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PPX Mining — Audit Report / Information 2025
Jan 29, 2026
44369_rns_2026-01-28_8720c0be-c0c6-401c-bc87-2408faf7d114.pdf
Audit Report / Information
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PPX
PPX Mining Corp.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND 2024
EXPRESSED IN CANADIAN DOLLARS
Crowe
Crowe MacKay LLP
1400 - 1185 West Georgia Street
Vancouver, BC V6E 4E6
Main +1 (604) 687-4511
Fax +1 (604) 687-5805
www.crowemackay.ca
Independent Auditor's Report
To the Shareholders of PPX Mining Corp.
Opinion
We have audited the consolidated financial statements of PPX Mining Corp. (the "Group"), which comprise the consolidated statements of financial position as at September 30, 2025 and September 30, 2024 and the consolidated statements of loss and comprehensive loss, changes in shareholders' equity (deficiency) and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at September 30, 2025 and September 30, 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 to the consolidated financial statements which describes the material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the year ended September 30, 2025. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be a key audit matter to be communicated in our report. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Recoverability of Exploration and Evaluation Assets
As disclosed in Note 8 to the consolidated financial statements, the carrying value of Exploration and Evaluation Assets represents a significant asset of the Group. Refer to Note 3 and Note 4 to the consolidated financial statements for a description of the accounting policy and significant judgments applied to Exploration and Evaluation Assets.
At each reporting period end, management applies judgment in assessing whether there are any indicators of impairment relating to mining claims and deferred exploration costs. If there are indicators of impairment, the recoverable amount of the related asset is estimated in order to determine the extent of any impairment. Indicators of impairment may include (i) the period during which the entity has the right to explore in the specific area has expired during the year or will expire in the near future and is not expected to be renewed; (ii) substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned; (iii) exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; and (iv) sufficient data exists to indicate that the carrying amount of the mining claims and deferred exploration costs is unlikely to be recovered in full from successful development or by sale. No impairment indicators were identified by management as at September 30, 2025.
Why the matter was determined to be a key audit matter
We considered this a key audit matter due to (i) the significance of the mining claims and deferred exploration costs balance and (ii) the judgments made by management in its assessment of indicators of impairment related to mining claims and deferred exploration costs, which have resulted in a high degree of subjectivity in performing audit procedures related to these judgments applied by management.
How the matter was addressed in our audit
We have evaluated management's assessment of impairment indicators per IFRS 6 Exploration for and Evaluation of Mineral Resources, including but not limited to:
- Obtaining, by reference to government registries, evidence to support (i) the right to explore the area and (ii) claim expiration dates;
- Considering the status of the relevant exploration areas by holding discussions with management, and reviewing the Group's exploration budget and directors' minutes;
- Enquiring with management and reviewing its future plans and other documentation as evidence that further exploration and evaluation activities in the area of interest will be continued in the future;
- Assessing whether any data exists to suggest that the carrying value of the Exploration and Evaluation Assets is unlikely to be recovered through development or sale; and
- Assessing the adequacy of the related disclosures in Note 3, Note 4 and Note 8 to the consolidated financial statements.
Environmental Rehabilitation Provisions
We draw attention to Notes 3, 4 and 13 to the consolidated financial statements. The Group makes a provision for the future cost of environmental rehabilitation related to current and past site exploration activities, and remediation required as a result of the construction of the processing plant. The calculation and recognition of the provision in the consolidated financial statements requires a number of significant assumptions, including estimation of the costs and timing of rehabilitation.
Why the matter was determined to be a key audit matter
We considered the Group's environmental rehabilitation provisions a key audit matter due to a higher professional judgment required by management when assessing this obligation, including assessment of the nature and extent of future work to be performed, the future cost of performing the rehabilitation work, the timing of when the rehabilitation will take place and economic assumptions such as discount rate and inflation rates applied to future cash outflows associated with rehabilitation activities to bring them to their present value. Auditing these assumptions involved subjective audit judgment due to the nature and extent of audit procedures required to address these matters.
How the matter was addressed in our audit
In responding to the key audit matter, we performed the following audit procedures:
- Obtaining an understanding of management's process to develop their estimate;
- Engaging with a subject matter expert to assist us in the valuation of the assumptions, methodology and data used by the Group;
- Evaluating and testing the significant assumptions in the calculations of the provision;
- Comparing assumptions including the risk-free rate and inflation rate to current and market data;
- Verifying the accuracy of the estimate; and
- Evaluating the adequacy of the Group's disclosures for the environmental rehabilitation provision.
Net Profit Interest Arrangement
As disclosed in Note 8 to the consolidated financial statements, the Company recognizes income and a receivable related to a Net Profit Interest ("NPI") arrangement, pursuant to which the Company is entitled to receive a portion of net profits generated from mining operations. Refer to Note 3 and Note 4 of the consolidated financial statements for a description of the accounting policy applied and the significant judgments involved in its recognition, measurement, and presentation.
The accounting for the NPI arrangement requires management to apply judgment in determining the appropriate accounting treatment under IFRS, including assessing the Company's rights and obligations in accordance with the underlying agreement, the determination of net profit amounts subject to the NPI, and the measurement of NPI income and related receivable. The recognition of NPI income is dependent on the accuracy and completeness of financial and operational information provided by the mining operator, including revenue, cost of sales, and operating expenses. In addition, judgment is required in assessing the collectibility of the NPI receivable.
Why the matter was determined to be a key audit matter
We considered this matter to be a key audit matter due to (i) the significance of NPI income recognized and the related accounts receivable balance and (ii) the significant judgment required by management in applying IFRS to the arrangement. These factors resulted in a high degree of auditor judgment and effort in performing audit procedures related to this matter.
How the matter was addressed in our audit
Our audit procedures related to the NPI arrangement included, among others:
- Evaluating management's accounting assessment of the NPI arrangement for compliance with IFRS;
- Agreeing cash received to underlying supporting documentation and verifying the mathematical accuracy of the NPI calculation;
- Obtaining an understanding of Proyectos La Patagonia SAC's ("PLP") revenue cycle and key processes related to the sale of concentrate, including the identification of customers, contract terms, pricing mechanisms, determination of quantities sold, and the timing of revenue recognition;
- Agreeing PLP's reported revenues to third party evidence, including customer confirmations, invoices, settlement statements, shipping documentation, and production reports, and assessing whether revenue recognition was consistent with IFRS 15;
- Testing costs included in the NPI calculation by examining supporting documentation for cost of sales and operating expenses on a sample basis;
- Assessing the existence, valuation, and collectability of the NPI receivable by reviewing subsequent cash receipts, confirming balances directly with PLP, and evaluating whether amounts recorded were consistent with the terms of the NPI agreement; and
- Evaluating the adequacy and clarity of the Company's disclosures related to the NPI arrangement, including the accounting policy applied and significant judgments made by management.
Other Information
Management is responsible for the other information. The other information comprises:
- Management's Discussion and Analysis
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained the other information prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the work performed for the purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Pejman Mahlooji.
Crowe Mackay LLP
Chartered Professional Accountants
Vancouver, Canada
January 28, 2026
PPX
Content
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 8
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS 9
CONSOLIDATED STATEMENTS OF CASH FLOWS 10
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND 2024 13
1. DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS 13
2. BASIS OF PRESENTATION 14
3. MATERIAL ACCOUNTING POLICIES 14
4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY 22
5. CHANGES IN ACCOUNTING POLICIES AND STANDARDS 25
6. FINANCE EXPENSE AND OTHER 26
7. AMOUNTS RECEIVABLE 27
8. EXPLORATION AND EVALUATION ASSETS AND PROPERTY, PLANT AND EQUIPMENT 27
9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 31
10. PROMISSORY NOTES 31
11. LONG TERM DEBT 32
12. CONVERTIBLE DEBENTURE 36
13. ENVIRONMENTAL REHABILITATION PROVISION 37
14. LOAN PAYABLE 38
15. SHARE CAPITAL 39
16. SEGEMENT INFORMATION 43
17. RELATED PARTY TRANSACTIONS 43
18. FINANCIAL INSTRUMENTS 44
19. COMMITMENTS AND CONTINGENCIES 48
20. INCOME TAXES 49
21. SUBSEQUENT EVENTS 50
The accompanying notes are an integral part of these consolidated financial statements
P PX
Consolidated Statements of Financial Position
| As at September 30, | As at September 30, | |
|---|---|---|
| 2025 | 2024 | |
| ASSETS | ||
| Current assets | ||
| Cash | $ 5,157,014 | $3,032,136 |
| Amounts receivable (note 7) | $5,007,496 | $242,527 |
| Prepaids and advances | $27,022 | $15,776 |
| Total current assets | $10,191,532 | $3,290,439 |
| Non-current assets | ||
| Exploration and evaluation assets (note 8) | $10,905,636 | $9,841,271 |
| Property, plant and equipment (note 8) | $11,522,399 | $1,579,603 |
| Total assets | $32,619,567 | $14,711,313 |
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities (note 9) | $6,922,973 | $1,299,255 |
| Promissory notes (note 10) | $228,025 | $203,594 |
| Derivative liability (note 11) | $1,158,256 | $- |
| Environmental rehabilitation provision (note 13) | $404,458 | $356,216 |
| Gold stream facility (note 11) | $3,373,037 | $- |
| Loan payable (note 14) | $1,583,056 | $- |
| Total current liabilities | $13,669,805 | $1,859,065 |
| Non-current liabilities | ||
| Convertible debenture (note 12) | $5,242,242 | $5,170,206 |
| Derivative liability (notes 11 & 12) | $24,994,739 | $2,416,994 |
| Deferred income tax liability (note 20) | $1,508,424 | $- |
| Gold stream facility (note 11) | $1,530,295 | $2,317,774 |
| Environmental rehabilitation provision (note 13) | $1,379,935 | $539,292 |
| Loan payable (note 14) | $4,946,149 | $2,182,055 |
| Total liabilities | $53,271,589 | $14,485,386 |
| Shareholders' equity (deficiency) | ||
| Share capital (note 15) | $74,735,889 | $68,781,814 |
| Reserves (note 15) | $8,790,524 | $8,866,755 |
| Deficit | $(104,178,435) | $(77,422,642) |
| Total shareholders' equity (deficiency) | $(20,652,022) | $225,927 |
| Total liabilities and shareholders' equity (deficiency) | $32,619,567 | $14,711,313 |
Nature of operations and going concern (note 1)
Commitments and contingencies (note 19)
Subsequent events (note 21)
Approved on behalf of the Board:
/s/ John Thomas
Director
/s/ Brian Imrie
Director
8 | Page
P PX
Consolidated Statements of Loss and Comprehensive Loss
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Operating expenses | ||
| Communication and regulatory | $88,473 | $61,577 |
| Consulting fees, salaries and benefits (note 17) | $863,350 | $556,834 |
| Depreciation (note 8) | $5,476 | $5,797 |
| Office and miscellaneous | $375,261 | $203,195 |
| Premises | $- | $4,642 |
| Professional fees (note 17) | $678,734 | $495,270 |
| Share based payments (notes 15 & 17) | $165,289 | $968,430 |
| Travel and promotion | $57,144 | $49,055 |
| Loss from operations | $(2,233,727) | $(2,344,800) |
| Finance and other items | ||
| Finance expense and other (note 6) | $(1,295,858) | $(974,632) |
| Foreign exchange loss | $(124,569) | $(89,317) |
| Gold streaming expense (note 11) | $(3,299,097) | $(1,455,872) |
| Loss on debt settlement (notes 9 & 15) | $(1,266,650) | $(19,760) |
| Loss on derivative liability revaluation (notes 11 & 12) | $(20,866,590) | $(1,022,134) |
| Loss on modification of convertible debenture (note 12) | $(458,112) | $- |
| Net profit interest income (note 8) | $9,315,405 | $518,182 |
| Net smelter royalty (note 11) | $(858,872) | $(356,999) |
| Transaction costs | $(93,334) | $- |
| Net loss before tax | $(21,181,404) | $(5,745,332) |
| Income tax (expense) recovery (note 20) | $(4,065,965) | $418,298 |
| Deferred income tax expense (note 20) | $(1,508,424) | $- |
| Net loss | $(26,755,793) | $(5,327,034) |
| Other comprehensive income (loss) | ||
| Items that may be reclassified subsequently to profit or loss | ||
| Exchange differences on translation of foreign operations | $(241,520) | $12,452 |
| Total comprehensive loss | $(26,997,313) | $(5,314,582) |
| Basic and diluted loss per share | $(0.04) | $(0.01) |
| Weighted average number of common shares | ||
| Outstanding (basic and diluted) | 699,367,156 | 655,855,295 |
The accompanying notes are an integral part of these consolidated financial statements
7 | Page
P PX
Consolidated Statements of Cash Flows
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Operating activities | ||
| Net loss for the year | $(26,755,793) | $(5,327,034) |
| Adjustments for: | ||
| Accretion expense | $396,474 | $431,178 |
| Depreciation | $5,476 | $5,797 |
| Deferred income tax expense | $1,508,424 | $- |
| Foreign exchange loss | $133,963 | $89,317 |
| Loss on derivative liability revaluation | $20,866,590 | $1,022,134 |
| Loss on debt settlement | $1,266,650 | $19,760 |
| Loss on modification of convertible debenture | $458,112 | $- |
| Gold streaming expense | $3,299,097 | $1,455,872 |
| Interest expense | $896,746 | $540,979 |
| Net profit interest income | $(9,315,405) | $(518,182) |
| Net smelter royalty | $858,872 | $356,999 |
| Share based payments | $165,289 | $968,430 |
| $(6,215,505) | $(954,750) | |
| Changes in non-cash operating working capital: | ||
| (Increase) in receivables | $(2,779,361) | $(250,544) |
| (Increase) decrease in prepaids | $(11,246) | $14,162 |
| (Decrease) increase in accounts payable and accrued liabilities | $5,033,338 | $(410,358) |
| Net cash flow used in operating activities | $(3,972,774) | $(1,601,490) |
| Financing activities | ||
| Proceeds from private placements, net of share issuance costs | $3,318,275 | $1,297,455 |
| Proceeds from loan payable | $4,190,220 | $2,424,240 |
| Proceeds from Silver Crown Royalty Agreement | $2,587,472 | $- |
| Proceeds from warrants exercised | $469,718 | $- |
| Interest paid on loan payable | $(519,848) | $- |
| Gold stream facility payments | $(1,406,836) | $(691,213) |
| Convertible debenture interest payments | $- | $(101,301) |
| Net cash flow from financing activities | $8,639,001 | $2,929,181 |
| Investing activities | ||
| Additions to exploration and evaluation assets | $(1,258,673) | $(1,028,224) |
| Additions to property, plant and equipment | $(8,581,719) | $(143,907) |
| Net profit interest received | $7,229,655 | $2,049,082 |
| Net cash flow (used in) from investing activities | $(2,610,737) | $876,951 |
| Impact of foreign exchange on cash balances | $69,388 | $23,743 |
| Net change in cash | $2,124,878 | $2,228,385 |
| Cash, beginning of year | $3,032,136 | $803,751 |
| Cash, end of year | $5,157,014 | $3,032,136 |
| Income tax paid | $- | $210,190 |
The accompanying notes are an integral part of these consolidated financial statements
PPX
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Non-cash investing and financing activities | ||
| Shares issued for payment of finder's fees | $140,075 | $253,555 |
| Units issued for settlement of payables | $- | $22,000 |
| Shares issued for settlement of debt | $1,435,000 | $- |
| Shares issued for conversion of convertible debenture | $731,082 | $1,355,463 |
| Environmental rehabilitation additions | $759,008 | $- |
| Environmental rehabilitation provision adjustment | $96,144 | $41,459 |
| $3,161,309 | $1,672,477 |
The accompanying notes are an integral part of these consolidated financial statements
PPX
Consolidated Statements of Changes in Shareholders' Equity (Deficiency)
| Share Capital | Reserves | |||||||
|---|---|---|---|---|---|---|---|---|
| Description | Number of shares | Amount | Warrants | Share based payments | Other | Accumulated other comprehensive income (loss) | Deficit | Total Equity (Deficiency) |
| Balance, September 30, 2023 | 636,077,828 | $65,853,341 | $1,010,461 | $7,916,194 | $47,071 | $(1,105,613) | $(72,095,608) | $1,625,846 |
| Private placement units issued, net of share issuance costs | 31,167,101 | $1,297,455 | $- | $- | $- | $- | $- | $1,297,455 |
| Shares issued for conversion of convertible debenture | 12,500,000 | $1,355,463 | $- | $- | $- | $- | $- | $1,355,463 |
| Units issued for settlement of payables | 400,000 | $22,000 | $17,760 | $- | $- | $- | $- | $39,760 |
| Shares issued for payment of finder's fees | 5,634,545 | $253,555 | $- | $- | $- | $- | $- | $253,555 |
| Share-based payments | - | $- | $- | $968,430 | $- | $- | $- | $968,430 |
| Net loss | - | $- | $- | $- | $- | $- | $(5,327,034) | $(5,327,034) |
| Other comprehensive income | - | $- | $- | $- | $- | $12,452 | $- | $12,452 |
| Balance, September 30, 2024 | 685,779,474 | $68,781,814 | $1,028,221 | $8,884,624 | $47,071 | $(1,093,161) | $(77,422,642) | $225,927 |
| Private placement units issued, net of share issuance costs | 41,830,036 | $3,318,275 | $- | $- | $- | $- | $- | $3,318,275 |
| Shares issued for conversion of convertible debenture | 6,250,000 | $731,082 | $- | $- | $- | $- | $- | $731,082 |
| Shares issued for settlement of debt | 14,350,000 | $1,435,000 | $- | $- | $- | $- | $- | $1,435,000 |
| Shares issued for warrants exercised | 6,710,257 | $469,718 | $- | $- | $- | $- | $- | $469,718 |
| Share-based payments | - | $- | $- | $165,289 | $- | $- | $- | $165,289 |
| Net loss | - | $- | $- | $- | $- | $- | $(26,755,793) | $(26,755,793) |
| Other comprehensive loss | - | $- | $- | $- | $- | $(241,520) | $- | $(241,520) |
| Balance, September 30, 2025 | 754,919,767 | $74,735,889 | $1,028,221 | $9,049,913 | $47,071 | $(1,334,681) | $(104,178,435) | $(20,652,022) |
The accompanying notes are an integral part of these consolidated financial statements
PPX
Notes to Consolidated Financial Statements for the Years Ended September 30, 2025 and 2024
1. DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS
PPX Mining Corp. (“PPX Mining” or the “Company”) is a publicly listed company incorporated under the Alberta Business Corporations Act on July 28, 1987; the Company’s shares are traded on the Toronto Venture Exchange (the “TSX Venture Exchange”), and the Lima Stock Exchange (Bolsa De Valores De Lima). Following a number of name changes the Company became PPX Mining Corp. on August 4, 2016. The head office, principal address and records office of the Company are located at 82 Richmond Street East, Toronto, ON, M5C 1P1.
The Company is in the business of acquiring, exploring and evaluating mineral properties, and either joint venturing or developing these properties further or disposing of them when the evaluation is completed. As its principal business, the Company acquires and explores mineral properties in areas deemed to have relatively high potential for mining success. The Company’s business plan is to engage in these mining activities on a long-term basis.
To maintain positive cash flow, the Company must rely on debt or equity financings, as well as proceeds from Net Profit Interest (“NPI”) received from the assignment of the Igor 4 concession to fund its operations. To date the Company’s main source of funding has been the cash flow from the assignment of the Igor 4 mining concession and the issuance of equity securities and debt, through private transactions with sophisticated investors or public offerings to institutional and retail investors.
The consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern. This assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its obligations in the normal course of operations. The Company has incurred operating losses since inception and has accumulated a deficit of $104,178,435 as at September 30, 2025 (September 30, 2024 - $77,422,642). As at September 30, 2025, the Company has cash of $5,157,014 (September 30, 2024 - $3,032,136) and a working capital deficiency of $(3,478,273) (September 30, 2024 – working capital of $1,431,374).
The Company needs to raise funds in order to continue on as a going concern and there can be no assurances that sufficient funding, including adequate financing, will be available to cover its required funding or develop its mineral properties and / or cover general and administrative expenses necessary for the maintenance of a public company. The ability of the Company to arrange additional financing in the future depends in part, on the prevailing capital market conditions and mineral property exploration success. The Company’s business may be affected by changes in political and market conditions, such as interest rates, tariffs, availability of credit, inflation rates, changes in laws, interpretations of tax legislation in the emerging markets that the Company operates and national and international circumstances. Recent geopolitical events and potential economic global challenges such as the risk of the higher inflation and market volatility, may create further uncertainty and risk with respect to the prospects of the Company’s business. These material uncertainties may cast significant doubt on the Company’s ability to continue as a going concern. Accordingly, the consolidated financial statements do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities, contingent obligations and commitments other than in the normal course of business and at amounts different from those in the consolidated financial statements.
13 | Page
PPX
2. BASIS OF PRESENTATION
Statement of Compliance
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The consolidated financial statements were approved by the Board of Directors of the Company on January 28, 2026.
These consolidated financial statements have been prepared under the historical cost convention, except for certain financial instruments measured at fair value, as set out in the accounting policies in note 3.
The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4.
3. MATERIAL ACCOUNTING POLICIES
Basis of presentation and consolidation
These consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. Subsidiaries are those entities controlled by the Company. Control exists when the Company is exposed to or has rights to the variable returns from the subsidiary and has the ability to affect those returns through its power over the subsidiary. Power is defined as existing rights that give the Company the ability to direct the relevant activities of the subsidiary. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control is transferred to the Company to the date control ceases. All intercompany transactions, balances, income and expenses are eliminated in full upon consolidation.
An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. The Company is presumed to have significant influence if it holds, directly or indirectly, 20% or more of the voting power of the investee. If the Company holds less than 20% of the voting power, other relevant factors are examined by the Company to determine whether it has significant influence. The factors that may enable the exercise of significant influence include the proportion of seats on the board being assigned to the Company, nature of the business decisions that require unanimous consent of the directors, ability to influence the operating, strategic and financing decisions and the existing ownership composition vis-à-vis the Company's ability to exercise significant influence. The Company does not have any associates as at September 30, 2025 and 2024.
The subsidiaries of the Company as at September 30, 2025 and 2024 and their principal activities are described below:
| Name | Place of incorporation | Overship Interest | Principal activity |
|---|---|---|---|
| Sienna Minerals S.A.C | Peru | 100% | Exploration |
| Agraria Huaranchal S.A.C | Peru | 100% | Exploration |
PPX
On September 28, 2018, the Company signed a Usufruct and Options Agreement (the "Usufruct Agreement"), with Igor Mining Exploration S.A.C ("IME"), a Peruvian entity owned by the Company's lawyers in Peru. IME holds the title to the land where the future processing plant will be built. The Usufruct Agreement provides the Company with the same rights as the shareholders of IME and an option to acquire IME for 3,500 Peruvian Soles. Based on the fact that the Company controls all strategic and day to day decisions of IME and IME's key management personnel is comprised of officers appointed by PPX Mining, the Company concluded that it has control over IME. Accordingly, IME meets the criteria to be classified as a subsidiary. Commencing at the date of the signing of Usufruct agreement, the financial results of IME were included in the consolidated results.
The financial statements of subsidiaries are prepared for the same reporting periods as the Company, using consistent accounting policies. Where necessary, adjustments are made to bring the accounting policies of the Company's associates in line with those of the Company. All intercompany balances and transactions have been eliminated upon consolidation.
Foreign currency translation
The functional currency for each entity consolidated with the Company is determined by the currency of the primary economic environment in which it operates. The consolidated financial statements are presented in Canadian dollars, which is the Company's presentation currency. The functional currency of the Company is the Canadian dollar while the functional currency of its Peruvian subsidiaries is the United States ("US") dollar. The functional currency determinations were conducted through an analysis of the consideration factors identified in International Accounting Standard ("IAS") 21 "The Effects of Changes in Foreign Exchange Rates".
In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the rate on the date of transaction.
Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the year in which they arise. Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive income (loss) to the extent that gains and losses arising on those nonmonetary items are also recognized in other comprehensive income (loss). Where the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.
The financial results and position of foreign operations whose functional currency is different from the Company's presentation currency are translated into the Company's presentation currency at each reporting period with assets and liabilities translated at period-end exchange rates prevailing at that reporting date and income and expenses using average exchange rates during the period.
Exchange differences arising on translation of foreign operations are transferred directly to the Company's exchange difference on translating foreign operations on the Consolidated Statements of loss and Comprehensive loss and are reported as a separate component of shareholders' equity (deficiency) titled "Accumulated other comprehensive income (loss)". These differences are recognized in the profit or loss in the year in which the operation is disposed of.
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Financial instruments
Recognition and Classification
The Company recognizes a financial asset or financial liability on the statement of financial position when it becomes party to the contractual provisions of the financial instrument.
The Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"), at fair value through other comprehensive income (loss) ("FVTOCI") or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company's business model for managing the financial assets and their contractual cash flow characteristics.
Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.
The following table shows the classification of the Company financial assets and financial liabilities:
| Classification Under IFRS9 | |
|---|---|
| Cash | FVTPL |
| Accounts receivables | Amortized cost |
| Accounts payable and accrued liabilities | Amortized cost |
| Convertible debenture | Amortized cost |
| Loan payable | Amortized cost |
| Promissory notes | Amortized cost |
| Gold stream facility | FVTPL |
| Derivative liability | FVTPL |
Measurement
Financial assets and liabilities at FVTPL: Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in profit or loss in the period in which they arise. Where management has opted to recognize a financial liability at FVTPL, any changes associated with the Company's own credit risk will be recognized in other comprehensive income (loss).
Financial assets and liabilities at amortized cost: Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.
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Impairment of financial assets at amortized cost: The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in profit or loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.
Derecognition
Financial assets: The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in profit or loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).
Financial liabilities: The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets, is recognized in profit or loss.
Modification
When the terms of an existing financial liability are modified or exchanged with the same lender, the Company assesses whether the modification is substantial based on quantitative and qualitative factors. A modification is considered substantial if the discounted present value of the cash flows under the new terms, including fees paid or received, differs by 10% or more from the discounted present value of the remaining cash flows of the original liability. If the modification is substantial, the original liability is derecognized, and a new financial liability is recognized at fair value. The difference between the carrying amount of the extinguished liability and the fair value of the new liability is recognized in profit or loss. If the modification is not substantial, the carrying amount of the liability is adjusted for any fees or costs incurred, and the modified effective interest rate is recalculated to reflect the revised cash flows. Any gain or loss arising from the modification that does not result in derecognition is recognized in profit or loss over the remaining term of the liability through the revised effective interest rate. Transaction costs directly attributable to the modification or extinguishment are recognized as part of the gain or loss on extinguishment.
Fair values
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 subsequent to initial recognition are grouped into a hierarchy based on the degree to which the fair value is observable as follows:
Level 1 fair value measurements are quoted prices (unadjusted) in active markets for identical assets or liabilities;
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Level 2 fair value measurements are those derived from inputs other than quoted prices included within 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 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Cash and cash equivalents
Cash and cash equivalents include cash and short-term money market instruments that are readily convertible to cash with original terms of three months or less. As at September 30, 2025 and 2024, the Company did not have any cash equivalents.
Mining interest and property, plant and equipment
Exploration and Evaluation Assets
Mineral exploration and evaluation costs are charged to operations in the period incurred until such time as the property has been acquired or is under option, in which case subsequent exploration costs and costs incurred to develop the property are capitalized.
Direct costs related to the acquisition of mineral property interests are capitalized on a property-by-property basis. Property acquisition costs include cash expenses and the fair market value of common shares, based on the trading price of the shares, issued for mineral properties interests, pursuant to the related property agreements. Payments relating to a property acquired under an option or joint venture agreement, where payments are made at the sole discretion of the Company, are recorded as mineral property costs upon payment.
Once the technical feasibility and commercial viability of extracting the mineral resource from a property has been determined, the property is considered to be a mine under development and is classified as "mines under construction". Exploration and evaluation assets are tested for impairment before the assets are transferred to development properties.
Upon commencement of commercial production of a mineral property, the related capitalized costs are amortized and depleted on a unit-of-production basis using estimated proven and probable reserves of the mineral property.
Periodic reviews are made by management and where the long-term expectation is that the net carrying amount of these capitalized exploration and development costs will not be recovered, the carrying amount is then written down accordingly and the write-down amount charged to operations.
The amounts shown for exploration and evaluation assets represent acquisition and deferred exploration costs incurred to date, on a property-by-property basis, and are not intended to reflect present or future values. It is reasonably possible, based on existing knowledge, that change in future conditions could require a material change in the recognized amount.
Property, Plant and Equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes the purchase price and directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Where an item of equipment comprises major components with different useful lives, the components are accounted for as separate items of equipment. The carrying amounts of plant and equipment are depreciated using the straight-line method over the estimated useful lives of the related assets. The significant classes of depreciable plant and equipment and their estimated useful lives are as follows:
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| Category | Rates |
|---|---|
| Office furniture | 3 years |
| Computer equipment | 2 years |
| Plant | Life of mine |
| Land | Not amortized |
Depreciation methods, useful lives and residual values are reviewed at each financial year end and are adjusted if appropriate.
Convertible debentures
The Company recognizes and presents separately the components of a hybrid financial instrument that both creates a financial liability of the Company and grants an option to the holder of the instrument to convert it into a variable number of common shares of the Company (a liability instrument). The conversion feature does not meet the fixed for-fixed criteria and therefore is an embedded derivative that is assessed separately from the host liability. On initial recognition, the conversion feature of a financial instrument is recorded as a derivative liability measured first based on its fair value at initial recognition. The host liability component is recognized initially as the difference between the fair value of the hybrid financial instrument as a whole and the fair value of the conversion feature.
Subsequent to initial recognition, the host liability component of a hybrid financial instrument is measured at amortized cost using the effective interest method. The conversion feature of a hybrid financial instrument is remeasured subsequent to initial recognition at each reporting period. Interest related to the financial liability is recognized in profit or loss. On conversion, the financial liability is reclassified to equity reserve and no gain or loss is recognized.
Impairment of assets
Non-financial assets that have an indefinite life are not subject to amortization and are tested annually for impairment or whenever impairment indicators exist. Assets that are subject to amortization or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When indicators of impairment are present the recoverable amount of an asset is evaluated at the level of a cash generating unit ("CGU"), the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets, where the recoverable amount of a CGU is the greater of the CGU's fair value less costs to sell and its value in use. An impairment loss is recognized in profit or loss to the extent the carrying amount exceeds the recoverable amount.
In calculating the recoverable amount, if applicable, the Company uses discounted cash flow techniques to determine fair value when it is not possible to determine fair value either by quotes from an active market or a binding sales agreement. The determination of discounted cash flows is dependent on a number of factors, including future metal prices, the amount of reserves, the cost of bringing the project into production, production schedules, production costs, sustaining capital expenditures, and site closure, restoration and environmental rehabilitation costs. Additionally, the reviews take into account factors such as political, social, legal, and environmental regulations. These factors may change due to changing economic conditions or the accuracy of certain assumptions and, hence, affect the recoverable amount.
The Company uses its best efforts to fully understand all of the aforementioned to make an informed decision based upon historical and current facts surrounding the projects. Discounted cash flow techniques often require management to make estimates and assumptions concerning reserves and expected future production revenues and expenses.
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An impairment loss is reversed if there is an indication that there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. An impairment loss with respect to goodwill is never reversed.
Net profit interest
Net profit interest income is comprised of income earned in the period based on the agreement with the operator. The Company has determined that income recognition occurs when the operator transfers the relevant commodity to the end customer. Income is measured at the fair value of the consideration receivable or received, when management can reliably estimate the amount, and there is reasonable certainty regarding its collectability, pursuant to the terms of the agreement. In some instances, the Company will not have access to sufficient information to make a reasonable estimation of consideration to which it expects to be entitled and, accordingly, income is not recognized until management can make a reasonable estimate.
Provisions
Provisions are recognized when the Company or its subsidiaries have a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period. If the effect of the time value of money 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. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities are not recognized in the consolidated financial statements, if not estimatable and probable, and are disclosed in notes to the financial statements unless their occurrence is remote. Contingent assets are not recognized in the consolidated financial statements, but are disclosed in the notes if their recovery is deemed probable.
Environmental rehabilitation
Provisions for environmental rehabilitation (decommissioning and restoration) are made in respect of the estimated future costs of closure and restoration and for environmental rehabilitation costs (which include the dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas) in the accounting period when the related environmental disturbance occurs. The provision is discounted using a pre-tax rate, and the unwinding of the discount is included in finance costs. At the time of establishing the provision, a corresponding asset is capitalized and is depreciated over future production from the mining property to which it relates. The provision is reviewed on an annual basis for changes in cost estimates, discount provision on future obligations required to retire an asset.
Share based payments
The fair value of the equity settled share options ("equity-based instruments") awarded to employees, officers and directors, is recognized as share-based compensation expense over the vesting period of the stock options with a corresponding increase to equity (share-based payments reserve). Upon exercise, shares are issued from treasury and the amount reflected in share-based payment reserve is credited to share capital, adjusted for any consideration paid.
The fair value of each stock option granted is estimated on the date of the grant using the Black-Scholes option pricing model and is expensed over the vesting period, based on the Company's estimate of equity instruments that will eventually vest. At the end of each reporting period, the Company revises its estimate of the number of equity
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instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the accumulated expense reflects the revised estimate, with a corresponding adjustment to the share-based payment reserve.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Equity based instruments granted to non-employees are recorded at the fair value of the goods or services received in profit or loss, unless they are related to the issuance of shares in which case the fair value is recorded as a reduction of share capital. When the value of goods or services received in exchange for the equity-based instruments cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
Income taxes
Taxes, comprising both current and deferred income taxes, are recognized in profit or loss, except where they relate to items recognized in other comprehensive income or directly in equity, in which case the related taxes are recognized in other comprehensive income or equity. Deferred income taxes are provided using the balance sheet liability method, providing for unused tax losses, unused tax credits and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled based on the tax rates (and tax laws) that have been enacted or substantively enacted at the statement 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. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current assets and liabilities on a net basis.
Share capital
Common shares, stock options, warrants, and conversion features on convertible debentures where the contract can be settled by issuing a fixed number of shares for a fixed value are classified as equity. Incremental costs directly attributable to the issue of common shares, conversion features on convertible debentures, stock options and warrants are recognized as a deduction from equity (share issue costs), net of any tax effects. Proceeds from unit placements are allocated between common shares and warrants issued based on the residual value method, with the common shares being valued first.
The Company uses the Black-Scholes option pricing model to value finder's warrants issued in private placements. The fair value assigned to finder's warrants is recorded as share issue costs and an increase to warrants reserve. Upon exercise the consideration paid by the holder together with the amount previously recognized is recorded as an increase to share capital. When the terms of the warrants are modified, no adjustments are recognized in equity.
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Profit (loss) per share
Basic profit (loss) per share is computed by dividing net profit (loss) available to common shareholders by the weighted average number of outstanding common shares for the period. In computing diluted profit per share, an adjustment is made for the dilutive effect of the exercise of stock options and warrants. The number of additional shares is calculated by assuming that outstanding stock options and warrants are exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting periods. In periods where a net loss is reported, all outstanding options and warrants are excluded from the calculation of diluted loss per share, as they are anti-dilutive.
Segment reporting
An operating segment is a component of an entity:
- that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity);
- whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and
- for which discrete financial information is available.
The Company has one operating segment, being mineral exploration.
Joint arrangements
A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The Company considers whether a joint arrangement is a joint operation or a joint venture. The Company is not a party to any joint venture arrangements.
A joint arrangement that is not structured through a separate vehicle is a joint operation. Accounting for a joint operation is determined based on the underlying terms of the contractual arrangement, which describes the nature of the joint activities and how the parties intend to undertake those activities together. When an arrangement specifies that each party is: (i) required to acquire its own assets and incur its own expenses and corresponding liabilities when undertaking such activities; and (ii) only entitled to a percentage of the net profits ("net profit interest") resulting from the joint activities, the Company recognizes those assets and liabilities for which it has rights and obligations and its net profit interest in accordance with the contractual arrangement.
4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company's accounting policies, which are described in note 3, management is required to make judgments, estimates and assumptions about the carrying amount and classification of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revisions affect only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
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The following are the critical judgments and areas involving estimates, that management have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements.
Critical Judgments in Applying Accounting Policies
Critical accounting judgments are accounting policies that have been identified as being complex or involving subjective judgments or assessments, as follows:
The point in time that an economic feasibility study has established the presence of proven and probable reserves
- The determination of the point in time at which an economic feasibility study establishes the presence of proven and probable reserves requires judgment, including the evaluation of technical, economic, environmental, and regulatory factors, and has a direct impact on the classification of mineral properties and the accounting for exploration and evaluation expenditures;
Determination of the functional currency in accordance with IAS 21, The Effects of Changes in Foreign Exchange Rates
- Determination of functional currency may involve certain judgments to determine the primary economic environment, and to reconsider the functional currency if there is a change in events and conditions that determined the primary economic environment;
Determination of derivative liability
- The assessment of whether a streaming arrangement contains an embedded derivate requires judgment in interpreting the contractual terms and evaluating the substance of the arrangement under IFRS;
Determination of commercial production
- Judgment is a requirement in determining whether a plant has met commercial production. In making this determination, management considers specific facts and circumstances, including, but not limited to, whether the product produced by the plant is saleable, the completion of a reasonable commissioning period, and the achievement of consistent operating results such as output at a predetermined level of design capacity for a reasonable period of time;
Determination of contingencies
- Provisions and contingencies arising in the course of operations, including provision for income or other tax matters are subject to estimation uncertainty. Management uses all information available in assessing the recognition, measurement and disclosure of matters that may give rise to the provisions or contingencies. The actual outcome of various provisional and contingent matters may vary and may cause significant adjustments when the amounts are determined or additional information is acquired; and
Determination of arrangement with PLP as a joint operation
- In the determination that the arrangement with PLP meets the definition of a joint operation, significant judgement is applied in the application of the contractual terms of the underlying arrangement to the relevant IFRSs. A joint operation requires a joint arrangement to be in place whereby the contractual terms give PPX and PLP joint control of the arrangement. In the assessment as to whether PPX and PLP have joint control over the joint operation as per the underlying contractual arrangement, consideration is given as to whether decisions about the relevant activities require the unanimous consent of both PPX and PLP, whether PPX and PLP act together to direct the key activities that significantly affect the returns of the arrangement (i.e. the relevant activities), and that neither PPX or PLP control the arrangement on its own. A joint arrangement that is not
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structured through a separate vehicle is a joint operation. The Company considers the determination of joint control of the operations with PLP as a critical judgement.
Key Sources of Estimation Uncertainty
Useful life of plant and equipment
As discussed in note 3, the Company reviews the estimated lives of its plant and equipment at the end of each reporting period. There were no material changes in the lives of plant and equipment for the years ended September 30, 2025 and 2024.
Impairment of assets
The carrying amounts of mining interest, plant and equipment, and advances for assets under construction are reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable. If there are indicators of impairment, an exercise is undertaken to determine whether the carrying values are in excess of their recoverable amount. Such review is undertaken on an asset-by-asset basis, except where such assets do not generate cash flows independent of other assets, and then the review is undertaken at the CGU level.
The assessment requires the use of estimates and assumptions such as, but not limited to, long-term commodity prices, foreign exchange rates, discount rates, future capital requirements, resource estimates, exploration potential and operating performance as well as the CGU definition. It is possible that the actual fair value could be significantly different from those assumptions, and changes in these assumptions will affect the recoverable amount of the mining interests. In the absence of any mitigating valuation factors, adverse changes in valuation assumptions or declines in the fair values of the Company's CGUs or other assets may, over time, result in impairment charges causing the Company to record material losses.
The Company considers both external and internal sources of information in assessing whether there are any indications that mining interests are impaired. External sources of information the Company considers include changes in the market, economic and legal environment in which the Company operates that are not within its control and affect the recoverable amount of mining interests. Internal sources of information the Company considers include the manner in which assets are being used or are expected to be used and indications of economic performance of the assets.
Determination of taxes payable
The determination of taxes payable requires judgment in estimating current tax obligations based on applicable tax legislation, interpretations of tax laws, and assessments of positions taken in tax filings, including the evaluation of uncertainties that may affect the amount payable.
Recoverability of accounts receivable
Judgment is applied in assessing the recoverability of accounts receivable, including the evaluation of expected credit losses based on the creditworthiness of counterparties, historical payment patterns, and current and forward-looking information that may affect collectability.
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Gold stream facility
The Company has entered into a Gold Stream Agreement (note 11) which contains a derivative liability. The valuation of this derivative utilizes a number of assumptions, including discount rate, future gold prices, the probability of achieving commercial production from the Igor 4 concession, change in expected ounces to be delivered and future production levels. As at the statement of financial position date, management, due to uncertainties related to the amount and timing of future ounces to be delivered, has determined the derivative value to be nominal.
Environmental rehabilitation
Significant estimates and assumptions are made in determining the environmental rehabilitation costs as there are numerous factors that will affect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases, and changes in discount rates. Those uncertainties may result in actual expenditures in the future being different from the amounts currently provided. The provision represents management's best estimate of the present value of the future rehabilitation costs required.
Silverstream liability
The Company has entered into a silver royalty agreement (note 11) which is accounted for as a derivative financial liability measured at fair value through profit or loss. The fair value of the silver royalty derivative liability is determined using a discounted cash flow model and requires the use of significant estimates and assumptions.
Key assumptions used in the valuation include estimates of future silver prices, expected silver production volumes and timing, the number of ounces expected to be delivered under the royalty agreement, the commencement of minimum royalty payments, the timing of termination of the agreement upon delivery of the contracted ounces, and the discount rate applied to future cash flows.
These estimates are subject to significant uncertainty and are affected by factors including commodity price volatility, operational performance, mine production schedules, and changes in market conditions. Actual outcomes may differ from management's assumptions, and changes in any of these estimates could result in a material adjustment to the carrying value of the silver royalty derivative liability in future periods.
Changes in Accounting Policies and Standards
Adoption of New Accounting Standards
The Company has adopted the following new standards, along with any consequential amendments, effective October 1, 2024. These changes were made in accordance with the applicable transitional provisions. The adoption of the new standards and consequential amendments did not have a material impact on the Company's consolidated financial statements.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
The amendments to IAS1 provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date.
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Amendments to IAS 1: Non-current Liabilities with Covenants
This amendment specifies that only covenants that an entity is required to comply with on or before the reporting date affect the entity's right to defer settlement of a liability for at least twelve months after the reporting date, which must be considered when assessing whether to classify the liability as current or non-current.
Accounting Standards Issued but Not Yet Effective
IFRS 18: Presentation and Disclosure in Financial Statements
On April 9, 2024, the IASB issued IFRS 18 “Presentation and Disclosure in the Financial Statements” (“IFRS 18”) replacing IAS 1. IFRS 18 introduces categories and defined subtotals in the statement of profit or loss, disclosures on management-defined performance measures, and requirements to improve the aggregation and disaggregation of information in the financial statements. As a result of IFRS 18, amendments to IAS 7 “Statements of Cash Flows” (“IAS 7”) were also issued to require that entities use the operating profit subtotal as the starting point for the indirect method of reporting cash flows from operating activities and also to remove presentation alternatives for interest and dividends paid and received. Similarly, amendments to IAS 33 “Earnings per Share” were issued to permit disclosure of additional earnings per share figures using any other component of the statement of profit or loss, provided the numerator is a total or subtotal defined under IFRS 18. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, and is to be applied retrospectively, with early adoption permitted. The Company will be assessing the impact of the standard on its consolidated financial statements.
Amendments to IAS 21: Lack of Exchangeability
The amendment to IAS 21, The Effects of Changes in Foreign Exchange Rates, contains guidance on when a currency is exchangeable into another currency and how to determine the exchange rate when it is not. The amendment also adds a disclosure requirement when a currency is not exchangeable. The new amendment is effective for annual reporting periods beginning on or after January 1, 2025, with earlier adoption permitted. The Company is currently assessing the impact of these amendments.
6. FINANCE EXPENSE AND OTHER
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Gold stream facility interest expense (note 11) | $604,542 | $234,866 |
| Convertible debenture interest expense and accretion (note 12) | $654,489 | $685,532 |
| Promissory note interest expense (note 10) | $24,431 | $21,813 |
| Accretion - environmental closure provision (note 13) | $9,758 | $27,329 |
| Accretion - loan payable (note 14) | $- | $2,617 |
| Bank charges and other | $2,638 | $2,475 |
| Finance expenses and other | $1,295,858 | $974,632 |
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7. AMOUNTS RECEIVABLE
| As at September 30, | As at September 30, | |
|---|---|---|
| 2025 | 2024 | |
| Accounts receivable | $4,717,381 | $ - |
| Sales tax and government receivables | $290,115 | $242,527 |
| $5,007,496 | $242,527 |
Accounts receivable consists primarily of amounts due from PLP arising from the Company's net profit interest related to the operations at the Igor 4 property. The receivable represents the Company's share of the net profits earned from PLP's ongoing mining and operational activities, calculated in accordance with the terms of the NPI agreement. As at September 30, 2025, all such amounts due from PLP are considered collectible.
8. EXPLORATION AND EVALUATION ASSETS AND PROPERTY, PLANT AND EQUIPMENT
| Year ended September 30, 2025 | Exploration and evaluation asset | Property, plant and equipment |
|---|---|---|
| Cost | ||
| At September 30, 2024 | $9,841,271 | $1,747,974 |
| Additions | $1,258,673 | $9,205,434 |
| Change in environmental rehabilitation provision | $96,144 | $759,008 |
| Foreign exchange | $(290,452) | $(11,303) |
| Cost at September 30, 2025 | $10,905,636 | $11,701,113 |
| Accumulated depreciation | ||
| At September 30, 2024 | $- | $168,371 |
| Depreciation | $- | $5,476 |
| Foreign exchange | $- | $4,867 |
| Accumulated depreciation at September 30, 2025 | $- | $178,714 |
| Carrying value at September 30, 2025 | $10,905,636 | $11,522,399 |
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Year ended September 30, 2024
| Cost | ||
|---|---|---|
| At September 30, 2023 | $8,819,586 | $1,607,601 |
| Additions | $969,971 | $143,907 |
| Change in environmental rehabilitation provision | $41,459 | $- |
| Foreign exchange | $10,255 | $(3,534) |
| Cost at September 30, 2024 | $9,841,271 | $1,747,974 |
| Accumulated depreciation | ||
| At September 30, 2023 | $- | $162,836 |
| Depreciation | $- | $5,797 |
| Foreign exchange | $- | $(262) |
| Accumulated depreciation at September 30, 2024 | $ - | $168,371 |
| Carrying value at September 30, 2024 | $9,841,271 | $1,579,603 |
Exploration and Evaluation Assets
The Company, through its subsidiary Sienna Minerals S.A.C., has a 100% interest in the Igor Project, located in Northern Peru. The Igor Project totals approximately 1,300 hectares on four concessions which includes Igor 1, Igor 3, Igor 4 and La Busqueda XXVIII. The production from the Igor 4 concessions is subject to the requirements of a gold streaming facility as disclosed in note 11.
During the year ended September 30, 2020, the Company's environmental license at the Igor 1 and 3 exploration projects expired. The Company intends to renew these licenses once exploration is continued. The Company holds an exploitation license for Igor 4 which expires on March 2027.
On February 2024, the Company filed a completed NI 43-101 Technical Resource Update for the Igor Project. As the Company ramps up the construction of the plant, this information will be used to develop a plan for additional exploration activities on Igor 1 and 3 and the required and relevant permits to complete these activities will be obtained.
The Company's spending in the Igor concessions for years ended September 30, 2025 and 2024 is as follows:
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Drilling, road and site preparation | $258,344 | $211,946 |
| Salaries, claims maintenance and staking | $403,244 | $457,433 |
| Social development | $484,550 | $255,537 |
| Environmental | $112,535 | $45,055 |
| Total additions | $1,258,673 | $969,971 |
The Company earned net profit interest income of $9,315,405 (year ended September 30, 2024 – $518,182) on the Igor 4 concession, which was recorded as other income in profit or loss during the year ended September 30, 2025.
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Agreement with Proyectos La Patagonia S.A.C. ("Patagonia" or "PLP")
The Company entered into a commercial agreement with Patagonia, a Peruvian mining contractor, whereby the Company granted Patagonia a right to mine the Igor 4 concession for a certain number of years. During the term of the agreement, the Company and Patagonia share the net profits from the mining operation in the Igor 4 concession, at a ratio of 70%/30% respectively and 75%/25% once the Company builds a processing plant to treat the ore from this concession.
Patagonia is responsible for obtaining all necessary permits and licenses to carry out mining operations on the Igor 4 concession in order to reach certain production milestones. The Company is responsible for building and installing a processing plant with a capacity of at least 150 MTPD and to be expanded to 350 MTPD, while Patagonia has the responsibility to maintain certain operating costs levels.
The Company can terminate the assignment agreement at any time subject to payments to Patagonia as follows:
- if terminated after November 1, 2019, US$3,000,000 less US$5 multiplied by the tons of ore extracted;
- if terminated before November 1, 2019, US$4,000,000 less US$5 multiplied by the tons of ore extracted;
The assignment agreement represents a joint operation as defined in IFRS 11, Joint Arrangements, and as such the Company recognizes its assets, liabilities, and its share of revenues and expenses from the operation. The Company's Igor 4 project remains in exploration stage and has not reached commercial production based on the criteria established in the 2024 NI 43-101 Technical Report.
On June 5, 2024, the Company entered into the fourth amendment to the ongoing assignment agreement with PLP, extending the expiration of the assignment until December 31, 2024. This amendment ratified the initial assignment agreement, as well as the first, second and third amendments. In addition, it included certain clauses related to earlier termination of the agreement, if certain milestones to conclude negotiations of the new assignment agreement are not met.
On December 10, 2024, the Company signed a new assignment agreement with PLP until 2034 to operate the Callanquitas mine located on the Igor 4 concession. The main terms of this new assignment agreement are as follows:
- Structured through two contracts, one that regulates the business relationship among the parties before the processing plant becomes operational ("Phase 1 Contract") and a second contract, once the plant is fully operational ("Phase 2 Contract");
- Phase 1 Contract automatically expires once PPX notifies PLP that its new plant is operational and fully permitted;
- The NPI, as defined in the agreement, is split 75% to PPX and 25% to PLP in Phase 1 Contract; while 80% to PPX and 20% to PLP in Phase 2 Contract. In both cases, an improvement to PPX from the initial agreement that contemplated 70% to PPX and 30% to PLP;
- The new term has been set until the end of 2034, with specific early termination clauses, in the event the parties decide to terminate the agreement with or without cause;
- The agreement contemplates an open book policy in respect to production and accounting records;
- A Steering Committee ("CTAN") composed by senior management representatives of each party was created. The CTAN will mainly coordinate budgeting, exploration, mining, processing and social aspects of the operation;
- Once Phase 2 Contract is in place, PPX will take over the commercialization of the minerals produced in the Callanquitas Mine;
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- The agreement controls the mechanics for exploration expenses, capital cost and corporate expenses. Also, it provides guidance on how to liquidate assets in a termination event and at expiration of the agreement; and
- Finally, the agreement also covers the social and environmental responsibility of each party. Once the agreement transitions into Phase 2, PPX will obtain title to the concentrate during the processing stage and will be responsible for marketing and selling the product to customers. Accordingly, revenue will be recognized on a gross basis rather than through an NPI arrangement, and NPI payments and mining-related charges remitted to PLP will be recorded as cost of sales.
Community Agreements
On February 14, 2018, the Company signed a ten-year agreement with the community of Callanquitas in Northern Peru that provides the Company with the Social License to conduct mining and exploration activities at the Igor Project, including the ongoing test-mining and bulk-sampling program at Igor 4 concession. The agreement provides for employment opportunities for the people of Callanquitas, improved road maintenance in the vicinity of the community, and infrastructure improvements to the local elementary school.
On November 20, 2018, the Company signed an agreement with the Igor community in Northern Peru that provides the Company with the Social License to build and operate the heap leach facility for processing of the ore from the Igor 4 concession. The agreement provides for employment opportunities for the people of the Igor community, improved road maintenance in the vicinity of the community, and infrastructure improvements to local schools and medical facility.
On August 18, 2023, the Company conducted a community meeting and workshop to update its environmental impact study (for small producers) with the objective of completing the requirements to amend its existing beneficiation plant permit (heap leach) to one in line with the new plant configuration that the Company is planning to build (CIL and flotation).
Property, Plant and Equipment
Property, plant and equipment at September 30, 2025 includes $8,523,825 (September 30, 2024 - $1,226,570) for construction expenses related to the gold and silver processing facility being built by the Company on the Igor 4 concession including spending for permits, design and engineering work. Property, plant and equipment as at September 30, 2025 also includes $580,789 (September 30, 2024 - $351,200) for land and $2,417,785 (September 30, 2024 - $1,833) for equipment.
On February 14, 2024, the Company received from the regional authority of the Energy and Mines Ministry of Peru approval of the amendment of the Environmental Impact Study (EIAsd) for the IGOR Project beneficiation plant. This approval constitutes the acceptance of the F1 environmental portion of the permitting application that will allow the Company to build its CIL and Flotation processing plant at site. Days after this approval, the Company completed the submission of the final detail engineering portion of the permit application (F2). On September 19, 2024, the Company received its final construction permit for the CIL and Flotation plant.
During the year ended September 30, 2025, the Company capitalized borrowing costs related to the construction of the plant in the amount of $623,715 as the proceeds of the associated loan were directly attributed to the construction of the plant.
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9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
| As at September 30 | As at September 30, | |
|---|---|---|
| 2025 | 2024 | |
| Trade payables | $1,434,982 | $627,271 |
| Taxes payable | $4,167,744 | $108,341 |
| RIVI NSR accrual | $1,266,533 | $563,643 |
| Silver Crown NSR accrual | $53,714 | $- |
| Total accounts payable and accrued liabilities | $6,922,973 | $1,299,255 |
The fair value of accounts payable and accrued liabilities approximates their carrying amount. Trade payables relate mainly to general admin, salary, and contractor services. These payables do not accrue interest and no guarantees have been granted.
During the year ended September 30, 2024, the Company entered into a debt settlement agreement with a certain vendor to settle $20,000 of outstanding trade payables by issuing 400,000 units of the Company (the "Units") at a deemed issue price of $0.05 per Unit. On May 28, 2024, the Company issued 400,000 Units to settle the outstanding trade payables. Each Unit is comprised of one common share (a "Common Share") and one common share purchase warrant of the Company (a "Warrant"). Each Warrant is exercisable into one Common Share at a price of $0.07 per Common Share and expires on May 28, 2026. The fair value of the common share portion of the Units issued was $22,000 based on a fair value of $0.055 per common share, and the fair value of the warrant portion of the Units issued was estimated to be $17,760 using the Black-Scholes option pricing model with the following assumptions: share price of $0.055, risk free interest rate of 4.28%, expected volatility of 190.17%, dividend yield of 0%, forfeiture rate of 0%, and an expected life of 2 years (note 15).
During the year ended September 30, 2025, the Company entered into a debt settlement agreement with a former employee of the Company (the "Creditor") to fully settle outstanding debt owed by the Company to the Creditor in the amount of US$123,000 ($168,350) for outstanding fees and expenses, by the Company issuing 1,850,000 common shares of the Company to the Creditor at a deemed price of $0.091 per common share (the "Debt Settlement"). On July 28, 2025, the Company issued 1,850,000 common shares at a price of $0.10 per common share (note 15) to settle the outstanding trade payables.
During the year ended September 30, 2025, the Company recorded a loss on debt settlement of $16,650 (year ended September 30, 2024 – $19,760).
10. PROMISSORY NOTES
On June 30, 2019, the Company entered into an unsecured promissory note agreement to repay amounts owing to the former CFO of the Company. The promissory note has a principal amount of $112,160, bears interest at 12% per annum payable semi-annually, starting on December 31, 2019, and matured on June 30, 2020. On December 22, 2025, the promissory note and accrued interest of $230,268 was paid in full. See note 21.
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Balance, beginning of year | $203,594 | $181,781 |
| Accrued interest (note 6) | $24,431 | $21,813 |
| Balance, end of year | $228,025 | $203,594 |
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11. LONG TERM DEBT
| Year Ended September 30, | ||
|---|---|---|
| GEOs produced on top of principal portion of the stream facility | 2025 | 2024 |
| Balance, beginning of year | $2,317,774 | $1,333,909 |
| Gold streaming expense | $3,299,097 | $1,455,872 |
| Gold stream facility payments | $(1,406,836) | $(691,213) |
| Interest expense (note 6) | $604,542 | 234,866 |
| Foreign exchange | $88,755 | $(15,660) |
| Balance, end of year | $4,903,332 | $2,317,774 |
| Current portion | $3,373,037 | $- |
| Non-current portion | $1,530,295 | $2,317,774 |
On October 10, 2016, the Company entered into an agreement with RIVI Opportunity Fund LP ("RIVI") to provide the Company with an investment of US$5 million in return for a Metal Purchase Agreement ("Gold Stream Facility" or the "Facility") on future precious metal production from the Company's Igor 4 concession, further amended on November 21, 2017. RIVI is entitled to receive the greater of 10% of the Company's portion of the combined production of gold and silver ounces from the Igor 4 concession on a Gold Equivalent Ounce ("GEO") basis and 50 GEOs at a price per GEO of the lesser of US$400 or 80% the market price of gold on a monthly basis.
The Company received the first tranche of US$2.5 million on October 11, 2016 and the second tranche on December 13, 2017 (total net proceeds of US$4.550 million ($5,907,855), net of US$225,000 finder and restructuring fees for each tranche). The Company incurred total transaction costs of $875,940 in relation to the gold stream facility, including $584,833 (US$450,000) for the finder and restructuring fees; $288,113 and $587,827 of the transaction costs were incurred respectively, during the years ended September 30, 2018 and 2017.
The Facility was classified as a financial liability at FVTPL and is revalued at its fair value on each subsequent reporting date with the changes in the fair value recorded in profit or loss. Due to the uncertainty of the total expected ounces to be delivered and the timing of cash flows, the Facility is currently recorded at its face value with the derivative measured at a nominal value.
The first tranche payment was subject to interest of 10% per annum, payable quarterly in US$ and accruing on daily balances until the end of the third month after certain production milestones were met. The amended agreement signed on November 21, 2017 (the "Amended Agreement") provides for interest at 12%, payable quarterly in US$ and accruing daily on the full amount of the investment of US$5 million, until a contractual production threshold at Igor 4 has been met. Such threshold was met during the year ended September 30, 2022.
The Amended Agreement provides that until equivalent dollar amount of 20,000 GEOs have been delivered to RIVI, the GEOs will include:
- all production from the Igor 4 concession and any other sources from the first 700 tons of ore processed at the Company's plant in any given day; production from only Igor 4 for any production above the 700 tons of ore processed in any given day and after 20,000 GEOs have been delivered to RIVI.
- The principal balance of US$5 million is reduced as the GEOs are delivered to RIVI. The amount of reduction for each period is determined based on the GEOs from the Igor 4 pre-production, multiplied by the difference between the market price of gold and the lesser of US$400 or 80% the market price of gold. Upon expiry of the term which is the earlier of 40 years and depletion of the mine, any balance remaining unpaid shall be refunded to RIVI.
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During the year ended September 30, 2025, the Company paid to RIVI $1,406,836 (year ended September 30, 2024 – $691,213) related to GEOs produced. The stream facility at September 30, 2025 and September 30, 2024 entirely relates to amounts due to RIVI for GEOs produced and not yet paid until that respective date.
During the year ended September 30, 2025, resulting from additional GEOs produced, the Company accrued an additional amount of $3,299,097 (US$2,369,882) (year ended September 30, 2024 - $1,455,872 (US$1,068,781)) in gold streaming expense.
Seventy-two months after the Monthly Production Milestone has been met, or when 20,000 GEOs have been delivered under the Gold Stream Agreement (whichever occurs first), the Company has the option to reduce RIVI's entitlement to 5% of the GEOs produced on the Igor 4 concession by making a one-time payment of US$5 million to RIVI, subject to the price of gold being greater than US$1,200 per ounce. These conditions have not yet been met as at September 30, 2025.
The Company granted RIVI a first and preferred mining tenements mortgage of US$5 million on the Igor 1, Igor 3 and Igor 4 concessions and surface land and general security interest (the "Security") over all of the present and after-acquired assets within the property. The Security provided to RIVI will cease once the Company has fully paid the US$5 million investment by RIVI.
On April 30, 2021, the Company signed a Net Smelter Royalty Agreement with RIVI, whereby RIVI is granted an option to acquire a royalty equal to 2% of Net Smelter Returns ("NSR") over the Igor, Igor 3 and Igor 4 concessions, in exchange for reducing $637,000 (US$500,000) of the amounts owed to RIVI by the Company. In addition, the Company has the option to repurchase 1% of the NSR royalty for US$750,000 until October 21, 2021. The $637,000 (US$500,000) reduction in the amounts owed to RIVI by the Company was recorded to reduce the Company's exploration and evaluation assets and to reduce the accrued interest during the year ended September 30, 2021.
On June 1, 2023, the Company entered into a letter agreement with RIVI, whereby the Net Smelter Royalty Agreement was amended such that the royalty obligation thereunder shall not commence (and none shall be deemed to have accrued) until January 1, 2023, in consideration for US$540,000 payable to RIVI by the Company. From and after January 1, 2023, the royalty obligations shall commence in accordance with the terms of the Net Smelter Royalty Agreement. In addition, the option to repurchase 1% of the NSR royalty is extended in perpetuity at the same price, US$750,000, but limited to the Igor and Igor 3 concessions. The Igor 4 concession in which the Callanquitas mine is located is excluded from this repurchase extension. During the year ended September 30, 2023, the Company made the payment in the amount of $732,903 (US$540,000) and recognized a gain on the amendment of the Net Smelter Royalty Agreement in the amount of $294,478.
During the year ended September 30, 2025, the Company recorded NSR expense of $702,891 (year ended September 30, 2024 – $356,999).
On February 19, 2023, the Company entered into an amended and restated gold and silver purchase agreement (the "Amended and Restated GPA") with RIVI, whereby the Company and RIVI have agreed, to restructure the Company's streaming and payment obligations under the original gold and silver purchase agreement dated October 10, 2016 between the Company and RIVI, as amended (the "Original GPA").
The Amended and Restated GPA provides for the following material changes to the Original GPA:
- Convertible Debenture
The due and outstanding balance of US$5,399,946 owing to RIVI under the Original GPA as at September 30, 2022 will be entirely satisfied by the issuance by the Company of a secured convertible debenture to RIVI for this amount (the "Convertible Debenture"). The Convertible Debenture will mature on the third anniversary of the date of issue and bears interest at a rate of 5% per annum, payable semi-annually. RIVI may convert all or any part of the principal amount outstanding into common shares of the Company (the "Shares"), at a conversion price of
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US$0.04 per Share (subject to adjustment), subject to a restriction on any conversion which would result in RIVI owning, on a post-conversion basis, more than 19.9% of the outstanding Shares with the approval of the TSX Venture Exchange. The Company may prepay all or any portion of the Principal Amount without penalty. The obligations under the Convertible Debenture will be secured by the same security package granted under the Original GPA (and which continue under the Amended and Restated GPA) (note 12).
- Restructuring of Stream Obligations
The Original GPA contemplated monthly delivery obligations to RIVI equal to 10% of the gold equivalent ounces produced in its Callanquitas Mine (the "Stream Percentage"), currently operated by Patagonia and subject to certain production milestones. Even though the Amended and Restated GPA continues to accrue gold equivalent ounces under the same Stream Percentage, the maximum delivery obligation is linked to 30% of the monthly collected net profit interest attributable to the Company from Patagonia (the "NPI"), rather than the number of gold equivalent ounces produced in the Callanquitas mine. Any refined metals required to be delivered in excess of the monthly maximum will accrue in a stream account (with interest at 2.00% per month) until repaid in full. When the Company receives an annual bulk payment from Patagonia, it must use up to 40% of such payment to satisfy any accrued stream obligations and interest.
- Removal of Default NSR Royalty Provisions
In the Amended and Restated GPA, all default provisions under the Original GPA that would have required the Company to grant to RIVI a net smelter returns royalty were eliminated (including any net smelter returns royalties that RIVI may have earned, but not granted, prior to the entering into of the Amended and Restated GPA).
During the year ended September 30, 2025, the Company accrued interest of $604,542 (US$428,173) (year ended September 30, 2024 - $234,866 (US$174,029)) related to the refined metals required to be delivered in excess of the monthly maximum per the Amended and Restated GPA. As at September 30, 2025, there was $875,869 (US$629,171) (September 30, 2024 - $271,327 (US$200,998)) accrued interest outstanding.
Silver Royalty Agreement
On December 13, 2024, the Company signed a definitive silver royalty agreement (the "Agreement") with Silver Crown Royalties Inc. ("SCRi"). Proceeds will be used by the Company to support its ongoing construction of the CIL and flotation plant at the Company's Igor project, located in La Libertad, Peru (the "Beneficiation Plant").
The Agreement involves the sale of a royalty (the "Silver Royalty") for up to 15% of the cash equivalent of 225,000 ounces of silver produced from PPX's Mina Callanquitas at its Igor 4 mining concession, located in La Libertad, Peru (the "Project"), less customary deductions, for total aggregate proceeds of US$2,470,000. The first tranche of $1,433,445 (US$1,000,000) was received on the closing date of February 6, 2025, with the second tranche of US$1,470,000 (the "Second Tranche") to be paid within six months of closing. Upon closing, SCRi became entitled to a Silver Royalty of 6% of the cash equivalent of 90,000 ounces of silver produced from the Project. The Silver Royalty became payable immediately, based on current operations at the Project with payments due one quarter in arrears.
The Silver Royalty increases to 15% upon receipt of the Second Tranche. If the Second Tranche is not completed within 6 months of closing (August 6, 2025), PPX will have the right to repurchase the royalty for US$1,000,000, less any Royalty payments made to date.
Amendment
On July 31, 2025, the Company amended certain terms of the Agreement between the Company and SCRi originally dated December 13, 2024 (the "Amendment"). The Second Tranche price of the Agreement in the amount of US$1,470,000, originally payable by SCRi to the Company on or before August 6, 2025, was amended to break down the payment obligation in two and extend the time by which the total amount of US$1,470,000 must be paid. In
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connection with these amendments, $1,149,290 (US$833,000) of the second tranche payment was received on August 1, 2025, and the remaining US$637,000 was to be payable on or before December 31, 2025. The final payment of $894,858 (US$637,000) was received on October 16, 2025. In connection with the separation of the second tranche payment obligations and the partial payment made by SCRi, the Silver Royalty and total payable ounces to which SCRi is entitled under the Agreement were divided corresponding to the cash payments received by the Company. Receipt of US$833,000 on August 1, 2025 increased the Silver Royalty to 11.1% and total payable ounces to 166,500 ounces of silver. Receipt of US$637,000 on October 16, 2025 increased the Silver Royalty to 15% and 225,000 total payable ounces of silver.
The Agreement contains a minimum silver royalty period which provides for minimum quarterly deliveries of the cash equivalent of 14,062.5 ounces of silver applying the average market silver price for the relevant quarter until the total of 225,000 ounces has been paid.
Minimum payments will be required the earlier of: i) March 31, 2026; and ii) the startup of metallurgical operations at the Beneficiation Plant, currently under construction. Upon the delivery of the cash equivalent of 225,000 ounces of silver to SCRi, the Silver Royalty will automatically terminate.
The Company retains an option to increase the royalty rate to 30% and total payable ounces to 450,000 ounces upon payment of additional consideration of US$2,470,000. The consideration may be paid in cash, shares of SCRi with an equivalent fair value, or a combination of both at SCRi's discretion.
SCRi holds security over the Igor Project and associated mining rights, subject to an intercreditor agreement with RIVI Opportunity Fund LP. The security remains in place until the total payable ounces have been delivered through royalty payments.
The Silver Royalty Agreement is accounted for as a derivative financial liability under IFRS 9 because the cash flows associated with the Silver Royalty depend on movements in silver prices and production volumes.
The derivative liability is initially recognized at fair value and remeasured at each reporting date with gains or losses recorded in profit or loss.
Fair value is determined using a discounted cash flow model that incorporates unobservable inputs including estimated future silver prices, production forecasts, timing of termination of the Agreement (depends on deliveries prior to the minimum royalty period) and a discount rate. As the fair value measurement of the derivative liability relies on unobservable inputs, it is categorized as Level 3 in the fair value hierarchy.
A summary of the Company's derivative liability associated with the Agreement is as follows:
| Year Ended September 30, | ||
|---|---|---|
| Derivative Liability | 2025 | 2024 |
| Balance, beginning of year | $- | $- |
| Additions | $2,587,472 | $- |
| Loss on derivative liability revaluation | $2,344,571 | $- |
| Foreign exchange | $(46,649) | $- |
| Balance, end of year | $4,885,394 | $- |
| Current portion | $1,158,256 | $- |
| Non-current portion | $3,727,138 | $- |
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During the year ended September 30, 2025, the Company received $2,587,472 (US$1,833,000), which was recorded as derivative liability.
During the year ended September 30, 2025, the Company recorded silver royalty expense of $155,981 (year ended September 30, 2024 – $nil).
A maturity analysis of undiscounted contractual cash flows associated with future cash flows estimated in the Agreement is as follows:
| < 1 year | 1 – 3 years | 3 – 5 years | > 5 years | Total | |
|---|---|---|---|---|---|
| $ | $ | $ | $ | $ | |
| Derivative liabilities | 1,407,487 | 4,379,136 | 2,801,825 | - | 8,588,448 |
| 1,407,487 | 4,379,136 | 2,801,825 | - | 8,588,448 |
12. CONVERTIBLE DEBENTURE
On February 19, 2023, the Company issued a convertible debenture to RIVI in connection to the stream restructuring totaling $7,282,907 (US$5,399,946) (note 11). The conversion feature does not meet the fixed-for-fixed criteria and therefore is an embedded derivative that is assessed separately from the host liability. The fair value of the derivative liability on initial recognition was estimated to be $1,596,617 using the Black-Scholes model with the following assumptions: share price of $0.02, risk free interest rate of 3.87%, expected volatility of 125.9%, and an expected life of 3 years. The derivative liability was revaluated as at September 30, 2025 to $21,267,601 (September 30, 2024 - $2,416,994) using the Black-Scholes model with the following assumption: share price of $0.27, risk free interest rate of 2.47%, expected volatility of 159.9%, and an expected life of 1.25 years (September 30, 2024 - share price of $0.04, risk free interest rate of 3.87%, expected volatility of 162.8%, and an expected life of 1.39 years). The host liability was accreted using an effective interest rate of 8.28% over their term, such that the carrying amount will equal the total face value at maturity.
During the year ended September 30, 2024, RIVI opted to convert US$500,000 principal amount of its convertible debenture for 12,500,000 common shares of the Company to RIVI at a deemed issue price of US$0.04 per common share. On April 23, 2024, the Company issued 12,500,000 common shares at a total value of $1,355,463, resulting in $589,913 of the host liability and $765,550 of the derivative liability being transferred from loan to equity.
On June 17, 2025, the Company issued 6,250,000 common shares at a total value of $731,082 upon conversion, resulting in $298,537 of the host liability and $432,545 of the derivative liability being transferred from loan to equity.
During the year ended September 30, 2025, the Company and RIVI agreed to defer the maturity date of the convertible debenture from February 19, 2026 to December 31, 2026. As a result, the Company recorded a gain on modification of $346,955 on the host liability and a loss on modification of $805,067 on the derivative liability during the year ended September 30, 2025.
During the year ended September 30, 2024, the Company repaid $101,301 (US$75,000) of interest payable.
Convertible debentures as at September 30, 2025 includes $654,489 (US$473,395) (September 30, 2024 - $380,683 (US$282,009)) of interest payable.
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| Convertible debenture | Liability Component | Derivative Liability Component | Total |
|---|---|---|---|
| Balance, September 30, 2023 | $5,086,098 | $2,133,864 | $7,219,962 |
| Accretion and interest expense (note 6) | $685,532 | $- | $685,532 |
| Foreign exchange | $89,790 | $26,546 | $116,336 |
| Interest payment | $(101,301) | $- | $(101,301) |
| Shares issued for conversion of convertible debenture | $(589,913) | $(765,550) | $(1,355,463) |
| Loss on derivative liability revaluation | $- | $1,022,134 | $1,022,134 |
| Balance, September 30, 2024 | $5,170,206 | $2,416,994 | $7,587,200 |
| Accretion and interest expense (note 6) | $654,489 | $- | $654,489 |
| Foreign exchange | $63,039 | $(43,934) | $19,105 |
| Shares issued for conversion of convertible debenture | $(298,537) | $(432,545) | $(731,082) |
| (Gain) loss on modification | $(346,955) | $805,067 | $458,112 |
| Loss on derivative liability revaluation | $- | $18,522,019 | $18,522,019 |
| Balance, September 30, 2025 | $5,242,242 | $21,267,601 | $26,509,843 |
The maturity analysis of the undiscounted contractual balances of the convertible debenture is as follows:
| As at September 30, 2025 | |
|---|---|
| Less than one year | $- |
| One to three years | $5,081,090 |
| Total undiscounted convertible debenture | $5,081,090 |
| Amount representing implicit interest | $161,152 |
| Convertible debenture | $5,242,242 |
13. ENVIRONMENTAL REHABILITATION PROVISION
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Balance, beginning of year | $895,508 | $828,558 |
| Additions | $759,008 | $- |
| Accretion | $9,758 | $27,329 |
| Change in estimates | $96,144 | $41,459 |
| Foreign exchange | $23,975 | $(1,838) |
| Balance, end of year | $1,784,393 | $895,508 |
| Current portion | $404,458 | $356,216 |
| Non-current portion | $1,379,935 | $539,292 |
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The environmental rehabilitation provision on the mineral property at September 30, 2025 is $1,028,911 (September 30, 2024 – $904,925). As at September 30, 2025, the Company's exploration licenses have expired, the Company is in the process of applying for new exploration permits that will encompass the areas requiring remediation. As a result, remediation related to Igor 1 and Igor 3 are current until the point at which exploration licenses are renewed. As at September 30, 2025, $404,458 (September 30, 2024 – $356,216) of the environmental rehabilitation provision is classified as current.
The environmental rehabilitation provision on the plant is calculated using a risk free-rate of 5.22% and inflation rate of 2.09%. The remediation of the plant is discounted over the expected life of the mine, as such, the entire remediation is non-current. The total undiscounted estimated rehabilitation provision at September 30, 2025 is $1,021,924 (September 30, 2024 – $nil).
14. LOAN PAYABLE
On December 29, 2023, the Company and a major shareholder entered into a definitive agreement for a US$6,000,000 debt facility to fund most of the capital cost for the CIL and flotation plant that the Company intends to build in its Igor Project, located in La Libertad, Peru. The plant will process oxides and sulfides currently mined from its high-grade Callanquitas Mine, and other important satellite deposits that constitute part of the project in the near future. The first tranche of the US$6,000,000 debt facility will be funded once certain conditions precedent are met.
The key terms of this financing are as follows:
- US$6,000,000 total debt facility to be disbursed in 4 tranches;
- 11.75% annual interest rate;
- 1.5 years grace period, paying only interest, to cover the construction and commissioning periods;
- 3 years principal repayment period, following the grace period;
- The facility will be administered through a trust structure that will guarantee the repayment of the loan obligations as it is secured by the Company's NPI with PLP. In addition, other trusts will be established to ensure the construction funding flow and to protect the surface rights and shares of the Peruvian subsidiary holding the construction and processing permits;
- Total and partial prepayments are authorized with no penalties; and
- A 3% finder's fee payable in shares of the Company is applicable to this transaction.
On September 19, 2024, the Company closed the first tranche of the construction facility (the "Loan") provided by its major shareholder and received gross proceeds of $2,424,240 (US$1,800,000). On September 25, 2024, in connection with the loan agreement, the Company issued 5,634,545 common shares at a fair value of $0.045 per share for a total value of $253,555 as payment for finder's fee (note 15).
On January 15, 2025, the Company closed the second tranche of the Loan provided by its major shareholder and received gross proceeds of $1,720,080 (US$1,200,000).
On June 3, 2025, the Company closed the third tranche of the Loan provided by its major shareholder and received gross proceeds of $2,470,140 (US$1,800,000).
On January 9, 2026, the Company received the final tranche of the loan totaling US$1,200,000.
During the year ended September 30, 2025, the Company repaid $519,848 (US$371,692) of interest payable and capitalized $623,715 in accretion and interest expense to property, plant and equipment (note 8).
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| Balance, September 30, 2023 | $ - |
|---|---|
| Proceeds received, net of issuance costs | $2,170,685 |
| Accretion and interest expense (note 6) | $2,617 |
| Foreign exchange | $8,753 |
| Balance, September 30, 2024 | $2,182,055 |
| Proceeds received | $4,190,220 |
| Accretion and interest expense | $623,715 |
| Foreign exchange | 53,063 |
| Interest payment | $(519,848) |
| Balance, September 30, 2025 | $6,529,205 |
The maturity analysis of the undiscounted contractual balances of the loan is as follows:
| As at September 30, 2025 | |
|---|---|
| Less than one year | $1,670,520 |
| One to three years | $5,011,560 |
| Total undiscounted loan payable | $6,682,080 |
| Amount representing implicit interest | $(152,875) |
| Loan payable | $6,529,205 |
15. SHARE CAPITAL
Authorized
Unlimited number of common shares, without par value; and unlimited number of preference shares, without par value.
Issued
On April 18, 2024, the Company closed its non-brokered private placement (the "Private Placement") of 30,000,000 units of the Company (the "Private Placement Units") at a price of $0.045 per Private Placement Unit for gross proceeds of $1,350,000. Each Private Placement Unit is comprised of one common share and one common share purchase warrant of the Company (a "Private Placement Warrant"). Each Private Placement Warrant is exercisable into one common share at a price of $0.07 per common share and expires on April 18, 2026.
The gross proceeds of $1,350,000 were allocated between share capital (in the amount of $1,350,000) and the warrant reserve within reserves (in the amount of $nil) based on the residual value method. In connection with the Private Placement, the Company issued 1,167,101 Private Placement Units as finder's fee. The Company incurred share issuance costs of $105,065, including legal fees of $52,545 and $52,520 in finder's units. The entire value of the finder's units was allocated to the share portion and $nil was allocated to the warrant portion.
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On May 5, 2025, the Company closed its non-brokered private placement (the "May 2025 Offering") of 17,828,945 units of the Company (the "Offering Units") at a price of $0.045 per Offering Unit for gross proceeds of $802,303. Each Offering Unit is comprised of one common share and one common share purchase warrant of the Company (a "Offering Warrant"). Each Offering Warrant is exercisable into one common share at a price of $0.07 per common share and expires on May 5, 2027.
The gross proceeds of $802,303 were allocated between share capital (in the amount of $802,303) and the warrant reserve within reserves (in the amount of $nil) based on the residual value method. In connection with the Offering, the Company issued 572,096 Offering Units as finder's fee. The Company incurred share issuance costs of $56,513, including legal fees of $30,769 and $25,744 in finder's units. The fair value of the finder's Offering Units was valued using the May 2025 Offering price of $0.045 per Offering Unit. The entire value of the finder's Offering Units was allocated to the share portion and $nil was allocated to the warrant portion based on the residual value method.
On September 11, 2025, the Company closed its non-brokered private placement (the "September 2025 Offering") of 22,434,813 units of the Company (the "September Offering Unit") at a price of $0.115 per September Offering Unit for gross proceeds of $2,580,004. Each September Offering Unit is comprised of one common share and one common share purchase warrant of the Company (a "September Offering Warrant"). Each September Offering Warrant is exercisable into one common share at a price of $0.14 per common share and expires on September 11, 2027.
The gross proceeds of $2,580,004 were allocated between share capital (in the amount of $2,580,004) and the warrant reserve within reserves (in the amount of $nil) based on the residual value method. In connection with the offering, the Company issued 994,182 September Offering Units as finder's fee. The Company incurred share issuance costs of $147,594, including legal fees of $33,263 and $114,331 in finder's September Offering Units. The fair value of the finder's September Offering Units was valued using the September 2025 Offering price of $0.115 per September Offering Unit. The entire value of the finder's September Offering Units was allocated to the share portion and $nil was allocated to the warrant portion based on the residual value method.
During the year ended September 30, 2025, the Company entered into a debt settlement agreement with Mr. Abraham Gleiser, an arm's length party of the Company (the "Creditor") to settle outstanding debt owed by the Company to the Creditor in the amount of US$1,005,538 with respect to a commission for the Creditor locating a mining operator for the Company's mineral projects, by the Company issuing 12,500,000 common shares of the Company to the Creditor (the "Debt Settlement"). On July 28, 2025, the Company issued 12,500,000 common shares at a share price of $0.10 per common share to settle the outstanding debt. As a result of the share issuance, the Company recorded a loss on debt settlement of $1,250,000 (year ended September 30, 2024 - $nil)
During the year ended September 30, 2025, 6,710,257 (year ended September 30, 2024 – nil) warrants were exercised at a share price of $0.07 (year ended September 30, 2024 – $nil) per share for total proceeds of $469,718 (year ended September 30, 2024 – $nil). The fair value of the warrants exercised was $nil, there was no transfer of fair value from warrant reserve to share capital.
See note 9 for common shares issued for settlement of payables and note 12 for common shares issued for partial conversion of the convertible debenture.
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Reserves
Share purchase options
Pursuant to the Company's share option plan (the "Option Plan"), the Company may grant incentive share options to directors, officers, employees and consultants of the Company or any subsidiary thereof. The total number of shares issuable pursuant to the Option Plan is up to a maximum of 10% of the issued and outstanding common shares of the Company at any given time. The exercise price of each share option shall not be lower than the market price or such discount from the market price as may be permitted by the stock exchange on which the common shares are listed and provided that no share option shall have a term exceeding ten years (or such longer period as is permitted by the stock exchange on which the common shares are listed). The Board of Directors determines the vesting terms of the options which may vary between grants.
The number of share options issued to insiders of the Company within a one-year period cannot exceed 10% of the number of common shares outstanding; no one eligible optionee can hold share options that represent more than 5% of the total common shares issued and outstanding. Finally, there may not be issued to any one insider and such insider's associates, within a one-year period, a number of share options exceeding 5% of the number of common shares outstanding.
Movements in the Company's share options for the years ended September 30, 2025 and 2024 are as follows:
| Number of Stock Options | Weighted Average Exercise Price | |
|---|---|---|
| Balance, September 30, 2023 | 30,000,000 | $0.04 |
| Granted | 16,750,000 | $0.07 |
| Balance, September 30, 2024 | 46,750,000 | $0.05 |
| Granted | 1,750,000 | $0.10 |
| Balance, September 30, 2025 | 48,500,000 | $0.05 |
On March 1, 2024, the Company granted 1,000,000 share options to certain employees of the Company. The options vested immediately at the date of grant, are exercisable at a price of $0.05 per share and expire on March 1, 2031. The fair value of the options granted was estimated to be $17,850 using the Black-Scholes option pricing model with the following assumptions: share price of $0.02, risk free interest rate of 3.42%, expected volatility of 129.71%, dividend yield of 0%, forfeiture rate of 0%, and an expected life of 7 years.
On April 26, 2024, the Company granted 15,750,000 share options to certain directors and officers of the Company. The options vested immediately at the date of grant, are exercisable at a price of $0.07 per share and expire on March 28, 2031. The fair value of the options granted was estimated to be $950,580 using the Black-Scholes option pricing model with the following assumptions: share price of $0.065, risk free interest rate of 3.81%, expected volatility of 133.66%, dividend yield of 0%, forfeiture rate of 0%, and an expected life of 6.92 years.
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On June 20, 2025, the Company granted 1,750,000 share options to certain employees of the Company. The options vested immediately at the date of grant, are exercisable at a price of $0.10 per share and expire on June 20, 2032. The fair value of the options granted was estimated to be $165,289 using the Black-Scholes option pricing model with the following assumptions: share price of $0.10, risk free interest rate of 3.07%, expected volatility of 141.15%, dividend yield of 0%, forfeiture rate of 0%, and an expected life of 7 years.
Option pricing models require the input of subjective assumptions including the expected price volatility and the expected option life. Expected price volatility was calculated based on the Company's historical share prices. Changes in these assumptions can materially affect the estimated fair value of the stock options granted.
During the year ended September 30, 2025, the Company recorded share-based payments $165,289 (year ended September 30, 2024 – $968,430).
The summary of the Company's options outstanding and exercisable as at September 30, 2025 is as below:
| Expiry Date | Exercise Price | Remaining Contractual Life (years) | Number of Options Outstanding | Number of Options Vested (Exercisable) |
|---|---|---|---|---|
| September 22, 2029 | $0.04 | 3.98 | 15,000,000 | 15,000,000 |
| March 3, 2030 | $0.04 | 4.42 | 15,000,000 | 15,000,000 |
| March 1, 2031 | $0.05 | 5.42 | 1,000,000 | 1,000,000 |
| March 28, 2031 | $0.07 | 5.49 | 15,750,000 | 15,750,000 |
| June 20, 2032 | $0.10 | 6.73 | 1,750,000 | 1,750,000 |
| $0.05 | 4.74 | 48,500,000 | 48,500,000 |
Warrants
Movements in the Company's warrants for the years ended September 30, 2025 and 2024 are as follows:
| Number of Warrants | Weighted Average Exercise Price | |
|---|---|---|
| Balance, September 30, 2023 | - | $- |
| Granted in the Private Placement (note 15) | 31,167,101 | $0.07 |
| Granted for Settlement of Payables (note 9) | 400,000 | $0.07 |
| Balance, September 30, 2024 | 31,567,101 | $0.07 |
| Granted in the Offerings (note 15) | 41,830,036 | $0.11 |
| Exercised (note 15) | (6,710,257) | $0.07 |
| Balance, September 30, 2025 | 66,686,880 | $0.09 |
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The summary of the Company's warrants outstanding and exercisable as at September 30, 2025 is as below:
| Expiry Date | Exercise Price | Remaining Contractual Life (years) | Number of Warrants Outstanding |
|---|---|---|---|
| April 18, 2026 | $0.07 | 0.55 | 25,606,844 |
| May 28, 2026 | $0.07 | 0.66 | 400,000 |
| May 05, 2027 | $0.07 | 1.59 | 17,251,041 |
| September 11, 2027 | $0.14 | 1.95 | 23,428,995 |
| $0.09 | 1.31 | 66,686,880 |
16. SEGMENT INFORMATION
The Company operates in one reportable operating segment, being mineral exploration. Geographic segment information of the Company as at and for the years ended September 30, 2025 and 2024 is as follows:
| As at September 30, 2025 | As at September 30, 2024 | |||||
|---|---|---|---|---|---|---|
| Canada | Peru | Total Company | Canada | Peru | Total Company | |
| Total assets | $1,783,221 | $30,836,346 | $32,619,567 | $700,194 | $14,011,119 | $14,711,313 |
| Total non-current assets | $- | $22,428,035 | $22,428,035 | $- | $11,420,874 | $11,420,874 |
| Total liabilities | $37,741,842 | $15,529,747 | $53,271,589 | $10,669,456 | $3,815,930 | $14,485,386 |
| Year Ended September 30, 2025 | Year Ended September 30, 2024 | |||||
| --- | --- | --- | --- | --- | --- | --- |
| Canada | Peru | Total Company | Canada | Peru | Total Company | |
| Net income (loss) | $(29,636,481) | $2,880,688 | $(26,755,793) | $(5,493,778) | $166,744 | $(5,327,034) |
17. RELATED PARTY TRANSACTIONS
The Company's key management personnel consist of the Company's officers, directors and companies associated with them.
Compensation includes consulting and professional fees paid to a company in which the Chief Executive Officer is an owner, a company in which the former Chief Financial Officer is an owner, amounts paid to the Executive Chairman, and share based compensation granted to management and directors.
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| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Consulting fees, salaries and benefits | $659,000 | $392,000 |
| Professional fees | $48,000 | $48,000 |
| Share based compensation | $- | $950,580 |
| Total | $707,000 | $1,390,580 |
Related party transactions are conducted in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.
The Company has agreements with certain members of key management. In the event that there is a change of control as defined by the agreements, the Company is committed to pay severance payments of salary which amounts to a total of $468,000. In the event of termination without notice or cause, certain senior management would be entitled to a total of $234,000.
18. FINANCIAL INSTRUMENTS
Management of capital risk
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the exploration and development of its mineral properties and to maintain a flexible capital structure. The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support future business opportunities. 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's capital at September 30, 2025 and 2024 is as follows:
| As at September 30, | As at September 30, | |
|---|---|---|
| 2025 | 2024 | |
| Share capital | $74,735,889 | $68,781,814 |
| Reserves | $8,790,524 | $8,866,755 |
| Deficit | $(104,178,435) | $(77,422,642) |
| Debt financing | $43,055,799 | $12,290,623 |
| $22,403,777 | $12,516,550 |
Debt financing consists of promissory notes, derivative liability, gold stream facility, and loan payable.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company's approach to capital management during the year ended September 30, 2025. The Company is not subject to externally imposed capital requirements and does not have exposure to asset-backed commercial paper or similar products.
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Carrying values of financial instruments
The carrying values of the financial assets and liabilities at September 30, 2025 and 2024 are as follows:
| As at September 30, 2025 | As at September 30, 2024 | |
|---|---|---|
| Financial Assets | ||
| At fair value through profit or loss | ||
| Cash | $5,157,014 | $3,032,136 |
| At amortized cost | ||
| Accounts receivable (note 7) | $4,717,381 | $- |
| Total Financial Assets | $9,874,395 | $3,032,136 |
| Financial Liabilities | ||
| At fair value through profit or loss | ||
| Gold stream facility | $4,903,332 | $2,317,774 |
| Derivative liability | $26,152,995 | $2,416,994 |
| At amortized cost | ||
| Accounts payable and accrued liabilities | $6,922,973 | $1,299,255 |
| Promissory notes | $228,025 | $203,594 |
| Convertible debenture | $5,242,242 | $5,170,206 |
| Loan payable | $6,529,205 | $2,182,055 |
| Total Financial Liabilities | $49,978,772 | $13,589,878 |
Fair values of financial instruments
The fair value of accounts receivable, accounts payable and accrued liabilities and promissory notes approximate their carrying amounts due to their short terms to maturity.
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The fair value hierarchy of financial instruments measured at fair value on the statement of financial position is as follows:
| As at September 30, | As at September 30, | |
|---|---|---|
| 2025 | 2024 | |
| Level 1 | Level 1 | |
| Cash | $5,157,014 | $3,032,136 |
| Level 3 | Level 3 | |
| Gold stream facility (note 11) | $4,903,332 | $2,317,774 |
| Derivative liability (note 12) | $26,152,995 | $2,416,994 |
Risk management policies
The Company is exposed to financial risks sensitive to changes in commodity prices, foreign exchange and interest rates. The Company's Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Currently the Company has not entered into any options, forward or future contracts to manage its foreign exchange related exposures.
Similarly, derivative financial instruments are not used to reduce these financial risks.
The Company's risk exposures and the impact on the Company's financial instruments are summarized below:
Credit risk
Credit risk is the risk of loss associated with counterparty's inability to fulfill its payment obligations. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and accounts receivable. The Company's maximum exposure to credit risk for cash and receivables is the amounts disclosed in the consolidated statements of financial position. The Company limits its exposure to credit loss by placing its cash with major financial institutions. The Company's accounts receivable are concentrated with a single long-standing customer with a strong payment history, management considers the credit risk to be low.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses or risking harm to the Company's reputation. At September 30, 2025, the Company has a cash balance of $5,157,014 to settle its current obligations related to accounts payable and accrued liabilities of $6,922,973, gold stream facility of $3,373,037, derivative liability of $1,158,256, loan payable of $1,583,056 and promissory notes of $228,025.
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Currency risk
The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company operates in Peru and Canada and a portion of its expenses are incurred in United States dollars and Peruvian Soles. A significant change in the currency exchange rates between the US dollar relative to the Canadian dollar and the Peruvian Soles to the Canadian dollar could have an effect on the Company's results of operations, financial position and cash flows. The Company has not hedged its exposure to currency fluctuations.
At September 30, 2025, the Company is exposed to currency risk through the following assets and liabilities denominated in US dollars and Peruvian Soles:
| Peruvian Soles (S/.) | United States Dollars (US$) | |
|---|---|---|
| Assets | ||
| Cash | 5,161,541 | 913,955 |
| Amounts receivable | 11,586,868 | - |
| 16,748,409 | 913,955 | |
| Liabilities | ||
| Accounts payable and accrued liabilities | (1,572,841) | - |
| Convertible debenture | - | (3,292,313) |
| Derivative liability | - | (18,786,722) |
| Gold stream facility | - | (3,522,255) |
| (1,572,841) | (25,601,290) |
At September 30, 2025, USD amounts were converted at a rate of USD 1.00 to CAD 1.3921; Peruvian Soles amounts were converted at a rate of Peruvian Sol 1.00 to CAD 0.4011.
Based on the above net exposures as at September 30, 2025, and assuming that all other variables remain constant, a 10% change of the Canadian dollar against the US dollar and Peruvian Soles would result in a change of approximately $2,828,000 in the Company's net loss for the year.
Interest rate risk
The Company considers the interest rate risk to be insignificant, as all of its interest-bearing debt have fixed interest rates.
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Price risk
The Company is exposed to price risk with respect to commodity and equity prices on its gold stream facility and derivative liability. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices of gold and silver, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.
19. COMMITMENTS AND CONTINGENCIES
a) The Company has ongoing commitments with the Callanquitas and Igor communities as described in the Community Agreement section of note 8.
b) As at September 30, 2025, the Company has undiscounted environmental closure costs (note 13) for remediation and rehabilitation work on the Company's Igor properties of $1,028,912 (US$739,108).
c) During the year ended September 30, 2021, the Company was notified of a claim filed by Patagonia against the Company, for damages as a result of incomplete construction of the processing plant. On November 5, 2023, the Supreme Court of Lima dismissed the case on the basis that any dispute between the parties must be settled by arbitration, as per the terms of the assignment agreement between Sienna Minerals SAC and PLP. As at September 30, 2025, no arbitration claim has been filed by PLP and was settled.
On December 10, 2024, the Company entered into a settlement with PLP regarding past past claims between the parties. This settlement reset the relationship between the Company and PLP. The main terms of the settlement are:
- Both parties agreed to terminate past legal claims in respect to certain unfulfilled obligations; and
- As part of the settlement the Company renegotiated how the NPI distribution was being calculated. The revised calculation of the net profit interest that was subsequently agreed upon is to be applied retrospectively to the calendar 2023 year, resulting in an additional settlement payment of S/3,667,911 that is to be paid to the Company by PLP through monthly instalments between fiscal year 2025 to 2026. Interest is accrued on the settlement payment at a rate of 0.60% monthly.
d) On August 5, 2016, Peruvian Precious Metals Corp. (former name of PPX Mining Corp.) was notified of a claim filed by Abraham Gleiser Ludmir requesting the payment of an unpaid finder's fee. The Company's local counsel is in the view that the case shall be dismissed on the bases that the Company honoured such payment to a related third party of Mr. Gleiser which signed the finder's fee agreement with the Company. The court resolved in favour of Mr. Gleiser. Following that decision, the Company filed an appeal to the next court level. Further information is disclosed in note 15.
e) Based on Peruvian laws governing mining concessions, the Company is required to achieve certain minimum production requirements within the twentieth year counted from the year following the year in which the mining concessions title is granted to avoid certain penalties.
f) On October 19, 2024, the Company signed an EPC agreement with Sertecpet de Peru S.A. to construct most of the 350 tpd CIL and Flotation plant at the Igor Project. On January 12, 2026, both parties reached a settlement resolving all disputes related to the contract. The original US$571,911 bank guarantee was returned, replaced by two freely available cheques, and penalties of US$149,983 were applied. After offsetting penalties, the Company paid US$401,454 plus VAT for October 2025 services. Both parties mutually released all present and future claims, and no further liabilities or contingencies remain.
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20. INCOME TAXES
A reconciliation of income taxes at Canadian statutory rates of 27% for the years ended September 30, 2025 and 2024 with the reported income taxes is as follows:
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Net income (loss) income before taxes | $(21,181,404) | $(5,745,332) |
| Computed expected income tax (recovery) expense at Canadian statutory rates | $(5,718,979) | $(1,551,294) |
| Effect of tax rate difference in other jurisdiction | $210,663 | $308,231 |
| Non-deductible (taxable) items | $(48,598) | $282,964 |
| Impact of tax reassessment, true up and other | $9,236,229 | $(16,690) |
| Changes in deferred tax assets not recognized | $1,895,074 | $558,491 |
| Income tax (recovery) expense | $5,574,389 | $(418,298) |
| Year Ended September 30, | ||
| --- | --- | --- |
| 2025 | 2024 | |
| Current tax (recovery) expense | $4,065,965 | $(418,298) |
| Deferred tax (recovery) expense | $1,508,424 | $- |
| Total tax (recovery) expense | $5,574,389 | $(418,298) |
Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax values. Details of deferred tax assets (liabilities) are as follows:
| Year Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Non-capital losses carry forwards | $874,314 | $731,446 |
| Exploration and evaluation assets | $(2,274,551) | $(805,228) |
| Property, plant and equipment | $(495,250) | $104,532 |
| Gold stream facility | $(30,750) | $(30,750) |
| Other | $417,813 | $- |
| Total deferred tax assets (liabilities) | $(1,508,424) | $- |
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The unrecognized deductible temporary differences as at September 30, 2025 and 2024 are comprised of the following:
| As at September 30 | As at September 30, | |
|---|---|---|
| 2025 | 2024 | |
| Non-capital losses carry forward - Canada | $42,489,740 | $34,734,242 |
| Tax losses - Peru | $311,086 | $4,355,154 |
| Share issuance costs | $86,189 | $54,157 |
| Exploration and evaluation assets | $- | $15,151,293 |
| Property, plant and equipment | $936,256 | $969,523 |
| Other | $1,080,236 | $208,082 |
| Total unrecognized deductible temporary differences | $44,903,507 | $55,472,451 |
At September 30, 2025, the Company has available non-capital tax losses for Canadian income tax purposes of approximately $42,489,740 available for carry-forward to reduce future years' taxable income which expire between 2026-2045.
The Company has approximately $311,086 of losses in Peru which can be carried forward indefinitely but are limited to 50% of taxable income each subsequent year.
21. SUBSEQUENT EVENTS
a) On October 16, 2025, the Company announced that SCRi has made a payment of US$637,000 to the Company, representing the remainder of the second and final tranche payable by SCRi to the Company under the agreement entered into by the parties on December 13, 2024, as amended on July 31, 2025 (the "Silver Royalty Agreement"). The proceeds will be used by the Company to support its ongoing construction of the carbon-in-leach and flotation plant at the Company's Igor project, located in La Libertad, Peru.
Pursuant to the terms of the Silver Royalty Agreement, upon the final payment made by SCRi, the royalty percentage has increased by an additional 3.9% to the final total of 15%, and the total payable ounces have increased by 58,500 ounces of silver to the final aggregate total of 225,000 ounces of silver.
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b) On October 3, 2025, the Company executed a binding Letter of Intent ("LOI") with Glencore Peru S.A.C. (collectively with Glencore AG, "Glencore"), to advance PPX's Igor Project in La Libertad, Peru through a strategic equity investment, a life-of-mine precious-metals concentrate offtake, and technical collaboration.
On December 8, 2025, the Company closed the strategic transaction with affiliates of Glencore. This transaction represents a significant milestone for the advancement of the Company's Igor Project in La Libertad, Peru; and includes a cornerstone equity investment (the "Glencore Investment"), a life-of-mine precious-metals concentrate offtake agreement, and provides the Company with the opportunity to access Glencore's leading expertise and technology.
Under the terms of the Glencore Investment, Glencore Canada Corporation ("Glencore Canada", the Canadian affiliate of Glencore plc) subscribed for units of the Company (the "Units"), at a price of $0.237 per Unit, with each Unit consisting of one common share of the Company (a "Common Share") and one Common Share purchase warrant (a "Warrant"), and each Warrant exercisable for one Common Share at an exercise price of $0.289 per share for a period of 36 months following closing.
The number of Units issued resulted in Glencore Canada owning 9.99% of the outstanding Common Shares (before exercising the Warrants), on a post-closing basis. Accordingly, a total of 84,056,387 Units were issued by the Company (resulting in the issuance of the same number of Common Shares and Warrants underlying such Units), for gross proceeds to the Company of $19,921,364.
c) On December 22, 2025, the Company granted 3,450,000 share options to certain employees of the Company. The options vested immediately at the date of grant, are exercisable at a price of $0.295 per share and expire on December 22, 2035.
d) The Company reached an agreement with the former Chief Financial Officer to settle the full principal amount owed of $112,160, together with accrued interest of $118,108 calculated as at November 30, 2025. The total amount was paid in full, and the obligation was fully discharged on December 22, 2025. See note 10.
e) On January 9, 2026, the Company closed the final tranche of the Loan provided by its major shareholder and received gross proceeds of $1,661,280 (US$1,200,000). See note 14.
f) Subsequent to the year ended September 30, 2025, 6,264,066 warrants were exercised at a price of $0.07 per share for total proceeds of $438,485.
g) Subsequent to the year ended September 30, 2025, the Company issued 567,073 shares for 750,000 options exercised on a net basis at a net exercise price of $0.41 per share.
h) Subsequent to the year ended September 30, 2025, the Company issued 500,000 shares for 600,000 options exercised on a net basis at a net exercise price of $0.30 per share.
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