REGENCY SILVER CORP.

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

(Expressed in Canadian Dollars)

17th floor, 1030 West Georgia St., Vancouver, BC, Canada V6E 2Y3
Tel: 604.714.3600 Fax: 604.714.3669 Web: manningelliott.com

INDEPENDENT AUDITORS' REPORT

To the Shareholders and Directors of Regency Silver Corp.

Opinion

We have audited the consolidated financial statements of Regency Silver Corp. and its subsidiaries (together, the "Company") which comprise:

the consolidated statements of financial position as at December 31, 2024 and December 31, 2023;
the consolidated statements of loss and comprehensive loss for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, including material accounting policy information and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2024 and 2023, and its consolidated financial performance and its 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 Auditors' Responsibilities for the Audit of the consolidated financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 of the accompanying consolidated financial statements, which describes matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2024. 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.

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

Other Information

Management is responsible for the other information. The other information comprises the Company's Management Discussion and Analysis to be filed with the relevant Canadian securities commissions.

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.

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. 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 Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditors' 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 auditors' 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 Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' 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 auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance 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 auditors' 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 auditors' report is Joseph Bonvillain.

Manning Elliott LLP

CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, British Columbia
April 30, 2025

Regency Silver Corp.

Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

	Note	December 31, 2024	December 31, 2023
ASSETS
Current Assets
Cash		$ 14,973	$ 57,886
Amounts receivable		53,338	53,252
Prepaid expenses	8	73,463	102,489
		141,774	213,627
Non-current Assets
Deposit		-	10,000
Prepaid expenses in exploration and evaluation assets		-	101,149
Property, plant and equipment	11	16,185	-
Exploration and evaluation assets	5	6,886,829	6,414,285
TOTAL ASSETS		$ 7,044,788	$ 6,739,061
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities	8	$ 729,586	$ 534,976
Notes payable	7	44,392	-
		773,978	534,976
EQUITY
Share capital	6	16,738,955	14,618,102
Share subscription received (receivable)	6	(120,000)	200,000
Reserves	6	2,470,418	1,866,976
Accumulated deficit		(12,818,563)	(10,480,993)
Total equity		6,270,810	6,204,085
TOTAL LIABILITIES AND EQUITY		$ 7,044,788	$ 6,739,061

Nature of operations – Note 1

Going concern – Note 2

Commitments – Note 14

Approved on behalf of the Board of Directors:

"Mick Thomson", Director

"Bruce Bragagnolo", Director

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

Regency Silver Corp.

Consolidated Statements of Loss and Comprehensive Loss

(Expressed in Canadian dollars)

	Note	Years Ended
		December 31, 2024	December 31, 2023
EXPENSES
Consulting		$ 549,357	$ 665,283
Exchange and filing fees		46,922	43,227
Management fees	8	289,900	288,000
Marketing		324,210	822,939
Office		331,509	264,467
Professional fees		194,380	128,197
Property investigation costs	6	165,000	280,000
Rent		23,926	22,390
Share-based payments	6	320,540	558,313
		(2,245,744)	(3,072,816)
OTHER ITEMS
Recovery (loss) on settlement	13	3,786	(21,285)
Impairment of exploration and evaluation assets	5	-	(15,385)
Write-off of deposits and prepaid expenses		(92,299)	-
Foreign exchange		(3,313)	(76,606)
NET LOSS AND COMPREHENSIVE LOSS		$ (2,337,570)	$ (3,186,092)
Loss per share, basic and diluted		$ (0.02)	$ (0.04)
Weighted average number of common shares outstanding		99,691,941	84,167,239

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

Regency Silver Corp.

Consolidated Statements of Changes in Equity

(Expressed in Canadian dollars)

	Share Capital			Share subscription received	Reserves	Deficit	Total
	Note	Number	Amount
			$	$	$	$	$
Balance, December 31, 2022		74,167,668	9,780,720	150,000	1,201,261	(7,294,901)	3,837,080
Shares issued for private placement	6	14,446,900	4,037,460	-	99,920	-	4,137,380
Share subscriptions received	6	-	-	200,000	-	-	200,000
Share issuance costs	6	-	(117,957)	-	13,004	-	(104,953)
Shares issued on exercise of stock options	6	100,000	12,522	-	(5,522)	-	7,000
Shares issued for warrant exercise	6	1,962,427	264,107	(150,000)	-	-	114,107
Shares issued for debt settlement	6	550,000	110,000	-	-	-	110,000
Shares issued for property investigation	6	1,000,000	280,000	-	-	-	280,000
Shares issued for mineral property payment	5,6	300,000	127,500	-	-	-	127,500
Shares issued for services	6	500,000	123,750	-	-	-	123,750
Share-based payments	6	-	-	-	558,313	-	558,313
Net loss and comprehensive loss		-	-	-	-	(3,186,092)	(3,186,092)
Balance, December 31, 2023		93,026,995	14,618,102	200,000	1,866,976	(10,480,993)	6,204,085
Shares issued for private placement	6	12,042,872	1,871,225	(320,000)	191,131	-	1,742,356
Share issuance costs	6	-	(65,640)	-	19,039	-	(46,601)
Shares issued for warrant exercise	6	130,000	19,851	-	(6,851)	-	13,000
Shares issued for property investigation	6	1,000,000	165,000	-	-	-	165,000
Shares issued for debt settlement	6	1,000,000	85,000	-	65,000	-	150,000
Shares issued for service	6	383,334	45,417	-	14,583	-	60,000
Share-based payments	6	-	-	-	320,540	-	320,540
Net loss and comprehensive loss		-	-	-	-	(2,337,570)	(2,337,570)
Balance, December 31, 2024		107,583,201	16,738,955	(120,000)	2,470,418	(12,818,563)	6,270,810

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

Regency Silver Corp.

Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

	Years ended
	December 31, 2024	December 31, 2023
OPERATING ACTIVITIES:
Net loss	$ (2,337,570)	$ (3,186,092)
Items not affecting cash:
Share-based payments	320,540	558,313
Property investigation costs	165,000	280,000
Shares issued for services	60,000	123,750
Impairment of exploration and evaluation assets	-	15,385
Net changes in non-cash working capital items:
Amounts receivable	(86)	122,109
Reclassification of IVA receivable to exploration and evaluation assets	-	(214,763)
Deposits	10,000	-
Notes payable	10,392	-
Prepaid expenses	130,175	148,209
Accounts payable and accrued liabilities	257,677	159,095
Cash used in operating activities	(1,383,872)	(1,993,994)
INVESTING ACTIVITIES
Exploration and evaluation assets	(430,611)	(3,522,117)
Purchase of property, plant and equipment	(16,185)	-
Cash used in investing activities	(446,796)	(3,522,117)
FINANCING ACTIVITIES
Proceeds from issuance of common shares, net of shares issuance cost	1,590,755	4,032,427
Proceeds received from issuance of notes payable	7	184,000
Proceeds from share subscriptions received	-	200,000
Proceeds from exercise of stock options	-	7,000
Proceeds from exercise of warrants	13,000	114,107
Cash provided by financing activities	1,787,755	4,463,534
Change in cash	(42,913)	(1,052,577)
Cash, beginning of year	57,886	1,110,463
Cash, end of year	$ 14,973	$ 57,886

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

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

1. NATURE OF OPERATIONS

Regency Silver Corp. (the "Company") was incorporated on March 23, 2017, under the laws of the Province of British Columbia, Canada, and its principal activity is the identification, evaluation, acquisition and exploration of mineral properties in Mexico and Peru. The corporate head office, principal address and registered and records offices of the Company are located at Suite 1100, 570 Granville Street, Vancouver, British Columbia, V6C 3P1, Canada.

The recoverability of amounts shown as exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves, the Company's ability to obtain financing to develop the properties and the ultimate realization of profits through future production or sale of the properties. Realized values may be substantially different than carrying values as recorded in these condensed consolidated interim financial statements.

2. GOING CONCERN

These consolidated financial statements are presented on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of operations. There are conditions and events that form a material uncertainty which may cast significant doubt on the validity of this assumption. As at December 31, 2024, the Company incurred a loss of $2,337,570, had a working capital deficiency of $632,204, and an accumulated deficit of $12,818,563. The Company has no source of revenue and does not have sufficient cash resources to meet its administrative overhead. The Company does not generate cash flows from operations and has therefore relied principally on the issuance of equity securities to finance its operation activities to the extent that such instruments are issuable under terms acceptable to the Company. If future financing is unavailable, the Company may not be able to meet its ongoing obligations, in which case the realizable values of its assets may decline materially from current estimates. These material uncertainties may cast significant doubt as to the ability of the Company to continue as a going concern. The consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue operations.

Although the Company has been successful in the past in obtaining financing, there can be no assurances that the Company will continue to obtain the additional financial resources necessary and/or achieve profitability or positive cash flows from its future operations. If the Company is unable to obtain adequate additional financing, the Company would be required to curtail its planned operations, and exploration and development activities.

3. BASIS OF PRESENTATION

These consolidated financial statements have been prepared on a historical cost basis. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The accounting policies below have been applied to all periods presented in these consolidated financial statements and are based on IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

These consolidated financial statements were authorized for issue by the Board of Directors on April 30, 2025.

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

3.1. Basis of Consolidation

These consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries, Regency Silver S.A. de C.V., incorporated and located in Mexico ("Regency Mexico") and Regency Mining SAC, incorporated and located in Peru ("Regency Peru"). All significant intercompany transactions and balances have been eliminated on consolidation.

3.2. Significant judgments, estimates and assumptions

The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continually evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

Functional currency

Determination of an entity’s functional currency involves judgment taking into account the transactions, events, and conditions relevant to the entity. Determination of functional currency involves evaluating evidence about the primary economic environment in which the entity operations and is re-evaluated when facts and circumstances indicate that conditions have changed.

Going concern

The assessment of the Company’s ongoing viability as an operating entity and determination of the related disclosures require significant judgment. The assumption that the Company will be able to continue as a going concern is subject to critical judgments by management with respect to assumptions surrounding the short and long-term operating budget, expected profitability, investing and financing activities and management’s strategic planning. Should those judgments prove to be inaccurate, management’s continued use of the going concern assumption could be inappropriate.

Impairment of exploration and evaluation assets

The Company is required to make significant judgments regarding the capitalization of the costs incurred in respect to its exploration and evaluation assets. The Company is also required to make critical judgments on the ongoing feasibility of mineral exploration, and whether there are indicators that the development of a specific area is unlikely, and exploration and evaluation assets should be impaired.

Income Taxes

The determination of income tax is inherently complex and requires making certain judgments and assumptions about future events. While income tax filings are subject to audits and reassessments, the Company has adequately provided for all income tax obligations. However, changes in facts and circumstances as a result of income tax audits, reassessments, jurisprudence and any new legislation may result in an increase or decrease in our provision for income taxes.

Rehabilitation Provisions

Rehabilitation provisions have been determined to be $Nil based on the Company’s judgment. Assumptions, based on the current economic environment, have been made which management believes are a reasonable basis upon which to estimate the future liability. These assumptions take into account any material changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed annually

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period.

Valuation of share-based compensation

The Company uses the Black-Scholes option pricing model for valuation of share-based. Option pricing models require the input of subjective assumptions including expected price volatility and interest rate.. Changes in input assumptions can materially affect the fair value estimate and the Company's earnings and equity reserves. Common shares issued for compensation are valued based on the quoted market price of the Company's shares.

4. MATERIAL ACCOUNTING POLICY INFORMATION

4.1 Exploration and Evaluation Assets

(i) Pre-license costs:

Costs incurred before the Company has obtained the legal right to explore are expensed as incurred.

(ii) Exploration and evaluation costs:

Once the legal right to explore has been acquired, exploration and evaluation expenditures are capitalized as incurred, unless future economic benefit is not expected to be realized. The Company capitalizes, on a property by property basis, the costs of acquiring, maintaining its interest in, and exploring and evaluating mineral properties until such time as the lease expires, it is abandoned, sold or considered impaired in value. The Company pays VAT value-added taxes ("IVA") in Mexico and due to uncertainty surrounding the timing and collection of future refunds to IVA, the Company has capitalized IVA costs and when any amounts of IVA are collected, a recovery will be recorded to reduce the amount capitalized for IVA. Indirect administrative costs are expensed as incurred.

Exploration and evaluation properties are not depreciated during the exploration and evaluation stage. From time to time, the Company may acquire or dispose of properties pursuant to the terms of the option agreements. Due to the fact that the options are exercisable entirely at the discretion of the optionee, the amounts payable or receivable are not accrued, but rather recorded when payment is made or received.

Recovery of capitalized costs is dependent on successful development of economic mining operations or the disposition of the related mineral property.

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers, non-compliance with regulatory requirements or title may be affected by undetected defects.

4.2 Decommissioning and Restoration

The Company is subject to various governmental laws and regulations relating to the protection of the environment. The environmental regulations are continually changing and are generally becoming more restrictive.

Decommissioning and restoration obligations encompass legal, statutory, contractual or constructive obligations associated with the retirement of a long-lived tangible asset (for example, mine reclamation

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

costs) that results from the acquisition, construction, development and/or normal operation of a long-lived asset. The retirement of a long-lived asset is reflected by an other-than-temporary removal from service, including sale of the asset, abandonment or disposal in some other manner.

The fair value of a liability for decommissioning and restoration is recorded in the period in which the obligation first arises. The Company records the estimated present value of future cash flows associated with site closure and reclamation as a long-term liability and increases the carrying value of the related assets for that amount. Over time, the liability is increased to reflect an interest element in the estimated future cash flows (accretion expense) considered in the initial measurement of fair value. The capitalized cost is depreciated on either the unit-of-production basis or the straight-line basis, as appropriate. The Company's estimates of its provision for decommissioning and restoration obligations could change as a result of changes in regulations, changes to the current market-based discount rate, the extent of environmental remediation required, and the means of reclamation or cost estimates. Changes in estimates are accounted for in the period in which these estimates are revised.

As at December 31, 2024 and 2023, the Company has determined that it does not have any decommissioning and restoration obligations related to current or former operations.

4.3 Impairment of exploration and evaluation assets

Management reviews the carrying values of its exploration and evaluation assets on an annual basis, or when an impairment indicator exists, to determine whether an impairment should be recognized. In making its assessment, management considers, among other things, exploration results to date and future exploration plans for a particular property. In addition, acquisition costs related to relinquished property rights are written off in the period of relinquishment. Capitalized acquisition costs in respect of the Company's exploration and evaluation assets may not be recoverable and there is a risk that these costs may be written down in future periods. Impairment is charged through profit or loss.

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

4.4 Functional Currency

The functional currency is the currency of the primary economic environment in which an entity operates and may differ from the currency in which the entity enters transactions. The reporting currency of the Company is the Canadian dollar. The functional currency of Company and its subsidiaries is the Canadian dollar.

Transactions in currencies other than the functional currency are translated to the functional currency at exchange rates prevailing on the dates of the transactions. Monetary assets and liabilities that are denominated in currencies other than the functional currency are translated to the functional currency using

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

the exchange rate prevailing on the date of the consolidated statement of financial position, while non-monetary assets and liabilities are translated at historical rates.

Exchange gains and losses arising from the translation of foreign currency-denominated transactions or balances are recorded in profit or loss in the period in which they occur.

4.5 Provisions

Liabilities are recognized when the Company has a present obligation (legal or constructive) that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. A provision is a liability of uncertain timing or amount.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects the current market assessments of the time value of money and the risk specific to the obligation. The increase in the provision due to the passage of time is recognized as a financing expense.

4.6 Income Taxes

Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity.

Current tax assets and liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred taxes are based on temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects taxable profit or accounting profit. Deferred tax liabilities on temporary differences associated with shares in subsidiaries and joint ventures is not provided for if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are likely to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in profit or loss in the period that includes the substantive enactment date. Deferred tax assets are recognized for all temporary differences, carry-forward of unused tax credits and unused tax losses to the extent that it is probable that future taxable profits will be available against which they can be utilized.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset only when the Company has a right and intention to offset current tax assets and liabilities from the same taxation authority and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same entity or different entities

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

which intend to settle current tax assets and liabilities on a net basis or simultaneously in each future period in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Changes in deferred tax assets or liabilities are recognized as a component of income or expense in profit or loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.

4.7 Share capital

The Company records proceeds from share issuances net of issue costs and any tax effects in equity. Common shares issued for consideration other than cash are valued based on their market value at the date the shares were granted. Common shares held by the Company are classified as treasury stock and recorded as a reduction to equity.

The Company has adopted a residual value method with respect to the measurement of shares and warrants issued as private placement units. The residual value method first allocates value to the more easily measurable component based on fair value and then the residual value, if any, to the less easily measurable component. The Company considers the fair value of common shares issued in private placements to be the more easily measurable component of unit offerings and the common shares are valued at their fair value, as determined by the closing quoted bid price on the announcement date. The balance, if any, is allocated to any attached warrants or other features. Any fair value attributed to warrants is recorded as reserves.

4.8 Share-based Payments

Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled transactions and, when determinable, are recorded at the value of the goods and services received. If the value of the goods and services received is not determinable, then the fair value of the share-based payment is used.

The Company uses a fair value-based method (Black-Scholes Option Pricing Model) for all share options granted to directors, employees and certain non-employees. For directors and employees, the fair value of the share options is measured at the date of grant. For grants to non-employees where the fair value of the goods or services is not determinable, the fair value of the share options is measured on the date the services are received.

The fair value of share-based payments is charged either to profit or loss or exploration and evaluation properties, with the offsetting credit to reserves. For directors, employees and consultants, the share options are recognized over the vesting period based on the best available estimate of the number of share options expected to vest. If options vest immediately, the expense is recognized when the options are issued. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. No adjustment is made to any expense recognized in prior periods where vested. For non-employees, the share options are recognized over the related service period. When share options are exercised, the amounts previously recognized in reserves are transferred to share capital.

In the event share options are forfeited prior to vesting, the associated fair value recorded to date is reversed. The fair value of any vested share options that expire remain in reserves.

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

4.9 Related Party Transactions

Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.

4.10 Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) (the numerator) by the weighted average number of outstanding common shares for the period (denominator). In computing diluted earnings per share, an adjustment is made for the dilutive effect of outstanding share options, warrants and other convertible instruments. In the periods when the Company reports a loss, the effect of potential issuances of shares under share options and other convertible instruments is anti-dilutive. Therefore, basic and diluted loss per share are the same. When diluted earnings per share is calculated, only those share options and other convertible instruments with exercise prices below the average trading price of the Company's common shares for the period will be dilutive.

4.11 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets – Classification

The Company classifies its financial assets in the following categories:

Those to be measured subsequently at fair value (either through Other Comprehensive Income ("OCI"), or through profit or loss), and
Those to be measured at amortized cost.

The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses are either recorded in profit or loss or OCI.

Fair value hierarchy

The following table summarizes the fair value hierarchy under which the Company's financial instruments are valued.

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 - Inputs for the asset or liability that are not based upon observable market data.

Cash is carried at fair value using a level 1 fair value measurement. The carrying value of accounts payable and note payable approximate their fair values because of the short-term nature of the instruments.

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

Financial assets – Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Financial assets are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Subsequent measurement of financial assets depends on their classification. There are three measurement categories under which the Company classifies its financial assets:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included as finance income using the effective interest method.
Fair value through OCI (“FVOCI”): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains and losses, interest revenue, and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains (losses). Interest income from these financial assets is included as finance income using the effective interest method.
Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on an investment that is subsequently measured at FVTPL is recognized in profit or loss in the consolidated statement of comprehensive loss in the period in which it arises.

The Company classifies its cash as FVTPL.

Financial liabilities

The Company classifies its financial liabilities into the following categories:

Financial liabilities at FVTPL; and
Amortized cost.

A financial liability is classified as at FVTPL if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognized in profit or loss as incurred. The fair value change to financial liabilities at FVTPL are presented as follows:

the amount of change in the fair value that is attributable to changes in the credit risk of the liability is presented in OCI; and
the remaining amount of the change in the fair value is presented in profit or loss.

The Company has classified its accounts payable and note payable at amortized cost. The Company does not designate any financial liabilities at FVTPL.

Other non-derivative financial liabilities are initially measured at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method.

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

4.12 Share Issuance Costs

Share issuance costs, which include commissions, facilitation payments, professional fees and regulatory fees, are charged directly to share capital.

4.13 Comprehensive Income (Loss)

Total comprehensive income comprises all components of profit or loss and other comprehensive income. Other comprehensive income includes items such as gains and losses on re-measuring available-for-sale financial assets and the effective portion of gains and losses on hedging instruments in a cash flow hedge.

4.14 Property, plant and equipment

Property, plant and equipment are recorded at historical cost less accumulated amortization. Historical cost includes amounts that are directly attributable to acquisition, construction, development or betterment of the asset, as well as interest related to financing costs. When historical cost records were not available, other methods were used to estimate the costs and accumulated amortization.

The Company assesses at the end of each reporting period, whether there is an indication that an asset may be impaired. If any indication of impairment exists, the Company estimates the recoverable amount of the asset. If the carrying amount of the asset, or its respective cash generating unit, exceeds the recoverable amount, the difference is recognized as an impairment charge.

Depreciation is charged so as to write off the cost of the asset using the straight-line method over the estimated useful lives as follows:

Motor vehicle	5 years

4.15 Accounting standards and amendments issued

The following standards, amendments and interpretations have been issued but are not yet effective:

In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7). These amendments updated classification and measurement requirements in IFRS 9 Financial Instruments and related disclosure requirements in IFRS 7 Financial Instruments: Disclosures. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance ("ESG")-linked features and other similar contingent features.

The IASB added disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs, and amended disclosures relating to equity instruments designated at FVOCI. The amendments are effective for annual periods beginning on or after January 1, 2026 with early adoption permitted. This amendment is not expected to have a material impact on the Company.

In April 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements which will replace International Accounting Standard ("IAS") 1, Presentation of Financial Statements. The new

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

standard on presentation and disclosure in financial statements focuses on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to the structure of the statement of profit or loss, required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general. Many of the other existing principles in IAS 1 are retained, with limited changes. IFRS 18 will apply for reporting periods beginning on or after January 1, 2027 and also applies to comparative information. The Company is in the process of assessing the impact of this standard.

There are no other IFRS Accounting Standards or International Financial Reporting Interpretations Committee interpretations that are not yet effective or early adopted that are expected to have a significant impact on the Company.

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

5. EXPLORATION AND EVALUATION ASSETS

A continuity of the Company’s exploration and evaluation assets is as follows:

	Dios Padre	La Libertad	Total Expenditures
	$	$	$
Balance, December 31, 2022	2,549,905	15,385	2,565,290
Acquisition cost	127,500	-	127,500
Assaying	272,942	-	272,942
Camp costs	277,823	-	277,823
Consulting and professional fees	683,477	-	683,477
Drilling	1,431,443	-	1,431,443
Equipment	93,678	-	93,678
Geologist fees	181,791	-	181,791
Property taxes and payments	209,640	-	209,640
Travel and transportation	3,351	-	3,351
Wages and salaries	302,177	-	302,177
Other payments	65,795	-	65,795
IVA taxes paid	214,763	-	214,763
Impairment of exploration and evaluation assets	-	(15,385)	(15,385)
Balance, December 31, 2023	6,414,285	-	6,414,285
Camp costs	84,176	-	84,176
Consulting and professional fees	3,668	-	3,668
Equipment	20,829	-	20,829
Geologist fees	31,501	-	31,501
Property taxes and payments	182,702	-	182,702
Travel and transportation	65	-	65
Wages and salaries	155,686	-	155,686
Other payments	3,131	-	3,131
IVA reduction	(9,214)	-	(9,214)
Balance, December 31, 2024	6,886,829	-	6,886,829

Dios Padre Property, Mexico

The Company’s subsidiary, Regency Mexico, has exercised its option and acquired the Dios Padre mineral property in 2022. Regency Mexico entered into an Option to Purchase and Promise to Assignment Agreement dated November 27, 2017 (“Option Agreement”), subsequently amended, with Minera Pena Blanca, S.A. de C.V. (“Minera Pena”), pursuant to which Regency Mexico was granted an option to purchase 100% title to the mineral concessions comprising the Dios Padre mineral property located in Yecora, Sonora, Mexico in consideration of:

the payment of US$145,000 plus IVA value-added tax as follows:
US$25,000 on the date of signing (paid);
US$30,000 on or before November 27, 2018 (paid);
US$30,000 on or before November 27, 2019 (paid);

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

US$30,000 on or before November 27, 2020 (paid); and
US$30,000 on or before November 27, 2021 (paid).
incurring aggregate exploration expenditures of not less than US$1,000,000 as follows:
US$250,000 on or before November 27, 2018; (incurred)
US$500,000 on or before November 27, 2021 (incurred);
US$250,000 on or before April 30, 2022 (waived – see disclosure below).

Pursuant to the Option Agreement, Minera Pena will retain a 3% net smelter return royalty, 2% of which can be purchased by the Company for US$1.5 million. Minera Pena may be obligated to pay an underlying 2.5% net smelter return royalty in favour of a third party. In the event the underlying royalty is valid, Regency may not be able to reduce the NSR to 1%. The Dios Padre Property may be subject to advance minimum royalty payments of US$100,000 due January 1st of each year, payable by Minera Pena to third parties.

On October 7, 2022, the Company entered into an option exercise agreement pursuant to which Minera Pena agreed to waive the last exploration expenditure of US$250,000 required to exercise the option for a 100% interest in the Dios Padre property. Consideration for the early exercise was the issuance of 300,000 common shares in the capital of the Company (the "Common Shares") at a price of $0.425 per share. The Common Shares were subject to a four month hold period from the date of issue in accordance with applicable securities legislation.

Ejido La Trinidad Agreement

To acquire necessary surface access and use, Regency Mexico executed a four-year agreement with the Ejido "La Trinidad" on November 29, 2017, requiring the Company to make annual payments of US$6,000 and minor improvement costs. During the year ended December 31, 2021, the Ejido La Trinidad Agreement expired, and no further amendments were made. A payment of US$7,500 was made during the year ended December 31, 2022 to the Ejido La Trinidad for annual surface access and use for 2022. On June 18, 2022, the agreement was amended such that the Company is required to make annual payments of US$7,500 per year for three years.

El Tablon, Mexico

The Company entered into an option agreement dated September 22, 2022 (the "Option Agreement") to option a 100% undivided interest in the El Tablon Claims located in the State of Durango, Mexico. The El Tablon Claims cover an area of approximately 7,200 hectares.

In order to exercise the option, the Company must pay US$50,000 on receipt of Exchange acceptance (paid in fiscal 2022), issue a total of 1,000,000 common shares (issued in fiscal 2023 and valued at $280,000, Note 5) and pay back taxes and mining filings on or before March 31, 2024. The back taxes and mining filings have been expensed as property investigation costs. The Company must also pay a US$1,000,000 bonus upon a NI 43-101 resource being published, which estimates the El Tablon Claims contain a minimum of 70 million silver equivalent ounces or 1 million gold ounces in the measured or indicated categories. The shares are subject to a four month hold period.

The Company has not exercised its option to acquire the El Tablon Claims as management does not yet have a substantive work plan and accordingly costs incurred to date have been expensed as project investigation costs.

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

San Dimas, Mexico

The Company entered into a term sheet option agreement dated December 27, 2023 (the “Option Agreement”) to option a 100% undivided interest in the El Milagro, El Milagro II, El Milagro III and Dorada claims (the “San Dimas Claims”) located in the State of Sinaloa, Mexico.

In order to exercise the option, the Company must pay US$100,000 with US$50,000 due on receipt of Exchange acceptance and $50,000 due on or before July 1, 2024, and issue a total of 1,000,000 common shares (issued in February 2024 (see Note 6)). The Company must also pay a US$1,000,000 bonus upon a NI 43-101 resource being published, which estimates the San Dimas Claims contain a minimum of 70 million silver equivalent ounces or 1 million gold ounces in the measure or indicated categories. The shares are subject to a four month hold period.

The Company has not exercised its option to acquire the San Dimas Claims as management does not yet have a substantive work plan and accordingly costs incurred to date have been expensed as project investigation costs.

6. SHARE CAPITAL

Authorized Capital

The authorized capital of the Company consists of an unlimited number of common shares without par value.

Issued Share Capital

During the year ended December 31, 2024, the Company issued a total of 14,556,206 common shares as follows:

From January to March 2024, the Company issued 4,918,500 units at a price of $0.20 per unit for gross proceeds of $983,700. Each unit is comprised of one common share and one half of one common share purchase warrant. Each whole warrant is exercisable to purchase one common share at a price of $0.30 per share for a period of two years from the date of issuance. In connection with this closing, the Company paid cash finder’s fees of $10,271 and issued 76,410 broker warrants. Each broker warrant will entitle the holder to purchase one common share of the Company at a price of $0.30 per share for a period of two years from the date of issuance. The broker’s warrants were valued at $6,087 using the Black-Scholes option pricing model with the following weight average assumptions: risk-free interest rate – 5.00%; volatility – 132%; expected dividend yield – 0.0%; expected option life in years – 2.
From September to December 2024, the Company issued 7,124,372 units at a price of $0.15 per unit for gross proceeds of $1,068,656. Each unit is comprised of one common share and one common share purchase warrant. Each whole warrant is exercisable to purchase one common share at a price of $0.15 per share for a period of two years from the date of issuance. In connection with this closing, the Company paid cash finder’s fees of $36,330 and issued 162,200 broker warrants. Each broker warrant will entitle the holder to purchase one common share of the Company at a price of $0.15 per share for a period of two years from the date of issuance. The broker’s warrants were valued at $12,952 using the Black-Scholes option pricing model with the following weight average

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

assumptions: risk-free interest rate – 5.00%; volatility – 132%; expected dividend yield – 0.0%; expected option life in years – 2.

On April 10, 2024, the Company issued 130,000 common shares upon the exercise of 130,000 warrants at a price of $0.10 per common share for gross proceeds of $13,000.
On February 8, 2024, the Company issued 1,000,000 common shares at a fair value of $0.165 per common share for the San Dimas property (Note 5). An amount of $165,000 has been recorded as property investigation costs which was expensed in the consolidated statements of loss and comprehensive loss.
On December 17, 2024, the Company issued 1,000,000 units to settle notes payable for a total amount of $150,000 to a shareholder of the Company (Note 7). Each unit consists of one common share and one share purchase warrant. The fair value of the common shares was determined to be $0.085 and the fair value of share purchase warrants was determined to be $0.065.
On April 10, 2024, the Company issued 50,000 units for shares for services with a fair value of $10,000. Each unit consists of one common share and one-half common share purchase warrant. The fair value of the common shares was determined to be $0.195 and the fair value of warrants was determined to be $0.005 on the date of issuance.
On November 22, 2024, the Company issued 133,335 units for shares for services with a fair value of $20,000. Each unit consists of one share and one common share purchase warrant. The fair value of the common shares was determined to be $0.14 and the fair value of the warrants was determined to be $0.01 on the date of issuance.
On December 17, 2024, the Company issued 200,000 units for shares for services with a fair value of $30,000. Each unit consists of one common share and one common share purchase warrant. The fair value of the common shares was determined to be $0.085, and the fair value of the warrants was determined to be $0.065 on the date of issuance.

During the year ended December 31, 2023, the Company issued a total of 18,859,327 common shares as follows:

On January 5, 2023, issued 1,000,000 common shares at a value of $0.28 per common share for the El Tablon property. An amount of $280,000 has been recorded as property investigation costs which was expensed in the consolidated statements of loss and comprehensive loss.
On January 6, 2023, issued 1,500,000 common shares upon the exercise of 1,500,000 warrants for gross proceeds of $150,000.
On January 6, 2023, issued 250,000 common shares at a value of $0.30 per common share for consulting services. An amount of $75,000 has been recorded as consulting fees in the consolidated statements of loss and comprehensive loss.
On February 28, 2023, issued 10,000 common shares upon the exercise of 10,000 warrants for gross proceeds of $1,000.

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

On March 1, 2023, issued 26,940 common shares upon the exercise of 26,940 warrants for gross proceeds of $6,735.
On March 15, 2023, issued 300,000 common shares at a value of $0.425 per common share for its Dios Padre property.
On March 15, 2023, issued 98,700 common shares upon the exercise of 98,700 warrants for gross proceeds of $24,675.
On April 6, 2023, the Company closed a private placement through the issuance of 6,240,000 common shares at $0.40 per common share for total proceeds of $2,496,000. The proceeds of $2,496,000 were allocated entirely to share capital using the residual value method. The Company paid finder’s fees of $91,140 in connection with the financing.
On April 6, 2023, issued 41,000 common shares upon the exercise of 41,000 warrants for gross proceeds of $10,250.
On April 13, 2023, issued 106,787 common shares upon the exercise of 106,787 warrants for gross proceeds of $26,697.
On April 17, 2023, issued 120,000 common shares upon the exercise of 120,000 warrants for gross proceeds of $30,000.
On April 19, 2023, issued 59,000 common shares upon the exercise of 59,000 warrants for gross proceeds of $14,750.
On September 27, 2023, the Company closed a private placement through the issuance of 5,613,500 units at $0.20 per unit for total proceeds of $1,122,700. Each unit is comprised of one common share and one half of one common share purchase warrant. Each whole warrant has an exercise price of $0.30 and is exercisable until September 27, 2025. The proceeds of $1,122,700 were allocated to share capital of $1,038,497 and to share purchase warrants of $84,203 using the residual value method. The Company paid finder’s fees of $6,212 in connection with the financing and issued 106,560 finder’s warrants. Each finder’s warrant has an exercise price of $0.30 and is exercisable until September 27, 2025. The finder’s warrants were valued at $9,523 using the Black-Scholes option pricing model with the following weight average assumptions: risk-free interest rate – 5.00%; volatility – 100%; expected dividend yield – 0.0%; expected option life in years – 2.
On October 26, 2023, issued 250,000 common shares at a value of $0.195 per common share for consulting services. An amount of $48,750 has been recorded as consulting fees in the consolidated statements of loss and comprehensive loss.
On October 27, 2023, the Company closed a private placement through the issuance of 2,593,400 units at $0.20 per unit for total proceeds of $518,680. Each unit is comprised of one common share and one half of one common share purchase warrant. Each whole warrant has an exercise price of $0.30 and is exercisable until October 27, 2025. The proceeds of $518,680 were allocated to share capital of $502,963 and to share purchase warrants of $15,717 using the residual value method. The Company paid finder’s fees of $7,601 in connection with the financing and issued 38,004 finder’s warrants. Each finder’s warrant has an exercise price of $0.30 and is exercisable until October 27,

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

The finder's warrants were valued at $3,481 using the Black-Scholes option pricing model with the following weight average assumptions: risk-free interest rate – 5.00%; volatility – 100%; expected dividend yield – 0.0%; expected option life in years – 2.
On October 27, 2023, the Company issued 550,000 shares with a value of $0.20 per share as par of a debt settlement (Note 6).
On November 29, 2023, issued 100,000 common shares upon the exercise of 100,000 stock options for gross proceeds of $7,000. Upon exercise of the stock options, the Company reclassified $5,522 from reserves to share capital.

Warrants

A summary of the changes in warrants is presented below:

	Share Purchase Warrants
	Number	Weighted average exercise price
Outstanding, December 31, 2022	4,181,544	$ 0.21
Issued	4,523,014	0.30
Exercised	(1,962,427)	0.13
Outstanding, December 31, 2023	6,742,131	0.27
Issued	11,180,566	0.26
Expired	(589,117)	0.25
Exercised	(130,000)	0.10
Outstanding, December 31, 2024	17,203,580	0.27
Exercisable, December 31, 2024	17,203,580	$ 0.27

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

The following warrants were outstanding as at December 31, 2024:

Number	Exercise price	Expiry Term
2,913,310	$ 0.30	September 25, 2025
1,609,704	$ 0.30	October 26, 2025
1,500,000	$ 0.20	December 15, 2025
1,312,500	$ 0.30	January 9, 2026
276,450	$ 0.30	January 16, 2026
391,250	$ 0.30	March 1, 2026
293,700	$ 0.30	March 27, 2026
286,760	$ 0.30	April 10, 2026
1,254,972	$ 0.25	September 3, 2026
2,016,500	$ 0.25	October 23, 2026
3,348,434	$ 0.25	November 22, 2026
2,000,000	$ 0.25	December 17, 2026
17,203,580

Stock Option Plan

The Company adopted a Stock Option Plan where directors, officers, employees, consultants and related persons of the Issuer, or persons engaged in investor relations activities on behalf of the Issuer are eligible to receive grants of options under the Stock Option Plan. The maximum number of common shares reserved for issuance upon exercise of options granted pursuant to the provisions of the Stock Option Plan at any time shall not exceed 10% of the issued and outstanding common shares of the Issuer at the relevant time less any common shares required to be reserved with respect to any other options granted prior to the adoption and implementation of the Stock Option Plan. The exercise price of any options granted is determined by the Board of Directors in its sole discretion as of the date the Board of Directors grants the options and shall not be less than the discounted Market Price as calculated and defined in accordance with the policies of the Exchange. Vesting terms are also determined by the Board of Directors.

A summary of the changes in stock options is presented below:

	Stock Options
	Number	Weighted average exercise price
Outstanding, December 31, 2022	5,500,000	$ 0.25
Granted	2,690,000	0.28
Exercised	(100,000)	0.07
Outstanding, December 31, 2023	8,090,000	0.25
Granted	1,700,000	0.20
Outstanding, December 31, 2024	9,790,000	0.23
Exercisable, December 31, 2024	9,790,000	$ 0.23

Regency Silver Corp. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Expressed in Canadian dollars)

On January 16, 2023, the Company granted 2,190,000 stock options to officers, directors, and consultants of the Company. The stock options vest immediately. The stock options were valued at $438,726 using the Black-Scholes option pricing model with the following weight average assumptions: risk-free interest rate – 3.09%; volatility – 129%; expected dividend yield – 0.0%; expected option life in years – 3.5.

On July 13, 2023, the Company granted 500,000 stock options to consultants of the Company for consulting services to be performed over a 12-month period. The stock options vest quarterly over 12 months beginning October 13, 2023. The stock options were valued at $69,375 using the Black-Scholes option pricing model with the following weight average assumptions: risk-free interest rate – 4.50%; volatility – 142%; expected dividend yield – 0.0%; expected option life in years – 3.17. During 2023, the Company expensed $53,009 as share-based compensation expense and the remaining amount of $16,366 has been expensed in the consolidated statement of loss and comprehensive loss for the year ended December 31, 2024.

On March 8, 2024, the Company granted 1,700,000 stock options to consultants of the Company for consulting services to be performed over a 12-month period. The stock options vest immediately. The stock options were valued at $304,174 using the Black-Scholes option pricing model with the following weight average assumptions: risk-free interest rate – 3.32%; volatility – 132%; expected dividend yield – 0.0%; expected option life in years – 5.

Details of stock options outstanding and exercisable as at December 31, 2024 are as follows:

Number	Exercise price	Expiry Date
1,300,000	$ 0.07	July 15, 2027
4,100,000	$ 0.25	April 26, 2027
2,190,000	$ 0.30	January 16, 2028
500,000	$ 0.20	July 13, 2028
1,700,000	$ 0.20	March 8, 2029
9,790,000

The weighted average remaining contractual life of stock options outstanding at December 31, 2024 was 2.90 years (December 31, 2023 – 3.63 years).

7. NOTE PAYABLE

On May 9, 2024, the Company entered into a promissory note with a shareholder of the Company for a total amount of $150,000. The Company repaid the loan through the issuance of common shares during the year ended December 31, 2024 (Note 6). The loan bears an interest of 10%, effective September 1, 2024, and is unsecured and is payable on demand. As at December 31, 2024, the amount payable related to this promissory note was $4,397.

On July 16, 2024, the Company entered into a promissory note with an arm's length party for a total amount of $25,000. Under the terms of the promissory note agreement, the Company incurred an additional $5,000 to the lender as a bonus, effectively increasing the total repayment obligation to $30,000. The loan bears an interest of 10%, effective September 1, 2024, is unsecured and is payable on demand. As at December 31, 2024, the amount payable related to this promissory note was $30,995.

On May 31, 2024, the Company entered into a promissory note with the Executive Chairman of the Company for a $9,000 loan. These amounts are non-interest bearing and does not have specific repayment terms. As at December 31, 2024, the amount payable related to this promissory note was $9,000.

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

8. RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making operating and financial decisions. This would include the Company's senior management, who are considered to be key management personnel by the Company. Parties are also related if they are subject to common control or significant influence. Related parties may be individuals or corporate entities.

Key management personnel include the members of the Board of Directors and officers of the Company who have the authority and responsibility for planning, directing and controlling the activities of the Company. Amount paid and accrued to directors and officers are as follows:

	For the years ended
	December 31, 2024	December 31, 2023
Management and director compensation:
Management fees	$ 288,000	$ 288,000
Consulting fees	146,000	154,500
Share-based payments	-	210,348
Total management compensation	$ 434,000	$ 652,848

Included in accounts payable and accrued liabilities is $155,073 (December 31, 2023 - $17,917) owed to the directors and officers of the Company. These amounts are non-interest bearing with no specific terms of repayment.

Included in notes payable is $9,000 (December 31, 2023 - $nil) owed to the Executive Chairman of the Company.

Included in prepaid expenses is $32,783 (December 31, 2023 - $53,297) in travel advances paid to officers and directors of the Company.

9. MANAGEMENT OF CAPITAL

The Company defines the capital that it manages as its cash and share capital.

The Company's objective when managing capital is to maintain corporate and administrative functions necessary to support the Company's operations and corporate functions; and to seek out and acquire new projects of merit.

The Company manages its capital structure in a manner that provides sufficient funding for operational and capital expenditure activities. Funds are secured, when necessary, through debt funding or equity capital raised by means of private placements. There can be no assurances that the Company will be able to obtain debt or equity capital in the case of working capital deficits.

The Company does not pay dividends and has no long-term debt or bank credit facility. The Company is not subject to any externally imposed capital requirements.

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

10. RISK MANAGEMENT AND FAIR VALUE MEASUREMENT

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

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash held in bank accounts. As most of the Company’s cash is held by one bank there is a concentration of credit risk. This risk is managed by using a major bank that is high credit quality financial institutions as determined by rating agencies. Receivables are due from a government agency.

Foreign Exchange Risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to exchange risk as its mineral property interests are located in Mexico and Peru and certain transactions are conducted in the Mexican Peso and US dollar respectively. The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Mexican Peso (“MXN”):

	December 31, 2024	December 31, 2023
Balance in MXN:	$	$
Cash	170,741	71,886
Accounts payable	(2,238,033)	(3,104,833)
Net exposure	(2,067,292)	(3,032,947)
Balance in Canadian dollars:	(143,243)	(237,116)

A 10% change in the Mexican Peso to the Canadian dollar exchange rate would impact the Company’s net loss by approximately $14,243 for the year ended December 31, 2024 (December 31, 2023 – $23,712). A 10% change in the US dollar and Peruvian Soles would not have a significant impact on the Company’s balance sheet accounts and net loss for the year ended December 31, 2024 and December 31, 2023.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to interest rate risk relates to its ability to earn interest income on cash balances at variable rates. The fair value of the Company’s cash accounts is relatively unaffected by changes in short term interest rates.

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages this risk by careful management of its working capital. As at December 31, 2024, the Company has a working capital deficiency of $632,204 and requires additional financing to fund current operations. Historically, the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements. The Company's access to financing is always uncertain. There is no assurance of continued access to significant equity funding. The Company requires additional funding to continue with its ongoing operations and exploration commitments and accordingly is exposed to liquidity risks.

Fair value measurement

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

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 – Quoted prices in markets that are not active, or inputs that are not observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The carrying values of cash and accounts payable and accrued liabilities approximate their fair values due to their short-term to maturity. The Company records its cash at FVTPL and accounts payable and note payable at amortized cost. Cash is measured using level 1 inputs.

The following table summarizes information regarding the carrying and fair values of the Company's financial instruments:

	December 31, 2024		December 31, 2023
	Fair Value $	Carrying Value $	Fair Value $	Carrying Value $
FVTPL assets (i)	14,973	14,973	57,886	57,886
Amortized cost liabilities (ii)	729,586	729,586	534,976	534,976

(i) Cash
(ii) Accounts payable

The Company's financial assets measured at fair value on a recurring basis are presented on the Company's consolidated statement of financial position as of December 31, 2024 are as follows:

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

Financial Assets	Balance as at December 31, 2024 $	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Cash	14,973	14,973	-	-
Total	14,973	14,973	-	-

11. Property, plant and equipment

	Vehicle
Cost	$
Balance, December 31, 2023 and 2022	-
Additions	16,185
Balance, December 31, 2024	16,185

12. SEGMENTED INFORMATION

The Company primarily operates in one reportable operating segment being the exploration and evaluation of exploration and evaluation assets. As at December 31, 2024 and 2023, the full exploration and evaluation asset balance relates to expenditures incurred in Mexico.

13. LOSS ON SETTLEMENT

The Company and one of its directors were named as defendants in a legal proceeding commenced in the Supreme Court of British Columbia. The legal proceeding claimed damages against the director and the Company for a breach of an agreement and in 2022 the Company negotiated a settlement and recorded $225,000 loss on settlement. During 2022, the Company paid $125,000 to the claimant and agreed to pay $97,500 on or before June 15, 2023. During 2023, the Company paid the remaining balance and recorded a loss for an additional $21,285 penalty for late payment. During 2024, the Company recorded a recovery of $3,786 related to the overpayment of settlement amount.

14. COMMITMENTS

On June 1, 2020, the Company entered into a management consulting agreement with the Executive Chairman of the Company whereby the Executive Chairman agreed to provide management services to the Company. The agreement provides for the payment of $10,000 per month commencing June 1, 2020, for services provided. In the event of termination of the agreement without cause or a change of control of the Company, the Company must pay severance equal to 12 months of management fees.

On July 27, 2020, the Company entered into an independent consultant agreement with the Chief Financial Officer ("CFO") of the Company for the provision of financial consulting services to the Company. The agreement provides for the payment of $3,000 per month plus the goods and services tax for the months of August and September 2020. Commencing May 1, 2022, the fees have been $4,000 per month. The CFO will be entitled to a severance payment of 4 months of consulting fees in the event of early termination of the agreement without cause.

Regency Silver Corp.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

15. INCOME TAXES

A reconciliation of income taxes at statutory rates is as follows for the years ended December 31:

	2024		2023
Loss for the year	$	(2,337,570)	$ (3,186,092)
Expected income tax recovery at 27% statutory rate	$	(631,131)	$ (860,245)
Permanent difference and other		(133,869)	(43,755)
Change in unrecognized deductible temporary differences		765,000	904,000
Total income tax expense (recovery)	$	-	$ -

The significant components of the Company's temporary differences, unused tax credits and unused tax losses that have not been included on the consolidated statement of financial position are as follows:

	2024		2023
Deferred Tax Assets (liabilities)
Exploration and evaluation assets	$	82,000	$ 82,000
Share issue costs		60,000	74,000
Capital losses		6,000	6,000
Non-capital losses available for future period		3,171,000	2,392,000
		3,319,000	2,554,000
Unrecognized deferred tax assets		(3,319,000)	(2,554,000)
Net deferred tax asset (liability)	$	-	$ -

The Company's unused tax losses that have not been recognized as deferred tax assets on the consolidated statement of financial position are as follows:

	2024	Expiry Date
Temporary Differences	$
Capital losses	43,994	No expiry date
Non-capital losses available for future period	11,706,058	Beginning in 2037
	2023	Expiry Date
Temporary Differences	$
Capital losses	43,994	No expiry date
Non-capital losses available for future period	9,538,940	Beginning in 2037

Tax attributes are subject to review, and potential adjustment, by tax authorities.

AI assistant

Regency Silver Corp. — Audit Report / Information 2024

35757_rns_2025-04-30_cae47167-dc31-4224-88c8-b9d0fbfe6047.pdf

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Independence

Material Uncertainty Related to Going Concern

Key Audit Matters

Other Information

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

1. NATURE OF OPERATIONS

2. GOING CONCERN

3. BASIS OF PRESENTATION

3.1. Basis of Consolidation

3.2. Significant judgments, estimates and assumptions

Functional currency

Going concern

Impairment of exploration and evaluation assets

Income Taxes

Rehabilitation Provisions

Valuation of share-based compensation

4. MATERIAL ACCOUNTING POLICY INFORMATION

4.1 Exploration and Evaluation Assets

(i) Pre-license costs:

(ii) Exploration and evaluation costs:

4.2 Decommissioning and Restoration

4.3 Impairment of exploration and evaluation assets

4.4 Functional Currency

4.5 Provisions

4.6 Income Taxes

4.7 Share capital

4.8 Share-based Payments

4.9 Related Party Transactions

4.10 Earnings (Loss) per Share

4.11 Financial Instruments

Financial assets – Classification

Fair value hierarchy

Financial assets – Measurement

Financial liabilities

4.12 Share Issuance Costs

4.13 Comprehensive Income (Loss)

4.14 Property, plant and equipment

4.15 Accounting standards and amendments issued

5. EXPLORATION AND EVALUATION ASSETS

Dios Padre Property, Mexico

Ejido La Trinidad Agreement

El Tablon, Mexico

San Dimas, Mexico

6. SHARE CAPITAL

Authorized Capital

Issued Share Capital

Warrants

Stock Option Plan

7. NOTE PAYABLE

8. RELATED PARTY TRANSACTIONS

9. MANAGEMENT OF CAPITAL

10. RISK MANAGEMENT AND FAIR VALUE MEASUREMENT

Credit Risk

Foreign Exchange Risk

Interest Rate Risk

Liquidity Risk

Fair value measurement

11. Property, plant and equipment

12. SEGMENTED INFORMATION

13. LOSS ON SETTLEMENT

14. COMMITMENTS

15. INCOME TAXES

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Regency Silver Corp. Audit Report / Information 2024