Mercado Minerals — Management Reports 2026

Jan 28, 2026

MERCADO MINERALS LTD.
Management Discussion and Analysis
For the nine months ended November 30, 2025

The Management Discussion and Analysis ("MD&A"), prepared as of January 28, 2026, should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements for the nine months ended November 30, 2025 and the Company's audited financial statements and notes thereto for the year ended February 28, 2025 of Mercado Minerals Ltd. ("Mercado" or the "Company") which were prepared in accordance with IFRS Accounting Standards.

This MD&A may contain forward-looking information (as such term is defined under applicable securities laws) in respect of various matters including upcoming events. The results or events predicted in this forward-looking information may differ materially from the actual results or events. The Company disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

DESCRIPTION OF BUSINESS

Mercado Minerals Ltd. was formed on March 24, 2021, under the laws of British Columbia. The address of the Company's corporate office and its principal place of business is Suite 615 - 625 Howe Street, Vancouver, British Columbia, Canada, V6C 2T6. On November 8, 2024, the Company changed its name to Mercado Minerals Ltd.

The Company's principal business activities include the acquisition and exploration of mineral property assets. As at November 30, 2025, the Company holds an interest in an early-stage mineral exploration property and the Company had not yet determined whether the Company's mineral property asset contains a deposit of minerals that is economically recoverable. The recoverability of amounts shown for exploration and evaluation asset is dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to complete the development of and the future profitable production from the property or realizing proceeds from its disposition. The outcome of these matters cannot be predicted at this time and the uncertainty casts significant doubt upon the Company's ability to continue as a going concern.

The Company had an accumulated deficit of $1,783,300 as at November 30, 2025, which has been funded by the issuance of equity. The Company's ability to continue its operations and to realize its assets at their carrying values is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs. The financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the financial statements.

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EXPLORATION PROJECTS

Exploration and evaluation assets are as follows:

	Porter Property	Concordia Properties	Total
Acquisition Costs
Balance, February 29, 2024	$ 102,000	$ -	$ 102,000
Additions – cash	8,000	-	8,000
Balance, February 28, 2025	110,000	-	110,000
Additions – shares	-	1,134,000	1,134,000
Balance, November 30, 2025	110,000	1,134,000	1,244,000

Exploration Costs

Balance, February 29, 2024	$ 209,967	$ -	$ 209,967
Additions – cash	468	-	468
Balance, February 28, 2025	210,435	-	210,435
Geological consulting	-	59,219	59,219
Permits and tax	-	301,113	301,113
Balance, November 30, 2025	210,435	360,332	570,767

Porter Property option

On March 24, 2021, the Company entered into a Purchase Option Agreement (the "Agreement") with an arms-length party (the "Optionor"). Pursuant to the Agreement, the Company has an option to acquire 100% interest in five mineral claims known as Porter Property located near Port Alberni on Vancouver Island, British Columbia, Canada (the "Claims") from the Optionor.

Under the terms of the Agreement, the Optionor has granted the Company the option to acquire all rights, title and interest within five kilometers of the five mineral claims. In addition, the Claims are subject to Net Smelter Return Royalty of 1.5% which can be purchased at any time for $1,500,000 by the Company.

Under the Agreement, the Company will make cash payments totaling $40,000 and issue 300,000 common shares as follows:

a. make a cash payment of $6,000 (the "Initial Payment") (paid) upon execution and delivery of the Agreement;
b. make a further cash payment of $6,000 (paid) and issue 300,000 (issued) common shares on the date upon which the common shares are listed on a stock exchange in Canada ("Listing date");
c. make a further cash payment of $8,000 (paid) within 18 months of the Listing date (as renegotiated); and
d. make a further cash payment of $20,000 on or before December 18, 2025 (as renegotiated).

On April 5, 2023, the Company entered into a purchase agreement to acquire the El Medio claim, which is contiguous to the Company's Porter Property, 30 kilometers west of Port Alberni, BC. In consideration for the El Medio claim, the Company issued 1,500,000 common shares of the Company to the vendor, who will retain a 1.5% net smelter returns royalty, which can be purchased by the Company at any time for a cash payment of $1,500,000.

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Concordia Silver Properties

On September 26, 2025 the Company acquired all of the outstanding share capital of Concordia Silver Company S.A. DE C.V. The acquisition includes two silver - gold mineral properties held by Concordia, Copalito and Zamora, located in Sinaloa, Mexico. Under the terms of the agreement, Mercado acquired all of the outstanding share capital of Concordia in consideration for a cash payment US$105,000 and the issuance of 6,000,000 common shares (the "Consideration Shares") to Concordia shareholders (collectively, the "Vendors"). Mercado will issue a further 2,000,000 common shares to the Vendors on the first anniversary of closing the Acquisition and a further 2,000,000 common shares to the Vendors on the second anniversary of closing the Acquisition. The Considerations Shares will be subject to restrictions on resale following issuance from which they will be release in four equal tranches every six months over a 24-month period.

Copalito Project

The Copalito project presents a district scale opportunity with known and drilled silver – gold low sulphidation vein mineralization that is open for expansion. Historical third-party high-grade silver and significant gold and base metal drill intercepts include: 347 g/t silver, 0.22 g/t gold, 0.17% lead and 0.38% zinc over 13.10 m in BDH-20-004 and 125 g/t silver, 2.00 g/t gold, 0.34% lead and 0.58% zinc over 23.00 m in BDH-21-055. Mercado acquired an option to purchase seven concessions covering 2,820 Ha. Six principle known veins on the project have a cumulative strike length of over 8 km. The Copalito project is located approximately 123 km northeast of Culiacan, Sinaloa. The property has good access, moderate topography, and infrastructure nearby. The neighboring property to Copalito is McEwen Mining's "El Gallo mine" complex, located 35 km to the west.

Zamora Project

The Zamora project and greater area presents district scale potential that, according to available historic reports, has never been drilled. Mercado acquired four (4) concessions covering 378 Ha, which covers small scale historic underground production at Campanillas, and the right to potentially bring another 2,999 Ha of concessions back into good standing with the government, thereby securing title. If successful, Mercado will own a total of 3,377 Ha covering a cumulative strike length of over 8 km of structures with 14 historic high grade silver gold mines on them.

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SELECTED ANNUAL INFORMATION

The table below sets forth selected financial data, in Canadian dollars, relating to the Company for the years ended February 28, 2025, February 29, 2024 and February 28, 2023:

	2025	2024	2023
	$	$	$
Net loss for the year	(518,191)	(190,664)	(214,211)
Basic and diluted loss per share	(0.02)	(0.01)	(0.02)
Total assets	1,056,166	321,201	326,046
Total long-term liabilities	-	-	-

The Company is in the exploration stage and, therefore, does not have revenue from operations. The Company's operating activities are dependent on the Company's working capital.

The Company's total assets as at February 28, 2025 increased by $734,965 compared to the total assets as at February 29, 2024 primarily due to the increase in cash pursuant to the closing of the non-brokered financing on December 23, 2024 for gross proceeds of $810,500.

OPERATIONS

Mercado is an exploration stage company, and its property is in the early stages of exploration and not in production. Consequently, the Company's net loss is not a meaningful indicator of its performance or potential.

The key performance driver for the Company is the acquisition and development of prospective mineral properties. By acquiring and exploring projects of technical merit, the Company increases its chances of finding and developing an economic deposit.

At this time, the Company is not anticipating profit from operations in the near future. Until such time as the Company is able to realize profits from the production and marketing of commodities from its mineral interests, the Company will report an annual deficit and will rely on its ability to obtain equity or debt financing to fund on-going operations. Additional financing will be required for additional exploration and administration costs. Due to the inherent nature of the junior mineral exploration industry, the Company will have a continuous need to secure additional funds through the issuance of equity or debt in order to support its corporate and exploration activities.

The three-month period ended November 30, 2025

The net loss for the three months ended November 30, 2025 (the "Current Quarter") was $530,545, compared to a net loss for the three months ended November 30, 2024 (the "Comparative Quarter") of $69,969. The increase in net loss was primarily due to the following:

• Management fees increased from $24,500 in the Comparative Quarter to $92,000 in the Current Quarter primarily due to additional fees for the Company's CEO and Vice-President of Corporate Development in the Current Quarter (see Transactions with Related Parties section below);
• Travel and promotion increased from $432 in the Comparative Quarter to $197,401 in the Current Quarter due investor communications and shareholder activities; and
• Share-based payments increased from $Nil in the Comparative Quarter to $99,408 in the Current Quarter due to the granting of stock options during the period.

Overall, the Company saw an increase in expenditures due to the closing of a private placement and beginning additional operations on its interest in Mexico. The increase in operating costs is in line with the Company's activities in the Current Quarter compared to the Comparative Quarter.

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The nine-month period ended November 30, 2025

The net loss for the nine months ended November 30, 2025 (the "Current Period") was $737,391, compared to a net loss for the nine months ended November 30, 2024 (the "Comparative Period") of $158,390. The increase in net loss between the two periods was primarily due to the following:

• Management fees increased from $45,500 in the Comparative Quarter to $206,000 in the Current Quarter primarily due to additional fees for the Company's CEO and Vice-President of Corporate Development in the Current Quarter (see Transactions with Related Parties section below);
• Travel and promotion increased from $432 in the Comparative Quarter to $202,988 in the Current Quarter due investor communications and shareholder activities; and
• Share-based payments increased from $Nil in the Comparative Quarter to $99,408 in the Current Quarter due to the granting of stock options during the period.

Overall, the Company saw an increase in expenditures due to the closing of a private placement and beginning additional operations on its interest in Mexico. The increase in operating costs is in line with the Company's activities in the Current Quarter compared to the Comparative Quarter.

SUMMARY OF QUARTERLY RESULTS

	November 30, 2025	August 31, 2025	May 31, 2025	February 28, 2025
For the three months ended:	$	$	$	$
Total revenue	-	-	-	-
Net loss	(530,545)	(112,115)	(94,731)	(359,801)
Loss per share	$ 0.01	$ (0.00)	$ (0.00)	$ (0.01)
	November 30, 2024	August 31, 2024	May 31, 2024	February 29, 2024
For the three months ended:	$	$	$	$
Total revenue	-	-	-	-
Net loss	(69,969)	(41,774)	(46,647)	(36,000)
Loss per share	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.01)

LIQUIDITY AND CAPITAL RESOURCES

As of November 30, 2025, the Company had $5,857,687 in cash. The Company does not have any cash flow from operations because it is an exploration-stage company and therefore equity financing has been the sole source of funds.

At November 30, 2025, the Company had working capital of $5,502,713. The Company's current assets are not sufficient to support the Company's general administrative and operating requirements on an ongoing basis for the foreseeable future. Accordingly, further financing will be required, and the Company will have to raise additional funds to continue its operations.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off-balance sheet arrangements.

TRANSACTIONS WITH RELATED PARTIES

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. 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.

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	For the nine months ended November 30, 2025	For the nine months ended November 30, 2024
Management Fees
Chief Executive Officer	$ 84,000	$ 8,000
Former Chief Executive Officer	-	31,500
Chief Financial Officer	30,000	-
Former Chief Financial Officer	6,000	-
VP - Business Development	66,000	6,000
	$ 186,000	$ 45,500

Included in accounts payable and accrued liabilities is $69,900 (November 30, 2024 - $37,731) owed to the directors and officers of the Company. These amounts are non-interest bearing with no specific terms of repayment.

COMMITMENTS

The Company does not have any significant commitments.

EVENTS SUBSEQUENT TO NOVEMBER 30, 2025

i. The Company issued 5,025,000 units at a price of $0.20 per unit for gross proceeds of $1,005,000. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each whole warrant is exercisable to purchase one common share at a price of $0.35 per share for a period of three years from the date of issuance. In connection with this closing, the Company paid cash finder's fees of $25,000. Each broker warrant will entitle the holder to purchase one common share of the Company at a price of $0.35 per share for a period of three years from the date of issuance.

ii. The Company granted 3,785,000 stock options with an exercise price of $0.38 to directors, officers, and consultants of the Company. The stock options have an exercise price of $0.38 per stock option and expire 3 years from the date of grant.

iii. The Company issued 262,250 common shares upon the exercise of 262,250 warrants.

SIGNIFICANT ACCOUNTING ESTIMATES

The preparation of financial statements requires management to use judgment in applying its accounting policies and estimates and assumptions about the future. Estimates and other judgments are continuously evaluated and are based on management's experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. The Company's critical accounting estimates are disclosed in Note 3 of the audited financial statements for the year ended February 28, 2025.

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FINANCIAL INSTRUMENTS

Fair value of financial instruments

International Financial Reporting Standards 13, Fair Value Measurement, establishes a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 – 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 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Company's financial instruments include cash and accounts payable and accrued liabilities. The carrying amounts of accounts payable and accrued liabilities approximate their respective fair values due to the short-term to maturity of these financial instruments. Cash is measured based on Level 1 of the fair value hierarchy.

Financial risk management objectives and policies

The Company's financial instruments include cash, loan receivable and accounts payable and accrued liabilities. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. It is management's opinion that the Company is not exposed to material currency risk, interest rate risk or other price risk. The Company's exposure to and management of market risk has not changed materially from that of the prior year.

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 concentrations of credit risks consist principally of cash. To minimize the credit risk the Company places these instruments with a high-quality financial institution. The Company's exposure to and management of credit risk has not changed materially from that of the prior year.

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. In the management of liquidity risk of the Company, the Company maintains a balance between continuity of funding and flexibility through the use of borrowings. Management closely monitors the liquidity position and expects to have adequate sources of funding to finance the Company's projects and operations. As at November 30, 2025, the Company has cash of $5,857,687, to settle current liabilities of $373,441. The Company's management of liquidity risk has not changed materially from that of the prior year.

RISKS AND UNCERTAINTIES

The risks and uncertainties faced by the Company are substantially unchanged from those disclosed in the Company's Annual MD&A dated February 28, 2025.

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SHARE CAPITAL

As of the date of this MD&A, the Company had 75,264,251 common shares, 6,765,000 stock options, and 21,782,350 warrants outstanding.

QUALIFIED PERSON

Kelson Willms, the Senior Technical Advisor for Mercado Minerals Ltd., is the Qualified Person as defined under National Instrument 43-101 who reviewed and approved the scientific and technical information in this MD&A.