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Orestone Mining Management Reports 2025
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ORESTONE MINING CORP.
ORESTONE MINING CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS – QUARTERLY HIGHLIGHTS
FOR THE SIX MONTHS ENDED JULY 31, 2025
OVERVIEW AND INTRODUCTORY COMMENT
Orestone Mining Corp. ("Orestone" or the "Company") is a mineral exploration company incorporated on April 30, 2007 and subsequently listed on the TSX Venture Exchange (the "Exchange") under the trading symbol "ORS" on March 11, 2008.
This MD&A is dated September 29, 2025 and discloses specified information up to that date. Unless otherwise noted, all currency amounts are expressed in Canadian dollars. The following information should be read in conjunction with the unaudited condensed consolidated interim financial statements and the related notes for the six months ended July 31, 2025 and the Company's audited consolidated financial statements for the year ended January 31, 2025 and the related notes thereto.
Additional information relevant to the Company and the Company's activities can be found on SEDAR+ at www.sedarplus.ca, and/or on the Company's website at http://www.orestone.ca.
The Company recognizes environmental, social and governance ("ESG") best practices as key components to responsible mineral exploration and development. The Company's exploration programs are conducted to meet or exceed environmental regulations, while respecting the communities and environments in which we operate. The Company strives to earn its social license with local and indigenous communities by meeting with stakeholders, regulators, and other concerned parties before and during exploration work to understand traditional and cultural issues important to these communities. The Company's approach is based on transparency, open communication, inclusivity, and respect, to better enable social and economic benefit for communities as well as value for investors.
MAJOR INTERIM PERIOD OPERATING MILESTONES
The Captain Property, British Columbia, Canada
On March 13, 2025, the Company announced a planned airborne magnetotelluric ("AirMT") survey at Captain gold porphyry project prior to the next drill program. The Company is obtaining contractor quotes and refining the parameters of the survey at this time. Initially the new survey will consist of 18 lines at 7.2 kilometres in length totaling 157 line kilometres, and the Company expects to complete the program in the 4th ¼ or as soon as possible
The Captain project hosts a gold-dominant, porphyry-style mineralized system occurring within a five-kilometre-long, north-south-trending corridor of low resistivity defined by a 2022 AirMT survey. Three targets occur at the intersection of interpreted northeast- and northwest-trending cross-faults. This type of low-resistivity feature is often related to large porphyry systems. In addition, gold-rich porphyry systems such as the Red Chris mine in northeastern British Columbia are typically strongly structurally controlled, and are characterized by a narrow zone of multiple intrusive dike phases widening at depth with a halo of copper-gold-rich disseminated sulphides and quartz stockworks overlying the dike system.
On July 31, 2025, the Company provided an update on Captain project. The Company filed an amended notice of work (NOW) permit for an additional 23 drill locations at the Captain property. The drill locations are on existing logging roads focused on the T2 target area which is a large, although not fully defined target lying to
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the south of the primary T1 target along the same structural corridor. Drilling is anticipated in the first quarter of 2026.
The Las Burras Property, Salta, Argentina
Having conducted no work on the Las Burras-Incahuasi copper porphyry property, Orestone terminated its option to earn an interest effectively on August 29, 2025.
The Francisca I Property, Salta, Argentina
On February 4, 2025, the Company signed an option agreement with two arm's-length Argentine vendors to earn an up to 85% interest in the Francisca I property for cash payments and exploration expenditures totalling US$4.2 million over seven years. After reaching certain milestones, the Company and the vendors will form a jointly owned company, after which, if any individual shareholder's interest is diluted to 5%, its interest will be converted to a 1% net smelter return royalty ("NSR"). The Company will have the right to purchase 50% of any NSR granted (0.50%) for a sum of US$1 million within five years from the granting of the corresponding NSR.
| Date for Completion | Cash Payment US$ | Expenditures US$ | |
|---|---|---|---|
| After Due Diligence period (15 days) | $ 20,000 | (Paid $28,376) | $ Nil |
| August 4, 2025 (6 months) | 20,000 | (Paid $27,688) | Nil |
| February 4, 2026 (1st Anniversary) | 40,000 | 100,000 | |
| February 4, 2027 (2nd Anniversary) | 40,000 | 150,000 | |
| February 4, 2028 (3rd Anniversary) | 90,000 | 250,000 | |
| February 4, 2029 (4th Anniversary) | 150,000 | 500,000 | |
| February 4, 2030 (5th Anniversary) | 840,000 | 1,000,000 | |
| February 4, 2032 (7th Anniversary) | 1,000,000 | Nil | |
| TOTAL | $2,200,000 | $2,000,000 |
The Francisca property is located in Salta province, Argentina. Geologic mapping has outlined an oxide gold stockwork mineralized trend over a northwestern strike length of 1,100 metres outcropping on the crest of a moderate relief hill. The Company is focused on defining an oxide gold deposit minable by open-pit methods and amenable to heap leach gold recovery.
On March 27, 2025, the Company announced that it completed a program of sampling on Francisca property. A total of 38 check samples were taken: 20 samples on the South gold zone and 18 on the North gold zone and other areas. The South gold zone is a strongly altered quartz stockwork outlined over a strike length of 500 metres and width of 50 - 100 metres. Of the 20 samples taken on the South zone, 11 were greater than 6.0 g/t gold and 8 samples assayed between 0.36 and 4.5 g/t gold. 13 samples were taken on the North gold zone, a quartz manganese stockwork zone, with values from 0.01 to 21.7 g/t gold averaging 0.38 g/t gold excluding two high grade samples of 9.4 and 21.7 g/t gold.
The sampling confirmed the high-grade nature of the South gold zone with 20 samples ranging in value from 0.03 to 33 g/t gold and 2.0 to 160 g/t silver, averaging 5.78 g/t gold and 29.2 g/t silver (gold grades cut to 10 g/t and silver grades cut to 60 g/t).
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Francisca Property South Gold Zone
On July 31, 2025, the Company provided an update on Francisca L project. The Company was preparing to initiate a phase I exploration program in the fourth quarter of 2025 with the advancement of various administrative and logistical tasks. The phase I program will consist of detailed mapping and up to 600 rock and trench samples to better define the surface extent of widespread oxide gold-silver mineralization prior to drilling.
On August 1, 2025, the Company entered into an addendum to the option agreement with the Argentine vendors, whereby additional land was included as part of the Francisca property under the option agreement in exchange for US$10,300 payable to the vendors (paid).
On September 17, 2025, the Company announced the geologic mapping outlining an oxide gold stockwork mineralized trend over a northwest strike length of 1,100 metres outcropping on the crest of a moderate relief hill. Two zones (North and South) surrounded by a 500-to-1,000-metre-wide area of strongly hornfels altered sediments and underlain by a large IP (induced polarization) chargeability anomaly, indicating potential for a larger intrusive body at depth. The oxide gold quartz limonite stockwork trend is associated with quartz feldspar porphyry intrusive dikes and intense sericite alteration along northwest-trending faults.
The additional lands were contiguous to the northern and eastern boundaries of the Francisca I property and more fully cover the potential extension of the mineralizing system to the east (west previously covered). Approximately 900 metres to the east of the trend hosting the North-South zones, geologic mapping and sampling in an area of historic shallow mine workings have outlined mineralization measuring approximately 400 metres by 200 metres of partially hornfels altered sedimentary rocks. Gold mineralization occurs in quartz veins and veinlets with argillic-chlorite and quartz sericite alteration from three to five metres wide on the margins of veins from a centimetre up to two metres wide. The presence of this style of mineralization fits with a model of distal precious metal mineralization related to a larger intrusive body at depth below the North-South zones.
Orestone has designed a two-phase program of detailed, mapping, sampling and drilling in the high-grade South zone. Phase 1 will consist of detailed mapping and sampling with approximately 580 rock-chip samples in the 11 existing trenches that crosscut the zone along its 500-metre-long strike length. The phase II work is planned to be a 1,200-metre reverse circulation drill program consisting of eight reverse circulation drill holes
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to a depth of 150 metres designed to crosscut the presently defined mineralized zone on a spacing of 40 to 80 metres.
INTERIM PERIOD FINANCIAL CONDITION
Capital Resources
On May 9, 2025, the Company entered into debt settlement agreements for a total of $180,000 ($58,000 included in Notes payable and $122,000 included in Due to related parties) with three creditors providing for the issuance of an aggregate of 3,999,998 shares at a deemed issue price of $0.045. On June 13, 2025, the Company issued 3,999,998 shares for the debt settlement.
On June 13, 2025, the Company closed a non-brokered private placement by issuing 13,333,333 units at a price of $0.045 per unit for gross proceeds of $600,000. Each unit consisted of one common share of the Company and one common share purchase warrant. Each warrant is exercisable for one common share at a price of $0.08 for two years until June 13, 2027. The common shares and warrants issued under the offering and the common shares issuable upon exercise of the warrants are subject to a hold period that expires on October 14, 2025. Finders' fees amounting to $7,088 were paid in connection with the offering. The Company intended to use the net proceeds from the private placement to: (i) develop its Francisca L property, (ii) to pay the debts owing and outstanding to certain non-arm's-length parties, and (iii) for general administrative expenses and working capital purposes.
On June 30, 2025, the Company granted officers, directors, advisers and consultants of the Company stock options to purchase an aggregate of 4,725,000 common shares. The options entitle the holders to purchase
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Management's Discussion & Analysis
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Management's Discussion & Analysis
the equivalent number of common shares of the Company at a price of $0.10 per common share for a period of five years from the date of grant (June 30, 2030). The options will vest as follows: 25% on the date of grant, followed by an additional 25% on each of the three-, six- and nine-month anniversaries of the date of grant.
The Company is aware of the current conditions in the financial markets and has planned accordingly. The Company's current treasury and the future cash flows from equity issuances and the potential exercise of options, along with the planned developments within the Company will allow its exploration efforts to continue throughout 2025. If the current market conditions change, the Company will make adjustments to budgets accordingly.
Liquidity
As at July 31, 2025, the Company had working capital of $213,285 (January 31, 2025 – working capital deficiency of $193,248). As at July 31, 2025, cash totaled $242,953, an increase of $197,153 from $45,800 as at January 31, 2025. The increase was due to (a) the net proceeds from the private placement $543,266, and (b) notes payable of $12,000. The notes payable are with two directors and a private company controlled by a director of the Company. On June 13, 2025, the Company settled a portion of the notes payable (see "Capital Resources" section above), leaving $7,000 outstanding as of July 31, 2025. The increase in cash was offset by (c) operating expenses of $252,559 and (d) exploration and evaluation assets expenditures of $105,554.
Operations
For the three months ended July 31, 2025 compared with the three months ended July 31, 2024:
The Company recorded a net loss for the three months ended July 31, 2025 of $229,175 (loss per share - $0.00) compared to a net loss of $37,055 (loss per share - $0.00) for the three months ended July 31, 2024.
Excluding the non-cash share-based compensation of $133,836 (2024 - $Nil), the Company's expenses increased $59,958 from $37,111 in 2024 to $97,069 in 2025. The change was primarily due to increases in: (a) salaries, benefits and consulting fees expenses (2025 - $29,015; 2024 - $2,000) as two officers' monthly amounts were increased, (b) professional fees expenses (2025 - $38,258; 2024 - $16,260) due to additional legal service on debt settlement agreements and the private placement, (c) filing fees expenses (2025 - $8,808; 2024 - $5,415), (d) marketing expenses (2025 - $8,490; 2024 - $1,030), (e) travel expenses (2025 - $494; 2024 - $104). The increase was offset by a decrease in: (f) office, rent and miscellaneous expenses (2025 - $12,004; 2024 - $12,302). All such increases are because the Company was active in raising the necessary capital to acquire the Francisca property in Argentina as well as carry out the evaluation and exploration work on its optioned Las Burras and Francisca properties.
For the six months ended July 31, 2025 compared with the six months ended July 31, 2024:
The Company recorded a net loss for the six months ended July 31, 2025 of $299,015 (loss per share - $0.00) compared to a net loss of $63,214 (loss per share - $0.00) for the six months ended July 31, 2024.
Excluding the non-cash share-based compensation of $133,836 (2024 - $Nil), the Company's expenses increased $102,681 from $63,271 in 2024 to $165,952 in 2025. The change was primarily due to increases in: (a) professional fees expenses (2025 - $84,536; 2024 - $24,425) due to additional legal service on debt settlement agreements and the private placement, (b) filing fees expenses (2025 - $16,824; 2024 - $12,203), (c) salaries, benefits and consulting fees expenses (2025 - $30,517; 2024 - $4,103) as two officers' monthly amounts were increased, (d) marketing expenses (2025 - $8,490; 2024 - $1,030). (e) travel expenses (2025 - $1,743; 2024 - $104), and (f) office, rent and miscellaneous expenses (2025 - $23,842; 2024 - $21,406). All such increases are because the Company was active in raising the necessary capital to acquire the
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Francisca property in Argentina as well as carry out the evaluation and exploration work on its optioned Las Burras and Francisca properties.
SIGNIFICANT RELATED PARTY TRANSACTIONS
During the quarter, there was no significant transaction between related parties.
COMMITMENTS, EXPECTED OR UNEXPECTED, OR UNCERTAINTIES
As of the date of the MD&A, the Company has no outstanding commitments.
Other than disclosed in this MD&A, the Company does not have any commitments, expected or unexpected, or uncertainties.
RISK FACTORS
In our MD&A filed on SEDAR May 30, 2025 in connection with our annual financial statements (the "Annual MD&A"), we have set out our discussion of the risk factors which we believe are the most significant risks faced by Orestone. An adverse development in any one risk factor or any combination of risk factors could result in material adverse outcomes to the Company's undertakings and to the interests of stakeholders in the Company including its investors. Readers are cautioned to take into account the risk factors to which the Company and its operations are exposed. To the date of this document, there have been no significant changes to the risk factors set out in our Annual MD&A.
DISCLOSURE OF OUTSTANDING SHARE DATA
The authorized share capital of the Company consists of an unlimited number of common shares without par value. The following is a summary of the Company's outstanding share data as at July 31, 2025 and as at the date of this MD&A:
| Issued and outstanding | ||
|---|---|---|
| July 31, 2025 | September 29, 2025 | |
| Common shares outstanding | 78,993,563 | 78,993,563 |
| Stock options | 6,340,000 | 6,340,000 |
| Warrants | 13,333,333 | 13,333,333 |
| Fully diluted common shares outstanding | 98,666,896 | 98,666,896 |
QUALIFIED PERSON
The technical information reported in this MD&A has been reviewed and approved by Mr. Gary Nordin P. Geo, the Company's Senior Consulting Geologist. Mr. Nordin is a Professional Geoscientist and member of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (APGEBC) and a qualified person as defined by NI 43-101.
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Management's Discussion & Analysis
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Management's Discussion & Analysis
Cautionary Statements
This document contains "forward-looking statements" within the meaning of applicable Canadian securities regulations. All statements other than statements of historical fact herein, including, without limitation, statements regarding exploration results and plans, and our other future plans and objectives, are forward-looking statements that involve various risks and uncertainties. Such forward-looking statements include, without limitation, our estimates of exploration investment, the scope of our exploration programs, and our expectations of ongoing administrative costs. There can be no assurance that such statements will prove to be accurate, and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations are disclosed in the Company's documents filed from time to time via SEDAR with the Canadian regulatory agencies to whose policies we are bound. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and we do not undertake any obligation to update forward-looking statements should conditions or our estimates or opinions change, except as required by law. Forward-looking statements are subject to risks, uncertainties and other factors, including risks associated with mineral exploration, price volatility in the mineral commodities we seek, and operational and political risks. Readers are cautioned not to place undue reliance on forward-looking statements.
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