indenture governing the $1.40 Warrants between the Company and TSX Trust company dated April 27, 2022 as soon as possible.
The lead agent in the private placement in which the $1.40 Warrants were issued agreed to accept units on the same terms as investors in the offering in lieu of cash compensation and therefore to the knowledge of the Company, holds 297,042 $1.40 Warrants on an effective basis. The $1.40 Warrants issued to the Lead Agent will not be subject to the proposed amendments and the terms of such $1.40 Warrants will remain as is.
Proposed Exercise Price Reduction for $0.50 Warrants
On February 16, 2024, the Company completed a private placement of 17,554,480 units at a price of $0.05 per unit, with each unit consisting of one Common Share and one-half of one Common Share purchase warrant exercisable at a price of $0.10 ($0.50 on a post-consolidation basis) until February 16, 2026 (the “$0.50 Warrants”). 1,755,448 $0.50 Warrants are outstanding on an effective basis as at the date thereof.
The Company proposes to reduce the exercise price of the $0.50 Warrants to $0.45. As the applicable “market price” of the Common Shares at the time of issuance of the $0.50 Warrants was greater than the proposed amended exercise price of $0.45, and as the $0.50 Warrants expire on February 16, 2026, no corresponding
accelerated exercise amendment to the term is proposed.
456,824 $0.50 Warrants are held by insiders of the Company on an effective basis, representing more than 10% of the outstanding $0.50 Warrants. The Company proposes to only reduce the price of up to 175,544 $0.50 Warrants (representing 10% of the total number of outstanding $0.50 Warrants on an effective basis) held by insiders, on a pro rata basis, and proportionally not reduce the price with respect to the remainder of the insider-held $0.50 Warrants.
Proposed Early Warrant Exercise Incentive Program for $0.30 Warrants
On September 26, 2024, the Company completed a financing pursuant to which it issued 33,333,333 units, with each unit consisting of one Common Share and one common share purchase warrant exercisable at $0.06 per Common Share until September 26, 2027 (the “$0.30 Warrants”). 6,666,667 $0.30 Warrants are outstanding on an effective basis as at the date hereof. The Company intends to implement a program (the “Incentive Program”) to encourage the early exercise of all outstanding $0.30 Warrants during a 30-day period (the “Incentive Period”) commencing on December 18, 2025, and expiring at 4:00 pm on January 19, 2026 (as the date that is 30 days from December 18, 2025 is a Saturday. Under the Program, the Company proposes to offer an incentive to each holder who exercises $0.30 Warrants during a designated incentive period by issuing one additional Common Share purchase warrant (an “Incentive Warrant”) for each $0.30 Warrant exercised. Each Incentive Warrant will entitle the holder to acquire one additional Common Share at an exercise price of $0.60 per Common Share for a period of 24 months from the date of issuance.
All Incentive Warrants will be issued to participating holders promptly following the expiry of the Incentive Period. The Incentive Warrants, and any Common Shares issued upon exercise thereof, will be subject to a statutory hold period of four months and one day from the date of issuance of the Incentive Warrants, in accordance with applicable Canadian securities laws and, where applicable, TSXV Policies. $0.30 Warrants that remain unexercised after the Incentive Period will continue to be exercisable on their original terms until September 27, 2027, however, no Incentive Warrants will be issued in respect of any such $0.30 Warrants exercised after January 19, 2026.
The Incentive Program is subject to certain conditions, including the receipt of all necessary regulatory approvals, including the final approval of the TSXV.
853,333 $0.30 Warrants are held by insiders on an effective basis, representing more than 10% of the outstanding $0.30 Warrants. The Company proposes to only incentive the exercise of up to 666,667 $0.30 Warrants, representing 10% of the total number of outstanding $0.30 Warrants, and proportionally not incentivize the exercise of the remainder of the insider-held $0.30 Warrants. If the Incentive Program is approved by TSXV and the incentive program is taken advantage of in full, an additional 6,480,001 Common Shares would be issuable upon the exercise, if any, of the Incentive Warrants.
2) On January 23, 2026, the Company announced that it has entered into an agreement with Cormark Securities Inc. (the "Sole Agent") to act as sole agent for and on behalf of Fredonia in connection with a "best efforts" private placement for aggregate gross proceeds of up to approximately C$5,000,000.
The Offering will consist of the issuance and sale of 12,500,000 units of the Company (the "Units") at a price of C$0.40 per Unit (the "Issue Price"). Each Unit will consist of one common share of the Company (each, a "Unit Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant shall entitle the holder thereof to purchase one common share of the Company (each, a "Warrant Share") at a price of C$0.56 for the period that is 36 months following the Closing Date.
The Company has granted the Sole Agent an option, exercisable in whole or in part, at any time prior to the Closing Date, to increase the size of the Offering to raise additional gross proceeds of up to C$1,000,000. The Company intends to use net proceeds from the Offering for the exploration and advancement of the Company's El Dorado Monserrat Project in Santa Cruz province, Argentina, and for general corporate and working capital purposes, all as further described in the offering document relating to the Offering.
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The Offering is expected to close on or about February 4, 2026, or on such other date as may be agreed to by the Company and the Sole Agent, subject to compliance with applicable securities laws (the "Closing Date"). Notwithstanding the foregoing, the closing of any Units issued pursuant to the Listed Issuer Financing Exemption must occur no later than the 45th day following the date of the announcement on the news released.
3) Subsequent to September 30, 2025, a total of 1,576,666 warrants were exercised, representing proceeds of approximately CAD$473,000.
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