Magna Mining Inc.
Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)

Doane Grant Thornton LLP
11th Floor
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Toronto, Ontario
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Independent auditor's report

To the Shareholders of Magna Mining Inc.

Opinion

We have audited the consolidated financial statements of Magna Mining Inc. and its subsidiaries (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2024, and 2023 and the consolidated statements of operations and comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2024, and 2023, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

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 has not yet achieved profitable production and has an accumulated deficit of $41,616,087 as at December 31, 2024. This condition, along with the matters set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt about 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 judgement, were of most significance in our audit of the consolidated financial statements of the current period. 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.

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Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our auditor's report.

Emphasis of matter – restated comparative information

We draw attention to Note 3 to the consolidated financial statements, which explains that certain comparative information presented for the year ended December 31, 2023 has been restated. Our opinion is not modified in respect of this matter.

Information Other than the Consolidated Financial Statements and Auditor's Report Thereon

Management is responsible for the other information. The other information comprises the Management Discussion and Analysis but does not include the consolidated financial statements and our auditor's report thereon.

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

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information 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.

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.

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

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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.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of audit work performed for purposes 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 period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because of 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 Mark Irwin.

Doane Grant Thornton LLP

Toronto, Canada
April 9, 2025

Chartered Professional Accountants
Licensed Public Accountants

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Magna Mining Inc.
Consolidated Statements of Financial Position
As at December 31, 2024 and 2023
(Expressed in Canadian dollars)

	Notes	December 31, 2024	December 31, 2023	January 1, 2023
			(Restated - Note 3)
ASSETS
Current
Cash		$ 17,535,316	$ 10,890,288	$ 6,175,126
Trade and other receivables	6	3,028,506	890,107	622,077
Prepaid expenses		212,925	111,310	107,947
Deferred financing costs		198,320	-	-
Investments	7	41,021	41,021	-
Total current assets		21,016,088	11,932,726	6,905,150
Non-current
Restricted cash	8	902,583	699,724	666,422
Equipment	9	78,763	94,678	96,251
Right-of-use asset	9	39,962	40,130	28,093
Exploration and evaluation assets	10	17,533,402	17,513,957	17,376,790
Total non-current assets		18,554,710	18,348,489	18,167,556
Total assets		$ 39,570,798	$ 30,281,215	$ 25,072,706
LIABILITIES
Current
Accounts payable and accrued liabilities	12,24	$ 3,606,681	$ 1,613,826	$ 1,651,594
Deferred acquisition cost		-	-	2,645,375
Term loan	14	-	-	30,000
Right-of-use lease liability		35,936	28,452	21,195
Flow-through premium payable	27	-	2,944,597	-
Total current liabilities		3,642,617	4,586,875	4,348,164
Non-current
Asset retirement obligation	13	874,543	831,988	715,789
Right-of-use lease liability		10,123	13,602	9,670
Total non-current liabilities		884,666	845,590	725,459
Total liabilities		4,527,283	5,432,465	5,073,623
Shareholders' equity
Share capital	16	71,284,941	45,784,084	32,466,633
Share-based payment reserve	18,20	3,945,452	2,820,100	1,818,268
Warrants reserve	19	1,429,209	1,592,926	1,340,663
Deficit		(41,616,087)	(25,348,360)	(15,626,481)
Total shareholders' equity		35,043,515	24,848,750	19,999,083
Total shareholders' equity and liabilities		$ 39,570,798	$ 30,281,215	$ 25,072,706
Going concern (note 1)
Commitments and contingencies (note 27)
Subsequent events (note 28)
"Jason Jessup" Director			"John Seaman" Director

See accompanying notes to the consolidated financial statements

Magna Mining Inc.
Consolidated Statements of Operations and Comprehensive Loss
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)

	Notes	Year ended December 31, 2024	Year ended December 31, 2023
			(Restated - Note 3)
Operating expenses
Exploration and evaluation	11,21,22	$ 10,116,892	$ 7,646,763
General and administrative	21	5,038,372	2,110,059
Share-based compensation	18,20	1,840,375	1,458,031
Professional fees		1,958,448	634,891
Property maintenance	21	161,901	504,178
Marketing and promotion		261,151	175,446
Depreciation	9	83,099	62,081
Total operating expenses		19,460,238	12,591,449
Other items
Flow-through premium income	16,27	2,944,597	2,392,425
Interest income		401,247	856,599
Accretion of asset retirement obligation	13	(23,110)	(26,501)
Foreign exchange gain		37,405	4,807
Interest expense	27	(173,124)	(357,760)
Gain on disposal of equipment		5,496	-
Total other income		3,192,511	2,869,570
Net loss and comprehensive loss		$ 16,267,727	$ 9,721,879
Basic and diluted loss per common share	17	$ 0.10	$ 0.06
Weighted average number of outstanding shares outstanding shares
Basic and diluted		170,766,096	160,965,300

See accompanying notes to the consolidated financial statements

Magna Mining Inc.
Consolidated Statements of Changes in Equity
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)

	Notes	Number of shares	Share capital	Share-based payment reserve	Warrants reserve	Deficit	Total shareholders' equity
Balance at December 31, 2022		146,912,330	$ 32,466,633	$ 1,818,268	$ 1,340,663	$ (33,003,271)	$ 2,622,293
Accounting policy change	3	-	-	-	-	17,376,790	17,376,790
Balance at December 31, 2022 - restated		146,912,330	$ 32,466,633	$ 1,818,268	$ 1,340,663	$ (15,626,481)	$ 19,999,083
Net loss and comprehensive loss for the year		-	-	-	-	(9,721,879)	(9,721,879)
Private placement	16	10,964,186	17,949,998	-	-	-	17,949,998
Share issue costs	16	-	(1,301,496)	-	-	-	(1,301,496)
Shares issued to obtain claims	16	40,625	17,469	-	-	-	17,469
Agents' warrants	16,19	-	(327,433)	-	327,433	-	-
Flow-through premium	16	-	(5,337,022)	-	-	-	(5,337,022)
Options exercised	16,18	2,572,187	1,075,061	(456,199)	-	-	618,862
Warrants exercised	16,19	2,890,532	1,240,874	-	(75,170)	-	1,165,704
Share-based compensation	18,20	-	-	1,458,031	-	-	1,458,031
Balance at December 31, 2023		163,379,860	$ 45,784,084	$ 2,820,100	$ 1,592,926	$ (25,348,360)	$ 24,848,750
Net loss and comprehensive loss for the year		-	-	-	-	(16,267,727)	(16,267,727)
Private placement	16	20,809,480	21,849,954	-	-	-	21,849,954
Share issue costs	16	-	(1,516,620)	-	-	-	(1,516,620)
Warrants exercised	16,19	9,588,204	4,256,588	-	(163,717)	-	4,092,871
Options exercised	16,18	903,300	811,123	(353,471)	-	-	457,652
Redemption of restricted share units	16,20	229,400	99,812	(99,812)	-		-
Redemption of restricted share units - cash payroll withholding tax payments	20	-	-	(261,740)	-	-	(261,740)
Share-based compensation	18,20	-	-	1,840,375	-	-	1,840,375
Balance at December 31, 2024		194,910,244	71,284,941	3,945,452	1,429,209	(41,616,087)	$ 35,043,515

See accompanying notes to the consolidated financial statements

Magna Mining Inc.
Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

	Notes	Year ended December 31, 2024	Year ended December 31, 2023
Operating activities
Net loss for the year		$ (16,267,727)	$ (9,721,879)
Items not requiring an outlay of cash:
Share-based compensation		1,578,635	1,458,031
Depreciation		83,099	62,081
Accretion of asset retirement obligation		23,110	26,501
Interest on right-of-use lease	13	5,423	3,097
Shares issued to acquire claims		-	17,469
Interest on deferred acquisition costs		-	354,625
Interest on investments		-	(771)
Gain on disposal of equipment		(5,496)	-
Interest on restricted cash		(34,611)	(33,302)
Flow-through premium income		(2,944,597)	(2,392,425)
Net change in non-cash working capital balances
Trade and other receivables		(2,138,399)	(268,030)
Prepaid expenses		(101,615)	(3,363)
Accounts payable and accrued liabilities		1,992,855	(37,768)
Net cash used in operating activities		(17,809,323)	(10,535,734)
Financing activities
Issuance of common shares, net of costs		20,333,334	16,648,502
Proceeds from exercise of warrants		4,092,871	1,165,704
Proceeds from exercise of options		457,652	618,862
Payment of term loan		-	(30,000)
Payment of deferred acquisition costs		-	(3,000,000)
Payment of lease liabilities		(44,641)	(30,149)
Payment of deferred financing costs		(198,320)	-
Cash provided by financing activities		24,640,896	15,372,919
Investing activities
Proceeds on disposal of equipment		6,074	-
Purchase of equipment		(24,371)	(34,304)
Increase in restricted cash	8	(168,248)	-
Purchase of investments		-	(40,250)
Exploration and evaluation assets		-	(47,469)
Cash used in investing activities		(186,545)	(122,023)
Increase in cash during the year		6,645,028	4,715,162
Cash at the beginning of the year		10,890,288	6,175,126
Cash at the end of the year		$ 17,535,316	$ 10,890,288
Supplemental disclosures with respect to cash flows
Share issue costs included in accounts payable and accrued liabilities		$ -	$ 306,629
Recognition of right-of-use asset		$ 43,223	$ -
Additions to asset retirement obligations		$ -	$ -
Change in asset retirement obligation estimate		$ (127,428)	$ 89,698
Non-cash items
Non-cash share issuance costs		$ -	$ 327,433

See accompanying notes to the consolidated financial statements

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

Reporting entity

Magna Mining Inc. (the "Company" or "Magna") was incorporated under the Canada Business Corporations Act (Canada) on April 2, 2011. On November 17, 2011, the Company completed its initial public offering and, on November 23, 2011, listed its common shares on the TSX Venture Exchange ("TSXV") as a capital pool company ("CPC"). Effective August 19, 2014, the Company's common share listing was transferred to the NEX Board of the TSXV.

On May 4, 2021, Magna Mining (Canada) Corp. ("MMCC") and CT Developers Ltd ("CT") (now Magna Mining Inc.) completed a qualifying transaction whereby CT acquired 100% of the issued and outstanding shares of MMCC by means of a share-for-share exchange, under which the former shareholders of MMCC acquired control of CT (now Magna Mining Inc.). Trading on the TSXV commenced on May 11, 2021, under the symbol NICU and the name Magna Mining Inc.

On February 28, 2025, the Company announced the closing of the acquisition of a portfolio of base metal assets from KGHM International Ltd. ("KGHM") located in the Sudbury Basin (the "KGHM Acquisition" or the "Transaction") (see note 28).

The Company's head office and principal business address is 1300 Kelly Lake Road, Sudbury, Ontario, P3E 5P4.

Going concern

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards applicable to a going concern, which assumes the Company will be able to realize its assets and settle its liabilities in the normal course of business. For the year ended December 31, 2024, the Company reported a net loss of $16,267,727 (2023 - $9,721,879), and as at December 31, 2024 had net working capital of $17,373,471 (2023 - $7,345,851) and an accumulated deficit of $41,616,087 (2023 - $25,348,360).

As of December 31, 2024, the Company had not generated any revenue from commercial mining operations and was considered to be in the exploration stage. Subsequent to December 31, 2024, as part of the KGHM Transaction, the Company acquired the revenue-producing McCreedy West mine. Additionally, subsequent to December 31, 2024, the Company closed a private placement financing for aggregate gross proceeds of $33,487,671 (see note 28 – Subsequent events). As a result, the Company expects to rely on cash flow from operations from the McCreedy West Mine and the proceeds from the financing. However, the Company may need to obtain additional funding from loans or equity financings by the Company's existing shareholders and/or new shareholders or through other arrangements to continue its mining operations and exploration and development activities. There is no assurance that the Company will be successful in this regard if additional funding is required. These events and conditions indicate a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.

These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

2. Basis of presentation

(a) Statement of compliance

These consolidated financial statements were prepared in accordance with IFRS Accounting Standards and its interpretations adopted by the International Accounting Standards Board ("IASB").

The policies applied in these consolidated financial statements are based on IFRS Accounting Standards issued and outstanding as of April 9, 2025, the effective date the Board of Directors approved these consolidated financial statements.

(b) Basis of consolidation

These financial statements include the accounts of the Company and its wholly owned subsidiaries: MMCC, Ursa Major Minerals Incorporated, and Lonmin Canada Inc.

All intercompany transactions and balances have been eliminated upon consolidation.

A subsidiary is an entity which Magna controls. The Company has control over an entity when it is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

A subsidiary is fully consolidated from the date on which control is obtained by the Company and is deconsolidated from the date that control ceases. Details on the Company's subsidiaries as at December 31, 2024 are as follows:

Name of subsidiary	Country of incorporation	Proportion of ownership interest	Principal activity
Magna Mining (Canada) Corp.	Canada	100%	Mineral exploration
Ursa Major Minerals Incorporated	Canada	100%	Mineral exploration
Lonmin Canada Inc.	Canada	100%	Mineral exploration

(c) Basis of presentation

These consolidated financial statements have been prepared on an accrual basis, except for cash flow information, and measured at historical cost.

(d) Functional and presentation currency

Management is required to assess the functional currency of the parent company, Magna Mining Inc., and the Company's subsidiaries, MMCC, Ursa Major Minerals Inc., and Lonmin Canada Inc. In concluding the functional currencies of the parent and its subsidiary companies, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates. The Company also considered secondary indicators, including the currency in which funds from financing activities are denominated and the currency in which funds are retained.

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of Magna Mining Inc., MMCC, Ursa Major Minerals Inc., and Lonmin Canada Inc.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

2. Basis of presentation (continued)

(e) Significant estimates and critical judgments

The preparation of the consolidated financial statements in conformity with IFRS Accounting Standards requires the use of judgments and estimates that affect the amounts reported and disclosed in the consolidated financial statements and related notes. These judgments and estimates are based on management's knowledge of the relevant facts and circumstances having regard to previous experience, but actual results may differ materially from the amounts included in the consolidated financial statements. Information about such judgments and estimations is contained in the accounting policies and notes to the consolidated financial statements, and the key areas are summarized below.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the review affects both current and future periods. The most significant estimates as at December 31, 2024 and 2023 relate to the asset retirement obligation (note 13), share-based payment reserve (note 18), warrants (note 19), and restricted share units ("RSUs") (note 20).

Critical accounting judgments

In the preparation of these consolidated financial statements, management has made judgments, aside from those that involve estimates, in the process of applying the accounting policies. The judgments which may have an effect on the amounts recognized in the consolidated financial statements include the following:

The assessment of the going concern assumption;
The recognition of deferred tax assets;
The valuation of stock options issued;
The valuation of RSUs issued; and
The valuation of warrants issued.

3. Change in accounting policy

During the year ended December 31, 2024, the Company changed its accounting policy to capitalize rather than expense the acquisition costs of exploration and evaluation assets. The capitalization of acquisition costs is a standard approach in the mineral exploration and development industry, and the Company believes this accounting policy change provides more reliable and relevant financial information. Under the new policy, exploration and evaluation expenditures incurred on the Company's exploration and evaluation assets will continue to be expensed until it has been established that a mineral property is commercially viable and the Company has made a mine development decision. Thereafter, the Company capitalizes expenditures subsequently incurred to develop the mine prior to the start of mining operations. These consolidated financial statements for the year ended December 31, 2023 reflect the capitalization of $17,513,957 in acquisition costs and include the following transactions:

i. the acquisition of Ursa Major Minerals Inc. on February 7, 2017, which included mineral exploration properties with a value of $774,046;
ii. the Spanish River option agreement the Company entered into on November 2, 2020, which included cash and share payments between 2020 and 2023 with an aggregate value of $135,578;
iii. the acquisition of Lonmin Canada Inc. on November 7, 2022, which included mineral exploration properties with a value of $16,514,635; and
iv. a change in the asset retirement obligation estimate on the Company's Shakespeare property for $89,698 in 2023, originally recorded as exploration and evaluation expense.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

3. Change in accounting policy (continued)

The consolidated statement of financial position as at December 31, 2023 has been restated to reflect adjustments made as a result of this change in accounting policy. The accumulated effect of the change of $17,376,790 has been reflected in the opening deficit of the consolidated financial statements as of January 1, 2023. This change in accounting policy resulted in a $137,167 reduction to the net loss and comprehensive loss for the year ended December 31, 2023, from $9,859,046 to $9,721,879, and a $47,469 reduction in the cash used in operating activities from $10,583,203 to $10,535,734, with an offsetting increase to cash used in investing activities for the same amount.

4. Material accounting policies

Foreign currency translation

Assets and liabilities are translated at the exchange rate in effect at the year-end date. Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transaction. Foreign currency gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss.

Revenue recognition

Under IFRS 15, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of the goods or services and the Company has satisfied its performance obligations. Determining the timing of the transfer of control, whether at a point in time or over time, requires judgment. Control typically passes on the transfer of key shipping documents which typically occurs around the shipment date.

Under the terms of the Company's concentrate sales contracts, the final sales amount is based on final assay results and quoted market prices, which may occur in a period subsequent to the date of sale. Revenues for these sales, net of treatment and refining charges, are recorded when the customer obtains control of the concentrate, based on an estimate of metal contained using initial assay results and forward market prices for the expected date that final sales prices will be fixed. The period between provisional pricing and final settlement can be up to six months. This settlement receivable is recorded at fair value each reporting period by reference to forward market prices until the date of final pricing, with changes in fair value recorded as an adjustment to the revenue.

Metal revenues earned as part of exploration and evaluation activities on properties that are not yet under development or have not commenced production are considered incidental revenues and are recorded as a credit against exploration and evaluation expenses on the consolidated statement of operations and comprehensive loss.

Cash

Cash consists of cash on deposit with banks and is subject to insignificant risk of changes in fair value.

Investments

Investments consist of guaranteed investment certificates issued by major Canadian financial institutions and are measured at amortized cost.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

4. Material accounting policies (continued)

Equipment

Recognition and measurement

Items of equipment are initially measured at cost. Items of equipment are carried at cost less accumulated depreciation and accumulated impairment losses. Equipment is classified by significant components, which are individually amortized over the useful life of the component.

Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of equipment have different useful lives, they are accounted for as separate items (major components) of equipment.

Depreciation

Depreciation is provided at the following rates:

Computer equipment	3 years straight-line
Motor vehicles	3 years straight-line
Equipment	3 years straight-line
Office furniture	3 years straight-line
Right-of-use asset	Same term as related lease
Fencing	20 years straight-line

Depreciation is calculated on the depreciable amount, which is the cost of an asset or other amount substituted for cost, less its residual value.

Depreciation is recognized in profit or loss over the estimated useful lives of each part of an item of equipment since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Impairment

Long-lived assets with finite lives are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If an indicator is identified, the asset's recoverable amount is calculated and compared to the carrying amount. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units or "CGUs"). The recoverable amount is the higher of an asset's fair value, less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGU, as determined by management). An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount.

The Company evaluates impairment losses for potential reversals when events or circumstances warrant such consideration.

Exploration and evaluation expenditures

The costs of acquiring exploration properties are capitalized as exploration and evaluation assets. Acquisition costs may include cash consideration, transaction costs, the fair value of common shares issued, and the fair value of share purchase warrants and options issued based on amounts determined

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

4. Material accounting policies (continued)

using the Black Scholes option pricing model for mineral property interests. All other exploration and evaluation expenditures are expensed in the period in which they are incurred. Acquisition costs for each exploration property are carried forward as an asset provided that one of the following conditions is met:

such costs are expected to be recouped in full through the successful exploration and development of the exploration property or alternatively, by sale; or
exploration and evaluation activities in the property have not reached a stage which permits a reasonable assessment of the existence of economically recoverable reserves, but active and significant operations in relation to the exploration property are continuing or planned.

Exploration and evaluation costs, net of bulk sample or other incidental revenues, are charged to the consolidated statement of operations and comprehensive loss in the year incurred until the technical feasibility and commercial viability of the extraction of mineral reserves or resources from a particular mineral property has been determined, in which case subsequent exploration costs and the costs incurred to develop a property are capitalized into mineral property, plant, and equipment. The establishment of technical feasibility and commercial viability of a mineral property is assessed based on a combination of factors, such as but not limited to the extent to which mineral reserves or mineral resources have been identified through a feasibility study or similar level document; the results of optimization studies and further technical evaluation carried out to mitigate project risks identified in the feasibility study; the status of environmental permits, and the status of mining leases or permits.

The costs related to a property from which there is production, together with the costs of production equipment, will be depleted and amortized using the unit of production method.

Property interests granted to others under an option agreement where payments are to be made to the Company are at the sole discretion of the optionee, are recorded as recoveries at the time of receipt. Where recoveries exceed capitalized costs, such amounts are recognized in profit or loss.

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and which do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated.

Government grants

Government grants are recorded as a reduction to the related exploration and evaluation expenses when there is reasonable assurance that the Company has complied with, and will continue to comply with, all necessary conditions to obtain the grants.

Asset retirement obligation

An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration, development or ongoing production of a mineral interest by or on behalf of the Company. Costs for restoration of site damage incurred on an ongoing basis during exploration and evaluation are provided for at their net present values and charged to profit or loss in the period such exploration and evaluation occurs. Net present value is calculated using the pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The liability is adjusted each period for the unwinding of the discount and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

4. Material accounting policies (continued)

Impairment of exploration and evaluation assets

When exploration and evaluation costs have been capitalized, they are assessed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. Assessment of impairment indicators involves the application of a number of significant judgments over internal and external factors, including reserve and resource estimation, future precious metal prices, estimated costs of future production, changes in government legislation and regulations, estimated deferred taxes and the availability of financing and various other operational factors. If any such indication exists, an estimate of the recoverable amount is undertaken. If the asset's carrying amount exceeds its recoverable amount, an impairment loss is recognized in profit or loss.

Income taxes

Income tax expense comprises current and deferred tax. Income tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity, in which case, the income tax is also recognized in other comprehensive income or directly in equity, respectively.

Current tax

Current tax is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the country where the Company's subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax

Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax is not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related deferred tax asset is realized, or the deferred tax liability is settled.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

4. Material accounting policies (continued)

Share capital

Common shares, stock options, RSUs, and warrants issued by the Company are classified as equity. Costs directly attributable to the issue of common shares, share purchase warrants, stock options and RSUs are recognized as a deduction from equity, net of any related income tax effects.

Resource expenditure deductions for income tax purposes may be renounced to investors in accordance with income tax legislation for flow-through share arrangements. On issuance of flow-through common shares, the Company bifurcates the flow-through share proceeds into (i) share capital for the fair value of common shares without a flow-through feature (based on the most recent quoted trading price), and (ii) a flow-through share premium liability, for the amount investors pay for the flow-through feature (in excess of the most recent quoted trading price of the common shares). As resource expenditures are incurred, the Company derecognizes the liability and recognizes other income.

The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Look-back Rule, in accordance with Government of Canada flow-through regulations. Under the Look-back Rule, amounts unspent at the end of each month after January of the year following the year of renunciation are subject to a monthly Part XII.6 tax calculated as the unspent amount multiplied by a prescribed rate. The prescribed rate at December 31, 2024 was 5%. Amounts renounced under the Look-back Rule that are unspent at the end of the year following the year of renunciation are also subject to an additional 10% tax on the unspent amount.

Options, warrants, restricted share units, reserves and share-based compensation

The estimation of the fair value of options and warrants at the date of grant requires a valuation model and consideration as to the inputs necessary for the valuation model chosen. For issuance of units, consisting of shares and warrants, the residual value method is used by determining the value of the more reliably measured component, with the residual being allocated to the remaining component. When the Company's shares are publicly traded, the market price is the more reliably measured component, and the residual is allocated to the warrants. Warrants not issued as part of a unit are measured using the Black-Scholes Option pricing model. The Company has made estimates as to the volatility, the expected life of the warrants, the expected dividend rate, the current price of the underlying shares, and the risk-free interest rate for the life of the warrants. The expected life of the warrants is based on the contractual life and historical data. The expected volatility is based on the historical volatility of comparable companies over the period of the expected life of the stock option or warrant.

The estimated fair value of RSUs is the market price on the date that the RSUs are granted.

Employees (including directors and senior executives) of the Company may receive a portion of their remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments ("equity-settled transactions"). The value of equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date on which they are granted using either the Black-Scholes option pricing model when valuing stock options or the market price on the date of grant when valuing RSUs.

In situations where equity instruments are issued to non-employees for goods or services, the transaction is measured at the fair value of the goods or services received by the Company. When the value of the goods or services cannot be reliably estimated, the equity instruments are measured at the fair value of the share-based payment.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

4. Material accounting policies (continued)

The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant option holder becomes fully entitled to the award ("vesting date"). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company's best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period, and the corresponding amount is recorded in reserves.

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional amount is recognized on the same basis as the amount of the original award for any modification which increases the total fair value of the equity-settled transactions or is otherwise beneficial to the option holder as measured at the date of modification.

Share-based payment reserve consists of stock-based compensation expense relating to options and RSUs vesting, net of exercises and forfeitures.

The Company has the option to redeem RSUs either for common shares or for cash. The RSUs are accounted for as equity-settled awards as the Company expects to settle RSUs with the issuance of common shares.

Loss per share

Basic loss per share is computed by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding during the year. The computation of diluted loss per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on loss per share. The dilutive effect of outstanding options and warrants and their equivalents is reflected in diluted loss per share by the treasury stock method. In a loss period, potentially dilutive stock options and warrants are excluded from the loss per share calculation as the effect is anti-dilutive.

Financial instruments

The following table summarizes the classification and measurement of the Company's financial instruments:

Classification	Financial instrument	Description
Amortized cost	Cash	Cash balances with banks
FVTPL	Trade receivables	Receivables from metal sales
Amortized cost	Other receivables	Receivables from third parties and sales tax recoverable
Amortized cost	Investments	Guaranteed investment certificates
Amortized cost	Restricted cash	Cash held by Ontario Ministry of Energy, Northern Development and Mines
Amortized cost	Accounts payable and accrued liabilities	Amounts payable to third parties

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

4. Material accounting policies (continued)

Criteria for classification

The Company classifies financial instruments at amortized cost, fair value through other comprehensive income ("FVOCI"), or fair value through profit or loss ("FVTPL"). The classification is driven by the following criteria:

| Amortized cost | • Held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
• Contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
| --- | --- |
| FVOCI | • Held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
• Contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
| FVTPL | • Measured at fair value through profit or loss unless measured at amortized cost or FVOCI.
• Derivative financial instruments that are not designated and effective as hedging instruments are classified as FVPL. Derivatives embedded in non-derivative contracts that have more than nominal value are recognized separately unless they are closely related to its host contract. |

Measurement

After classification as amortized cost, FVTPL or FVOCI, the Company uses the following policy for initial measurement and subsequent measurement at each reporting period:

Classification	Initial measurement	Subsequent measurement	Changes in fair value
Financial assets measured at amortized cost	Fair value less expected credit loss plus transaction costs	Amortized cost using the effective interest method	Reported in profit or loss when realized or impaired
Financial liabilities measured at amortized cost	Fair value less transaction costs	Amortized cost using the effective interest method	Reported in profit or loss when liability is extinguished
Financial assets measured at FVOCI	Fair value plus transaction costs	Fair value	Reported in other comprehensive income (loss)
Financial liabilities measured at FVOCI	Fair value less transaction costs	Fair value	Reported in other comprehensive income (loss)
Financial assets measured at FVTPL	Fair value	Fair value	Reported in profit or loss

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

5. Recent accounting pronouncements

New standards and interpretations

The following new amendments to IAS 1 Presentation of Financial Statements have been adopted since the release of the Company's financial statements for the year ended December 31, 2023.

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

The IASB has published Classification of Liabilities as Current or Non-Current (Amendments to IAS 1), which clarifies the guidance on whether a liability should be classified as either current or non-current. The amendments:

Clarify that the classification of liabilities as current or non-current should only be based on rights that are in place "at the end of the reporting period."
Clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability.
Make clear that settlement includes transfers to the counterparty of cash, equity instruments, other assets or services that result in extinguishment of the liability.

This amendment is effective for annual periods beginning on or after January 1, 2024. Earlier application was permitted. The adoption of this amendment did not have any impact on the Company's financial statements.

Standards and amendments issued but not yet effective

Following are the new standards and amendments issued by the IASB which are applicable to the Company's financial statements. The Company will assess the impact of the adoption of these standards and amendments on its financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements, which is intended to give investors more transparent and comparable information about companies' financial performance, thereby enabling better investment decisions. IFRS 18 introduces new sets of requirements to improve companies' reporting of financial performance and give investors a better basis for analyzing and comparing companies through

Improved comparability in the statement of profit or loss or income statement;
Enhanced transparency of management-defined performance measures; and
More useful grouping of information in the financial statements.

IFRS 18 also requires companies to provide more transparency about operating expenses, helping investors to find and understand the information they need. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, but companies can apply it earlier. IFRS 18 replaces IAS 1. It carries forward many requirements from IAS 1 unchanged.

IFRS 9 Amendments to the Classification and Measurement of Financial Instruments

In May 2024, the IASB issued amendments to the classification and measurement requirements in IFRS 9. The amendments will address diversity in accounting practice by making the requirements more understandable and consistent. These include:

Clarifying the classification and assessment of contractual cash flows of financial assets with environmental, social and corporate governance ("ESG").
Settlement of liabilities through electronic payment systems - the amendments clarify the date on which a financial asset or financial liability is derecognized. The IASB also decided to develop an accounting policy option to allow a company to derecognize a financial liability before it delivers cash on the settlement date if specified criteria are met.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

5. Recent accounting pronouncement (continued)

With these amendments, the IASB has also introduced additional disclosure requirements to enhance transparency for investors regarding investments in equity instruments designated at fair value through other comprehensive income and financial instruments with contingent features, for example, features tied to ESG-linked targets. The amendments are effective for annual reporting periods beginning on or after January 1, 2026.

Annual Improvements to IFRS Accounting Standards

In July 2024, the IASB issued narrow amendments to IFRS Accounting Standards and accompanying guidance as part of its regular maintenance of the Standards. The amended Standards are:

IFRS 1 First-time Adoption of International Financial Reporting Standards;
IFRS 7 Financial Instruments: Disclosures and its accompanying Guidance on implementing IFRS 7;
IFRS 9 Financial Instruments;
IFRS 10 Consolidated Financial Statements; and
IAS 7 Statement of Cash Flows.

The amendments are effective for annual periods beginning on or after January 1, 2026, with earlier application permitted. Annual improvements are limited to changes that either clarify the wording in an IFRS Accounting Standard or correct relatively minor unintended consequences or oversights in the Accounting Standards. They also correct minor conflicts between the requirements of the Accounting Standards.

6. Trade and other receivables

The Company's trade and other receivables are from the bulk sample sale of copper, nickel, cobalt, platinum, palladium, and gold, and harmonized sales tax ("HST") and a grant receivable from Canadian taxation authorities.

	December 31, 2024	December 31, 2023
Trade receivables	$ 1,374,139	$ -
Government grant receivable	500,000	-
HST receivables	1,154,367	890,107
	$ 3,028,506	$ 890,107

7. Investments

Investments consist of short-term guaranteed investment certificates issued by major Canadian financial institutions.

8. Restricted cash

Restricted cash includes cash provided as financial assurance for future reclamation work. In 2018, the Company filed a Notice of Material Change and Updated Closure Cost Estimate with the Ontario Ministry of Northern Development and Mines, and provided a cash surety deposit as a financial assurance guarantee in connection with the Stage One Mining Closure Plan on the Shakespeare Mine. As at December 31, 2024, the deposit had a balance of $731,855.

In 2024, the Company posted an additional $168,248 in cash as collateral for a letter of credit provided as financial assurance for work commencing at the Crean Hill Project.

As at December 31, 2024, the aggregate deposits plus accrued interest amounted to $902,583 (December 31, 2023: $699,724).

Magna Mining Inc.

Notes to the Consolidated Financial Statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

9. Equipment and right-of-use assets

The changes in the carrying value of equipment and right-of-use assets are as follows:

	Company owned						Right-of-use assets
	Computer equipment	Fencing	Equipment	Motor vehicles	Office furniture	Total
a) Cost
At December 31, 2022	$ 11,090	$ 44,689	$ 10,790	$ 58,991	$ 350	$ 125,910	$ 59,491
Additions	20,386	-	9,895	-	4,023	34,304	38,241
At December 31, 2023	$ 31,476	$ 44,689	$ 20,685	$ 58,991	$ 4,373	$ 160,214	$ 97,732
Additions	23,701	-	-	-	670	24,371	43,223
Dispositions	-	-	-	(6,000)	-	(6,000)	-
At December 31, 2024	$ 55,177	$ 44,689	$ 20,685	$ 52,991	$ 5,043	$ 178,585	$ 140,955
b) Accumulated depreciation
At December 31, 2022	$ 3,335	$ 9,720	$ 7,539	$ 8,953	$ 112	$ 29,659	$ 31,398
Depreciation	8,852	2,234	4,802	18,965	1,024	35,877	26,204
At December 31, 2023	$ 12,187	$ 11,954	$ 12,341	$ 27,918	$ 1,136	$ 65,536	$ 57,602
Depreciation	13,083	2,234	4,752	17,957	1,682	39,708	43,391
Dispositions	-	-	-	(5,422)	-	(5,422)	-
At December 31, 2024	$ 25,270	$ 14,188	$ 17,093	$ 40,453	$ 2,818	$ 99,822	$ 100,993
c) Carrying value
At December 31, 2023	$ 19,289	$ 32,735	$ 8,344	$ 31,073	$ 3,237	$ 94,678	$ 40,130
At December 31, 2024	$ 29,907	$ 30,501	$ 3,592	$ 12,538	$ 2,225	$ 78,763	$ 39,962

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

10. Exploration and evaluation assets

Exploration and evaluation assets for the years ended December 31, 2024 and 2023, are as follows:

	Crean Hill Project	Shakespeare Mine	Spanish River	Total
Balance, December 31, 2022	$ 16,514,635	$ 774,046	$ 88,109	$ 17,376,790
Acquisition costs	-	-	47,469	47,469
Change in asset retirement obligation estimate	-	89,698	-	89,698
Balance, December 31, 2023	$ 16,514,635	$ 863,744	$ 135,578	$ 17,513,957
Additions to asset retirement obligation assets	146,873	-	-	146,873
Change in asset retirement obligation estimate	-	(127,428)	-	(127,428)
Balance, December 31, 2024	$ 16,661,508	$ 736,316	$ 135,578	$ 17,533,402

As at December 31, 2024, the Company's primary exploration and evaluation assets are comprised of the past producing Crean Hill and Shakespeare projects. The Company also holds interests in other exploration and evaluation assets.

All of the Company's properties are located near Sudbury, Ontario, Canada.

The Company is required to make a $24,000 per year advance royalty payment in order to maintain certain property agreements in good standing, as outlined below. The Company is also required to make statutory licence and property tax expenditures each year to maintain its properties in good standing.

a) Crean Hill Project

The Crean Hill Project is located in Denison Township within the City of Greater Sudbury, Ontario, Canada. The project contains a nickel, copper, cobalt, gold, and platinum group metal resource. The property is in an area of patented surface and mining rights. The patents do not have an expiry date but are subject to an annual rent of $4 per hectare plus municipal taxes. The Crean Hill Project is subject to a 3% net smelter return ("NSR") royalty.

b) Shakespeare Mine

The Company has a 84% interest in the Shakespeare Mine consisting of six claims and three leases. The Shakespeare Mine contains a nickel, copper, cobalt, gold, and platinum group metal resource. Parts of the property are subject to aggregate NSR royalties totalling 2.5%, of which the Company can repurchase 1.0% for $1,500,000.

In 2010, the Company's subsidiary, Ursa Major Minerals Inc., declared commercial production at the Shakespeare Mine. Subsequently, it suspended production, and the mine remains on care and maintenance.

Various exploration mineral claims surrounding the Shakespeare Mine are subject to an 84%/16% joint venture between the Company and Glencore International PLC.

c) Stumpy Bay Property

The Company owns an 84% interest in claims known as the Stumpy Bay Property in Shakespeare and Baldwin Townships, Ontario. The Stumpy Bay Property is subject to a 0.5% NSR royalty, of which the Company can repurchase 100% for $250,000.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

10. Exploration and evaluation assets (continued)

Prior vendors have retained a 2% net returns royalty. The Company has the right to purchase one-half of the royalty for $750,000.

Glencore International PLC elected to include this property as part of the Shakespeare agreement, and accordingly, it holds a 16% interest in the Stumpy Bay Property.

d) Porter Baldwin Property

The Company has a 100% interest in mining claims in the Agnew Lake area that are contiguous with the Shakespeare Mine noted above. The Company has granted a 0.5% net returns royalty to certain mining claims, 100% of which can be repurchased for $250,000 related to certain mining claims.

e) Porter Option

The Company has a 100% interest in certain mineral claims known as the Porter Option, located in Shakespeare, Dunlop and Porter Townships, Ontario. The optionor has retained a 2% net returns royalty. Advance royalty payments of $24,000 per year commenced January 15, 2007. The advanced royalty payments are expensed as incurred to the consolidated statements of operations and comprehensive loss. The Company has the right to purchase one-half of the royalty for $1,000,000.

f) Shining Tree Property

The Company has a 100% interest in mineral claims known as the Shining Tree Property, located in Fawcett Township, Ontario. The optionor has retained a 1% net returns royalty. The Company has the right to purchase one-half of the royalty for $500,000. The property is subject to an additional 0.5% NSR royalty, of which 100% can be repurchased by the Company for $250,000.

h) Spanish River Property

Following the final option payment in November 2023 of $30,000 in cash and 40,625 common shares of the Company, with a fair value of $17,469, the Company acquired a 100% interest in certain claim units located in Baldwin Township, Ontario (the "Spanish River Property"). The Company also completed the required cumulative exploration expenditures totalling $100,000. The Spanish River Property is subject to a 1.5% NSR royalty of which the Company can repurchase 50% (0.75%) for $1,000,000 at any time.

Magna Mining Inc.

Notes to the Consolidated Financial Statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

11. Exploration and evaluation expenditures

The Company incurred the following exploration and evaluation expenditures on its properties during the years ended December 31, 2024 and 2023:

	2024	Year ended December 31, 2023
Crean Hill Project
Assays	$ 420,472	$ 661,327
Drilling	4,397,748	3,174,567
Engineering	136,696	12,455
Exploration support	2,552,092	160,787
Geology	642,642	329,549
Geology software	82,808	-
Geophysics	439,567	216,246
Technical studies	271,792	879,089
Claim maintenance	13,817	-
Environmental studies	185,083	-
Government grants	(500,000)	-
Bulk sample revenue (1)	(1,374,139)	-
	$ 7,268,578	$ 5,434,020
Shakespeare Mine
Assays	$ 3,974	$ 95,769
Drilling	3,934	-
Claim maintenance	59,460	6,587
Exploration support	137,987	24,431
Engineering	-	3,730
Geology	457,358	464,358
Geology software	47,051	-
Geophysics	10,253	-
Technical studies	-	109,201
Environmental studies	50,519	-
Government grants	-	(103,951)
	$ 770,536	$ 600,125
Regional exploration
Advanced royalty	$ 24,000	$ 24,000
Exploration support	30,022	42,180
Drilling	1,137,757	988,851
Environmental studies	36,869	-
Claim maintenance	9,837	11,502
Geology	12,098	99,031
Assays	159,596	-
Technical studies	-	29,017
Geophysics	640,207	417,147
	$ 2,050,386	$ 1,611,728
Spanish River
Claim maintenance	$ 792	$ 780
	$ 792	$ 780
Shining Tree
Geology	$ -	$ 110
Geophysics	26,600	-
	$ 26,600	$ 110
Exploration and evaluation expenses	$ 10,116,892	$ 7,646,763

Note (1): Provisional revenue recorded on the sale of metal recovered from the bulk sampling completed at the Crean Hill Project has been recorded as an offset against exploration and evaluation expenditures.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

12. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities consist of:

	December 31, 2024	December 31, 2023
Trade accounts payable	$ 1,257,752	$ 826,843
Accrued liabilities and other payables	2,348,929	786,983
	$ 3,606,681	$ 1,613,826

13. Asset retirement obligation

The Company's provision for closure and reclamation costs is based on management's estimates of the discounted costs to abandon and reclaim the Shakespeare property and facilities and to remediate the Company's activities at Crean Hill, as well as an estimate of the future timing of the costs to be incurred.

The Company has estimated its total provision for closure and reclamation to be $874,543 at December 31, 2024 (December 31, 2023 - $831,988), using an inflation rate of 2.43% (2023 – 3.90%) and a discount rate of 3.28% (2023 – 3.29%) over a period of 20 years (2023 – 20 years) for the Shakespeare property and 14 years for the Crean Hill project.

The following is an analysis of the provision for closure and reclamation:

		Crean Hill Project	Shakespeare Mine	Total
Balance, December 31, 2022	$	-	$ 715,789	$ 715,789
Accretion		-	26,501	26,501
Change in estimate		-	89,698	89,698
Balance, December 31, 2023	$	-	$ 831,988	$ 831,988
Accretion		-	23,110	23,110
Additions		146,873	-	146,873
Change in estimate		-	(127,428)	(127,428)
Balance, December 31, 2024	$	146,873	$ 727,670	$ 874,543

14. Term loan

On April 17, 2020, the Company received a $40,000 loan under the Canada Emergency Business Account ("CEBA") program. The loan was unsecured and guaranteed by the Canadian government and remained interest-free through December 31, 2023. Contingent on the Company repaying $30,000 on or before December 31, 2023, the remaining $10,000 was eligible for forgiveness. During the year ended December 31, 2020, the Company recognized $10,000 as other income for the forgivable portion of the loan. As at December 31, 2023, the principal balance owing on the loan was $nil, as the Company paid $30,000 towards the loan in December 2023, and the remaining $10,000 was forgiven.

The funds from the CEBA program were only to be used to pay non-deferrable operating expenses such as payroll, rent, utilities, insurance, property tax and regularly scheduled debt service and not to be used to fund any costs such as prepayment or refinancing of existing indebtedness, payments of dividends and distributions, and/or increases in management compensation.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

15. Income taxes

A reconciliation of income taxes at the statutory rate is as follows:

	December 31, 2024	December 31, 2023
Net loss before income taxes	$ 16,267,727	$ 9,721,879
Expected income tax recovery at the statutory tax rate of 26.5%	4,311,000	2,576,000
Renunciation of mineral exploration expenses	(2,276,000)	(1,685,000)
Non-deductible items:
Share-based compensation	(488,000)	(386,000)
Share issue costs	402,000	227,000
Flow-through premium	780,000	634,000
Other	(16,000)	(6,000)
Expected income tax recovery	2,713,000	1,360,000
Unrecognized benefit of deferred tax assets	2,713,000	1,360,000
Tax expense	$ -	$ -

The Company has not recognized a deferred tax asset on the following temporary differences and tax losses:

	December 31, 2024	December 31, 2023
Non-capital losses	$ 3,403,000	1,282,000
Mineral properties expense and equipment	16,983,000	16,573,000
Share issue costs	638,000	468,000
Asset retirement obligation	232,000	220,000
	$ 21,256,000	$ 18,543,000

Non-capital losses as at December 31, 2024 have expiry dates between 2031 and 2044 (December 31, 2023 – 2031 to 2043).

16. Issued share capital

The authorized share capital of the Company is comprised of an unlimited number of common shares without par value. As at December 31, 2024, the Company had 194,910,244 shares outstanding (December 31, 2023 – 163,379,860).

Transactions for the year ended December 31, 2024:

Private Placement

On November 4, 2024, the Company completed a private placement of 20,809,480 common shares at a price of $1.05 per common share for gross proceeds of $21,849,954. The Company paid $1,516,620 in share issue costs, which included legal fees, agent expenses, exchange fees, and a cash payment for agent fees of $1,290,968.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

16. Issued share capital (continued)

Option, RSU and warrant exercise/settlement

During the year ended December 31, 2024, a total of 903,300 common shares were issued upon the exercise of options for proceeds of $457,652. A total of $353,471 was reallocated from reserves to share capital in connection with the exercise of the options. The weighted average share price at the date of exercise of options during the year ended December 31, 2024 was $1.26.

During the year ended December 31, 2024, a total of 457,000 RSUs were settled with the issuance of 229,400 common shares and the balance of 227,600 RSUs were settled with cash to pay for payroll withholding tax payments. A total of $99,812 was reallocated from reserves to share capital in connection with the settlement of the 229,400 RSUs settled for common shares.

During the year ended December 31, 2024, a total of 9,588,204 common shares were issued upon the exercise of warrants for proceeds of $4,092,871. A total of $163,717 was reallocated from reserves to share capital in connection with the exercise of the warrants.

Transactions for the year ended December 31, 2023:

Private Placement

On January 25, 2023, the Company completed a private placement of (i) 8,236,914 flow-through common shares at a price of $1.815 per share for gross proceeds of $14,949,999, and (ii) 2,727,272 common shares at a price of $1.10 per common share for gross proceeds of $2,999,999.

The Company paid $284,496 in legal fees, exchange fees, agents' expenses and other items related to the financing. The Company also incurred agents' fees paid in cash of $1,017,000 and issued 603,305 agents' warrants with a fair value of $327,433. Each agents' warrant entitles the holder thereof to one common share of the Company at a price of $1.10 per common share until the close of business 24 months from the issue date.

Flow-through liabilities totalling $5,337,022 were recognized with respect to the January 25, 2023 private placement financing. Flow-through liabilities related to the financing are equal to the premium investors paid for the flow-through feature.

Option and warrant exercises

During the year ended December 31, 2023, a total of 2,572,187 common shares were issued upon the exercise of options for proceeds of $618,862. A total of $456,199 was reallocated from reserves to share capital in connection with the exercise of the options. The weighted average share price at the date of exercise of options in the year ended December 31, 2023 was $1.02.

During the year ended December 31, 2023, a total of 2,890,532 common shares were issued upon the exercise of warrants for proceeds of $1,165,704. A total of $75,170 was reallocated from reserves to share capital in connection with the exercise of the warrants.

Other issuances

On October 26, 2023, the Company issued 40,625 common shares with a fair value of $17,469 in connection with the Spanish River Option (note 10(h)).

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

17. Basic and diluted loss per share

The calculation of basic and diluted loss per share for the year ended December 31, 2024 was based on the loss attributable to common shareholders of $16,267,727 (2023 - $9,721,879) and the weighted average number of common shares outstanding of 170,766,096 (2023 – 160,965,300). All stock options and warrants were excluded from the diluted loss per share calculation as they were all considered anti-dilutive.

18. Share-based payment reserve

The Company has established a Stock Option Plan that provides for the issuance of stock options (the "Options") and RSUs enabling the directors to grant Options to employees, officers, directors, and consultants of the Company. From time to time, shares may be reserved by the Board, in its discretion, for Options and/or RSUs provided that the total number of shares reserved for issuance by the Board shall not exceed 10% of the issued and outstanding common shares of the Company on a non-diluted basis. Options are non-assignable and may be granted for a term not exceeding that permitted by the Exchange, currently ten years. Options issued are subject to vesting terms determined by the Board of Directors.

Details of the stock options issued and exercised during the years ended December 31, 2024 and 2023 are as follows:

	Year ended December 31, 2024		Year ended December 31, 2023
	Number of stock options	Weighted average exercise price	Number of stock options	Weighted average exercise price
Outstanding at beginning of year	8,786,800	$ 0.48	8,191,250	$ 0.38
Issued during the year	2,896,100	$ 1.30	3,621,800	$ 0.50
Exercised during the year	(903,300)	$ 0.51	(2,572,187)	$ 0.24
Expired during the year	(16,700)	$ 0.44	(454,063)	$ 0.13
Outstanding at end of year	10,762,900	$ 0.70	8,786,800	$ 0.48
Vested and exercisable	8,000,030	$ 0.56	5,887,792	$ 0.49

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

18. Share-based payment reserve (continued)

As at December 31, 2024, the Company had outstanding and exercisable stock options as follows:

Grant date	Expiry date	Number of options outstanding	Weighted average remaining life in years	Exercise price	Number of options exercisable
May 28, 2021	May 28, 2026	775,000	1.41	$ 0.50	775,000
December 23, 2021	December 23, 2026	525,000	1.98	$ 0.40	525,000
November 10, 2022	November 10, 2027	3,325,000	2.86	$ 0.47	3,325,000
May 1, 2023	May 1, 2028	75,000	3.34	$ 0.87	50,000
August 9, 2023	August 9, 2028	915,800	3.61	$ 0.58	915,800
November 2, 2023	November 2, 2028	2,001,000	3.84	$ 0.44	1,327,330
November 23, 2023	November 23, 2028	250,000	3.90	$ 0.47	166,667
September 19, 2024	September 19, 2029	1,031,900	4.72	$ 1.15	831,900
October 17, 2024	October 17, 2029	250,000	4.80	$ 1.17	83,333
December 20, 2024	December 20, 2029	1,614,200	4.97	$ 1.41	-
		10,762,900	3.53	$ 0.70	8,000,030

On December 20, 2024, the Company granted 1,614,200 Options to certain officers, employees, and consultants. The Options have a term of five years, with one-half vesting annually for the next two years and have an exercise price of $1.41 per common share.

On October 17, 2024, the Company granted 250,000 Options to certain officers. The Options have a term of five years, one-third vested immediately and one-third vest annually thereafter, and have an exercise price of $1.17 per common share.

On September 19, 2024, the Company granted 1,031,900 Options to certain officers, directors, employees, and consultants, of which 731,900 Options vested immediately. The vesting schedule for the remaining 300,000 Options consists of one-third that vested immediately and one-third vest annually thereafter. The Options have a term of five years and an exercise price of $1.15 per common share.

On November 23, 2023, the Company granted 250,000 Options to certain officers and employees. The Options have a term of five years, one-third vested immediately and one-third vest annually thereafter, and have an exercise price of $0.47 per common share.

On November 2, 2023, the Company granted 2,281,000 Options to certain officers, employees, and consultants. The Options have a term of five years, one-third vested immediately and one-third vest annually thereafter, and have an exercise price of $0.44 per common share.

On August 9, 2023, the Company granted 915,800 Options to certain officers and directors. The Options have a term of five years, vested immediately and have an exercise price of $0.58 per common share.

On May 1, 2023, the Company granted 175,000 stock options to certain employees and officers. The options have a term of five years, one-third vested immediately and one-third vest annually thereafter, and have an exercise price of $0.87 per common share.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

18. Share-based payment reserve (continued)

The Options outstanding at December 31, 2024 had a weighted average exercise price of $0.66 (December 31, 2023: $0.48), and a weighted average remaining contractual life of 3.53 years (December 31, 2023: 4.02 years). The Options vest from November 2025 to December 2027. The aggregate of the estimated fair values of the Options granted during the year ended December 31, 2024 was $2,623,027 (December 31, 2023: $1,263,505).

The inputs to the Black-Scholes Option Pricing model for the years ended December 31, 2024 and 2023 are as follows:

	Year ended December 31, 2024	Year ended December 31, 2023
Dividend	NIL	NIL
Expected volatility	87.1% - 88.54	89.6% - 90.3%
Risk-free interest rate	2.72% - 3.05	3.10% - 3.94%
Expected life (months)	60	60
Exercise price	$1.15 - $1.41	$0.44 - $0.87
Spot price	$1.15 - $1.41	$0.44 - $0.84
Forfeiture rate	0%	0%

Expected volatility in 2024 and 2023 was determined by calculating the historical volatility of similar public companies over the same period as the expected life of the Options.

During the year ended December 31, 2024, the Company recognized total stock option compensation expense related to Options of $1,380,890 (December 31, 2023 - $1,308,564).

19. Warrants

The outstanding warrants as at December 31, 2024 and 2023 and the respective changes during the year are summarized as follows:

	Year ended December 31, 2024		Year ended December 31, 2023
	Number of warrants	Weighted average exercise price	Number of warrants	Weighted average exercise price
Outstanding at beginning of year	35,769,564	$ 0.42	38,056,791	$ 0.41
Issued during the year	-	$ -	603,305	$ 1.10
Exercised during the year	(9,588,204)	$ 0.43	(2,890,532)	$ 0.40
Outstanding at end of year	26,181,360	$ 0.41	35,769,564	$ 0.42

On January 25, 2023, the Company issued 603,305 agents' warrants in relation to a private placement (note 16). The warrants had a term of two years and an exercise price of $1.10 per common share.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

Warrants (continued)

Details of the warrants outstanding and exercisable as at December 31, 2024 are as follows:

Grant date	Expiry date	Number of warrants outstanding	Weighted average remaining life in years	Exercise price
November 4, 2022	November 4, 2025	25,879,707	0.84	$ 0.41
January 25, 2023	January 25, 2025	301,653	0.07	$ 1.10
		26,181,360	0.84	$ 0.41

The Company did not issue any warrants during the year ended December 31, 2024.

The agents' warrants issued in 2023 were valued using the Black-Scholes Option Pricing Model. The inputs to the Black-Scholes Option Pricing model are as follows:

	Year ended December 31, 2023
Dividend	NIL
Expected volatility	82.3%
Risk-free interest rate	3.56%
Expected life (months)	24
Exercise price	$ 1.10
Spot price	$ 1.15
Forfeiture rate	0%

Restricted share units ("RSUs")

The Company has established a restricted share unit ("RSU") plan, which grants RSUs to directors, senior officers, employees, and consultants of the Company and its subsidiaries. The RSU plan is intended to provide an incentive to eligible persons to acquire a proprietary interest in the Company, to continue their participation in the affairs and to increase their efforts on its behalf. The RSU plan is administered by the Board of the Company. The RSU plan is a "fixed" RSU plan, whereby the maximum number of common shares that may be reserved for issue and which can be issued upon the settlement of all RSUs granted is approved by the Company's shareholders. The maximum number of common shares the Company can issue under the RSU plan is currently set at 3,000,000.

The aggregate number of common shares reserved for issuance under the stock option plan and RSU plan may not exceed 10% of the issued and outstanding common shares on the grant date.

On December 20, 2024, the Company granted certain officers 559,500 RSUs with a fair value of $788,895. The RSUs will fully vest at the end of three years from the grant date.

On November 2, 2023, the Company granted 961,000 RSUs with a fair value of $418,035 to certain officers and employees. The RSUs will fully vest at the end of three years from the grant date.

On May 1, 2023, the Company granted an officer 25,000 RSUs with a fair value of $21,000. The RSUs will fully vest at the end of three years from the grant date.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

20. Restricted share units (“RSUs”) (continued)

Details of the RSUs issued and settled during the years ended December 31, 2024 and 2023 are as follows:

	Year ended December 31, 2024		Year ended December 31, 2023
	Number of RSUs	Weighted average grant date fair value	Number of RSUs	Weighted average grant date fair value
Outstanding at beginning of year	1,814,000	$ 0.44	828,000	$ 0.44
Issued during the year	559,500	$ 1.41	986,000	$ 0.45
Settled during the year	(457,000)	$ 0.43	-	$ -
Outstanding at end of year	1,916,500	$ 0.73	1,814,000	$ 0.44

As of December 31, 2024, the Company had the following RSUs outstanding:

Grant date	RSUs outstanding	Price	Fair value	Vesting date
November 10, 2022	510,000	$ 0.47	$ 239,700	November 10, 2025
November 2, 2023	847,000	$ 0.44	368,445	November 2, 2026
December 20, 2024	559,500	$ 1.41	788,895	December 20, 2027
	1,916,500	$ 0.73	$ 1,397,040

The Company recognized a total RSU compensation expense of $459,485 for the year ended December 31, 2024 (year ended December 31, 2023 - $130,601) within share-based compensation expense.

21. Expenses by nature

Certain expenses are presented in the consolidated statements of operations and comprehensive loss using a classification based on the functions of exploration and evaluation, property maintenance and general and administrative.

Salaries and wages

Total salaries, wages and related costs paid or accrued in the year ended December 31, 2024 amounted to $4,385,765 (December 31, 2023 - $2,215,137). Key management salaries, wages, and related costs of $2,627,406 were paid or accrued to key management personnel during the year (December 31, 2023 - $1,462,088). The Company's key management personnel include executives, directors, and officers.

During the years ended December 31, 2024 and 2023, salaries, wages, and related costs were allocated to the following expense categories:

	Year ended
	December 31, 2024	December 31, 2023
General and administrative	$ 3,664,236	$ 1,585,820
Exploration and evaluation	703,623	581,168
Property maintenance	17,906	48,149
	$ 4,385,765	$ 2,215,137

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

21. Expense by nature (continued)

General and administrative expenses

For the years ended December 31, 2024 and 2023, general and administrative expenses consisted of the following:

	Year ended
	December 31, 2024	December 31, 2023
General office and administrative	$ 1,055,906	$ 378,220
Management compensation (1)	3,493,645	1,447,270
Investor relations	488,821	284,569
	$ 5,038,372	$ 2,110,059

(1) Management compensation consists of management salaries, wages and related costs, and consulting fees paid to key management and related corporations (note 24).

22. Government grants

Government grants recognized are amounts received through the Governments of Ontario and Canada and covered eligible exploration and payroll costs incurred in 2023 for the Shakespeare project. Total government grants received or receivable during the year ended December 31, 2024 were $500,000 (December 31, 2023 - $103,951) and are included in exploration and evaluation expenses.

23. Segmented information

As at December 31, 2024, the Company operates in one reportable operating segment, being the acquisition, exploration and development of mineral properties. The Company's assets are located in Canada.

24. Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence, and related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

During the years ended December 31, 2024 and 2023, the Company entered into various transactions with related parties. The transactions are measured at the exchange amounts, which are the amounts of consideration established between the related parties.

Key management consists of the Company's directors, CEO, CFO, COO and Senior Vice Presidents. The Company considers any member of key management to be a related party.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

24. Related party transactions (continued)

Compensation to related parties during the years ended December 31, 2024 and 2023 is summarized as follows:

	Year ended
	December 31, 2024	December 31, 2023
Salaries, consulting and management fees(1)	$ 2,798,523	$ 1,532,669
Share-based compensation(2)	1,386,246	1,239,606
Total remuneration	$ 4,184,769	$ 2,772,275

(1) Salaries, consulting, and management fees represent CEO, CFO, COO, Senior Vice Presidents, and director compensation.

a. Derrick Weyrauch, former CFO and director, was a related party to the Company and is related to Weyrauch and Associates Inc. During the year ended December 31, 2023, the Company paid or accrued $42,500 to Weyrauch and Associates Inc. while Derrick Weyrauch was a related party to the Company. There was $nil outstanding at December 31, 2024 and 2023.

b. Jason Jessup, CEO and director, is a related party to the Company and is related to Mine Management Partners Ltd. During the year ended December 31, 2023, a total of $3,698 was paid or accrued to Mine Management Partners Ltd. while Jason Jessup was a related party to the Company. There was $nil outstanding at December 31, 2024 and 2023.

c. David King, Senior Vice President, Technical Services, is a related party to the Company and is related to King Geoscience. During the year ended December 31, 2024, $16,000 (year ended December 31, 2023 - $198,000) was paid or accrued to King Geoscience while David King was a related party to the Company. There was $nil outstanding at December 31, 2024 and 2023.

d. Shastri Ramnath, director, is a related party to the Company and is related to Exiro Mineral Corp. During the year ended December 31, 2024, the Company paid or accrued $98,615 (year ended December 31, 2023 - $nil) to Exiro Mineral Corp., while Shastri Ramnath was a related party to the Company. There was $nil outstanding at December 31, 2024 and 2023.

(2) Share-based compensation represents stock option and RSU issuances to key management.

25. Capital management

The Company's objectives in managing its capital is to ensure that the Company is able to safeguard its ability to continue as a going concern, continue its operations, and has sufficient capital to be able to meet its strategic objectives, including the continued exploration and development of its existing mineral projects and the identification of additional projects.

The Company's primary source of capital is derived from equity issuances. As at December 31, 2024, capital consisted of equity attributable to common shareholders of $71,284,941 (December 31, 2023 - $45,784,084).

The Company has no externally imposed capital requirements and manages its capital structure in accordance with its strategic objectives and changes in economic conditions. In order to maintain or adjust its capital structure, the Company may issue new shares in the form of private placements and/or secondary public offerings.

There has been no change in the Company's approach to capital management in the year ended December 31, 2024.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

26. Financial instruments

Carrying value and fair value

The Company's financial instruments are comprised of cash, restricted cash, trade and receivables, investments, and accounts payable and accrued liabilities.

Financial instruments recognized at fair value on the consolidated statement of financial position are classified in fair value hierarchy levels as follows:

Level 1: Valuation based on unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2: Valuation techniques based on inputs other than Level 1 quoted prices that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and
Level 3: Valuation techniques with unobservable market inputs (involves assumptions and estimates by management).

Cash, restricted cash, trade and other receivables, and investments are recorded in the consolidated financial statements at amortized cost. Trade receivables are recorded in the consolidated financial statements at FVTPL. Provisional pricing mechanisms embedded within the Company's sales arrangements have the character of a commodity derivative and are carried at fair value as part of accounts receivable.

Accounts payable and accrued liabilities are classified as other financial liabilities and are recorded in the consolidated financial statements at amortized cost.

Fair value

The carrying values of cash, restricted cash, trade and other receivables, investments, accounts payable and accrued liabilities do not materially differ from their fair values given their short-term period to maturity.

Financial risk factors

The Company's activities expose it to a variety of financial risks, including credit risk, liquidity risk, foreign exchange risk, interest rate risk, and risks related to provisionally priced revenues.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that potentially subject the Company to credit risk consist of cash, trade and other receivables, investments, and restricted cash. The carrying value of the Company's financial assets recorded in the consolidated financial statements represents the Company's maximum exposure to credit risk. Management believes the credit risk is low. The Company monitors the financial condition of its customers and counterparties to contracts and the Company deals with a limited number of counterparties for its metal sales. The Company also manages credit risk by placing cash with major Canadian financial institutions. At December 31, 2024, the Company's other receivables consist of sales tax receivable due from the Government of Canada and a grant receivable from the Government of Canada.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

26 Financial instruments (continued)

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company manages liquidity risk through the management of its capital structure. The Company's approach to managing liquidity is to ensure that it will have sufficient liquidity to settle obligations and liabilities when due.

As at December 31, 2024, the Company had the following contractual obligations:

	<1 year	2 years	3-5 years	+5 years	Total
	$	$	$	$	$
Accounts payable and accrued liabilities	3,606,681	-	-	-	3,606,681
Lease liabilities	38,221	10,278	-	-	48,499
Asset retirement obligations	-	-	-	1,754,280	1,754,280
Total	3,644,902	10,278	-	1,754,280	5,409,460

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 foreign exchange rates. The Company operates in Canada and, therefore, currently has limited exposure to foreign exchange risk arising from transactions denominated in foreign currencies. Other than Canadian dollar balances, the Company has cash, trade receivables, and royalties payable that are denominated in US dollars, as outlined below. Accordingly, the Company is subject to foreign exchange risk relating to such balances in connection with fluctuations against the Canadian dollar. The Company has no program in place for hedging foreign currency risk.

The Company held the following foreign currency-denominated balances as at December 31, 2024 and December 31, 2023:

	December 31, 2024	December 31, 2023
Cash (US$)	$ 1,638,654	$ 2,068
Trade receivables (US$)	954,263	-
Accrued liabilities (US$)	(346,628)	(346,628)
	2,246,289	(344,560)
Foreign exchange rate	1.44	1.32
Equivalent in Canadian dollars	$ 3,234,656	$ (454,819)

Based on the balances held as at December 31, 2024, a 10% change in the Canadian dollar per US dollar exchange rate would have resulted in an increase or decrease in the net loss for the year of approximately $323,500 (December 31, 2023 - $45,500).

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. While the Company's financial assets are generally not exposed to significant interest rate risk because of their short-term nature, changes in interest rates will have a corresponding impact on interest income realized on such assets.

The Company did not have any interest-bearing liabilities outstanding as at December 31, 2024 and 2023.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

26 Financial instruments (continued)

Provisionally priced revenues

As a result of the provisional pricing terms in its sales contracts, the Company is exposed to commodity price risk until final pricing is determined. Provisional pricing mechanisms embedded within the sales contracts have the character of a commodity derivative and are carried at fair value as part of trade receivables. Therefore, expected cash receipts in subsequent periods will be adjusted for any changes to provisionally priced trade receivables outstanding at period end. Final pricing is usually four to six months after the date of shipment; therefore, changes in metal prices may have a material impact on the final cash receipt.

As at December 31, 2024, the Company had trade receivables related to provisionally priced metal sales of $1,374,139, net of milling and refining charges. A 10% decrease in the realized price would reduce the final cash receipt by $137,414.

Other price risks

Other price risks are the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market. The Company has limited exposure to other price risks.

27. Commitments and contingencies

Flow-Through Expenditures

In connection with financings completed by the issuance of flow-through shares (see note 16), the Company provides subscribers with an indemnification for any tax liability that may arise if the Company is found to have not incurred the qualifying exploration expenditures in accordance with the flow-through subscription agreements. As at December 31, 2023, the Company's remaining flow-through spending obligation was $8,248,368, which was required to be spent before December 31, 2024. The Company completed the required spending during the year ended December 31, 2024. During the year ended December 31, 2024, the Company accrued $167,701 in financial expense related to Part XII.6 tax on the issuance of these flow-through units (year ended December 31, 2023 - $nil), which has been recorded on the statement of operations and comprehensive loss as a finance expense.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

28. Subsequent event

Acquisition of mining operations and exploration assets

On February 28, 2025, the Company closed the previously announced acquisition of a portfolio of base metal assets located in the Sudbury Basin from a subsidiary of KGHM International Ltd. ("KGHM") (the "Transaction"). The Company acquired the producing McCreedy West copper mine, the past-producing Levack, Podolsky, and Kirkwood mines, as well as the Falconbridge Footwall (81.41%), Northwest Foy (81.41%), North Range, and Rand exploration assets (together, the "Sale Assets").

The Transaction was structured as a share purchase transaction whereby the Company acquired all of the outstanding shares of Project Nikolas Company Inc. ("PNCI") from KGHM. The purchase price was comprised of:

$5,300,000 in cash paid on closing;
1,180,705 common shares with a value of $2,000,000 issued on February 28, 2025;
a deferred payment of $2,000,000 in cash payable on December 31, 2026; and
contingent payments on the satisfaction of certain future milestones totalling up to $24,000,000.

The Company will also assume certain liabilities of PNCI, including approximately $9,900,000 of reclamation liabilities.

In addition, KGHM will retain a 4% NSR royalty on new discoveries on certain exploration properties that are part of the Sale Assets. The Company has the right to buy back 3% of these royalties (for a remaining 1% NSR royalty) at any time for various cash considerations.

The Company has determined that the Transaction represents a business combination and will report the financial statement impact of the acquisition, including the allocation of the purchase price based on the fair values of identifiable assets acquired and liabilities assumed as at the acquisition date, in its interim financial statements for the first quarter ending March 31, 2025.

Letter of credit facility

In connection with the Transaction, the Company entered into a letter of credit facility with Fédération des caisses Desjardins du Québec ("Desjardins"), under which the Company can obtain letters of credit having an aggregate maximum face amount of $12,000,000. The Company's obligations under the letter of credit facility are secured against all present and future personal property of the Company in accordance with the terms of an omnibus general security agreement between the Company and Desjardins.

Private Placement

On March 5, 2025, the Company closed a private placement financing for aggregate gross proceeds of $33,487,671, consisting of:

i. unsecured convertible debentures of the Company with a principal amount of $23,967,000, issued in ordinary multiples of $1,000, less an original issue discount of 2% of the principal amount, bringing the gross proceeds of the convertible debenture offering to $23,487,660; and
ii. 6,451,620 common shares of the Company at a price of $1.55 per common share for gross proceeds of $10,000,011.

Magna Mining Inc.
Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

28. Subsequent events (continued)

The principal amount of the convertible debentures bear interest at a fixed rate of 10.0% per annum, payable in cash quarterly in arrears and matures March 5, 2029 (the "Maturity Date").

The principal amount of each convertible debenture is convertible, at the election of the holder, into common shares at a conversion price of $2.00 per common share at any time until the earlier of (i) the business day preceding the Maturity Date and (ii) the date of repayment in full of the principal amount of the convertible debentures and all accrued and unpaid interest thereon.

If at any time following the two-year anniversary of the closing date of the convertible debenture offering, the daily volume weighted average trading price of the common shares on the TSXV equals or exceeds 150% of the $2.00 conversion price for 20 consecutive trading days, the Company shall have the right to elect, at any time during the three trading days after such trading period, to have all of the principal amount outstanding under the convertible debentures converted into common shares at the conversion price.

Options exercised

Subsequent to December 31, 2024, the Company issued 25,000 common shares upon the exercise of options for proceeds of $12,500.

Warrants exercised

Subsequent to December 31, 2024, the Company issued 961,853 common shares upon the exercise of warrants for proceeds of $599,199.

AI assistant

GoldQuest Mining Corp. — Audit Report / Information 2024

42490_rns_2025-04-09_f4ce6de7-aafa-4b1f-92ed-92dc24eee09a.pdf

Independent auditor's report

Opinion

Basis for Opinion

Material Uncertainty Related to Going Concern

Key Audit Matters

Emphasis of matter – restated comparative information

Information Other than the Consolidated Financial Statements and Auditor's Report Thereon

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

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

2. Basis of presentation

(a) Statement of compliance

(b) Basis of consolidation

(c) Basis of presentation

(d) Functional and presentation currency

2. Basis of presentation (continued)

(e) Significant estimates and critical judgments

Critical accounting judgments

3. Change in accounting policy

3. Change in accounting policy (continued)

4. Material accounting policies

Foreign currency translation

Revenue recognition

Cash

Investments

4. Material accounting policies (continued)

Equipment

Recognition and measurement

Depreciation

Impairment

Exploration and evaluation expenditures

4. Material accounting policies (continued)

Government grants

Asset retirement obligation

4. Material accounting policies (continued)

Impairment of exploration and evaluation assets

Income taxes

Current tax

Deferred tax

4. Material accounting policies (continued)

Share capital

Options, warrants, restricted share units, reserves and share-based compensation

4. Material accounting policies (continued)

Loss per share

Financial instruments

4. Material accounting policies (continued)

Criteria for classification

Measurement

5. Recent accounting pronouncements

New standards and interpretations

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

Standards and amendments issued but not yet effective

IFRS 18 Presentation and Disclosure in Financial Statements

IFRS 9 Amendments to the Classification and Measurement of Financial Instruments

5. Recent accounting pronouncement (continued)

Annual Improvements to IFRS Accounting Standards

6. Trade and other receivables

7. Investments

8. Restricted cash

9. Equipment and right-of-use assets

10. Exploration and evaluation assets

a) Crean Hill Project

b) Shakespeare Mine

c) Stumpy Bay Property

10. Exploration and evaluation assets (continued)

d) Porter Baldwin Property

e) Porter Option

f) Shining Tree Property

h) Spanish River Property

11. Exploration and evaluation expenditures

12. Accounts payable and accrued liabilities

13. Asset retirement obligation

14. Term loan

15. Income taxes

16. Issued share capital

Private Placement

16. Issued share capital (continued)

Option, RSU and warrant exercise/settlement

GoldQuest Mining Corp. Audit Report / Information 2024