Silver One Resources Inc.

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Consolidated Annual Financial Statements

For the years ended December 31, 2023 and 2022 (Expressed in Canadian Dollars)

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INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Silver One Resources Inc.

Opinion

We have audited the accompanying consolidated financial statements of Silver One Resources Inc. (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of loss and comprehensive loss, cash flows, changes in shareholders’ equity for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, 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 Consolidated 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 consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current year. 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.

Assessment of Impairment Indicators of Mineral Properties

As described in Note 7 to the consolidated financial statements, the carrying amount of the Company’s mineral properties was $29,936,700 as of December 31, 2023. As more fully described in Note 3 to the consolidated financial statements, management assesses its mineral properties for indicators of impairment at each reporting period.

The principal considerations for our determination that the assessment of impairment indicators of the Company’s mineral properties is a key audit matter are that there was judgment made by management when assessing whether there were indicators of impairment for its mineral properties, specifically relating to the assets’ carrying amount which is impacted by the Company’s intent and ability to continue to explore and evaluate these assets. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of impairment that could give rise to the requirement to prepare an estimate of the recoverable amount of its mineral properties.

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures included, among others:

Evaluating management’s assessment of impairment indicators.
Evaluating the intent for the Company’s mineral properties through discussion and communication with management.
• Reviewing the Company’s recent expenditure activity and expenditure budgets for future periods.
Assessing compliance with agreements and expenditure requirements including reviewing option agreements and vouching share issuances.
Assessing the Company’s rights to explore its mineral properties including sending confirmation requests to optionors to ensure good standing of agreements.
Obtaining, on a test basis through government websites, confirmation of title to ensure mineral rights underlying the mineral properties are in good standing.

Assessment of Reclamation Obligation

As described in Note 10 to the consolidated financial statements, the carrying amount of the Company’s reclamation obligation was $789,551 as of December 31, 2023. As more fully described in Note 3 to the consolidated financial statements, management recognizes provisions for site closure and reclamation in the period in which the obligation is incurred or acquired and measures it based on expected future cash flows to settle the obligation, discounted to their present value.

The principal considerations for our determination that the assessment of reclamation obligation is a key audit matter are that there was judgment made by management in assessing the nature and extent of future work to be performed, the future cost of performing the work, the timing of when the reclamation will take place and economic assumptions such as the discount and inflation rates applied to the future cash outflows associated with site closure and reclamation activities to bring them to their present value. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment.

Obtaining the Company’s assessment of their obligations to reclaim disturbed areas and the estimated future cost of that work.
Assessing the qualifications, competence and objectivity of management’s experts who produced the cost estimates.
Utilizing our internal valuation expert to assess the reasonability of the discount and inflation rates.
Testing the mathematical accuracy of the reclamation obligation model to support the provision balance.
Evaluating and testing, on a sample basis, key assumptions used in the reclamation obligation model and recalculating the present value of the obligation.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained 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 Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, 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.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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 consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the 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 year ended 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 Carmen Newnham.

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Vancouver, Canada February 28, 2024

Chartered Professional Accountants

Silver One Resources Inc. Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

December 31 Note 2023	December 31 2022
$ Assets Current Cash 959,557 Short-term investments 4 278,501 Receivables and prepaid expenditures 5 908,824 Net investment in sublease 9 - Marketable securities 6 143,680	$ 3,065,488 266,174 1,355,345 12,925 445,787
2,290,562 Non-current Mineral properties 7 29,936,700 Property and equipment 40,837 Reclamation deposits 7 3,419,898	5,145,719 27,323,109 62,741 20,645
Total Assets 35,687,997	32,552,214
Liabilities Current Accounts payable and accrued liabilities 8 100,917 Lease obligations 9 - Deferred rent -	220,649 13,079 720
100,917 Non-current Reclamation obligation 10 789,551	234,448 -
Total Liabilities 890,468 Shareholders’ Equity Share capital 11(b) 52,408,840 Share-based payment reserve 11(c) 5,409,683 Accumulated other comprehensive income 370,096 Accumulated deficit (23,391,090)	234,448 46,659,300 4,794,589 1,047,325 (20,183,448)
34,797,529 Total Liabilities and Shareholders’ Equity 35,687,997	32,317,766 32,552,214

Nature of operations and going concern – Note 1 Subsequent events – Notes 7 and 11

APPROVED BY THE DIRECTORS

“Claudia Tornquist” Director “Barry Girling” Director

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

Silver One Resources Inc. Consolidated Statements of Loss and Comprehensive Loss For the years ended December 31, 2023 and 2022

(Expressed in Canadian dollars)

Note 2023	2022
$ Expenses Administrative and office 140,979 Consulting 14 335,936 Depreciation 20,910 Director fees 14 78,000 Exploration and evaluation 20,592 Filing and listing fees 97,268 Professional fees 14 215,813 Salaries and benefits 14 286,460 Share-based payments 11(c),14 615,094 Shareholder communications 393,382 Travel and related costs 262,020	$
	99,117
	225,174
	31,775
	72,000
	747
	68,684
	143,164
	299,405
	1,071,232
	382,094
	183,729
Loss before other items (2,466,454) Foreign exchange (loss) gain (64,424) Finance charge on leases 9 (86) Income from sublease of office 9 85 Interest and other income 62,844 Impairment of mineral properties 7 - Loss on marketable securities 6 (302,107) Impairment of receivables 5 (437,500)	(2,577,121) 50,328 (7,621) 7,289 127,966 (544,252) (1,032,445) (122,832)
Net loss for the year (3,207,642) Other comprehensive (loss) income for the year Currency translation adjustment (677,229)	(4,098,688) 1,710,292
Comprehensive loss for the year (3,884,871) Loss per share Basic and diluted (0.01)	(2,388,396) (0.02)
Weighted average number of shares outstanding Basic and diluted 236,988,081	214,500,939

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

Silver One Resources Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2023 and 2022

(Expressed in Canadian dollars)

2023	2022
$ Cash (used in) provided by: Operating activities Net loss for the year (3,207,642) Depreciation 20,910 Share-based payments 615,094 Unrealized foreign exchange 18,825 Loss on marketable securities 302,107 Interest on long-term receivables (5,944) Impairment of receivables 437,500 Impairment of mineral properties - Changes in working capital items Receivables and prepaid expenditures 14,965 Net investment in sublease 12,925 Accounts payable and accrued liabilities (2,350) Deferred rent (720)	$ (4,098,688) 31,775 1,071,232 (140,099) 1,032,445 (72,102) 122,832 544,252 (32,455) 148,833 (190,336) (8,643)
(1,794,330)	(1,590,954)
Investing activities Mineral property expenditures (1,831,605) Purchase of reclamation deposits (3,434,160) Property and equipment expenditures - Purchase of short-term investments (12,327)	(5,417,549) - (8,223) (4,662)
(5,278,092)	(5,430,434)
Financing activities Issuance of shares pursuant to private placement 5,000,000 Cash share issuance costs (7,960) Repayment of lease obligation (13,079) Proceeds from exercise of warrants - Proceeds from exercise of options -	- - (163,527) 1,371,722 44,000
4,978,961	1,252,195
Effect of foreign exchange on cash (12,470)	125,789
Decrease in cash (2,105,931) Cash- beginning of year 3,065,488	(5,643,404) 8,708,892
Cash - end ofyear 959,557	3,065,488

Supplemental cash flow information – Note 15

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

Consolidated Statements of Changes in Shareholders’ Equity

(Expressed in Canadian dollars)

Number of common shares Share capital Share-based payment reserve AOCI Accumulated deficit	Total
$ $ $ $ Balance, December 31, 2021 208,608,596 44,315,713 3,738,722 (662,967) (16,084,760) Share-based payments - - 1,071,232 - - Shares issued on Silver Phoenix option agreement 2,500,000 912,500 - - - Exercise of options 200,000 59,365 (15,365) - - Exercise of warrants 6,408,611 1,371,722 - - - Net loss for the year - - - - (4,098,688) Cumulative translation adjustment - - - 1,710,292 -	$ 31,306,708 1,071,232 912,500 44,000 1,371,722 (4,098,688) 1,710,292
Balance, December 31, 2022 217,717,207 46,659,300 4,794,589 1,047,325 (20,183,448) Shares issued from private placement 23,809,524 5,000,000 - - - Less: Share issue costs - (7,960) - - - Share-based payments - - 615,094 - - Shares issued on Silver Phoenix option agreement 3,000,000 675,000 - - - Shares issued on Candelaria agreement 250,000 82,500 - - - Net loss for the year - - - - (3,207,642) Cumulative translation adjustment - - - (677,229) -	32,317,766 5,000,000 (7,960) 615,094 675,000 82,500 (3,207,642) (677,229)
Balance, December 31, 2023 244,776,731 52,408,840 5,409,683 370,096 (23,391,090)	34,797,529

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

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

1. Nature of operations and going concern

Silver One Resources Inc. (the “Company” or "Silver One") was incorporated pursuant to the provisions of the Business Corporations Act (British Columbia) on June 8, 2007.

The Company’s principal activities include the acquisition, exploration and development of mineral properties. The Company owns a 100% interest in the Candelaria silver project (the “Candelaria Project” or “Candelaria”) and a 100% interest in the Cherokee project (“Cherokee Project” or “Cherokee”) both located in Nevada. The Company also has an option agreement to acquire a 100% interest in the Phoenix Silver property in Arizona (“Phoenix Silver Property” or “Phoenix Silver”).

These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to meet its obligations and continue its operations for the next twelve months. As at December 31, 2023, the Company had an accumulated deficit of $23,391,090, and expects to incur further losses in the development of the business. As a result, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependant on its ability to obtain necessary financing to meet its corporate and deferred exploration expenditures and discharge its liabilities in the normal course of business. Although the Company has been successful in obtaining financing in the past, there can be no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. The Company has adequate financial resources for the next twelve months with working capital of $2,189,645.

Should the Company be unable to continue as a going concern, asset realization values may be substantially different from their carrying values. These consolidated financial statements do not give effect to adjustments that would be necessary to carrying values and the classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

Silver One is a public company listed on the TSX Venture Exchange (“TSX-V”) under the symbol “SVE”, on the OTCQX Marketplace under the symbol “SLVRF”, and on the Frankfurt Stock Exchange under the symbol “BRK1”.

The Company’s corporate office is located at Suite 1000, 1055 W Hastings St., Vancouver, BC Canada, V6E 2E9.

2. Basis of preparation

Statement of compliance and functional currency

These consolidated financial statements have been presented in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB’), effective for the Company’s reporting for the year ended December 31, 2023.

These consolidated financial statements were approved by the Board of Directors and authorized for issuance on February 28, 2024.

Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments that are measured at fair value. In addition, the consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow disclosure.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Basis of preparation (continued)

Statement of compliance and functional currency (continued)

Functional and presentation currency

These consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company’s Canadian entity. The functional currency of the Company’s foreign subsidiaries is US dollars.

The functional currency of an entity is translated into the presentation currency using the period-end rates for assets and liabilities while the operations and cash flows are translated using average rates of exchange. Exchange adjustments arising when net assets and profit or loss are translated into the presentation currency are taken into a separate component of equity and reported in other comprehensive income (loss).

Transactions in currencies other than the functional currency of an entity are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting date, monetary assets and liabilities are translated using the period end foreign exchange rate. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. Non-monetary assets and liabilities stated at fair value are translated using the historical rate on the date that the fair value was determined. All gains and losses on translation of these foreign currency transactions are included in profit or loss.

Basis of consolidation

The Company’s subsidiary as at December 31, 2023 is as follows:

The Company’s subsidiary as at December 31, 2023 is as	follows:
Name	Place of Incorporation	Ownership Percentage
Silver One Resources (USA) Inc.	USA	100%

3. Material accounting policies

These consolidated financial statements have been prepared using the following material accounting policies:

Financial assets and liabilities

a) Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss (“FVTPL”), at fair value through other comprehensive income (loss) (“FVTOCI”) or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company’s business model for managing the financial assets and their contractual cash flow characteristics.

Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them 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.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

3. Material accounting policies (continued)

Financial assets and liabilities (continued)

b) Measurement

Financial assets at FVTOCI

Elected investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses recognized in other comprehensive income (loss).

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in profit or loss in the period in which they arise. Where management has opted to recognize a financial liability at FVTPL, any changes associated with the Company’s own credit risk will be recognized in other comprehensive income (loss).

c) Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost.

At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the consolidated statements of loss and comprehensive loss as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

d) Derecognition

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the consolidated statements of net (loss) income. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).

The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in the consolidated statements of loss and comprehensive loss.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

3. Material accounting policies (continued)

Property and equipment

On initial recognition, equipment is valued at cost, being the purchase price and directly attributable cost of acquisition or construction required to bring the asset to the location and condition necessary to be capable of operating in the manner intended by the Company. Equipment is subsequently measured at cost less accumulated depreciation, less any accumulated impairment losses.

Depreciation is recognized in profit or loss and is provided on a straight-line basis over 5 years for office furniture and equipment, over the life of the lease for right-of-use assets, and 5 years for leasehold improvements. Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Mineral properties

Once the legal right to explore a property has been acquired, costs directly related to exploration and evaluation expenditures are recognized and capitalized, in addition to the acquisition costs. These direct expenditures include such costs as mineral concession taxes, option payments, wages and salaries, surveying, geological consulting and laboratory, field supplies, travel and administration. Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the period in which they are incurred. Exploration and evaluation properties are not amortized during the exploration and evaluation stage. Once the technical feasibility and commercial viability of extracting the mineral resource has been determined, the property is considered to be a mine under development and is classified as ‘mines under construction’.

Impairment of non-financial assets

Non-financial assets, including mineral properties are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which is the higher of value in use and fair value less costs to sell, the asset is written down to its recoverable amount. An impairment loss is charged to profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset 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 had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in the consolidated statements of loss and comprehensive loss.

The recoverable amount is the higher of the fair value less costs of disposal and the value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (“cash generating units” or “CGU”s). These are typically the individual properties or projects.

Reclamation obligation

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 is a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the liability.

When an obligation is initially recognized, the corresponding cost is capitalized to the carrying amount of the related asset. These costs are depreciated on a basis consistent with the depreciation, depletion, and amortization of the underlying assets.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

3. Material accounting policies (continued)

Reclamation obligation (continued)

The obligation is accreted over time for the change in its present value, with this accretion charge recognized as a finance expense in the consolidated statements of loss and comprehensive loss. Additional environment disturbances or changes in reclamation costs will be recognized as additions to the corresponding assets and reclamation provision in the year in which they occur.

Leases

At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Leases of right-of-use assets are recognized at the lease commencement date at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, and otherwise at the Company’s incremental borrowing rate. At the commencement date, a right-of-use asset is measured at cost, which is comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any decommissioning and restoration costs, less any lease incentives received.

Each lease payment is allocated between repayment of the lease principal and interest. Interest on the lease liability in each period during the lease term is allocated to produce a constant periodic rate of interest on the remaining balance of the lease liability. Except where the costs are included in the carrying amount of another asset, the Company recognizes in profit or loss (a) the interest on a lease liability and (b) variable lease payments not included in the measurement of a lease liability in the period in which the event or condition that triggers those payments occurs. The Company subsequently measures a right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses; and adjusted for any remeasurement of the lease liability. Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term, except where the lease contains a bargain purchase option a right-of-use asset is depreciated over the asset’s useful life.

When the Company subleases a right-of-use asset, the Company classifies the sublease as an operating lease if the head lease is a short-term lease. Otherwise, the sublease is classified as a finance lease. When the sublease is classified as a finance lease, the lessor derecognizes the right-of-use asset pertaining to the head lease that it transfers to the sublessee, at the commencement date, but continues to account for the original lease liability. The sublessor recognizes a net investment in sublease and evaluates it for impairment and may use the discount rate in the head lease to measure the net investment in sublease. The Company recognizes finance income on the net investment in sublease, and also records income relating to variable lease payments not included in the measurement of the net investment in the lease.

Share-based payments

Common shares issued for non-monetary consideration are recorded at the fair value of the goods or services received. When the value of goods or services received in exchange for share-based payments cannot be reliably estimated, the value is measured by reference to the trading price of the Company’s shares on the TSX-V on the date of the agreement to issue the shares. If market prices are not available, fair value is measured by use of a valuation model. The Company has a stock option plan (Note 11(c)), whereby stock options are granted in accordance with the policies of regulatory authorities.

The Company records a compensation cost attributable to all share purchase options granted at fair value at the grant date using the Black-Scholes valuation model and the fair value of all share purchase options are expensed over their vesting period with a corresponding increase to share-based payment reserve. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in share-based payment reserve, is recorded as an increase to share capital.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

3. Material accounting policies (continued)

Share capital

The Company’s common shares, share warrants and options are classified as equity instruments. Incremental costs directly related to the issue of new shares or options are shown in equity as a deduction from the proceeds. For equity offerings of units consisting of a common share and warrant, when both instruments are classified as equity, the Company does not bifurcate the proceeds between the common share and the other equity instruments.

Income taxes

Income taxes comprises both current and deferred tax. Income tax is recognized in the statement of loss except to the extent that it relates to items recognized in other comprehensive income or directly in equity, in which case the income tax is also recognized in other comprehensive income or directly in equity.

Current income taxes are the expected taxes payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to taxes payable in respect of previous years.

The Company accounts for potential future net tax assets which are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and which are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be settled. When the future realization of income tax assets does not meet the test of being more likely than not to occur, no net asset is recognized. No potential income tax assets of the Company have been recognized.

Loss per share

Basic loss per share is calculated by dividing the net loss for the period available to common shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in earnings of an entity. Basic and diluted loss per share are the same for the periods presented. The Company uses the treasury stock method of calculating fully diluted loss per share amounts, whereby any proceeds from the exercise of stock options or other dilutive instruments are assumed to be used to purchase common shares at the average market price during the period.

Segment reporting

The Company has identified its operating segments based on the internal reports that are reviewed and used by the chief executive officer and the executive management, collectively the chief operating decision maker, in assessing performance and in determining the allocation of resources.

Critical judgments in applying accounting policies

The critical judgments that the Company’s management has made in the process of applying the Company’s accounting policies with the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:

a) Functional currency

The functional currency for the Company and its subsidiaries is the currency of the primary economic environment in which the entity operates. Determination of functional currency involves certain judgments to determine the primary economic environment of an entity and this is re-evaluated for each new entity following an acquisition, or if events and conditions change.

b) Impairment of mineral properties

Expenditures on mineral properties are capitalized. The Company makes estimates and applies judgment about future events and circumstances in determining whether the carrying amount of a mineral property exceeds its recoverable amount. The recoverability of amounts shown as mineral properties and deferred exploration costs 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.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

3. Material accounting policies (continued)

Critical judgments in applying accounting policies (continued)

b) Impairment of mineral properties (continued)

Management reviews the carrying values of its mineral properties 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, capitalized costs related to relinquished property rights are written off in the period of relinquishment. Capitalized costs in respect of the Company’s mineral properties may not be recoverable and there is a risk that these costs may be written down in future periods.

c) Impairment of financial assets

The expected credit losses for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the available information.

d) Determining amount and timing of rehabilitation costs

Management must determine if estimates of the future costs the Company will incur to complete the rehabilitation work is required to comply with existing laws, regulations and agreements in place at each exploration site. Actual costs incurred may differ from those amounts estimated. Future changes to environmental laws and regulations could increase the extent of rehabilitation work required by the Company. Management determined at the date of the consolidated statements of financial position that no material rehabilitation provisions were required under IAS 37, Provisions, Contingent Liabilities, and Contingent Assets .

e) Going concern

In preparing these consolidated financial statements on a going concern basis, as is disclosed in Note 1 of these consolidated financial statements, management’s critical judgment is that the Company will be able to meet its obligations and continue its operations for the next twelve months.

Key sources of estimation uncertainty

The preparation of consolidated financial statements requires that the Company’s management make assumptions and estimates of effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Actual future outcomes could differ from present estimates and assumptions, potentially having material future effects on the Company’s consolidated financial statements. Estimates are reviewed on an ongoing basis and are based on historical experience and other facts and circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.

The significant assumptions about the future and other major sources of estimation uncertainty as at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amounts of the Company’s assets and liabilities are as follows:

a) Deferred income taxes

Deferred income tax assets and liabilities are measured using enacted or substantively enacted tax rates at the reporting date in effect for the period in which the temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized as part of the provision for income taxes in the period that includes the enactment date. The recognition of deferred income tax assets is based on the assumption that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

3. Material accounting policies (continued)

Key sources of estimation uncertainty (continued)

b) Share-based payments

‐ Share-based payments are determined using the Black Scholes option pricing model based on estimated fair values of all share ‐ based awards at the date of grant and are expensed to the consolidated statements of loss and ‐ comprehensive loss over each award’s vesting period. The Black Scholes option pricing model utilizes subjective assumptions such as expected price volatility, expected life of the option, risk free interest rates, and forfeiture rates. Changes in these input assumptions can significantly affect the fair value estimate.

c) Impairment of mineral properties

The Company applies significant estimates when performing impairment tests on mineral properties. Should these estimates prove to be incorrect, this could result in material differences in the Company’s impairment testing and conclusions reached therein.

d) Impairment of financial assets

The expected credit losses for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses forward-looking estimates to input into the impairment calculation.

Accounting standards issued but not yet effective

In October 2022, the IASB issued amendments to IAS 1, Presentation of Financial Statements – Classification of Liabilities as Current or Non-Current and Noncurrent Liabilities with Covenants . These amendments increase the disclosure required to enable users of financial statements to understand the risk that non-current liabilities with covenants could become repayable within 12 months. The amendments are effective January 1, 2024, with early adoption permitted. Retrospective application is required on adoption. We do not expect these amendments to have a material effect on our consolidated financial statements.

As at December 31, 2023, there are no other IFRS Accounting Standards with future effective dates that are expected to have a material impact on the Company.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

4. Short-term investments

Short-term investments of $278,501 (December 31, 2022 - $266,174) include highly liquid money market funds and redeemable GIC investments in an active market with original maturities of one year or less.

5. Receivables and prepaid expenditures

December 31 2023	December 31 2022
$ GST receivable 5,209 Other receivables - Short-term receivable from sale of KCP1 812,500 Prepaid expenditures2 91,115	$ 6,091 14,123 1,244,056 91,075
908,824	1,355,345

1 Short-term receivable from sale of KCP includes an amount owing as described below plus an expected credit loss applied of $437,500

2 Prepaid expenditures primarily include amounts in connection with insurance, investor relations conferences and marketing activities.

Short-term receivable from sale of KCP

On March 3, 2021, the Company completed the sale of its subsidiary, KCP Minerals Inc. (“KCP”), which through its 100% interest in Minera Terra Plata S.A. de C.V. held the Company’s three Mexican silver exploration projects to Lodestar Battery Metals Corp. (“Lodestar”) (formerly Silverton Metals Corp.) (the “KCP Purchase Agreement”).

Under the terms of the KCP Purchase Agreement, the Company transferred to Lodestar its 100% interest in KCP and, in consideration, Lodestar will pay in cash and shares as follows: (a) $1,250,000 in cash upon closing (received); (b) issue 4,375,000 common shares of Lodestar to the Company (issued); (c) pay $750,000 in cash 18 months after closing; and (d) pay $500,000 in cash 24 months after closing (as at the date of filing both of these amounts are in arrears).The common shares received are subject to an escrow release schedule where 10% of shares will be released on April 6, 2021 and 15% will be every 6 months thereafter for a period of 36 months.

The $750,000 to be received 18 months from the date of sale and the $500,000 to be received 24 months from the date of sale were initially recorded as long-term receivables. The amount was discounted to its present value using a borrowing rate of 8% and at December 31, 2023 was $1,250,000 (December 31, 2022 - $1,244,056). As at December 31, 2023 and December 31, 2022, the entire amount was included in current assets.

The Company assesses annually the expected credit losses associated with its accounts receivable balances. The impairment methodology applied depends on whether there has been a significant increase in credit risk. As at December 31, 2023, given the credit risk determined to be present, the Company applied an expected credit loss against the outstanding balance of $437,500.

6. Marketable securities

December 31 2023	December 31 2022
$ Beginning balance 445,787 Unrealized loss on marketable securities (302,107)	$ 1,478,232 (1,032,445)
143,680	445,787

Marketable securities includes 4,375,000 common shares received as part of the KCP Purchase Agreement (note 5) as well as 414,331 shares held in Hello Pal International that were received as shares-for-debt in 2020.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

7. Mineral properties

Balance December 31 2023	Additions December 31 2023 Balance December 31 2022 Additions December 31 2022	Balance December 31 2021
$ Candelaria Option payments – shares 3,831,678 Acquisition costs – shares 467,072 Acquisition costs – cash 115,150 Consulting fees 3,756,077 Drilling 7,332,365 Field supplies and other costs 506,905 Laboratory and analysis fees 2,035,398 Land payments 1,739,019 Staking and survey costs 211,474 Travel and accommodation 977,207 Reclamation obligation 789,551 Currency translation 572,509	$ $ $ - 3,831,678 - 82,500 384,572 - - 115,150 - 430,760 3,325,317 1,108,255 - 7,332,365 2,398,168 61,303 445,602 178,151 322,117 1,713,281 579,910 312,785 1,426,234 409,936 - 211,474 83,751 74,617 902,590 333,032 789,551 - - (478,397) 1,050,906 1,265,630	$ 3,831,678 384,572 115,150 2,217,062 4,934,197 267,451 1,133,371 1,016,298 127,723 569,558 - (214,724)
22,334,405 Phoenix Silver Acquisition costs - cash 487,609 Acquisition costs - shares 2,757,500 Consulting fees 514,208 Field supplies and other costs 6,626 Laboratory and analysis fees 16,786 Land payments 527,282 Staking and survey costs 161,483 Travel and accommodation 19,408 Currency translation 70,454	1,595,236 20,739,169 6,356,833 - 487,609 - 675,000 2,082,500 912,500 70,378 443,830 31,356 197 6,429 4,669 5,765 11,021 - 224,161 303,121 80,868 61,619 99,864 - 7,608 11,800 776 (102,276) 172,730 231,083	14,382,336 487,609 1,170,000 412,474 1,760 11,021 222,253 99,864 11,024 (58,353)
4,561,356 Cherokee Consulting fees 763,920 Drilling 439,312 Field supplies and other costs 73,199 Laboratory and analysis fees 133,917 Land payments 1,243,054 Staking and survey costs 125,450 Travel and accommodation 186,213 Currency translation 75,874	942,452 3,618,904 1,261,252 3,148 760,772 28,729 - 439,312 - 622 72,577 4,367 - 133,917 - 138,338 1,104,716 138,352 - 125,450 - 805 185,408 1,487 (67,010) 142,884 184,608	2,357,652 732,043 439,312 68,210 133,917 966,364 125,450 183,921 (41,724)
3,040,939 Eastern Nevada Consulting fees 221,614 Field supplies and other costs 6,469 Laboratory and analysis fees 7,161 Land payments 246,129 Staking and survey costs 8,970 Travel and accommodation 27,849 Currency translation 26,060 Impairment (544,252)	75,903 2,965,036 357,543 - 221,614 20,538 - 6,469 389 - 7,161 - - 246,129 44,377 - 8,970 - - 27,849 - - 26,060 33,254 - (544,252) (544,252)	2,607,493 201,076 6,080 7,161 201,752 8,970 27,849 (7,194) -
-	- -(445,694)	445,694
Total 29,936,700	2,613,591 27,323,109 7,529,934	19,793,175

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

7. Mineral properties (continued)

Candelaria Option Agreement

On January 16, 2017, the Company entered into an option agreement (the “Option Agreement”) with a subsidiary of SSR Mining Inc. (“SSR”), to acquire a 100% interest in the Candelaria silver project (the “Candelaria Project or “Candelaria”) located in Nevada, USA.

In order to exercise the option, the Company was required to:

issue US$1,000,000 in shares to SSR on the date that the parties satisfy the conditions to the Agreement, including obtaining final approval of the TSX-V (the “Effective Date”) (paid);
issue an additional US$1,000,000 in shares on each of the three anniversaries of the Effective Date (first and second year anniversary payments paid); and
assume the US$2,000,000 reclamation bond on the property immediately prior to exercise of the option (assumed with value of US$2,491,757).

Upon satisfying the terms set forth above, the Company would earn a 100% interest in the property subject to a 3% net smelter returns royalty payable to Teck Resources USA on production from a certain claims group of the property and a charge of $0.01 per ton payable for waste rock dumped on certain claims.

The Company issued 1,332,900 common shares at a fair value price of $1.00 per share to satisfy the initial option payment of US$1,000,000, the Company issued 2,828,636 common shares at a fair value of $0.44 per share in order to satisfy the first anniversary payment of US$1,000,000, and the Company issued 5,827,338 common shares at a fair value of $0.215 to satisfy the second anniversary payment of US$1,000,000. It was further obligated to issue an additional US$1,000,000 worth of Silver One shares in January 2020. However, Silver One entered into an agreement with SSR and Maverix Metals Inc. (“Maverix”) whereby:

Silver One will assume a Production Payment obligation by SSR to Maverix (formerly to Kinross). For this, SSR agreed to relinquish the option payment of US$1,000,000 in shares of Silver One and instead received US$100,000 in units of Silver One (issued). This agreement obliges Silver One to assume the obligation to pay Maverix US$1,000,000 upon Candelaria achieving commercial production of not less than 2,500,000 ounces of silver per annum (the “Production Payment”).
In consideration of Maverix agreeing to Silver One’s assumption of the Production Payment, Maverix will receive US$100,000 in units of Silver One.
Maverix has agreed to amend the Production Payment so that Silver One may satisfy it with US$500,000 cash and $500,000 in shares of Silver One on the first anniversary after commencement of commercial production at Candelaria.

Each unit is comprised of one share of Silver One and one-half of one share purchase warrant (each a “Warrant”) with each whole Warrant entitling the holder to purchase one additional share at a price of $0.40 per share for a period of three years.

On July 25, 2019, the Company amended the Candelaria Option Agreement (“Amended Agreement”). The Amended Agreement deferred the assumption of the bond obligation by the Company until January 2023. In December 2022, the Amended Agreement was further amended to extend the assumption of the bond obligation by Silver One by an additional sixty days, and in April 2023, the parties extended the period for the assumption of the bond obligation by Silver One until May 28, 2023. The Company issued 250,000 common shares to SSR for the amendment of the Candelaria Option agreement to extend the option end date.

During the year ended December 31, 2023, the Company assumed the reclamation bond of $3,300,756 (US$2,491,757) and on May 31, 2023, the Company acquired a 100% interest in Candelaria without a royalty payable to SSR. As at December 31, 2023, the reclamation bond is included in reclamations deposits on the statement of financial position.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

7. Mineral properties (continued)

Additional Candelaria claims acquired

In March 2018, the Company entered into an agreement to acquire 10 non-patented mineral claims located along the eastern structural projection of the Candelaria mineralized system. These claims are located immediately east of the former producing Mount Diablo open pit. Silver One has acquired these claims for the consideration of US$10,000 plus the issuance of 38,235 common shares at a fair value of $0.34 per share (total of US$10,000).

In November 2019, the Company acquired an additional three patented claims, located within the company’s claims. Consideration for these patents consisted of US$75,000 cash (paid) and US$5,000 in shares (issued), subject to a 2% NSR that can be purchased for US$50,000 plus US$5,000 in Silver One’s shares issued at market price on the date of the issuance.

Phoenix Silver Acquisition

On February 4, 2020 (the “Effective Date”), the Company entered into an agreement (the “Phoenix Silver Agreement”) with Granite-Solid LLC (the “Optionor”) whereby the Company has the option to acquire a 100% interest in the Phoenix Silver Property. The Phoenix Silver Property consists of 86 unpatented lode claims and 2 unpatented placer claims, located in Gila County, Arizona.

The Company may exercise the option by making the following cash payments and share issuances:

paying the Optionor US$350,000 within five days of TSX-V acceptance of the Phoenix Silver Agreement (the “Effective Date”) (paid); and
issuing the Optionor: (i) 500,000 shares on the date that is six (6) months from the Effective Date (issued); (ii) 1,000,000 shares on the date that is twelve months from the Effective Date (issued); (iii) 2,500,000 shares on the date that is twenty-four months from the Effective Date (issued); (iv) 3,000,000 shares on the date that is thirty-six months from the Effective Date (issued); and (v) 3,000,000 shares on the date that is fortyeight months from the Effective Date (issued subsequent to year end).

The Phoenix Silver Agreement is subject to a five-mile area of interest. Further, after two years of the Effective Date, Silver One has the right to require the Optionor to include other unpatented placer claims under this Phoenix Silver Agreement for no additional consideration.

The Phoenix Silver Property is subject to an underlying 2% Net Smelter Royalty (“NSR”) to the original prospectors of the project. Each 1% NSR may be purchased for US$500,000 resulting in a total of US$1,000,000 for the entire underlying NSR.

On February 8, 2024 the Company announced that it had exercised its option to acquire a 100% interest in the Phoenix Silver Project.

Signing of lease/purchase agreement on five patented claims at the Cherokee Project

In July 2018, the Company entered into a lease/purchase agreement with Castelton Park LLC (“Castelton”) of Sparks, Nevada to acquire five patented claims at its Cherokee Project. These patents lie within the Company’s Cherokee claim holdings in Lincoln County located in eastern Nevada.

The terms of the Lease/Purchase Agreement include three payments over a 2-year lease, consisting of a payment for US$23,125 upon execution of the agreement (paid), US$34,688 on the first anniversary (paid) and US$24,687 on the second anniversary (paid). This provides Silver One with a 100% interest in all patented claims. Castelton will also receive a payment of US$100,000 for every 7.5 million silver equivalent ounces of mineral resources calculated on the property, subject to a maximum of US$1,000,000.

Impairment of Eastern Nevada

During the year ended December 31, 2022, the Company booked an impairment of $544,252 on the Eastern Nevada property as it focuses its attention on the Candelaria, Phoenix Silver and Cherokee projects.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

8. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities
	December 31	December 31
	2023	2022
	$	$
Accounts payable	52,573	179,905
Accrued liabilities	48,344	40,744
	100,917	220,649

Accounts payable include amounts owing for consulting, exploration, and general corporate expenditures. Accrued liabilities include an accrual of audit fees and other administrative expenses.

9. Lease obligations

The Company entered into an office lease on February 2018. The terms and the outstanding balances as at December 31, 2023 and 2022 are as follows:

December 31, 2023 and 2022 are as follows:
	December 31	December 31
	2023	2022
	$	$
Right-of-use asset from office lease repayable in monthly
instalments between $10,676 and $14,878, an interest rate of
7.71% per annum and an end date of January 2023.	-	13,079
Total lease obligations	-	13,079
Less:current portion	-	(13,079)
Non-currentportion	-	-

During the year ended December 31, 2023, the lease obligation was paid in full. The Company has entered into a new office lease with no set term. During the year ended December 31, 2023, the Company incurred $32,514 (2022 - $nil) in rental costs which have been expensed and included in administrative and office expenses.

Sublease of office space

The Company entered into an agreement to sublease one of its office spaces beginning on December 1, 2020 through January 31, 2023 for approximately $157,000 per annum including the base rent, property tax and operating expenses. The right-of-use asset related to the office was derecognized and a net investment in sublease was set up.

The Company also subleases part of their office space on a month-to-month basis to other companies. The total lease income from the subleasing of the office for the year ended December 31, 2023 was $85 (2022 - $7,289).

During the year ended December 31, 2023, the Company recorded $86 (2022 - $7,621) of interest expense related to the leases.

As at December 31, 2023 and 2022 the net investment in sublease was made up of the following:

December 31 2023	December 31 2022
Net investment in sublease $ Short-term -	$ 12,925
Total receivables -	12,925

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

10. Reclamation obligation

The reclamation obligation is related to the Candelaria Project and is estimated based upon the present value of expected cash flows using estimates of inflation and risk-free discount rate. The undiscounted amount of cash flows required to settle the reclamation obligation was estimated at $3,300,756 (US$2,491,757) as at December 31, 2023 (December 31, 2022 – $nil).

The key assumptions on which the provision estimates were based on for the year ended December 31, 2023 were:

Expected timing of the cash flows between 2047-2051 based on the expected life of the Candelaria Project
• An inflation rate of 2.00%
A discount rate of 7.96%

The following table provides a summary of changes in the reclamation obligation:

	Reclamation
	Obligation
	$
Balance as at December 31, 2021 and 2022	-
Assumptionofbond	789,551
Balance as at December 31, 2023	789,551

11. Share capital

a) Authorized: Unlimited common shares without par value.

b) Shares issued

Common shares: 244,776,731 (December 31, 2022 – 217,717,207).

During the year ended December 31, 2023, the Company:

Issued 23,809,524 common shares of the Company in a non-brokered private placement financing at a price of $0.21 per share for aggregate gross proceeds of $5,000,000;
Issued 3,000,000 common shares valued at $675,000 pursuant to the Phoenix Silver Agreement (Note 7); and
Issued 250,000 common shares as consideration for extending the Candelaria Option Agreement (Note 7).

During the year ended December 31, 2022, the Company:

Issued 2,500,000 common shares valued at $912,500 pursuant to the Phoenix Silver Agreement (Note 7);
Issued 200,000 common shares for the exercise of options in the amount of $44,000. A value of $15,365 was transferred from the share-based payment reserve to share capital as a result; and
Issued 6,408,611 common shares for the exercise of warrants in the amount of $1,371,722.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

11. Share capital (continued)

c) Options

The Company has adopted a share option plan that allows for the issuance of up to 10% of the issued and outstanding shares as incentive share options to directors, officers, employees and consultants to the Company. Share options granted under the plan may be subject to vesting provisions as determined by the Board of Directors.

The vesting provisions of all options are the following: 25% - 6 months from the grant date, 35% - 1 year from the grant date, and 40% - 1.5 years from the grant date.

The Company’s share options outstanding as at December 31, 2023 and 2022 and the changes for the periods then ended are as follows:

ended are as follows:
		Weighted average
	Number	exercise price
		$
Balance as at December 31, 2021	10,293,500	0.56
Granted – January 20, 2022	100,000	0.45
Granted – April 26, 2022	300,000	0.45
Granted – August 25, 2022	2,590,000	0.33
Exercised	(200,000)	0.22
Expired	(975,000)	0.55
Balance as at December 31, 2022	12,108,500	0.52
Granted – March 13, 2023	150,000	0.30
Granted – July 27, 2023	1,995,000	0.40
Granted – October 15, 2023	200,000	0.25
Forfeited	(150,000)	0.30
Expired	(1,235,500)	0.40
Balance as at December 31, 2023	12,868,000	0.51

The total share-based payment expense recorded during the year ended December 31, 2023 was $615,094 (2022: $1,071,232).

The following table summarizes information about the share options as at December 31, 2023:

Exercise price per share of options outstanding	Number of options outstanding	Weighted average remaining life (years)	Number of options exercisable	Expiry date
$0.26	2,048,000	0.55	2,048,000	July 19, 2024
$0.30	60,000	0.79	60,000	October 15, 2024
$0.70	2,575,000	1.75	2,575,000	September 28, 2025
$0.65	100,000	2.08	100,000	January 28, 2026
$0.67	100,000	2.19	100,000	March 9, 2026
$0.75	50,000	2.31	50,000	April 23, 2026
$0.75	2,950,000	2.43	2,950,000	June 6, 2026
$0.45	100,000	3.06	100,000	January 20, 2027
$0.45	300,000	3.32	300,000	April 26, 2027
$0.33	2,590,000	3.65	1,554,000	August 25, 2027
$0.40	1,995,000	4.58	-	July 27, 2028
$0.25	200,000	4.79	200,000	October 15, 2028

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

11. Share capital (continued)

The fair value of options recognized in the period has been estimated using the Black-Scholes Pricing Model with the following assumptions on the grant date of the options:

Issue date	Expected Option	Risk free	Dividend	Expected	Weighted average
	life (years)	interest rate	yield	volatility1	fair value
January 20, 2022	5.00	1.59%	nil	87%	$0.29
April 26, 2022	5.00	2.92%	nil	87%	$0.27
August 25, 2022	5.00	3.32%	nil	88%	$0.22
March 13, 2023	5.00	2.82%	Nil	89%	$0.19
July 27, 2023	5.00	3.88%	Nil	89%	$0.25
October 15, 2023	5.00	4.28%	Nil	89%	$0.16

Note 1: The volatility used is the Company’s own share volatility for a period equal to the life of the options.

d) Warrants

The Company’s warrants outstanding as at December 31, 2023 and 2022 and the changes for the periods then ended are as follows:

ended are as follows:
		Weighted average
	Number	exercise price
		$
Balance as at December 31, 2021	34,302,440	0.39
Exercised	(6,408,611)	0.20
Expired	(8,730,000)	0.20
Balance as at December 31, 2022	19,163,829	0.53
Expired	(675,160)	0.45
Balance as at December 31, 2023	18,488,669	0.54

The balance of warrants outstanding as at December 31, 2023 is as follows:

	Exercise	Remaining Life	Warrants
Expiry Date	Price $	(Years)	Outstanding
January 13, 2024	0.40	0.04	4,576,000
January 17, 2024	0.40	0.05	3,721,000
July 14, 2024	0.65	0.54	10,191,669

Subsequent to December 31, 2023, the Company extended the warrant life of the 4,576,000 warrants with an expiry date of January 13, 2024 to January 13, 2025, and extended the warrant life of the 3,721,000 warrants with an expiry date of January 17, 2024 to January 17, 2025.

12. Segment information

The Company operates in a single reportable operating segment, being the acquisition, exploration and retention of mineral property assets. Geographic segment information of the Company’s non-current assets as at December 31, 2023 and 2022 is as follows:

2023 and 2022 is as follows:
Non-current assets	December 31	December 31
	2023	2022
	$	$
Canada	-	218
USA	33,397,435	27,406,277
Total	33,397,435	27,406,495

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

13. Income taxes

A reconciliation between the Company's income tax provision computed at statutory rates to the reported income tax provision is as follows:

tax provision is as follows:
	2023	2022
	$	$
Loss for the year before income tax recovery	(3,207,642)	(4,098,688)
Average statutory rate	27.00%	27.00%
Recovery of income taxes based on statutory rates	(866,000)	(1,107,000)
Increase (decrease) in income tax recovery resulting from:
Change in statutory, foreign tax rate, foreign exchange rates and other	8,000	32,000
Share issuance cost	(2,000)	-
True-up of opening temporary differences	2,000	(17,000)
Other non-deductible expenses	324,000	499,000
Change in non-recognized deferred tax assets	534,000	593,000
Income tax recovery	-	-

Deferred income tax assets are only recognized to the extent that the realization of tax benefits is determined to be probable. As at December 31, 2023 and 2022, the Company has not recognized the benefit of the following deductible temporary differences:

	December 31	December 31
	2023	2022
	$	$
Deferred tax assets
Losses carried forward	3,214,000	2,826,000
Allowable capital losses	178,000	178,000
Mineral properties	7,000	7,000
Marketable securities	462,000	421,000
Asset retirement obligation	129,000	-
Equipment	2,000	3,000
Undeducted financing costs and other	16,000	39,000
Unrecognized deferred tax assets	(4,008,000)	(3,474,000)
Total deferred tax assets	-	-

As at December 31, 2023, the Company has estimated non-capital losses for Canadian income tax purposes of $11,902,000 (2022 - $10,064,000) that may be carried forward to reduce taxable income derived in future years. The Canadian non-capital losses expire from 2026-2043 (2021 - 2026-2042).

As at December 31, 2023, the Company’s United States subsidiary had approximately $7,840,000 (2022 - $5,920,000) in losses that do not expire.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

14. Related party transactions

The Company’s related parties consist of the Company’s directors and officers, and any companies associated with them. The Company incurred the following charges during the years ended December 31, 2023 and 2022:

2023	2022
$ Consulting fees 210,000 Director fees 78,000 Professional fees 42,000 Salaries and benefits 282,883 Share-basedpayments 326,350	$ 210,015 72,000 64,344 282,211 507,918

Consulting fees include amounts paid to Raul Diaz, a director of the Company, for geological consulting services. Included in the amounts above is $181,010 in consulting fees for the year ended December 31, 2023 that was capitalized to mineral properties (2022 - $146,610).

Director fees were paid to the directors of the Company.

During the year ended December 31, 2023, Professional fees include amounts paid to Amezquita Management Inc., a company of which the CFO is President. During the year ended December 31, 2022, professional fees include amounts paid to Amezquita Management Inc. as well as to Malaspina Consultants Inc., a company in which the CFO, Carmen Amezquita, was an associate.

Salaries and benefits include amounts paid to Greg Crowe, President and Chief Executive Officer of the Company.

Share-based payments include options granted to officers and directors.

During the year ended December 31, 2023, the Company received lease income from a related company with common directors in the amount of $nil (2022 - $3,633).

As at December 31, 2023, directors, officers or their related companies were owed $3,675 (December 31, 2022 - $3,675) in respect of services. The amounts due to related parties are included in accounts payable.

Key management includes directors and executive officers of the Company. Other than the amounts disclosed above, there was no other compensation paid or payable to key management for employee services for the reported periods.

15. Supplemental cash flow information

Investing and financing activities that do not have a direct impact on the current cash flows are excluded from the cash flow statements. The following transactions were excluded from the consolidated statement of cash flows:

During the year ended December 31, 2023:

The issuance of 3,000,000 common shares valued at $675,000 pursuant to the Phoenix Silver Agreement (Note 7);
The issuance of 250,000 common shares valued at $82,500 as consideration for extending the Candelaria Option Agreement (Note 7);
The assumption of the reclamation obligation of $789,551 capitalized to mineral properties (Note 7); and
The movement of $117,382 in mineral property exploration expenditures in accounts payable and accrued liabilities.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

15. Supplemental cash flow information (continued)

During the year ended December 31, 2022:

The issuance of 2,500,000 common shares valued at $912,500 pursuant to the Phoenix Silver Agreement (Note 7); and
The movement of $35,246 in mineral property exploration expenditures in accounts payable and accrued liabilities.

The Company paid or accrued $nil for income taxes during the year ended December 31, 2023 (2022 - $nil).

16. Financial instruments

Classification of financial instruments

The Company’s financial instruments consist of cash, short-term investments, receivables, net investment in sublease, reclamation deposits, marketable securities, accounts payable and accrued liabilities and lease obligations. The Company classifies its cash, short-term investments, receivables, net investment in sublease, and reclamation deposits as financial assets at amortized cost. The Company classifies its accounts payable and accrued liabilities and lease obligations as financial liabilities at amortized cost. The Company classifies its marketable securities as FVTPL.

The classification of the financial instruments as well as their carrying values as at December 31, 2023 and 2022 is shown in the table below.

shown in the table below.
	FVTPL	Amortized cost	Amortized cost
At December 31, 2023	(Financial Assets)	(Financial Assets)	(Financial Liabilities)	Total
	$	$	$	$
Financial assets
Cash	-	959,557	-	959,557
Short-term investments	-	278,501	-	278,501
Receivables	-	812,500	-	812,500
Reclamation deposits	-	3,419,898		3,419,898
Marketable securities	143,680	-	-	143,680
Total financial assets	143,680	5,470,456	-	5,614,136
Financial liabilities
Accounts payable and accruedliabilities	-	-	100,917	100,917
Total financial liabilities	-	-	100,917	100,917

Note that the fair values approximate the carrying values due to their short-term nature.

	FVTPL	Amortized cost	Amortized cost
At December 31, 2022	(Financial Assets)	(Financial Assets)	(Financial Liabilities)	Total
	$	$	$	$
Financial assets
Cash	-	3,065,488	-	3,065,488
Short-term investments	-	266,174	-	266,174
Receivables	-	1,244,056	-	1,244,056
Net investment in sublease	-	12,925	-	12,925
Reclamation deposits	-	20,645		20,645
Marketable securities	445,787	-	-	445,787
Total financial assets	445,787	4,609,288	-	5,055,075
Financial liabilities
Accounts payable and accrued liabilities	-	-	220,649	220,649
Lease obligations	-	-	13,079	13,079
Total financial liabilities	-	-	233,728	233,728

Note that the fair values approximate the carrying values due to their short-term nature.

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

16. Financial Instruments (continued)

Fair value

Financial instrument disclosures establish a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company primarily applies the market approach for recurring fair value measurements. This section describes three input levels that may be used to measure fair value:

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide information on an ongoing basis.

Level 2 – quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value of cash, short-term investments, receivables, reclamation deposits and accounts payable and accrued liabilities approximates their carrying values. Marketable securities are measured at fair value using level 1 inputs. The carrying value of the Company’s net investment in sublease and lease obligations are measured as the present value of the discounted future cash flows.

Financial instruments risk management

The Board of Directors has overall responsibility for the determination of the Company’s risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility.

The Company thoroughly examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks include foreign currency risk, interest rate risk, credit risk, and liquidity risk. Where material, these risks are reviewed and monitored by the Board of Directors.

Discussions of risks associated with financial assets and liabilities are detailed below:

a) Foreign currency risk

The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company operates in Canada and the US and a portion of the Company’s expenses are incurred in Canadian dollars (“CAD”) and US dollars (“USD”). A significant change in the currency exchange rates between the Canadian and US dollar, could have an effect on the Company’s results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations.

As at December 31, 2023, the Company is exposed to currency risk on the following financial assets and liabilities denominated in USD. The sensitivity of the Company’s net earnings due to changes in the exchange rate between the USD against the Canadian dollar is included in the table below in Canadian dollar equivalents:

	USD amount	Total
	$	$
Cash	382,916	382,916
Accountspayable and accrued liabilities	(23,659)	(23,659)
Net exposure	359,257	359,257
Effect of +/- 10% change in currency	35,926

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

16. Financial Instruments (continued)

Financial instruments risk management (continued)

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a cash loss is limited as the Company’s liabilities are non-interest bearing. The Company considers this risk to be immaterial.

c) Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Credit risk arises from cash held with banks and financial institutions as well as from outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The Company considers credit risk with respect to its cash to be immaterial as cash is mainly held through large Canadian financial institutions. The credit risk with respect to accounts receivable is subject to the expected credit loss model where any identified impairment loss is applied. During the year ended December 31, 2023, the Company recognized a credit loss on its short-term receivable from the sale of KCP (Note 5).

d) Liquidity risk

Liquidity risk is the risk that the Company is not able to meet its financial obligations as they become due. The Company manages its liquidity risk by continuously monitoring forecasted and actual cash flows, as well as anticipated investing and financing activities. Accounts payable and accrued liabilities have contractual maturities of 30 days or are due on demand and are subject to normal trade terms.

17. Management of capital

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration of and retention of its mineral properties. In the management of capital, the Company includes its components of shareholders’ equity.

The capital structure of the Company consists of equity attributable to common shareholders, comprised of issued capital, reserves and deficit.

The Company maintains and adjusts its capital structure based on changes in economic conditions and the Company’s planned requirements. The Company may adjust its capital structure by issuing new equity, issuing new debt, or acquiring or disposing of assets, and controlling the capital expenditures program. The Company is not subject to externally imposed capital requirements.

The Company does not have a source of revenue. As such, the Company is dependent on external financing to fund its activities. In order to pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed.

Management reviews its capital management policies on an ongoing basis. There were no changes in the Company’s approach to capital management during the year ended December 31, 2023.

AI assistant

Silver One Resources Inc. — Annual Report 2023

46220_rns_2024-02-28_b02b225f-446e-418f-b90b-5278da44ede3.pdf

INDEPENDENT AUDITOR’S REPORT

Opinion

Basis for Opinion

Key Audit Matters

Assessment of Impairment Indicators of Mineral Properties

Assessment of Reclamation Obligation

Other Information

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

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Silver One Resources Inc. Consolidated Statements of Financial Position

APPROVED BY THE DIRECTORS

Silver One Resources Inc. Consolidated Statements of Loss and Comprehensive Loss For the years ended December 31, 2023 and 2022

Silver One Resources Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2023 and 2022

Silver One Resources Inc.

Consolidated Statements of Changes in Shareholders’ Equity

1. Nature of operations and going concern

2. Basis of preparation

Statement of compliance and functional currency

Basis of measurement

2. Basis of preparation (continued)

Statement of compliance and functional currency (continued)

Functional and presentation currency

Basis of consolidation

3. Material accounting policies

Financial assets and liabilities

a) Classification

3. Material accounting policies (continued)

b) Measurement

Financial assets at FVTOCI

Financial assets and liabilities at amortized cost

Financial assets and liabilities at FVTPL

c) Impairment of financial assets at amortized cost

d) Derecognition

3. Material accounting policies (continued)

Property and equipment

Mineral properties

Impairment of non-financial assets

Reclamation obligation

3. Material accounting policies (continued)

Reclamation obligation (continued)

Leases

Share-based payments

3. Material accounting policies (continued)

Share capital

Income taxes

Loss per share

Segment reporting

Critical judgments in applying accounting policies

a) Functional currency

b) Impairment of mineral properties

3. Material accounting policies (continued)

Critical judgments in applying accounting policies (continued)

b) Impairment of mineral properties (continued)

c) Impairment of financial assets

d) Determining amount and timing of rehabilitation costs

e) Going concern

Key sources of estimation uncertainty

a) Deferred income taxes

3. Material accounting policies (continued)

b) Share-based payments

c) Impairment of mineral properties

d) Impairment of financial assets

Accounting standards issued but not yet effective

4. Short-term investments

5. Receivables and prepaid expenditures

Short-term receivable from sale of KCP

6. Marketable securities

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

7. Mineral properties

7. Mineral properties (continued)

Candelaria Option Agreement

7. Mineral properties (continued)

Additional Candelaria claims acquired

Phoenix Silver Acquisition

Signing of lease/purchase agreement on five patented claims at the Cherokee Project

Impairment of Eastern Nevada

Silver One Resources Inc. Notes to the Consolidated Financial Statements For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

Silver One Resources Inc. Annual Report 2023