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Ridgestone Mining Audit Report / Information 2026
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Audit Report / Information
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RIDGESTONE MINING INC.
Consolidated Financial Statements
Year Ended December 31, 2025
(Expressed in Canadian dollars)
dmcl LLP
dmcl.ca
Independent Auditor's Report
To the Shareholders of Ridgestone Mining Inc.
Opinion
We have audited the consolidated financial statements of Ridgestone Mining Inc. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2025 and 2024, and the consolidated statements of comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2025 and 2024, and its 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 Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the 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 financial statements, which describes events or conditions, that indicate a material uncertainty exists that may cast significant doubt on 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 financial statements of the current period. These matters were addressed in the context of our audit of the 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 other key audit matters to communicate in our report.
Other Information
Management is responsible for the other information. The other information comprises the information included in Management's Discussion and Analysis.
Our opinion on the 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 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 financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, 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 Financial Statements
Management is responsible for the preparation and fair presentation of the 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 financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the 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.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 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 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 auditor's report to the related disclosures in the 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 Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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 Rakesh Patel.
DMCL LLP
CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, BC
April 24, 2026
RIDGESTONE MINING INC.
Consolidated statements of financial position
(Expressed in Canadian dollars)
| December 31, 2025 $ | December 31, 2024 $ | |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash | 32,294 | 114,468 |
| Prepaids and deposits | 13,017 | 22,000 |
| Taxes recoverable | 10,400 | 8,742 |
| Total current assets | 55,711 | 145,210 |
| Non-current assets | ||
| Equipment (Note 3) | 1,444 | 2,355 |
| Exploration and evaluation assets (Note 4) | 1 | 1,240,725 |
| Total assets | 57,156 | 1,388,290 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities (Notes 5, 6 and 7) | 218,288 | 206,237 |
| Due to related parties (Note 6) | 499,176 | 307,890 |
| Total liabilities | 717,464 | 514,127 |
| Shareholders' equity | ||
| Share capital (Note 8) | 10,212,981 | 10,212,981 |
| Equity reserve (Note 9 and 10) | 911,737 | 911,737 |
| Deficit | (11,785,026) | (10,250,555) |
| Total shareholders' equity | (660,308) | 874,163 |
| Total liabilities and shareholders' equity | 57,156 | 1,388,290 |
Nature of operations and continuance of business (Note 1)
Approved and authorized for issuance on behalf of the Board of Directors on April 24, 2026:
/s/ "Brian Goss"
Brian Goss, Director
/s/ "Erwin Wong"
Erwin Wong, Director
(The accompanying notes are an integral part of these consolidated financial statements)
RIDGESTONE MINING INC.
Consolidated statements of comprehensive loss
(Expressed in Canadian dollars)
| For the year ended December 31, 2025 | For the year ended December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Expenses | ||
| Consulting fees (Note 6) | 150,000 | 150,000 |
| Depreciation (Note 3) | 911 | 380 |
| Foreign exchange gain (loss) | 2,513 | (4,955) |
| General and administrative | 26,804 | 35,488 |
| Mineral exploration costs (Notes 4 and 6) | 36,582 | 6,126 |
| Professional fees | 70,482 | 70,165 |
| Total expenses | 287,292 | 257,204 |
| Net loss before other items | (287,292) | (257,204) |
| Other income or expense | ||
| Impairment of exploration and evaluation asset (Note 4) | (1,240,724) | – |
| Interest expense (Notes 6 and 7) | (6,455) | (7,552) |
| Net and comprehensive loss | (1,534,471) | (264,756) |
| Loss per share, basic and diluted | (0.10) | (0.02) |
| Weighted average shares outstanding, basic and diluted | 15,301,235 | 15,301,235 |
(The accompanying notes are an integral part of these consolidated financial statements)
RIDGESTONE MINING INC.
Consolidated statement of changes in shareholders' equity
(Expressed in Canadian dollars)
| Share capital | Equity reserve $ | Deficit $ | Total shareholders' equity $ | ||
|---|---|---|---|---|---|
| Number of shares | Amount $ | ||||
| Balance, December 31, 2023 | 15,301,235 | 10,212,981 | 911,737 | (9,985,799) | 1,138,919 |
| Net loss for the year | – | – | – | (264,756) | (264,756) |
| Balance, December 31, 2024 | 15,301,235 | 10,212,981 | 911,737 | (10,250,555) | 874,163 |
| Net loss for the year | – | – | – | (1,534,471) | (1,534,471) |
| Balance, December 31, 2025 | 15,301,235 | 10,212,981 | 911,737 | (11,785,026) | (660,308) |
(The accompanying notes are an integral part of these consolidated financial statements)
(The accompanying notes are an integral part of these consolidated financial statements)
RIDGESTONE MINING INC.
Consolidated statements of cash flows
(Expressed in Canadian dollars)
| For the year ended December 31, 2025 | For the year ended December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Operating activities | ||
| Net loss | (1,534,471) | (264,756) |
| Items not involving cash: | ||
| Depreciation | 911 | 380 |
| Impairment of exploration and evaluation asset | 1,240,724 | – |
| Changes in non-cash operating working capital: | ||
| Prepaids and deposits | 8,983 | (22,000) |
| Taxes recoverable | (1,658) | 1,655 |
| Accounts payable and accrued liabilities | 12,051 | 19,538 |
| Due to related parties | 191,286 | 62,032 |
| Net cash used in operating activities | (82,174) | (203,151) |
| Investing activities | ||
| Equipment purchase | – | (2,735) |
| Net cash used in investing activities | – | (2,735) |
| Decrease in cash | (82,174) | (205,886) |
| Cash, beginning of year | 114,468 | 320,354 |
| Cash, end of year | 32,294 | 114,468 |
5
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Nature of Operations and Continuance of Business
Ridgestone Mining Inc. (the "Company") was incorporated in British Columbia, Canada, on March 30, 2017 under the name 1113414 B.C. Ltd. On March 30, 2017, the Company changed its name to Ridgestone Mining Inc. The Company's principal business plan is to acquire, explore and develop mineral properties and ultimately seek earnings by exploiting mineral claims. The Company's common shares are listed and trade on the TSX Venture Exchange ("Exchange") under the symbol "RMI". The Company's registered and records office is Suite 501, 3292 Production Way, Burnaby, British Columbia, V5A 4R4.
These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will realize the carrying value of its assets and discharge its liabilities in the normal course of business. During the year ended December 31, 2025, the Company incurred a net loss of $1,534,471 and had current liabilities in excess of current assets of $661,753 at December 31, 2025. As at December 31, 2025, the Company has not generated any revenue and has accumulated losses of $11,785,026 since inception. The Company's continuation as a going concern are dependent upon the successful results from its mineral property exploration activities and its ability to attain profitable operations and generate funds therefrom and/or raise equity capital or borrowings sufficient to meet current and future obligations. There is no guarantee that the Company will be able to complete any of the above objectives. These factors indicate the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be available on acceptable terms. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.
- Material Accounting Policy Information
(a) Statement of Compliance and Basis of Presentation
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of financial statements.
These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Cerro de Oro Minerales, S.A. de C.V., a company incorporated on September 21, 2018, in Mexico, and 1330498 B.C. Ltd., a company incorporated on October 27, 2021, in British Columbia. All inter-company balances and transactions have been eliminated on consolidation.
The consolidated financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The consolidated financial statements are presented in Canadian dollars, which is also the Company and its subsidiaries functional currency.
6
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(b) Use of Estimates and Judgments
The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates. 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 and in any future periods affected.
Significant areas requiring the use of estimates include fair value of share-based payments, recoverability of exploration and evaluation assets, and unrecognized deferred income tax assets. Actual results could differ from those estimates.
Judgments made by management include the factors used to determine the assessment of whether the going concern assumption is appropriate. The assessment of the going concern assumption requires management to take into account all available information about the future, which is at least, but is not limited to, 12 months from the end of the reporting period. The Company is aware that material uncertainties related to events or conditions may cast significant doubt upon the Company's ability to continue as a going concern.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance, are readily convertible to known amounts of cash, and which are subject to insignificant risk of changes in value to be cash equivalents.
(d) Financial Instruments
(i) Classification
The Company classifies its financial instruments into 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 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 financial assets and liabilities:
| Financial assets/liabilities | Classification |
|---|---|
| Cash | FVTPL |
| Accounts payable | Amortized cost |
| Due to related parties | Amortized cost |
(ii) Measurement
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.
7
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(d) Financial Instruments (continued)
(ii) Measurement (continued)
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 the statements of comprehensive 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 the statements of comprehensive loss in the period in which they arise.
(iii) 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 the associated risks and rewards of ownership to another entity.
Financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled, or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and / or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
Gains and losses on derecognition are generally recognized in profit or loss.
(e) Exploration and Evaluation Assets
The Company records its interests in mineral properties and areas of geological interest at cost. All direct and indirect costs related to the acquisition of these interests are capitalized on the basis of specific claim blocks or areas of geological interest until the properties to which they relate are placed into production, sold or management has determined there to be an impairment in value. These costs will be depleted using the unit-of-production method based on the estimated proven and probable reserves available on the related property following commencement of production.
The amounts shown for mineral properties represent acquisition costs and option payments, and do not necessarily reflect present or future value. Recoverability of these amounts will depend upon the existence of economically recoverable reserves, the ability of the Company to obtain financing necessary to complete development, and future profitable production. The Company reviews the carrying values of mineral properties when there are any events or change in circumstances that may indicate impairment. Where estimates of future cash flows are available, an impairment charge is recorded if the estimated undiscounted future net cash flows expected to be generated by the property is less than the carrying amount. An impairment charge is recognized by the amount by which the carrying amount of the property exceeds the fair value of the property.
(f) Mineral Exploration and Development Costs
Exploration costs are charged to operations as incurred. When it has been established that a mineral deposit is commercially mineable and a decision has been made to formulate a mining plan (which occurs upon completion of a positive economic analysis of the mineral deposit), the costs subsequently incurred to develop the mine on the property prior to the start of the mining operations are capitalized. Exploration costs that are incurred before the Company has obtained the legal rights to explore and develop a property are expensed.
8
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(g) Impairment of Non-Current Assets
At each reporting date, the Company reviews the carrying amounts of its tangible assets to determine whether there are any indications of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.
Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit ("CGU") to which the asset belongs. The recoverable amount is determined as the higher of fair value less direct costs to sell and the asset's value in use. In assessing value in use, the estimated future cash flows are discounted to their present value. Estimated future cash flows are calculated using estimated recoverable reserves, estimated future commodity prices and the expected future operating and capital costs. The pre-tax discount rate applied to the estimated future cash flows reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted.
If the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying amount of the asset or CGU is reduced to its recoverable amount through an impairment charge to the statement of comprehensive loss.
Assets that have been impaired are tested for possible reversal of the impairment whenever events or changes in circumstance indicate that the impairment may have reversed. When an impairment subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but only so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of depreciation, depletion and amortization) had no impairment loss been recognized for the asset or CGU in prior periods. A reversal of impairment is recognized as a gain in the statement of comprehensive loss.
(h) Reclamation and Remediation Provisions
The Company recognizes a provision for statutory, contractual, constructive or legal obligations associated with decommissioning of mining operations and reclamation and rehabilitation costs arising when environmental disturbance is caused by the exploration or development of mineral properties, plant and equipment. Provisions for site closure and reclamation are recognized in the period in which the obligation is incurred or acquired, and are measured based on expected future cash flows to settle the obligation, discounted to their present value. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability including risks specific to the countries in which the related operation is located.
When an obligation is initially recognized, the corresponding cost is capitalized to the carrying amount of the related asset in mineral properties, plant and equipment. These costs are depreciated using either the unit of production or straight-line method depending on the asset to which the obligation relates. The obligation is increased for the accretion and the corresponding amount is recognized as a finance expense. The obligation is also adjusted for changes in the estimated timing, amount of expected future cash flows, and changes in the discount rate. Such changes in estimates are added to or deducted from the related asset except where deductions are greater than the carrying value of the related asset in which case, the amount of the excess is recognized in the statement of comprehensive loss.
Due to uncertainties concerning environmental remediation, the ultimate cost to the Company of future site restoration could differ from the amounts provided. The estimate of the total provision for future site closure and reclamation costs is subject to change based on amendments to laws and regulations, changes in technology, price increases and changes in interest rates, and as new information concerning the Company's closure and reclamation obligations becomes available.
9
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(i) Share Capital
Common shares are classified as equity. Transaction costs directly attributable to the issuance of common shares and stock options are recognized as a deduction from equity, net of any tax effects.
Valuation of equity units issued in private placements
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.
(j) Foreign Currency Translation
The Company's functional currency, being the currency of the primary economic environment in which the Company operates, is the Canadian dollar. Transactions denominated in foreign currencies are translated using the exchange rate in effect on the transaction date or at an average rate. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange in effect at the statement of financial position date. Non-monetary items are translated using the historical rate on the date of the transaction. Foreign exchange gains and losses are included in the statement of comprehensive loss.
(k) Income Taxes
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in the statement of comprehensive loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred income
Deferred income tax is provided using the asset and liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
(l) Loss Per Share
Basic loss per share is computed using the weighted average number of common shares outstanding during the period. The treasury stock method is used for the calculation of diluted loss per share, whereby all "in the money" stock options and share purchase warrants are assumed to have been exercised at the beginning of the period and the proceeds from their exercise are assumed to have been used to purchase common shares at the average market price during the period.
10
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Material Accounting Policy Information (continued)
(I) Loss Per Share (continued)
When a loss is incurred during the period, basic and diluted loss per share are the same as the exercise of stock options and share purchase warrants is considered to be anti-dilutive. As at December 31, 2025, the Company had 10,000,000 (2024 – 10,037,500) potentially dilutive shares outstanding.
(m) Share-based Payments
Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received. The corresponding amount is recorded to the equity reserve. The fair value of options is determined using the Black–Scholes Option Pricing Model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.
(n) Recent Accounting Pronouncements
As at the date of these Financial Statements, the IASB had issued certain pronouncements that are mandatory for the Company's accounting periods commencing on or after January 1, 2027. In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements ("IFRS 18") which replaces IAS 1 Presentation of Financial Statements. This standard aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation and disaggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company is currently assessing the impact the new standard will have on its financial statements.
Other recent accounting pronouncements are not applicable or do not have a significant impact to the Company, have been excluded.
11
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Equipment
| Computer equipment $ | |
|---|---|
| Cost | |
| Balance at December 31, 2023 | – |
| Additions | 2,735 |
| Balance at December 31, 2024 and 2025 | 2,735 |
| Accumulated depreciation | |
| Balance at December 31, 2023 | – |
| Depreciation | 380 |
| Balance at December 31, 2024 | 380 |
| Depreciation | 911 |
| Balance at December 31, 2025 | 1,291 |
| Carrying amount | |
| Balance at December 31, 2024 | 2,355 |
| Balance at December 31, 2025 | 1,444 |
- Exploration and Evaluation Assets
Mineral property acquisition costs:
| Alaska Property $ | Total $ | |
|---|---|---|
| Balance, December 31, 2023, and 2024 | 1,240,725 | 1,240,725 |
| Impairment | (1,240,724) | (1,240,724) |
| Balance, December 31, 2025 | 1 | 1 |
| Mineral exploration costs: | ||
| For the year ended December 31, 2025 | For the year ended December 31, 2024 | |
| $ | $ | |
| Alaska Property, Sonora, Mexico | ||
| General exploration | 19,991 | – |
| Geological and Geophysics | 13,300 | – |
| Mining duties | – | 508 |
| Rebeico Property, Sonora, Mexico | ||
| General exploration | – | 5,618 |
| Las Pilas Property, British Columbia, Canada | ||
| General exploration | 3,291 | – |
| 36,582 | 6,126 |
12
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Exploration and Evaluation Assets (continued)
Rebeico Property
In 2018, the Company closed an Assignment Agreement to assume interest in an Option Agreement with YQ Gold de Mexico, S. de R.L. de C.V. ("YQ Gold") to acquire the Rebeico property, located in Sonora, Mexico.
During the year ended December 31, 2023, the Company determined that it will not proceed with the Rebeico property and recognized an impairment of $715,814.
Alaska Property
On June 25, 2019, the Company entered into a Mineral Property Purchase Agreement (the "Agreement") to purchase a 100% interest in 10 mining concessions located in Sonora, Mexico. The Agreement received Exchange approval on September 11, 2019. In consideration for the mining concessions, the Company paid a total of $110,725 (US$83,000) and issued a total of 250,000 common shares with a fair value of $1,130,000. During the year ended December 31, 2025, the Company recognized an impairment of $1,240,724 on the Alaska property due to the unstable political environment and safety issues for foreign mining companies in the area.
Las Pilas Property
On December 31, 2025, the Company entered into an Option Agreement (the "Option Agreement") to acquire a 100% interest in the Las Pilas property located in southern British Columbia, Canada. In order to acquire a 100% interest in the property, the Company must:
- Pay $5,000 within 15 days of signing the Option Agreement;
- Pay an additional $15,000 and issue 200,000 common shares upon TSX Venture Exchange acceptance of the Option Agreement ("Exchange Acceptance");
- Pay an additional $100,000 and issue 100,000 common shares within 1 year of Exchange Acceptance;
- Pay an additional $100,000 and issue 100,000 common shares within 2 years of Exchange Acceptance; and
- Pay an additional $100,000 and issue 100,000 common shares within 3 years of Exchange Acceptance.
The Company must also incur exploration expenditures of at least $100,000 by December 31, 2026, at least an additional $100,000 by December 31, 2027, and at least an additional $300,000 by December 31, 2028. As at December 31, 2025, the Company has not made any option payments and the Option Agreement is subject to Exchange Acceptance.
- Accounts Payable and Accrued Liabilities
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Accounts payable (Note 6) | 76,875 | 62,789 |
| Accrued liabilities (Notes 6 and 7) | 141,413 | 143,448 |
| 218,288 | 206,237 |
RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Related Party Transactions
The remuneration to directors and other members of key management for the years ended December 31, 2025 and 2024, are as follows:
| 2025 | 2024 | |
|---|---|---|
| $ | $ | |
| Consulting fees | 150,000 | 150,000 |
| Rent | 12,000 | 12,000 |
| Mineral exploration costs | 33,291 | – |
| 195,291 | 162,000 |
(a) As at December 31, 2025, the Company owed $9,505 (2024 – $8,430) of accrued interest on a loan payable to a director of the Company, of which $nil (2024 – $7,172) is included in accounts payable and accrued liabilities. The balance is unsecured, non-interest bearing and due on demand.
(b) During the year ended December 31, 2025, the Company incurred $60,000 (2024 – $60,000) in consulting fees to the Chief Financial Officer (“CFO”) of the Company. As at December 31, 2025, the Company owed $163,848 (2024 – $102,402) to the CFO of the Company for accrued consulting fees and expenses paid on behalf of the Company. The balance is unsecured, non-interest bearing and due on demand.
(c) During the year ended December 31, 2025, the Company incurred $60,000 (2024 – $60,000) of consulting fees and rent of $12,000 (2024 – $12,000) to a private company controlled by a director of the Company. As at December 31, 2025, the Company owed a total of $191,231 (2024 – $128,230) to the director of the Company and the private company controlled by a director of the Company, of which $nil (2024 – $9,000) is included in accounts payable and accrued liabilities. The balance is unsecured, non-interest bearing and due on demand.
(d) During the year ended December 31, 2025, the Company incurred $30,000 (2024 – $30,000) of consulting fees to the President and Chief Executive Officer (“CEO”) of the Company and $33,291 in exploration expenditures (2024 – $nil) to a company controlled by the President and CEO of the Company. As at December 31, 2025, the Company owed a total of $115,000 (2024 – $85,000) to the President and CEO of the Company and $19,592 (US$14,287) (2024 – $nil) to a company controlled by the President and CEO of the Company. The balances are unsecured, non-interest bearing and due on demand.
- Loans Payable
As at December 31, 2025, the Company owed accrued interest totaling $57,043 (2024 – $50,587), of which $47,538 (2024 – $49,329) is included in accounts payable and accrued liabilities, and $9,505 (2024 – $1,258) is included in due to related parties. The interest is owing pursuant to loan agreements entered into between September 2022, and May 2023, for which the principal balances have been repaid and the unpaid accrued interest bears interest at 15% per annum.
- Share Capital
There were no share transactions during the years ended December 31, 2025 and 2024.
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RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
- Stock Options
The Company's Board of Directors approved a stock incentive plan dated November 15, 2017. The Board of Directors is authorized to grant options to directors, officers, consultants, or employees to acquire up to 10% of the issued and outstanding common shares of the Company. The exercise price will not be less than the discounted market price defined in the policies of the Exchange. The options that may be granted under this plan must be exercisable for over a period of not exceeding 10 years. Provided the Company is listed on the Exchange, the option holders can elect to exercise options on a cashless basis.
The following table summarizes information about the options at December 31, 2025 and 2024, and the changes for the years then ended:
| Number of options | Weighted average exercise price $ | |
|---|---|---|
| Options outstanding– December 31, 2023 | 57,500 | 3.00 |
| Expired | (20,000) | 3.00 |
| Options outstanding– December 31, 2024 | 37,500 | 3.00 |
| Expired | (37,500) | 3.00 |
| Options outstanding and exercisable – December 31, 2025 | – | – |
Equity reserve
The equity reserve records items recognized as share-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital.
- Warrants
The following table summarizes information about the warrants at December 31, 2025 and 2024, and the changes for the years then ended:
| Number of warrants | Weighted average exercise price $ | |
|---|---|---|
| Warrants outstanding – December 31, 2024, and 2025 | 10,000,000 | 0.10 |
The Company's warrants are exercisable for common shares. The following table summarizes information about warrants outstanding and exercisable at December 31, 2025:
| Exercise Price $ | Expiry date | Warrants outstanding | Weighted average remaining contracted life (years) |
|---|---|---|---|
| 0.10 | October 18, 2028 | 10,000,000 | 2.80 |
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RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
11. Financial Instruments
(a) Categories of Financial Instruments and Fair Value Measurements
The Company classifies the fair value of these transactions according to the following hierarchy:
- Level 1 – quoted prices in active markets for identical financial instruments.
- Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
- Level 3 – valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The Company classifies cash at FVTPL, and accounts payable and due to related parties at amortized cost.
The fair values of cash, accounts payable and due to related parties approximate their carrying values due to the relatively short-term maturity of these instruments.
(b) 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. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.
Management monitors the amount of credit extended to the parties for expense recoveries. The carrying amount of financial assets represents the maximum credit exposure. Credit risk is assessed as low.
(c) Foreign Exchange Rate Risk
Foreign exchange rate risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in the currencies that differ from the respective functional currency. The Company operates in Canada and Mexico. Future exploration programs and option payments may be denominated in U.S. dollars and Mexican pesos. Foreign exchange risk arises from purchase transactions as well as financial assets and liabilities denominated in these foreign currencies.
The Company does not use derivative instruments to hedge exposure to foreign exchange rate risk. However, management of the Company believes there is no significant exposure to foreign currency fluctuations.
(d) 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 currently settles its financial obligations with cash. The ability to do this relies on the Company raising debt or equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs. Liquidity risk is assessed as high.
(e) Price Risk
The Company is exposed to price risk with respect to commodity prices. The Company's ability to raise capital to fund exploration and development activities is subject to risks associated with fluctuations in the market price of commodities.
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RIDGESTONE MINING INC.
Notes to the consolidated financial statements
December 31, 2025
(Expressed in Canadian dollars)
12. Capital Management
The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and equity comprised of issued share capital.
The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issuances or by undertaking other activities as deemed appropriate under the specific circumstances.
The Company is not subject to externally imposed capital requirements and the Company's overall strategy with respect to capital risk management remains unchanged during the year ended December 31, 2025.
13. Income Taxes
The tax effect (computed by applying the Canadian federal and provincial statutory rate) of the significant temporary differences, which comprise deferred income tax assets and liabilities, are as follows:
| For the year ended December 31, 2025 $ | For the year ended December 31, 2024 $ | |
|---|---|---|
| Statutory income tax rate | 27% | 27% |
| Income tax recovery at statutory rate | (414,307) | (71,484) |
| Temporary differences | 15,973 | 15,723 |
| Change in valuation allowance | 398,334 | 55,761 |
| Income tax expense | – | – |
The Company's tax-effected future income tax assets and liabilities are estimated as follow:
| 2025 $ | 2024 $ | |
|---|---|---|
| Non-capital loss carry forwards | 1,387,414 | 1,316,314 |
| Share issuance costs | 624 | 8,386 |
| Exploration and evaluation assets | 1,051,527 | 716,531 |
| Valuation allowance | (2,439,565) | (2,041,231) |
| Deferred income taxes | – | – |
As of December 31, 2025, the Company has non-capital tax losses of approximately $5,138,000 (2024 – $4,875,000) that may be offset against future Canadian and Mexican taxable income. These losses expire commencing 2036.
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