Kermode Resources Ltd. — Interim / Quarterly Report 2026

Mar 14, 2026

KERMODE RESOURCES LTD.

UNAUDTED CONSOLIDTED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JANUARY 31, 2026 AND 2025

(Expressed in Canadian Dollars) (Unaudited)

Notice of No Auditor Review of the Interim Financial Statements

The accompanying unaudited interim financial statements of Kermode Resources Ltd. (the “Company”) have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the CPA Canada for a review of interim financial statements by an entity’s auditor.

KERMODE RESOURCES LTD.

Unaudited Consolidated Interim Statements of Financial Position

As at January 31, 2026 and October 31, 2025

(Expressed in Canadian Dollars)

		January 31,	October 31,
As at	Note	2026	2025
		$	$
Assets
Current assets
Cash		15,802	36,684
Receivables		-	2,468
Total assets		15,802	39,152
Liabilities
Current liabilities
Accounts payable and accrued liabilities	9	230,538	342,246
Loans payable	9	25,000	25,000
Total current liabilities		255,538	367,246
Shareholders' equity
Share capital	6	12,136,571	12,036,571
Contributed surplus	7,8	96,799	96,799
Deficit		(12,473,106)	(12,461,464)
Totalshareholders'equity		(239,736)	(328,094)
Total liabilities and shareholders' equity		15,802	39,152

Nature of business and going concern (Note 1)

Approved and authorized by the Board on March 13, 2026.

“Peter Bell” “Carlo Rigillo” Director Director

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

2

KERMODE RESOURCES LTD.

Unaudited Consolidated Interim Statements of Loss and Comprehensive Loss

For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

	Notes	2026	2025
		$	$
Operating expenses
Director fees	9	-	12,500
Management fees	9	-	15,000
Office and sundry		88	172
Professional fees	9	7,415	27,029
Consulting fees		-	30,000
Share-based compensation	9, 7	-	2,016
Transfer agent and filing fees		4,139	4,747
Write-down of exploration and evaluation assets	5	-	347,275
Loss and comprehensive loss for theyear		(11,642)	(438,739)
Basic and diluted lossper share		(0.00)	(0.00)
Weighted average number of common shares outstanding,
basic and diluted		83,173,062	58,677,535

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

3

KERMODE RESOURCES LTD.

Unaudited Consolidated Interim Statements of Changes in Shareholders’ Equity

For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

(Expressed in Canadian Dollars)
		Share	Contributed
	Shares	**Capital **	Surplus	Accumulated Deficit	**Total **
	#	$	$	$	$
Balance, October 31, 2024	61,481,970	11,832,665	74,238	(11,055,847)	851,056
Shares issued for services	4,799,863	47,999	-	-	47,999
Share-based compensation	-	-	2,016	-	2,016
Loss for the period	-	-	-	(438,739)	(438,739)
Balance, January 31, 2025	66,281,833	11,880,664	76,254	(11,494,586)	462,332
Balance, October 31, 2025	91,242,966	12,036,571	96,799	(12,461,464)	(328,094)
Shares issued for debt settlement	10,000,000	100,000	-	-	100,000
Loss for the period	-	-	-	(11,642)	(11,642)
Balance, January 31, 2026	101,242,966	12,136,571	96,799	(12,473,106)	(239,736)

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

4

KERMODE RESOURCES LTD. Unaudited Consolidated Interim Statements of Cash Flows For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

	2026	2025
	$	$
Operating Activities
Loss for the period	(11,642)	(438,739)
Items not affecting cash:
Shares issued for debt	-	-
Shares issued for management fees	-	47,999
Share based compensation	-	2,016
Write-down of exploration and evaluation assets	-	347,275
Change in non-cash working capital items
Receivables	2,468	13,590
Prepaid expenses	-	1,855
Accounts payable and accrued liabilities	-	73,539
Advances payable	(11,708)	-
Net cashprovided by (usedin) operating activities	(20,882)	47,535
Investing activities
Explorationand evaluationassets	-	(46,404)
Net cashusedin investing activities	-	(46,404)
Change in cash for the period	(20,882)	1,153
Cash, beginning of the period	**36,684 **	5,056
Cash, end of theperiod	15,802	6,187
Supplemental schedule of non-cash transactions:
Shares issued for exploration and evaluation assets	-	101,184
Shares issued for debt settlement	100,000
Shares issued in services	-	85,639
Exploration and evaluation expenditures included in accounts payable and
accrued liabilities	-	52,232

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

5

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

1. NATURE OF BUSINESS AND GOING CONCERN

Kermode Resources Ltd. (“Kermode” or the “Company”) was incorporated under the laws of the Province of Alberta and was subsequently continued into British Columbia.

As of October 31, 2025, the Company in no longer engaged in the business of acquiring, exploring, and transacting in mineral exploration properties located in Canada and the USA. On January 21, 2026, the Company announced, subject to disinterested shareholder approval, it will voluntarily delist (the “Delisting”) its common shares from the TSX Venture Exchange (the “TSXV”). The Company’s registered and records office is 2505 – 1177 West Hastings Street, Vancouver, BC, V6E 2L3.

These unaudited consolidated financial statements have been prepared on a going-concern basis with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception and expects to incur further losses in the development of its business. On January 31, 2026, the Company had a working capital deficit of $239,736 (October 31, 2025 - $328,094) and at that date, the Company also had an accumulated deficit of $12,473,106 (October 31, 2025 - $12,461,464) which has been funded primarily by the issuance of equity.

The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its general operating expenses and to continue to explore its mineral properties. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. These factors may indicate a material uncertainty that cast significant doubt upon the Company’s ability to continue as a going concern and, therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business. These consolidated financial statements do not reflect the adjustments to the carrying values of the assets and liabilities, the reported expenses and the consolidated statements of financial position classifications that would be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

2. BASIS OF PRESENTATION

Statement of Compliance

These unaudited consolidated interim financial statements have been prepared in accordance with International Accounting Standards as 34 ‘Interim Financial Reporting’ using accounting policies consistent with the IFRS® Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) and should be read in conjunction with the annual audited financial statements for the year ended October 31, 2025, which have been prepared in accordance with IFRS accounting standards.

Basis of presentation

These unaudited consolidated interim financial statements are presented in Canadian dollars (“CAD”), which is the Company’s functional and presentation currency. The unaudited consolidated interim financial statements are prepared on a historical cost basis except for certain financial instruments classified as fair value through profit or loss (FVTPL”), which is stated at their fair value. The accounting policies have been applied consistently throughout the entire period presented in these unaudited consolidated interim financial statements.

6

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

2. BASIS OF PRESENTATION

Principles of consolidation

These unaudited consolidated interim financial statements include the accounts of the Company and its subsidiary as at January 31, 2026. Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The unaudited consolidated interim financial statements present the results of the Company and its subsidiary as if they formed a single entity. All inter-company transactions and balances between the companies are therefore eliminated in full.

On February 27, 2025, the Company completed the acquisition of 1521158 B.C. Ltd. pursuant to a share purchase agreement whereby the Company issued 15,000,000 common shares. The entity holds 100% interest in and to 25 claims in the Thunder Bay Mining Division in Ontario (Note 4). These unaudited consolidated interim financial statements include the accounts of 1521158 B.C. Ltd. from the date of acquisition.

3. MATERIAL ACCOUNTING POLICY INFORMATION

Financial instruments

Financial instruments are measured on initial recognition at fair value, plus, in the case of financial instruments other than those classified as FVTPL, directly attributable transaction costs. Financial instruments are recognized when the Company becomes party to the contracts that give rise to them and are classified as amortized cost, fair value through profit or loss or fair value through other comprehensive income, as appropriate.

Financial assets at FVTPL

Financial assets at FVTPL include financial assets held for trading and financial assets not designated upon initial recognition as amortized cost or fair value through other comprehensive income (“FVOCI”). A financial asset is classified in this category principally for the purpose of selling in the short term, or if so designated by management. Transaction costs are expensed as incurred. On initial recognition, a financial asset that otherwise meets the requirements to be measured at amortized cost or FVOCI may be irrevocably designated as FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. Financial assets measured at FVTPL are measured at fair value with changes in fair value recognized in the unaudited consolidated interim statements of loss and comprehensive loss.

Financial assets at FVOCI

On initial recognition of an equity investment that is not held for trading, an irrevocable election is available to measure the investment at fair value upon initial recognition plus directly attributable transaction costs and at each period end, changes in fair value are recognized in other comprehensive income ("OCI") with no reclassification to the unaudited consolidated interim statements of operations. The election is available on an investment-by-investment basis. Investments in equity securities, where the Company cannot exert significant influence, are designated as financial assets at FVOCI.

Financial assets at amortized cost

A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding and is not designated as FVTPL. Financial assets classified as amortized cost are measured subsequent to initial recognition at amortized cost using the effective interest method. Cash and receivables are classified as and measured at amortized cost.

7

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in loss when the liabilities are derecognized as well as through the amortization process. Borrowing liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the unaudited consolidated interim statements of financial position date. Accounts payable, accrued liabilities, loans payable and advances payable are classified as and measured at amortized cost.

De-recognition of financial assets and liabilities

A financial asset is de-recognized when either the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party. If neither the rights to receive cash flows from the asset have expired nor the Company has transferred its rights to receive cash flows from the asset, the Company will assess whether it has relinquished control of the asset or not. If the Company does not control the asset, then derecognition is appropriate. A financial liability is de-recognized when the associated obligation is discharged or canceled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in profit or loss.

Impairment of financial assets

A loss allowance for expected credit losses is recognized in profit or loss for financial assets measured at amortized cost. At each statement of financial position date, on a forward-looking basis, the Company assesses the expected credit losses associated with its financial assets carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The impairment model does not apply to FVTPL instruments.

The expected credit losses are required to be measured through a loss allowance at an amount equal to the 12month expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date) or full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument). A loss allowance for full lifetime expected credit losses is required for a financial instrument if the credit risk of that financial instrument has increased significantly since initial recognition.

Financial instruments recorded at fair value

The fair value of quoted investments is determined by reference to market prices at the close of business on the statement of financial position date. Where there is no active market, fair value is determined using valuation techniques. These include using recent arm’s length market transactions; reference to the current market value of another instrument which is substantially the same; discounted cash flow analysis; and, pricing models.

Financial instruments that are measured at fair value subsequent to initial recognition are grouped into a hierarchy based on the degree to which the fair value is observable as follows:

8

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Exploration and evaluation assets

The Company is in the exploration stage with respect to its investment in mineral properties and accordingly follows the practice of capitalizing all costs relating to the acquisition of exploration for and development of mineral properties. Such costs include, but are not limited to, geological, geophysical studies, exploratory drilling and sampling. The aggregate costs related to abandoned mineral properties are charged to profit or loss at the time of any abandonment or when it has been determined that there is evidence of a permanent impairment. An impairment charge relating to a mineral property is subsequently reversed when new exploration results or actual or potential proceeds on sale or farmout of the property result in a revised estimate of the recoverable amount but only to the extent that this does not exceed the original carrying value of the property that would have resulted if no impairment had been recognized.

The recoverability of amounts shown for exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain financing to complete development of the properties, and on future production or proceeds of disposition.

The Company recognizes in income costs recovered on mineral properties when amounts received or receivable are in excess of the carrying amount.

All capitalized exploration and evaluation assets are monitored for indications of impairment. Where a potential impairment is indicated, assessments are performed for each area of interest. To the extent that exploration and evaluation assets are not expected to be recovered, they are charged to profit or loss. Exploration areas where reserves have been discovered, but require major capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is underway as planned.

Restoration, rehabilitation and environmental obligations

A legal or constructive obligation to incur restoration, rehabilitation and environmental costs may arise when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property interest. Such costs arising from the decommissioning of a plant and other site preparation work, discounted to their net present value, are provided for and capitalized to the carrying amount of the asset, as soon as the obligation to incur such costs arises. Discount rates using a pre-tax rate that reflects the time value of money are used to calculate the net present value. The related liability is adjusted for each period for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation.

Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is an indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the assets belong.

9

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in net loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years.

Provisions

A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably estimated. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Share-based compensation

The fair value of options and performance share units (“SBC”) granted to employees at the date of grant is recognized as an expense over the vesting period with a corresponding increase in contributed surplus. An individual is classified as an employee when the individual is an employee for legal or tax purposes or provides services similar to those performed by a direct employee, including directors of the Company.

In situations where SBC are issued to non-employees and some or all of the goods or services received by the Company as consideration cannot be specifically identified, the unidentified goods or services received (or to be received) are measured as the difference between the fair value of the share-based payment transaction and the fair value of any identified goods or services received at the grant date.

The fair value is measured at the grant date and recognized over the period during which the SBC vest. The fair value of the options granted is measured using the Black-Scholes SBC-pricing model, taking into account the terms and conditions upon which the options were granted. The performance share units are recorded at fair value based on the market price of the common shares at the date of grant and recorded over the estimated vesting period. At the end of each reporting period, the amount recognized as an expense is adjusted to reflect the actual number of SBC that are expected to vest. Share-based compensation incorporates an expected forfeiture rate.

All equity settled share-based compensation is reflected in contributed surplus, until exercised or granted. Upon exercising or granting, shares are issued from treasury and the amount reflected in contributed surplus is credited to share capital, adjusted for any consideration paid. If an SBC is not exercised or granted prior to its expiration, the amount previously reflected in contributed surplus is credited to deficit.

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

10

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

Deferred tax is recorded using the liability method, providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for relating to goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting or taxable loss, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the unaudited consolidated interim statements of financial position date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, it does not recognize that excess.

Loss per share

Basic loss per share is computed by dividing the loss for the year by the weighted average number of common shares outstanding during the year, including contingently issuable shares which are included when the conditions necessary for the issuance have been met. Diluted earnings per share is calculated in a similar manner, except that the weighted average number of common shares outstanding is increased to include potentially issuable common shares from the assumed exercise of common share purchase options and warrants, if dilutive. The number of additional shares included in the calculation is based on the treasury stock method for options and warrants. Diluted loss per share does not include the effect of potentially issuable common shares if their effect is anti-dilutive.

Share capital

Financial instruments issued by the Company are classified as equity only to the extent they do not meet the definition of a financial liability or financial asset. The Company’s common shares and flow-through shares are classified as equity instruments. Incremental costs directly attributable to the issuance of equity instruments are recognized as a deduction from the proceeds in equity in the period where the transaction occurs.

Critical areas of judgment and estimation uncertainty

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods presented. These judgments and estimates are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. Actual results may differ from the amounts included in the consolidated financial statements.

Areas of significant judgment and estimates affecting the amounts recognized in the consolidated financial statements include:

a. Going concern

The Company’s management has assessed the Company’s ability to continue as a going concern. The factors considered by management include, among other things, the Company’s cash position at January 31, 2026; its projected exploration and general operating costs; its ability to raise financing and its intention to continue operating the Company.

11

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICY INFORMATION (Continued)

b. Impairment of non-financial assets

Assets are reviewed for an indication of impairment at each date of the unaudited consolidated interim statement of financial position. This determination requires significant judgment. Factors which could trigger an impairment review include, but are not limited to, significant negative industry or economic trends, interruptions in exploration and evaluation activities and significant drop in precious metal prices.

c. Valuation of share-based compensation

The Company records all share-based compensation using the fair value method. The Company uses the market value for common shares and Black-Scholes model to determine the fair value of stock options. The main factor affecting the estimates of the fair value of stock options is the volatility used. The Company currently estimates the expected volatility of its common shares based on the trading history of the Company taking into consideration the expected life of the options.

Adoption of New Accounting Standards and New Accounting Pronouncements

The following amendments were adopted by the Company on November 1, 2024:

In January 2020, the IASB issued amendments to IAS 1, Presentation of Financial Statements, to provide a more general approach to the presentation of liabilities as current or non‐current based on contractual arrangements in place at the reporting date.

These amendments:

• specify that the rights and conditions existing at the end of the reporting period are relevant in determining whether the Company has a right to defer settlement of a liability by at least twelve months;

• provide that management’s expectations are not a relevant consideration as to whether the Company will exercise its rights to defer settlement of a liability; and

• clarify when a liability is considered settled.

On October 31, 2022, the IASB issued a deferral of the effective date for the new guidance by one year to annual reporting periods beginning on or after January 1, 2024 and is to be applied retrospectively.

There was no impact on the Company’s consolidated financial statements upon the adoption of these amendments.

4. ACQUSITION OF 1521158 B.C. LTD.

On March 12, 2025, the Company completed the acquisition of 1521158 B.C. Ltd. by issuing 15,000,000 common shares (issued and valued $75,000) to the former shareholders of 1521158 B.C. Ltd. In addition, the Company paid transaction costs of $10,205.

The transaction does not constitute a business combination, as 1521158 B.C. Ltd. does not meet the definition of a business under IFRS 3 – Business Combinations. As a result, the acquisition of 1521158 B.C. Ltd. has been accounted for as an asset acquisition, whereby all of the assets acquired, and liabilities assumed, are recorded at fair value. Upon closing of the transaction, 1521158 B.C. Ltd. became a wholly owned subsidiary of the Company. The net assets acquired pursuant to the acquisition are as follows:

12

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

4. ACQUSITION OF 1521158 B.C. LTD. (continued)

Net assets acquired
Exploration and evaluation assets (Note 5)	$ 85,205
Total purchase price
Issuance of 15,000,000 common shares Transaction costs	$ 75,000 10,205
	85,205

On October 31, 2025, the Company recognized an impairment of its Thunder Bay property which lapsed in January 2026. The Company recorded an impairment of $85,205 on this asset.

13

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements

For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

5. EXPLORATION AND EVALUATION ASSETS

The balance and summary of the changes of the exploration and evaluation assets are as follows:

			Khrysos	Light-
	Beaton	Eastgate	& Silver	ning	Lucky	Mt.	Santa	Slesse		Vigh	Thunder
	Gold	BC	Bell	Peak	Strike	Sicker	Anna	Creek	Trio	Graphite	Bay
	$	$	$	$	$	$	$	$	$	$	$
Balance, October 31, 2024	158,318	2,443	181,628	347	291,308	157,905	236,306	78,268	32,699	30,300	-
Acquisition Costs	-	-	-	-	-	-	-	-	-	-	85,205
Exploration	-	-	-	-	11,802	75,135	-	-	-	-	-
Write-off	(158,318)	(2,443)	(181,628)	(347)	(303,110)	(233,040)	(236,306)	(78,268)	(32,699)	(30,300)	(85,205)
Balance, January 31, 2026	-	-	-	-	-	-	-	-	-	-	-

	Total
	$
Balance, October 31, 2024	1,169,522
Acquisition Costs	85,205
Exploration	86,937
Write-off	(1,341,664)
Balance, October 31, 2025 and
January 31, 2026	-

On October 6, 2025, the Company and the optionors of the Beaton Gold, Mt. Sicker and Tamahi projects in British Columbia agreed to mutually terminate the respective option agreements with immediate effect. The board of directors has also decided that it does not intend to further advance the Lucky Strike project in British Columbia, and has abandoned the effort to transfer these claims to Kermode which continue to be registered in the name of the prospector, or the Company’s existing mining concessions in Thunder Bay, Ontario, which lapsed to the Crown in January 2026.

14

KERMODE RESOURCES LTD.

Notes to the Unaudited Consolidated Interim Financial Statements

For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

5. EXPLORATION AND EVLUATION ASSETS (Continued)

			Khrysos	Light-
	Beaton	Eastgate	& Silver	ning	Lucky	Mt.	Santa	Slesse		Vigh
	Gold	BC	Bell	Peak	Strike	Sicker	Anna	Creek	Trio	Graphite	Total
	$	$	$	$	$	$	$	$	$	$	$
Balance, October 31, 2024	158,318	2,443	181,628	347	291,308	157,905	236,306	78,268	32,699	30,300	1,169,522
Exploration	-	-	-	-	7,978	38,426	-	-	-	-	46,404
Write-off	-	-	-	-	-	-	(236,307)	(78,268)	(32,700)	-	(347,275)
Balance, January 31, 2025	158,318	2,443	181,628	347	299,285	196,330	-	-	-	30,300	868,651

15

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

5. EXPLORATION AND EVLUATION ASSETS (Continued)

Title to mineral properties

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties are in good standing.

The Company has not yet determined if the exploration and evaluation assets contain economic ore recoveries.

Projects where the Company has ceased to advance the agreement:

1) Thunder Bay, Ontario

On March 12, 2025, the Company entered into an agreement to acquire a 100% interest in the Thunder Bay Property through the acquisition of 100% of the common shares of a privately held company that owns the property (Note 4).

The Company issued 15,000,000 common shares (issued at a value of $75,000); and paid other transaction costs of $10,205 related to acquiring the privately held company.

The board of directors has decided that it does not intend to further advance the Company’s existing mining concessions in Thunder Bay, Ontario, which lapsed to the Crown in January 2026, as such the Company has written off this asset as a charge against exploration and evaluation assets for the year ended October 31, 2025.

2) Beaton Gold (formerly Black Panther), British Columbia

On August 10, 2023, the Company entered into an option agreement to acquire a 100% interest in the Black Panther project on Vancouver Island, British Columbia. On September 17, 2024, the Company amended the agreement reducing the size of exploration claims, changing the members of the vendor group, and changing the project name to Beaton Gold. The changes were approved by the TSXV on October 1, 2024.

To complete the acquisition, the Company is required to issue 4,800,000 common shares as follows:

• a. 1,200,000 common shares on the Effective Date (issued August 11, 2023, valued at $120,000);

• b. an additional 1,200,000 Shares on or before 12 months following the Effective Date (issued October 4, 2024, valued at $12,000);

• c. an additional 1,200,000 Shares on or before 24 months following the Effective Date; and

• d. an additional 1,200,000 Shares on or before 36 months following the Effective Date.

The property was subject to a net smelter return royalty (“NSR”) of 3% with a $6,000,000 buy-down and a Sale Participation Right of 30% of gross proceeds received by the Company from any future sale of disposition of any interest in the property in the next ten years. The NSR has been changed to 1% with a $1,000,000 buy-down, and the Sale Participation Right has been removed.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $158,318 to operations. The Company decided to terminate this property purchase option agreement without further liability or obligation.

3) Lucky Strike, British Columbia

On July 20, 2022, the Company entered into an option agreement to acquire a 100% interest in the Lucky Strike Copper project in British Columbia.

16

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

5. EXPLORATION AND EVLUATION ASSETS (Continued)

The Company completed the option exercise on July 24, 2024. To exercise the option, the Company issued 900,000 common shares valued at $135,000 in fiscal 2022, 900,000 common shares valued at $90,000 in fiscal 2023 and 900,000 common shares value at $9,000 on July 24, 2024. There are no work commitments for the Company. There shall be a 2% NSR Royalty payable to the vendor group, where each one percent can be bought down for $1,000,000.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $303,110 to operations. The Company decided to terminate this property purchase option agreement without further liability or obligation.

4) Mt. Sicker, British Columba

On October 25, 2023, the Company entered into the option agreement to acquire a 100% interest in the Mt. Sicker project located in British Columbia. To complete the acquisition, the Company is required to pay $210,000 and issue 20,000,000 common shares as follows:

			Exploration or Other
Timing	Cash	Securities	Work Commitments
Exchange Approval	$Nil	Nil	$Nil
Year 1	$Nil	2,500,000	$Nil
Year 2	$10,000	2,000,000	$Nil
Year 3	$20,000	2,500,000	$Nil
Year 4	$30,000	3,000,000	$Nil
Year 5	$50,000	4,000,000	$Nil
Year 6	$100,000	6,000,000	$Nil
Total	$210,000	20,000,000	$Nil

Pursuant to the option agreement, the Company issued 2,500,000 common shares valued at $25,000 on October 4, 2024. The property is subject to an NSR of 2% with a $1,000,000 buy-down and a Sale Participation Right of 5% of gross proceeds received by the Company from any future sale of disposition of any interest in the property in the next ten years.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $233,040 to operations. The Company decided to terminate this property purchase option agreement without further liability or obligation.

5) Tamahi Project, British Columbia

On July 21, 2025, the Company entered into the option agreement to acquire a 100% interest in the Tamahi project located in British Columbia.

To complete the acquisition, the Company is required to pay $210,000 and issue 20,000,000 common shares as follows:

					Exploration or Other
		Timing	Cash	Securities	Work Commitments
Year	5		$100,000	-	$250,000
Total			$100,000	-	$250,000

The property is subject to an NSR of 1% which is subject to buyback for $1,000,000.

During the year ended October 31, 2025, the Company decided to terminate this property purchase option agreement without further liability or obligation.

17

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

5. EXPLORATION AND EVLUATION ASSETS (Continued)

6) Eastgate BC Project, British Columbia

On June 22, 2023, the Company entered into an option to acquire a 100% interest in the Eastgate project located in British Columbia.

On February 16, 2024, the deal terms for the Eastgate BC property were amended, such that to earn a 100% interest in the project, the Company assigned the vendors a NSR of 1% with a $1,000,000 buy-down and a Sale Participation Right of 60% of gross proceeds received by the Company from any future sale of disposition of any interest in the property for a period of ten years.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $2,443 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

7) Khrysos & Silver Bell Project, British Columbia

On, May 26, 2023, the Company entered into an option agreement with Aurum Vena Mineral Resources Corp. to acquire a 100% interest in the Khrysos and Silver Bell projects located in British Columbia. On May 26, 2023, the Company issued 1,500,000 common shares valued at $150,000 and is required to issue an additional 1,500,000 on or before May 2028. The property is subject to a Sale Participation Right of 10% of gross proceeds received by the Company from any future sale of disposition of any interest in the property in the next ten years.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $181,628 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

8) Lightning Peak Project, British Columbia

On June 12, 2024, the Company entered into an option agreement to acquire a 100% interest in the Lightning Peak Project comprised of mineral claims located in British Columbia. The option agreement has an initial term of one year. There are no share payments under the option agreement, and there are no spending requirements.

The property is subject to a Sale Participation Right of 55% of gross proceeds received by the Company from any future sale of disposition of any interest in the property in the next ten years.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $347 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

9) Vigh Graphite Project, British Columbia

On December 7, 2023, the Company entered into an option agreement to acquire a 100% interest in the Vigh Graphite project comprised of mineral claims located in British Columbia. Pursuant to the option agreement, the Company issued 1,500,000 common shares valued at $30,000. To exercise the option, the Company must issue an additional 1,500,000 common shares within 36 months of closing. The property is subject to an NSR of 5% of which 3% is subject to a $3,000,000 buy-down and a Sale Participation Right of 10% of gross proceeds received by the Company from any future sale of disposition of any interest in the property in the next ten years.

18

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

5. EXPLORATION AND EVLUATION ASSETS (Continued)

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $30,300 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

10) Santa Anna Project, British Columbia

On September 20, 2023, entered into an option agreement to acquire a 100% interest in the Santa Anna project in British Columbia.

Pursuant to the option agreement, the Company issued 2,100,000 common shares valued at $210,000 on September 20, 2023. To exercise the option, the Company must issue an additional 2,800,000 common shares within 24 months and 3,500,000 common shares within 60 months of closing.

The property is subject to a NSR of 2% with a $3,500,000 buy-down and a Sale Participation Right of 7% of gross proceeds received by the Company from any future sale of disposition of any interest in the property in the next ten years.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $236,306 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

11) Slesse Creek Project, British Columbia

On June 22, 2023, the Company entered into an option agreement to acquire a 100% interest in the Slesse Creek project located in British Columbia.

Pursuant to the option agreement, the Company issued 400,000 common shares valued at $40,000 in fiscal 2023 and 400,000 common shares valued at $4,000 on July 24, 2024. To exercise the option, an additional 900,000 common shares must be issued within 24 months of closing.

The property is subject to a NSR of 1% with a $1,000,000 buy-down and a Sale Participation Right of 10% of gross proceeds received by the Company from any future sale of disposition of any interest in the property in the next ten years.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $78,268 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

12) Trio, British Columbia

On July 24, 2023, the Company entered into an option agreement to acquire a 100% interest in the Trio project located on Vancouver Island, British Columbia. On August 27, 2024, the Company changed the terms of the property option agreement as below.

To earn an 100% interest in the project, the Company assigned the vendors a NSR of 2% with a $2,000,000 buy-down and a Sale Participation Right of 30% of gross proceeds received by the Company from any future sale of disposition of any interest in the property in the next ten years. In addition, the Company must make a cash payment of $150,000 any time in the next 10 years payable equally to the vendors.

During the year ended October 31, 2025, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $32,699 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

19

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

5. EXPLORATION AND EVLUATION ASSETS (Continued)

13) Caycuse Copper, British Columbia

On December 9, 2022, the Company entered into an option agreement to acquire a 100% interest in the Caycuse Copper project located in British Columbia pursuant to which the Company issued 1,500,000 common shares valued at $150,000. In order to complete the acquisition, the Company is required to issue 500,000 common shares annually for the next nine years. On October 17, 2023, the Company issued 500,000 shares as the 1st anniversary payment, valued at $10,000. As at October 31, 2024, the project’s acquisition cost is $162,500.

During fiscal 2024, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $189,241 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

14) Tonya, Nevada, USA

On August 16, 2023, the Company initiated an option agreement to lease certain unpatented mining claims owned by Gold Range LLC in Pershing County, Nevada, USA, called the Tonya project. The option provides the Company with the right but not the obligation to undertake a lease of the property.

During fiscal 2024, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $34,154 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

15) Rye Patch, Nevada, USA

On May 17, 2024, the Company initiated an option agreement to lease certain patented and unpatented mining claims owned by Gold Range LLC in Pershing County, Nevada, USA, called the Rye Patch project. The option provides the Company with the right but not the obligation to undertake a lease of the property.

During fiscal 2024, the Company decided not to proceed with this property, that had a book value of $nil. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

16) Gold Rush Project, British Columbia

On January 11, 2024, the Company entered into an option agreement to acquire a 100% interest in the Gold Rush project comprised of mineral claims located in British Columbia. Pursuant to the option agreement, the Company must pay cash of $50,000 on or before the second anniversary and additional cash of $100,000 on or before the fourth anniversary of closing.

During fiscal 2024, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $600 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

17) Ogie Gold Project, British Columbia

On February 12, 2024, the Company entered into an option agreement to acquire a 100% interest in the Ogie Gold project comprised of mineral claims located in British Columbia.

During fiscal 2024, the Company decided not to proceed with this property and recorded an impairment to charge exploration and evaluation costs of $800 to operations. The Company decided to abandon this property purchase option agreement because it was unable to finance further exploration work on the project.

20

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

6. SHARE CAPITAL

Authorized share capital

As of January 31, 2026, the authorized share capital of the Company is an unlimited number of common shares without par value. All issued shares, consisting only of common shares, are fully paid.

Issued share capital:

As at January 31, 2026, the Company had 101,242,966 (October 31, 2025 – 91,242,966) common shares issued and outstanding.

Share issuances:

For the three months ended January 31, 2026, the Company completed the following transactions:

• (i) On January 21, 2026, 10,000,000 common shares issued valued at $100,000 in settlement of debts owing to a consultant. The fair value of the common shares was $0.01 based on market value at the time of issuance.

For the three months ended January 31, 2025, the Company completed the following transactions:

• (i) 250,000 common shares issued valued at $2,500 pursuant to shares-for-services agreements with the former CFO.

• (ii) 4,549,863 common shares issued valued at $45,499 in settlement of charges pursuant to shares-for-services agreements with exploration services providers.

7. SHARE-BASED PAYMENTS

The Company had adopted an equity incentive plan (the “Plan”) dated March 25, 2025 to govern the grant, administration and exercise of Security Based Compensation which may be granted to eligible Participant. The Plan allowed for a “rolling up to 10% and fixed up to 10%” security-based compensation plan. Under the Plan, the maximum number of Options issuable was 10% of the number of Shares outstanding as at the date of any Option grant and the maximum number of Restricted Share Units (“RSUs”) is fixed at 10% of the number of Shares of the Company outstanding as at the date of implementation of the Plan. At the Company’s annual general and special meeting held on April 28, 2025, the Plan was not approved by shareholders and terminated with immediate effect. As at January 31, 2026, the Company does not have an equity incentive plan.

a) Options

The following table summarizes the Company’s stock options outstanding at January 31, 2026 and October 31, 2025 and the changes for the years then ended.

		Weighted
		average	Weighted
	Number of	exercise price	average
	options	($ per share)	remaining life (years)
Balance - October 31, 2023	1,619,630	0.50	3.63
Granted	3,400,000	0.05	-
Forfeited	(3,819,630)	0.19	-
Balance - October 31, 2024	1,200,000	0.20	4.19
Cancelled	(1,200,000)	0.20	-
Balance – October 31, 2025 and Janu-
ary 31, 2026	-	-	-

21

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

7. SHARE-BASED PAYMENTS (Continued)

b) Performance Share Units

The total number of Performance Share Units (“ PSUs ”) exercisable as of January 31, 2026 is Nil (October 31, 2025 –nil). The PSUs were issued pursuant to the legacy equity incentive plan dated January 17, 2024. The fair value of the PSU granted are recorded at fair value based on the market price of the common shares on grant and recorded over the estimated vesting period of one year. The Performance Multiplier is set by the Board at the time of exercise of any PSU. The specific value for the multiplier reflects the recipient's performance at the time when the Board of Directors of the Company decides to exercise the PSU. The Performance Multiplier may be up to ten to one. The Company assumes the Performance Multiplier shall be one to one for the calculation of stock-based compensation.

The following table summarizes the Company’s PSUs outstanding at January 31, 2026 and October 31, 2025 and the changes for the year then ended.

changes for the year then ended.
		Weighted
		average
		remaining life
	Number of PSUs	(years)
Balance – October 31, 2023	1,000,000	2.34
Issued	800,000	-
Forfeited	(700,000)	-
Balance - October 31, 2024	1,100,000	2.14
Forfeited	(1,100,000)	-
Balance– October 31, 2025 and January 31, 2026	-	-

During the period ended January 31, 2026, the Company recognized share-based compensation of $nil (January 31, 2025 – $2,016) of which $nil (January 31, 2025 – $2,016) was related to vesting of PSUs.

8. WARRANTS

The following common share purchase warrants entitle the holders thereof the right to purchase one common share for each common share purchase warrant. The following table summarizes the Company’s common share purchase warrants outstanding at January 31, 2026 and October 31, 2025 and the changes for the year ended.

		Weighted	Weighted
		average	average
		exercise price	remaining life
	Number of warrants	($ per share)	(years)
Balance – October 31, 2023	1,246,560	0.50	1.52
Issued	3,275,000	0.05
Expired	(981,260)	0.50	-
Balance - October 31, 2024	3,540,300	0.08	2.64
Issued (i)	1,900,000	0.05	4.88
Balance– October 31, 2025	5,440,300	0.07	2.68
Balance- January 31, 2026	5,440,300	0.07	2.43

(i) On June 17, 2025, the Company issued 1,900,000 warrants in connection with the issuance of its unit financing. The warrants are exercisable within 60 months from the date of issuance, at an exercise price of $0.05 per share. These warrants were valued on the date of issue using the Black-Scholes option pricing model with the following assumptions: dividend yield 0%, discount rate 2.96%, expected volatility of 238.2% and an expected life of 60 months. The value attributed to these warrants was $18,704.

22

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

8. WARRANTS (Continued)

The balance of common share purchase warrants outstanding at January 31, 2026 is as follows:

Expiry date	Type	Exercise price $	# Warrants outstanding
May 9, 2026	Private Placement	0.50	257,300
May 9, 2026	Finders' Warrants	0.50	8,000
April 8, 2027	Private Placement	0.05	525,000
May 27, 2027	Private Placement	0.05	250,000
August 21, 2027	Private Placement	0.05	2,500,000
June17,2030	PrivatePlacement	0.05	1,900,000
			5,440,300

9. RELATED PARTY TRANSACTIONS AND BALANCES

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company’s Board of Directors and corporate officers. The Company had the following transactions with key management personnel during the three months ended January 31, 2026 and 2025:

2026 and 2025:
	2026	2025
	$	$
Director fees	-	12,500
Management fees	-	15,000
Professional fees	-	15,230
Share-based compensation	-	2,016
	-	44,746

During the three months ended January 31, 2026, the Company:

• i) incurred $nil (2025 - $12,500) in director fees including the following: $nil (2025 - $5,000) to a company controlled by a former director, Ryan Hounjet; $nil (2025 - $5,000) to a company controlled by a former director, Amar Purewal, and $nil (2025 - $2,500) to a company controlled by a former director, Stephen Wall.

• ii) incurred $nil (2025 - $15,000) in management fees including the following: $nil (2025 - $15,000) to the CEO, Peter Bell.

• iii) incurred $nil (2025 - $15,230) of professional fees including the following: $nil (2025 - $15,230) to a company where the former CFO, Matt Anderson, is a shareholder.

Accounts payable and accrued liabilities as of January 31, 2026 include $254,565 (October 31, 2025 - $254,565) owed to companies controlled by former directors of the Company, and former officers and directors, including Neil Briggs, Donald Moore, John Famy, Andrew Low, Peter Bell, Playfair Mining, Ricardo Ho, Leon Ho and Shoni Bernard and a company, Malaspina Consultants Inc., where a former officer, Matt Anderson, is a shareholder. These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

Advances payable as of January 31, 2026 of $Nil (October 31, 2025 - $nil) are due to a company with common former directors. The amount is due to Wasco Management Ltd., a company owned by Kathleen Mitchell, the spouse of former officer and director Donald Moore. The amount owed was written off during the year ended October 31, 2025 as a result of these liabilities being statute barred by the limitation periods of British Columbia.

23

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

9. RELATED PARTY TRANSACTIONS AND BALANCES (Continued)

During the three months ended January 31, 2025, the Company issued 250,000 common shares valued at $2,500 pursuant to shares-for-services agreement with a company, Malaspina Consultants Inc., in which the former CFO Matt Anderson have a controlling interest.

10. FINANCIAL AND CAPITAL RISK MANAGEMENT

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 – Inputs that are not based on observable market data.

The Company has made the following designations of its financial instruments:

•	Cash	Amortized cost
•	Receivables	Amortized cost
•	Advances payable	Amortized cost
•	Accounts payable and accrued liabilities	Amortized cost
•	Loans payable	Amortized cost

The fair values of the Company’s cash, receivables, advances payable and accounts payable, accrued liabilities and loans payable approximates their carrying values due to the short-term nature of these instruments.

The Company is exposed to varying degrees of a variety of financial instrument related risks:

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its cash and receivables balances. The Company has no significant concentration of credit risk arising from operations. Management believes that the credit risk concentration with respect to cash and amounts receivable is remote.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity risk is addressed in Note 1. As at January 31, 2026, the Company had a cash of $15,802 (October 31, 2025 - $36,684) available to settle current liabilities of $230,538 (October 31, 2025 - $367,246). All of the Company’s financial liabilities are subject to normal trade terms.

Market risk

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

a) Interest rate risk

The Company has cash balances held with financial institutions. The Company’s current policy is to invest excess cash in short-term treasury bills issued by the Government of Canada and its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

24

KERMODE RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian Dollars)

10. FINANCIAL AND CAPITAL RISK MANAGEMENT (Continued)

b) Foreign currency risk

The Company conducts the majority of its business in Canada and is therefore not exposed to significant foreign currency risk.

c) Price risk

The Company is exposed to price risk with respect to commodity prices. Changes in commodity prices will impact the economics of development of the Company’s mineral properties. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.

Capital management

The Company manages its capital structure and adjusts it, based on the funds available to the Company, in order to support the acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company defines capital that it manages as shareholders’ equity.

The properties in which the Company currently has an interest are in the exploration stage; as such the Company has historically relied on the equity markets to fund its activities. There is no certainty with respect to the Company’s ability to raise capital. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geological or economic potential and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company’s approach to capital management.

11. SEGMENTED INFORMATION

The Company operates in one segment, being the acquisition, exploration and evaluation of mineral properties in Canada (Note 5). At January 31, 2026, all of the Company’s active assets and liabilities were located in Canada.

25