Serrano Resources Ltd. — Management Reports 2026

Apr 22, 2026

SERRANO RESOURCES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2025

This management discussion and analysis of financial position and results of operations (“MD&A”) is prepared as at April 20, 2026 and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2025 of Serrano Resources Ltd. (“Serrano” or the “Company”) with the related notes thereto. These audited consolidated financial statements have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Readers may also want to refer to the December 31, 2025 audited consolidated financial statements and the accompanying notes. All dollar amounts included therein and in the following MD&A are expressed in Canadian dollars except where noted.

This discussion contains forward-looking statements that involve risks and uncertainties. Such information, although considered to be reasonable by the Company’s management at the time of preparation, may prove to be inaccurate and actual results may differ materially from those anticipated in the statements made. Additional information on the Company is available for viewing on SEDAR+ at www.sedarplus.ca.

Description of Business

Serrano was incorporated pursuant to the provisions of the Business Corporations Act (Alberta) on October 30, 2003. On April 8, 2008, the Company continued its corporate jurisdiction from Alberta to British Columbia. The Company trades under the symbol SC.H and is currently seeking projects for investment.

Going Concern

The Company’s consolidated financial statements have been prepared on the going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. At December 31, 2025, the Company has a deficit of $45,713,495 (2024 - $45,672,348) and has incurred losses since inception. The continuing operations of the Company are dependent upon obtaining necessary financing to meet the Company’s commitments as they come due and to finance future exploration and development of potential business acquisitions, economically recoverable reserves, securing and maintaining title and beneficial interest in the properties and upon future profitable production. Failure to continue as a going concern would require that assets and liabilities be recorded at their liquidation values, which might differ significantly from their carrying values. There is substantial doubt that the Company can meet general operating expenditures requirement due to its limited working capital. There can be no assurances that the Company will be able to raise additional financial resources necessary and/or achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, the Company will be required to curtail operations.

The Company’s business may be affected by changes in political and market conditions, such as interest rates, availability of credit, inflation rates, tariffs, changes in laws, and national and international circumstances. Recent geopolitical events, including and potential economic global challenges such as the risk of higher inflation and energy crises, may create further uncertainty and risk with respect to the prospects of the Company’s business. These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Company’s ability to continue as a going-concern.

There is no assurance that debt or equity financing will be available when needed on terms acceptable to the Company in the future.

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SERRANO RESOURCES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2025

Selected Annual Financial Information

	Year Ended December 31, 2025	Year Ended December 31, 2024	Year Ended December 31, 2023
Total revenues	$ -	$ -	$ -
Loss for the year	(41,147)	(42,761)	(47,921)
Comprehensive loss for the year	(41,147)	(42,761)	(47,921)
Basic and diluted loss per share	(0.00)	(0.00)	(0.00)
Total assets	1,951	3,966	3,019
Total non-current liabilities	-	-	-
Cash dividends	-	-	-

Results of Operation

Years ended December 31, 2025 and 2024

During the year ended December 31, 2025, the Company recorded a net and comprehensive loss of $41,147 (2024 – $42,761) and loss per share of $0.00 (2024 – $0.00).

• Office and general of $1,146 (2024 – $131) increased in the current year.
• Transfer agent and filing fees of $10,056 (2024 – $11,988) decreased due to the timing of transfer agent and filing fees in the current year.

Three months ended December 31, 2025 and 2024

During the three months year ended December 31, 2025, the Company recorded a net and comprehensive loss of $7,268 (2024 – $13,687) and loss per share of $0.00 (2024 – $0.00).

• Transfer agent and filing fees of $Nil (2024 – $6,418) decreased due to the timing of transfer agent and filing fees in the current period.

There are no significant transactions between the two comparative periods.

Quarterly Information

The following table sets forth selected quarterly financial information prepared by management of the Company:

	Three Months Ended December 31 2025	Three Months Ended September 30, 2025	Three Months Ended June 30, 2025	Three Months Ended March 31, 2025
	$	$	$	$
Total assets	1,951	1,969	1,899	4,049
Working capital deficiency	(495,329)	(488,061)	(478,912)	(463,657)
Operating expenses	(7,268)	(9,149)	(15,255)	(9,475)
Loss for the period	(7,268)	(9,149)	(15,255)	(9,475)
Basic and diluted loss per share	(0.00)	(0.00)	(0.00)	(0.00)

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SERRANO RESOURCES LTD.

MANAGEMENT DISCUSSION AND ANALYSIS

YEAR ENDED DECEMBER 31, 2025

	Three Months Ended December 31 2024	Three Months Ended September 30, 2024	Three Months Ended June 30, 2024	Three Months Ended March 31, 2024
	$	$	$	$
Total assets	3,966	3,664	3,559	3,537
Working capital deficiency	(454,182)	(440,495)	(431,279)	(421,666)
Operating expenses	(13,687)	(9,216)	(9,613)	(10,245)
Loss for the period	(13,687)	(9,216)	(9,613)	(10,245)
Basic and diluted loss per share	(0.00)	(0.00)	(0.00)	(0.00)

During the quarter ended December 31, 2025, loss decreased to $7,268 compared to $9,149 for the quarter ended September 30, 2025. The decrease was primarily attributable to transfer agent and filing fees of $Nil (September 30, 2025 - $1,250) due to no transfer agent fees incurred.

During the quarter ended September 30, 2025, loss decreased to $9,149 compared to $15,255 for the quarter ended June 30, 2025. The decrease was primarily attributable to transfer agent and filing fees of $1,250 (June 30, 2025 - $6,599) due to lower transfer agent fees incurred.

During the quarter ended June 30, 2025, loss increased to $15,255 compared to $9,475 for the quarter ended March 31, 2025. The increase was primarily attributable to transfer agent and filing fees of $6,599 (March 31, 2025 - $2,207) due to higher transfer agent fees incurred.

During the quarter ended March 31, 2025, loss decreased to $9,475 compared to $13,687 for the quarter ended December 31, 2024. The decrease was primarily attributable to transfer agent and filing fees of $2,207 (December 31, 2024 - $6,418) due to lower filing fees incurred.

During the quarter ended December 31, 2024, loss increased to $13,687 compared to $9,216 for the quarter ended September 30, 2024. The increase was primarily attributable to transfer agent and filing fees of $6,418 (September 30, 2024 - $1,948) due to higher filing fees incurred.

During the quarter ended September 30, 2024, the loss of $9,216 was comparable to loss of $9,613 for the quarter ended June 30, 2024.

During the quarter ended June 30, 2024, the loss of $9,613 was comparable to the loss of $10,245 for the quarter ended March 31, 2024.

During the quarter ended March 31, 2024, loss increased to $10,245 compared to $8,910 for the quarter ended December 31, 2023. The increase was primarily attributable to professional fees of $8,112 (December 31, 2023 - $7,000) due to higher accounting fees incurred.

Liquidity and Capital Resources

At December 31, 2025, the Company had a working capital deficiency of $495,329 and cash on hand of $1,863 compared to a working capital deficiency of $454,182 and cash on hand of $3,449 at December 31, 2024.

Net cash used in operating activities for the year ended December 31, 2025 was $1,586 compared to net cash provided by operating activities of $814 during the year ended December 31, 2024 primarily due to the changes in the Company's non-cash working capital items.

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SERRANO RESOURCES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2025

To finance future acquisition, exploration, development and operating costs, the Company will require financing from external sources, including from the issuance of new shares, issuance of debt or execution of working interest farm-out agreements. There can be no assurance that such financing will be available to the Company or, if available, that it will be offered on acceptable terms. If additional financing is raised through the issuance of equity or convertible debt securities, control of the Company may change and the interest of shareholders in the net assets of the Company may be diluted. Availability of capital will also directly impact the Company’s ability to take advantage of acquisition opportunities.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Related Party Transactions

The Company incurred the following fees and expenses in the normal course of operations in connection with the following related parties:

	Nature of transactions	Year Ended December 31, 2025	Year Ended December 31, 2024
Related parties:
A Company controlled by a Director	Professional fees	$ 20,000	$ 20,000

The amounts due to related parties included in accounts payable and accrued liabilities are as follows:

	December 31, 2025	December 31, 2024
Due to a Company controlled by a Director	$ 316,403	$ 331,055
Due to a Director of the Company	55,905	10,000
	$ 372,308	$ 341,055

The amounts due to related parties are unsecured, non-interest bearing and due on demand.

Basis of Consolidation and Presentation

The consolidated financial statements have been prepared on a historical cost basis except for certain financial assets measured at fair value. All dollar amounts presented are in Canadian dollars unless otherwise specified.

The consolidated financial statements include the financial statements of Serrano Resources Ltd. and its subsidiary listed in the following table:

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SERRANO RESOURCES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2025

Name of Subsidiary	Country of Incorporation	Proportion of Ownership Interest December 31, 2025	Proportion of Ownership Interest December 31, 2024	Principal Activity
1463411 Alberta Ltd.	Alberta, Canada	100%	100%	Not active

Functional and Presentation Currency

These consolidated financial statements are presented in Canadian dollars, which is the functional currency for the parent company and 1463411 Alberta Ltd.

Forward-Looking Statements

This MD&A contains certain forward-looking statements relating, but not limited to, the Company's operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as "may", "will", "should", "expects", "projects", "plans", "anticipates" or similar expressions suggesting future outcomes.

The Company does not have a history of earnings. These statements represent management's expectations or beliefs concerning, among other things, future performance and financial results and various components thereof. Readers are cautioned not to place undue reliance on forward-looking information because it is possible that predictions, forecasts, projections and other forms of forward-looking assumptions will not be achieved by the Company. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, including but not limited to: changes in business strategies; general economic and business conditions; the effects of competition; changes in laws and regulations, including environmental and regulatory laws; and various events that could disrupt operations. Actual performance and financial results in future periods may differ materially from any projections of future performance or results expressed or implied by forward-looking statements.

The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise, or the foregoing list of factors affecting such information.

Financial Instruments

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 for identical assets and liabilities;

Level 2 – Inputs other than quoted prices that are observable for the assets or liabilities either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

The Company’s primary financial instruments are classified as follows:

Financial instruments
Cash
Accounts payable and accrued liabilities

Classifications
FVTPL
Amortized cost

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SERRANO RESOURCES LTD.

MANAGEMENT DISCUSSION AND ANALYSIS

YEAR ENDED DECEMBER 31, 2025

The fair value of accounts payable and accrued liabilities approximates its carrying amount due to the short term nature except as otherwise noted. The fair value of the Company’s cash constitutes a Level 1 fair value measurement.

The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:

Liquidity risk

Liquidity risk is the risk that the Company cannot meet its financial obligations associated with financial liabilities in full. The Company manages liquidity risk through the management of its capital structure. As at December 31, 2025, the Company had a cash balance of $1,863 to settle current liabilities of $497,280. All of the Company’s financial liabilities have contractual maturities of 30 days or due on demand and are subject to normal trade terms. The Company will require financing from lenders, shareholders and other investors to generate sufficient capital to meet its short term business requirements. The Company is planning additional financings in the near term to raise working capital to finance its ongoing operations.

Credit risk

Credit risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. As at December 31, 2025, the Company’s receivables consisted of $88 in GST receivable from the government authorities in Canada. Substantially all cash balances are held at chartered banks in Canada. The Company believes it has no significant credit risk.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

a) Interest rate risk

The Company has cash balances and no interest-bearing debt. The Company believes it has no significant interest rate risk.

b) Foreign currency risk

The Company is not exposed to changes in foreign exchange rates risk as the Company does not hold financial instruments or are not exposed in foreign currency.

Proposed Transactions

There are no proposed transactions as of the date of this MD&A.

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SERRANO RESOURCES LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2025

Outstanding Share Data

As at April 30, 2026, the Company has:

a) 73,935,683 common shares outstanding;
b) Nil stock options outstanding;
c) Nil warrants outstanding; and
d) Nil common shares subject to escrow.