SPARTON RESOURCES INC.

CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

SPARTON RESOURCES INC.

CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)

INDEX	PAGE
Independent Auditor’s Report	3-5
Consolidated Statements of Financial Position	6-7
Consolidated Statement of Loss	8
Consolidated Statements of Comprehensive Loss	9
Consolidated Statements of Changes in Equity	10
Consolidated Statements of Cash Flows	11
Notes to the Consolidated Financial Statements	12-35

NVs PROFESSIONAL CORPORATION AUDIT·TAX·ADVISORY

INDEPENDENT AUDITOR'S REPORT

To the shareholders of Spartan Resources Inc.

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of Spartan Resources Inc. and its subsidiaries (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2024 and December 31, 2023, and the consolidated statements of loss, consolidated statement of comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2024 and December 31, 2023, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRS).

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 ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 period. 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.

We have determined that there are no key audit matters to communicate in our report.

Material Uncertainty Related to Going Concern

Without qualifying our audit opinion, we draw attention to Note 1 in the consolidated financial statements, which describes matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

Markham: 100 Allstate Parkway, Suite 201, Markham, ON | L3R 6H3 | Tel: 905.415.2511 | Fax: 905.415.2011

INDEPENDENT AUDITOR'S REPORT

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.

NVS PROFESSIONAL CORPORATION

INDEPENDENT AUDITOR'S REPORT

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.

The engagement partner on the audit resulting in this independent auditor's report is Sadik Najarali.

NVS Professional Corporation

NVS Professional Corporation
Authorized to practice public accounting by
Chartered Professional Accountants of Ontario
Markham, Ontario
April 29, 2025

NVS
PROFESSIONAL CORPORATION

SPARTON RESOURCES INC.

Consolidated Statements of Financial Position

As at December 31, 2024 and 2023

(Expressed in Canadian dollars)

	Notes	2024	2023
Assets
Current assets
Cash		5,253	411,406
Amounts receivable	2,8	192,892	223,138
Prepaid expenses		9,623	11,291
Total current assets		207,768	645,835
Property, plant and equipment	5	21,751	42,474
Long-term investment	12	1,683,513	1,547,442
Total assets		1,913,032	2,235,751

See accompanying notes to the consolidated financial statements.

SPARTON RESOURCES INC.

Consolidated Statements of Financial Position
As at December 31, 2024 and 2023
(Expressed in Canadian dollars)

	Notes	2024	2023
Liabilities
Current liabilities
Bank indebtedness	7	50,000	-
Accounts payable and accrued liabilities		149,530	107,143
Due to related parties	9	132,156	231,055
Loans payable	7	231,702	227,155
Total liabilities		563,388	565,353
Equity
Common shares	8(a)	20,375,387	20,157,047
Warrants	8(c)	205,334	207,798
Contributed surplus	8(a)	354,018	354,018
Share-based payment reserve	8(b)	15,337	248,355
Accumulated other comprehensive income		760,617	634,184
Deficit		(20,717,947)	(20,279,074)
Equity attributable to shareholders		992,746	1,322,328
Non-controlling interests		356,898	348,070
Total equity		1,349,644	1,670,398
Total liabilities and equity		1,913,032	2,235,751

Nature of operations and going concern (Note 1)
Commitments and contingencies (Note 9)
Subsequent event (Note 14)

Signed: "Richard Williams", Director

Signed: "A. Lee Barker", Director

See accompanying notes to the consolidated financial statements

SPARTON RESOURCES INC.

Consolidated Statement of Loss

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars, except for per share amount)

	Notes	2024	2023
		$	$
Drilling revenue		-	954,097
Drilling costs		-	(908,412)
Gross profit		-	45,685
Expenses
Exploring and evaluating expenditures	6	623,296	38,262
General and administrative expenses	9	103,427	92,604
Stock compensation expense	8	15,337	49,648
Investor relations		14,444	3,487
Management and consultant fees	9	54,520	64,057
Professional fees		55,329	51,843
Occupancy costs	9	18,000	18,000
Transfer agent, filing and listing fees		31,163	22,863
Depreciation expenses		20,723	44,912
Interest expense and financing costs		4,540	7,785
		940,779	393,461
Loss before other income		(940,779)	(347,776)
Loss on sale of marketable securities		-	(1,496)
Government grant		169,117	10,574
Gain on disposal of asset		-	5,331
		(771,662)	(333,367)
Income tax expenses recovery	13	64,000	-
Net loss		(707,662)	(333,367)
Net loss per share, basic and diluted		(0.00)	(0.00)
Weighted average number of shares outstanding
Basic and diluted		166,747,411	148,529,893
Net loss attributed to
Non-controlling interests		(810)	(2,484)
Shareholders of the Company		(706,852)	(330,883)
		(707,662)	(333,367)

See accompanying notes to the consolidated financial statements.

SPARTON RESOURCES INC.

Consolidated Statements of Comprehensive Loss

For the years ended December 31, 2024 and 2023

(Expressed in Canadian dollars)

	Notes	2024	2023
		$	$
Net loss for the year		(707,662)	(333,367)
Other comprehensive income loss
Gain (loss) on translation of foreign operations	12	136,071	(39,691)
		(435,520)	(373,058)
Comprehensive loss attributed to
Non-controlling interests		8,828	(2,484)
Shareholders of the Company		(444,348)	(370,574)
		(435,520)	(373,058)

See accompanying notes to the consolidated financial statements

SPARTON RESOURCES INC.

Consolidated Statements of Changes in Equity
(Expressed in Canadian dollars, except shares)

	Note	Common shares		Warrants	Contributed surplus	Share-based payment reserve	Accumulated other comprehensive Income (loss)	Deficit	Subtotal shareholders' equity	Non-controlling interests	Total equity
		Shares	Amount
			$	$	$	$	$	$	$	$	$
Balance at December 31, 2022		148,341,537	19,679,721	22,259	354,018	237,689	673,875	(19,989,808)	977,754	350,554	1,328,308
Net loss		-	-			-	-	(330,883)	(330,883)	(2,484)	(333,367)
Vesting of options	8(b)	-	-	-	-	49,648	-	-	49,648	-	49,648
Expiry of warrants	8(c)	-	-	(2,635)	-	-	-	2,635	-	-	-
Expiry of options	8(b)	-	-	-	-	(38,982)	-	38,982	-	-	-
Shares issued for property	8(a)	250,000	8,500	-	-	-	-	-	8,500	-	8,500
Shares and warrants issued for cash	8(a)	14,800,000	531,844	175,156	-	-	-	-	707,000	-	707,000
Shares issuance costs	8(a)	-	(63,018)	13,018	-	-	-	-	(50,000)	-	(50,000)
Valuation of available for sale investment		-	-	-	-	-	(39,691)	-	(39,691)	-	(39,691)
Balance at December 31, 2023		163,391,537	20,157,047	207,798	354,018	248,355	634,184	(20,279,074)	1,322,328	348,070	1,670,398
Net loss		-	-			-	-	(706,852)	(706,852)	(810)	(707,662)
Vesting of options	8(b)	-	-	-	-	15,337	-	-	15,337	-	15,337
Expiry of warrants	8(c)	-	-	(19,624)	-	-	-	19,624	-	-	-
Expiry of options	8(b)	-	-	-	-	(248,355)	-	248,355	-	-	-
Shares issued for property	8(a)	150,000	7,500	-	-	-	-	-	7,500	-	7,500
Shares issued for cash	8(a)	6,400,000	256,000	-	-	-	-	-	256,000	-	256,000
Shares issuance costs	8(a)	-	(45,160)	17,160	-	-	-	-	(28,000)	-	(28,000)
Valuation of available for sale investment		-	-	-	-	-	126,433	-	126,433	9,638	136,071
Balance at December 31, 2024		169,941,537	20,375,387	205,334	354,018	15,337	760,617	(20,717,947)	992,746	356,898	1,349,644

See accompanying notes to the consolidated financial statements.

SPARTON RESOURCES INC.

Consolidated Statements of Cash Flows
For the years ended December 31, 2024 and 2023
(Expressed in Canadian dollars)

	Notes	2024	2023
		$	$
Operating activities
Net loss		(707,662)	(333,367)
Items not involving cash
Share based payments		15,337	49,648
Depreciation of property, plant and equipment		20,723	44,912
Issuance of shares and warrants for property		6,000	8,500
Accrued interest expense		4,540	7,785
Loss on sale of marketable securities		-	1,496
		(661,062)	(221,026)
Changes in non-cash working capital		(152,091)	82,177
		(813,153)	(138,849)
Investing activities
Proceeds from disposal of marketable securities		-	4,571
Proceeds from disposal of asset		-	16,328
Purchase of property, plant and equipment	5	-	(1,200)
		-	19,699
Financing activities
Shares issued for cash	8(a)	435,000	500,000
Shares issue costs	8(a)	(28,000)	(50,000)
		407,000	450,000
(Decrease) increase in cash		(406,153)	330,850
Cash, beginning of year		411,406	80,556
Cash, end of year		5,253	411,406

See accompanying notes to the consolidated financial statements.

SPARTON RESOURCES INC. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Unless otherwise stated, all amounts are in Canadian dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

Sparton Resources Inc. (the "Company" or "Sparton") was incorporated in Ontario, Canada, pursuant to the Business Corporation Act (Ontario). Its common shares are listed on the TSX Venture Exchange ("TSX-V"). The Company's registered head office address is 81A Front Street East, Unit 216, Toronto, Ontario, M5E 1Z7. It is an exploration and development stage company and has interests in exploration properties in Canada.

The majority of the Company's efforts were devoted to financing exploration for a number of resource projects, seeking new business for the drilling operation and assisting in the development of the vanadium redox flow battery business.

The Company has completed initial exploration drilling programs on its Ontario and Quebec, Canada, gold projects. The Company continues to evaluate and seek new domestic and international exploration opportunities.

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and have to realize its assets and liquidate its liabilities and commitments at amounts different from those in the accompanying consolidated financial statements. These adjustments could be material.

Management is pursuing initiatives intended to address the current working capital deficiency. As at December 31, 2024, the Company had a working capital deficit of $355,620 (2023 – working capital surplus of $80,482) and a deficit of $20,717,947 (2023 - $20,279,074). Due to the continuing operating losses, the Company's ability to continue as a going concern is dependent upon its ability to obtain adequate financing and to reach profitable levels of operation. It is not possible to predict whether financing efforts will be successful or if the Company will attain profitable levels of operations. The Company has an investment that is carried on the books at a value of $1,683,513 as of December 31, 2024. Should the Company be able to liquidate this investment at the carried value or more, the Company should be able to meet its financial obligations and continue operations in the near future. Management believes it will be successful in obtaining the necessary funding to continue operations in the normal course of operations; however, there is no assurance that these funds will be available on terms acceptable to the Company. These conditions indicate the existence of material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance:

These consolidated financial statements of the Company and its subsidiaries were prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standard Board ("IASB"), and the IFRS Interpretations Committee (formerly "IFRIC"). These accounting policies are based on the IFRS standards and IFRIC interpretations that are expected to be applicable at December 31, 2024. These consolidated financial statements were approved by the board of directors of the Company on April 29, 2025.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

These consolidated financial statements were prepared on a going concern basis, under the historical cost convention except for financial instruments carried at fair value. The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

Basis of Consolidation:

The consolidated financial statements include the accounts of the Company and its subsidiaries and joint operations, as noted below.

Entity	Incorporation	Ownership	Ownership
		December 31, 2024	December 31, 2023
EDCOR Drilling Services Inc.	Canada	100.00%	100.00%
Sparton International Holdings Inc.	BVI	100.00%	100.00%
VanSpar Mining Inc.	BVI	90.00%	90.00%

As at December 31, 2024 and 2023 the Company wholly owned EDCOR Drilling Services Inc. ("EDCOR") and Sparton International Holdings Inc. ("SIH"). SIH owned a 90% interest in VanSpar Mining Inc. ("VanSpar").

Subsidiaries are entities over which the Company has control, where control is determined based on whether the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The effects of potential voting rights that are currently exercisable are considered when assessing whether control exists. Subsidiaries are fully consolidated when control is transferred to the Company, and become unconsolidated when control ceases.

Intercompany transactions and balances between subsidiaries are eliminated upon consolidation.

The Company has assessed the nature of its joint arrangement and determined it to be classified as a joint operation. The Company's subsidiary EDCOR has a joint operation with a joint operation partner. In 2017, the Company's subsidiary VanSpar entered into a profit sharing agreement with a private investor. The Company has determined this profit sharing agreement is a joint operation.

IFRS 11 "Joint Arrangements" requires an entity to consider whether a joint arrangement is structured through a separate vehicle, as well as the terms of the contractual arrangement and other relevant facts and circumstances, to assess whether the parties are entitled to the net assets of the joint arrangement (a "joint venture") or to a share of the assets and liabilities of the joint arrangement (a "joint operation"). Joint ventures are accounted for using the equity method, whereas joint operations are accounted for by recognizing the parties' right to the assets and obligations for the liabilities.

SPARTON RESOURCES INC.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Unless otherwise stated, all amounts are in Canadian dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition:

Revenue is measured at the fair value of the consideration received or receivable.

Revenue from drilling services is recognized when the services are provided, the amount of revenue can be measured reliably, the receipt of economic benefits is probable and costs incurred and expected to be incurred can be measured reliably.

Property, Plant and Equipment and Depreciation:

Property, plant and equipment include automobiles, drilling equipment and office equipment. Property, plant and equipment are carried at cost, less accumulated depreciation and accumulated impairment losses. Costs comprise the fair value of consideration given to acquire or construct an asset. These costs include the direct charges associated with bringing the asset to the location and condition necessary for it to be capable of operating along with the future cost of dismantling and removing the asset.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Depreciation of these assets commences when the assets are ready for their intended use. Depreciation of property, plant and equipment is the costs of the assets less their residual values over their estimated useful lives using the straight-line method. The estimated useful lives, residual values and amortization method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis. Depreciation is recorded as follows:

Mining plant equipment	Straight line over 5 years
Office equipment	Straight line over 10 years
Automobile	Straight line over 5 years

Exploration and evaluation expenditures:

The Company expenses exploration and evaluation expenditures as incurred. Exploration and evaluation expenditures include acquisition costs of mineral properties, property option payments and evaluation activities.

Once a project has been established as commercially viable and technically feasible, related development expenditure will be capitalized. This includes costs incurred in preparing the site for mining operations. Capitalization ceases when the mine is capable of commercial production, with the exception of development costs that give rise to a future benefit. If an exploration property is disposed of any, consideration is reflected as a gain on disposition.

Impairment of Non-financial Assets:

Non-financial assets with finite lives are tested for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. In addition, non-current assets that are not amortized are subject to an annual impairment assessment. Any impairment loss is recognized, for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less cost of disposal and its 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 "CGUs"). The Company evaluates impairment losses for potential reversals, other than goodwill impairment, when events or changes in circumstances warrant such consideration. There was no impairment reversal during the years 2023 and 2024.

SPARTON RESOURCES INC. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Unless otherwise stated, all amounts are in Canadian dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Share-based Payments:

The Company operates a number of equity-settled share-based payment plans where the Company receives services from employees and non-employees as consideration for equity instruments of the Company, or paying obligations for property acquisitions with the equity instruments of the Company.

Share-based payments to employees are measured at the fair value of the instruments issued at the grant date and amortized over their vesting periods. Share-based payments to non-employees are recorded at the date the goods or services are received and are measured at the fair value of the goods or services received or the fair value of the equity instrument issued, if it is determined that the fair value of the goods or services received cannot be reliably measured.

Non-market vesting conditions are considered in making assumptions about the number of awards that are expected to vest. The expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are satisfied. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting year. The offset to the recorded cost is to common shares, warrants, or share-based payment reserve. Considerations received on the exercise of warrants and stock options are recorded as common shares and the related value of warrants or share-based payment reserve is transferred to common shares.

At each statement of financial position date, the Company reassesses its estimates of the number of awards that are expected to vest and recognizes the impact of any revision in the consolidated statement of (loss) with a corresponding adjustment to equity or liabilities as appropriate.

Other Provisions:

Provisions represent liabilities to the Company for which the amount or timing is uncertain. Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Provisions are re-measured at each statement of financial position date using the current discount rate. The increase in the provision due to passage of time is recognized as a finance cost.

Income (Loss) Per Share:

Basic income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding during the year. In order to determine diluted loss per share, the proceeds from the exercise of dilutive stock options and warrants would be used to repurchase common shares at the average market price during the year, with the incremental number of shares being included in the denominator of the diluted income (loss) per share calculation. The diluted income (loss) per share calculation excludes any potential conversion of options and warrants that would decrease the income (loss) per share.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans payable:

Loans payables are recognized initially at fair value, net of transaction costs incurred. Loan is classified as a current liability unless the Company has an unconditional right to defer settlement for at least 12 months after the statement of financial position date. Subsequent to the initial measurement, debt will be accreted up to its face value over the duration of the debt.

Units Issuance:

From time to time, the Company may issue Units as a means of raising capital. Ordinarily, each Unit contains one common share of the Company and a whole, or fraction of, a share purchase warrant. The Company allocates the proceeds from each unit to the common share and warrant components based on their relative fair value using the Black-Scholes pricing model. Transaction costs arising on the issue of Units are recognized in equity as a reduction of the proceeds allocated to issued capital and warrants on a pro-rata basis.

Flow-through Shares:

Canadian tax legislation permits a company to issue flow-through shares whereby the deduction for tax purposes relating to qualified resource expenditures is claimed by the investors rather than the Company.

The Company may enter into flow-through share agreements whereby the Company agrees to transfer the rights to income tax deductions related to exploration expenditures to the flow-through shareholders. The premium, if any, paid for flow-through shares in excess of the market value of the shares without the flow-through features at the time of issuance is excluded from share capital and recorded as a flow- through share premium liability on the consolidated statement of financial position. The Company reduces its flow-through share premium on renunciation.

When the Company fulfills its obligation to pass on the tax deduction to the shareholders, the amount recorded as un-renounced flow-through share premium is recognized as deferred income taxes in the consolidated statement of loss and a deferred tax liability is recognized for the temporary tax difference. If the renouncement is prospective, the obligation is fulfilled when eligible expenditures are incurred. If the renouncement is retrospective, the obligation is fulfilled when the paperwork to renounce is filed.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Translation of Foreign Currencies:

The consolidated financial statements are presented in Canadian dollars, which is the Company and its subsidiaries' presentation currency and functional currency.

The financial statements of each of the Company's subsidiaries are measured using the currency of the primary economic environment in which the subsidiary operates (the "functional currency"). Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions as well as from the translation of monetary assets and liabilities not denominated in the functional currency of the subsidiary are recognized in the consolidated statement of (loss).

Assets and liabilities of entities ("foreign operations") with functional currencies other than Canadian dollars are translated to Canadian dollars at the year-end rates of exchange, and the results of their operations are translated at average rates of exchange for the year. The resulting translation adjustments are included in accumulated other comprehensive income in shareholders' equity.

Additionally, foreign exchange gains and losses related to certain intercompany loans that are part of a net investment in foreign operations are included in accumulated other comprehensive income.

References to "USD" are to U.S. dollars, references to “$” are to Canadian dollars.

Income Taxes:

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in income or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax

Deferred income tax is provided using the balance sheet method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognized for all taxable temporary differences, except:

Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit; and
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled by the Company and it is probable that the temporary differences will not reverse in the foreseeable future.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

Where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred income tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognized deferred income tax assets are reassessed at the end of each reporting year and are recognized to the extent that it has become probable that future taxable profit will be available to allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting year.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Financial Instruments:

Equity instruments

Marketable securities equity instruments are measured at FVTPL. Changes in fair value are recognized in the consolidated statement of income (loss) for equity instruments measured at FVTPL. Investment available for sale (shares of VRB Energy Solutions Inc.) are measured at FVTOCI. Changes in fair value are recognized in the consolidated statement of other comprehensive income (loss) for equity instruments measured at FVTOCI with no subsequent recycling of gains and losses to net income.

Financial assets designated at FVTPL

Financial assets classified in this category are those that have been designated so by management on initial recognition or are held for trading purposes. Financial assets are designated at FVTPL if doing so eliminates or significantly reduces an accounting mismatch which would otherwise arise. Financial assets designated at FVTPL are recorded in the consolidated statement of financial position at fair value. For assets designated at FVTPL, changes in fair values are recognized in income in the consolidated statements of (loss).

Assets that are held for collection of contractual cash flows where those cash flows are solely payments of principal and interest are measured at amortized cost. Interest is calculated using the effective interest method and gains or losses arising from impairment, foreign exchange and derecognition are recognized in profit or loss. Based on this assessment management has determined that cash, restricted cash, amounts and other receivables are classified as amortized cost.

The Company does not have any hedge accounting relationships.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Expected Credit Losses

The Company applies the three-stage approach to measure allowance for credit losses, using the expected credit loss impairment approach as required under IFRS 9, for the following categories of financial instruments that are not measured at FVTPL: (i) financial assets at AMC; and (ii) off balance sheet loan commitments (which there are none). The Company has adopted the simplified approach for calculation of impairment for amounts and other receivables based on a provision matrix.

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 the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are recognized in the consolidated statements of (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).

The Company classifies its financial instruments by category according to their nature and their characteristics. Management determines the classification when the instruments are initially recognized, which is normally the date of the transaction. The Company classifies its financial assets and financial liabilities as outlined below:

Assets / liabilities	Category		Measurement
Assets
Cash	FVTPL		Fair value
Amounts receivables	AMC		Amortized cost
Long-term investment	FVTOCI		Fair value
Liabilities
Bank indebtedness	FVTPL		Fair value
Accounts payable and accrued liabilities	Other liabilities	financial	Amortized cost
Due to related parties	Other liabilities	financial	Amortized cost
Loans payable	Other liabilities	financial	Amortized cost

As permitted by IFRS 9 the Company has made an election to hold its investment in VRB Energy Solutions Inc. (Note12) as fair value through other comprehensive income ("FVTOCI"), with no subsequent recycling of gains and losses to net income.

SPARTON RESOURCES INC.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Unless otherwise stated, all amounts are in Canadian dollars)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Government grant

Government grants are recognized when there is reasonable assurance that the grant will be received and the Company will comply with the conditions. The grant is recognized as income over the period to match with the cost that it is intended to compensated. The government grant recorded by the Company in 2023 is due to the Canada Emergency Business Account Loan ("CEBA"). Included in the 2024 government grant income of $169,117 is Ontario Junior Exploration Program of which $129,955 is received after December 31, 2024. Should the Company cease to comply with the conditions, the government grant would be reversed or derecognized.

Leases under IFRS 16

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease that conveys to the Company the right to control the use of an underlying asset in return for payment. If the contract meets the definition of a lease, the lease liability is recognized in an amount equal to the present value of the unpaid lease payments discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee's incremental borrowing rate is used. Lease payments include: (i) all fixed payments; (ii) variable payments that depend on an index or rate; and (iii) any purchase option or termination penalty reasonably certain to be incurred. A lease ROU asset is recognized in an amount equal to the lease liability less any lease incentives received and plus: (i) any payments made prior to the start of the lease; (ii) any initial direct costs incurred; and (iii) an estimate of the cost to restore the asset as required by the lease contract. The Company remeasures the lease liability in response to changes in future lease payments, such as consumer price index (CPI) escalations or changes in lease term, adjusting the lease asset by an equivalent amount. Depreciation starts at the commencement date of the lease.

The Company applies the cost model to subsequently measure lease ROU assets and applies the same impairment policy as other property and equipment. Lease ROU assets are depreciated over the period of the lease term.

The Company has leased an office space with a related party on a monthly basis without long term lease commitment. Therefore, no lease asset or liability has been recognized.

Amendments to IFRS that are mandatorily effective for the period:

As at April 29, 2025, the date of authorization of these financial statements, The Corporation performed an assessment of new and revised standards issued by the IASB that are not yet effective. The Company has assessed that the impact of adopting these accounting standards on its consolidated financial statements would not be material.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of financial statements requires management to make estimates and judgments about the future. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. The following discussion sets forth management's:

most critical estimates and assumptions in determining the value of assets and liabilities; and
most critical judgments in applying accounting policies.

SPARTON RESOURCES INC.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Unless otherwise stated, all amounts are in Canadian dollars)

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

Income Taxes

The Company computes an income tax provision in each of the jurisdictions in which it operates. However, actual amounts of income tax expense only become final upon filing and acceptance of the tax return by the relevant authorities, which occur subsequent to the issuance of the financial statements. Additionally, estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the ability to use the underlying future tax deductions before they expire against future taxable income. The assessment is based upon existing tax laws and estimates of future taxable income. To the extent estimates differ from the final tax return, earnings would be affected in a subsequent period. The Company's 2024 applicable tax rate is 26% (2023 – 26%) of earnings. Its subsidiaries in BVI have no income taxes. A 1% increase in the effective tax rate would have no material impact on the consolidated statements of (loss).

Long term investment

The Company exercises a substantial amount of estimation in the valuation of privately owned investments. Changes in any of the assumptions or situations noted above could have a material impact on the classification and valuation of the Company's investment. Refer to Note 12 for additional details.

Stock-based compensation, warrants

The Company generally utilizes the Black-Scholes option pricing model to determine the fair values of the stock-based payments, warrants and derivative liabilities. The Company uses significant judgement in the evaluation of the input variables in the Black-Scholes calculation which includes: risk free interest rate, expected stock price volatility, expected life, expected dividend yield.

Profit Sharing Agreement

The Company entered into a profit-sharing agreement with a private investor to permit VanSpar to acquire additional shares in VRB. The Company does not have an obligation to repay the funding provided by the private investor. The Company uses significant judgement in the assessment of the accounting treatment of the profit-sharing agreement. The Company has determined this profit-sharing agreement is a joint operation, and had recognized no share of gain, asset or liability in relation this profit-sharing agreement as of December 31, 2024. Refer to Note 12 for additional details.

Going Concern

The Company applies judgment in assessing whether material uncertainties exist that would cause doubt as to whether the Company could continue as a going concern.

Equity vs Liability

The Company makes estimates and utilizes assumptions in determining whether warrants issued by the Company as part of a unit should be classified as an equity instrument or a liability.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

Fair Value

Where the fair value of financial assets and financial liabilities and the fair value of share based payments recorded in the consolidated statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques including the discounted cash flow model and the Black-Scholes option pricing model for the valuation of stock options and warrants. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments on the discounted cash flow model include considerations of inputs such as liquidity risk, credit risk and volatility. The judgments on the measurement of stock options and warrants include the expected dividends, life of the instruments, volatility and vesting of options. Changes in assumptions about these factors could affect the reported fair value of financial instruments and the equity instruments.

4. FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT

Fair Value

Financial instruments measured at fair value on the consolidated statement of financial position require classification into one of the following levels of the fair value hierarchy:

Level 1—Unadjusted quoted prices inactive markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2—Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – The foreign exchange rate is significant to the fair value measurement and unobservable (supported by little or no market activity).

	As at December 31, 2024
	Level 1	Level 2	Level 3	Total
	$	$	$	$
Cash	5,253	-	-	5,253
Long term investment	-	-	1,683,513	1,683,513
	5,253	-	1,683,513	1,688,766
	As at December 31, 2023
	Level 1	Level 2	Level 3	Total
	$	$	$	$
Cash	411,406	-	-	411,406
Long term investment	-	-	1,547,442	1,547,442
	411,406	-	1,547,442	1,958,848

The carrying value of cash approximates its fair value because of the short term maturity of these instruments.

SPARTON RESOURCES INC. Notes to the Consolidated Financial Statements For the years ended December 31, 2024 and 2023 (Unless otherwise stated, all amounts are in Canadian dollars)

4. FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (Continued)

Company's subsidiary VanSpar has an investment in a private company: VRB Energy Inc. This investment has been classified as a financial asset of fair value through other comprehensive income ("FVTOCI"). At December 31, 2024, the fair value of the long term investment was revalued to be $1,683,513 (2023 - $1,547,442), based on the private placement price of shares of VRB of US$0.065 per share in July 2019 (Note 12) and the most recent estimate of fair value. The fair value of this investment did not change significantly during 2024.

The loans payable and the due to related parties are interest-bearing loans and borrowings valued at amortized cost using the effective interest rates of the loans.

Risk factors and the impact on the Company's financial instruments are summarized below. There have been no changes in the risks, objectives, policies and procedures from the previous year.

Credit Risk

Credit risk is the risk of loss associated with the counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash. Cash is held with reputable Canadian chartered banks and Chinese banks which are closely monitored by management. Management believes that the credit risk concentration with respect to financial instruments included in cash and accounts receivable.

Liquidity Risk

The Company has a liquidity concern. As at December 31, 2024, the Company had a cash balance of $5,253 and amounts receivable of $192,892 to settle current liabilities of $563,388. The Company's accounts payable and accrued liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. The bank indebtedness of $50,000 and loans payable plus interest of $231,702 are payable on demand. The Company will continue its efforts to obtain adequate financing and reach profitable levels of operations, or liquidate the assets for sale.

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 prices. The impact of currency risk is noted below.

Interest Rate Risk

The Company currently has a line of credit carry interest at a floating rate.

Foreign Currency Risk

The Company is exposed to foreign exchange rate risk, as a portion of the Company's business is carried out in US dollars ("USD") and one of the Company subsidiaries maintains a USD denominated bank accounts. Unfavorable changes in the applicable exchange rate between USD and the Canadian dollar may result in a change in foreign exchange gain or loss. The Company and its subsidiaries do not use derivative instruments to reduce the exposure to foreign currency risk.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

4. FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (Continued)

The Company's activities that result in exposure to fluctuations in foreign currency exchange rates consist of the purchase of properties and the purchase of services, materials and equipment from suppliers invoiced in foreign currencies. As at December 31, 2024, approximately 88% of its assets were carried in foreign currencies, and approximately 0% of expenses in 2024 were incurred in foreign currencies.

The Company is exposed to currency risk through the following assets and liabilities denominated in currencies other than the Canadian dollar:

Balances as at December 31, 2024	US$
Long term investment	1,170,000
Net exposure	1,170,000

Securities Price Risk

The Company's subsidiary VanSpar has investment in a private company VRB (Note 12). This investment has been classified as financial assets measured at fair value, with any resultant gain or loss being recognized directly under other comprehensive income (loss). Unfavorable changes in the price of the VRB shares may result in a material change in the value of the investment and in other comprehensive income or loss.

Sensitivity Analysis

Based on management's knowledge and experience of the financial markets, the Company believes the following movements are "reasonably possible" in the year:

(i) Interest rate risk is remote as the Company's line of credit that is subject to floating interest rate is of small balance.

(ii) As at December 31, 2024, a 10% fluctuation in the exchange rate from US$ to CDN$ will have an impact of about $117,000 on its comprehensive loss.

(iii) Commodity price risk could adversely affect the Company. In particular, the Company's future profitability and viability of development depends upon the world market price of vanadium. Commodity prices have fluctuated widely in recent periods. There is no assurance that commercial quantities of commodities may be produced in the future, or that a profitable market will exist for them. A decline in the market price of the commodities may affect the completion of future equity transactions and may also affect the Company's liquidity and its ability to meet its ongoing obligations.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

PROPERTY, PLANT AND EQUIPMENT

Costs	Mining plant Equipment	Automobile	Total
	$	$	$
December 31, 2022	212,416	14,995	227,411
Addition	-	1,200	1,200
Disposal	-	(14,995)	(14,995)
December 31, 2023	212,416	1,200	213,616
December 31, 2024	212,416	1,200	213,616
Accumulated amortization and depletion	Mining plant Equipment	Automobile	Total
---	---	---	---
	$	$	$
December 31, 2022	128,479	1,749	130,228
Amortization for the year	42,663	2,249	44,912
Disposal	-	(3,998)	(3,998)
December 31, 2023	171,142	-	171,142
Amortization for the year	20,483	240	20,723
December 31, 2024	191,625	240	191,865

Net book values

December 31, 2023	41,274	1,200	42,474
December 31, 2024	20,791	960	21,751

During the year ended December 31, 2024, the Company expensed $20,723 (2023 - $44,912) in depreciation to the consolidated statement of (loss). There was no reversal of impairment in the years.

EXPLORATION AND EVALUATION PROJECTS

Sir Harry Oaks Gold Property, Canada

On Sept. 25, 2019, the Company announced that it secured an option to purchase a strategic gold prospect, comprising 3 Mining Leases (the "Leases") in the Matachewan gold mining area of northern Ontario. In addition, the Company also acquired through staking, an additional 12 Mining Claim Units (approximately 300 hectares) adjacent to the area of the Mining Leases (the "Claims").

Sparton executed a 4-year Option to Purchase Agreement with a private owner of the Leases whereunder it has the right to purchase a 100% interest in the Leases.

On July 6, 2020, the Company announced that it acquired 18 additional mining claim units adjacent to or nearby to the Oakes Mining Leases for a cash consideration of $6,000. On September 4, 2020, the Company received a work permit for the project, and commenced a drill program on the project on October 19, 2020.

SPARTON RESOURCES INC.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Unless otherwise stated, all amounts are in Canadian dollars)

6. EXPLORATION AND EVALUATION PROJECTS (Continued)

On November 25, 2020, the Company announced that it signed, effective November 17, 2020, a Memorandum of Understanding (“MOU”) with the Matachewan First Nation (“MFN”) related to its exploration activities on the Sir Harry Oakes Gold Project, near Matachewan, Ontario. MFN is a signatory to Treaty No. 9 and holds inherent aboriginal and treaty rights to and over their traditional territory, which includes the Mining Leases and claims held by Sparton and referred to as the Sir Harry Oakes Project. The MOU recognizes these rights and provides for a mutually beneficial and cooperative relationship between the parties. The MOU, among other things, contemplates the possibility of an Investment Benefit Agreement (“IBA”) in the future if the project is successful in advancing the project to advanced exploration and development stages and completion of a positive feasibility study. Additionally, the Company will compensate MFN for its exploration activities in the MFN area by issuing to MFN 50,000 Sparton common shares with a deemed value of $0.06 each, and 50,000 Share Purchase Warrants (“SPW’s). The SPWs are valid for a period of three years from November 17, 2020, and entitled MFN to purchase up to 50,000 additional common shares of the Company at a price of $0.10 per share. As further compensation Sparton will pay MFN on an annual basis, 2% (percent) of its audited exploration costs directly related to the expenses on the Oakes Project. The MOU is valid and in effect until Sparton has either ceased its activities on the Project or an IBA agreement is concluded. 50,000 warrants issued by the Company to MFN on December 1, 2020 expired in 2023.

Bruell Property, Canada

On August 11, 2017 the Company entered into an option agreement with two independent prospectors (the “Vendors”) to explore the 20 claim Bruell Property (“the Property”) in Vauquelin Township, Quebec.

Under the terms of the 5-year option agreement Sparton issued a total of 1,500,000 Common Shares, incurred a total of $1,500,000 in exploration expenditures on the claims, and made cash payments totaling $300,000 to earn a 100% interest in the Property, all of which the Company completed in 2023.

Production Royalty: If commercial production takes place on the Bruell property, the Vendors collectively, will be entitled to receive an annual production royalty (the “Royalty”) equal to 2% of Net Smelter Returns as customarily defined. At any time after a feasibility study is completed for development of any part of the Property ½ of this Royalty (or 1%) may be purchased by the Company for the sum of $1,000,000. All cash payments share issuances, and royalty payments if any, will be paid or issued as to 50% of the totals to each prospector.

On October 21, 2019, the Company announced 15 additional mining claims have been acquired from a private prospector extending the original 36 Bruell mining claims.

On December 16, 2019, Sparton announced that it had executed definitive agreements including an Option Agreement with Eldorado Gold Corporation (“Eldorado”) to grant an option to Eldorado to earn up to an initial 75% interest (“Option”) in the Bruell Project. Under the Option Agreement Eldorado made all cash payments and funded all the expenditures required under the existing Property Option Agreement between the Company and the original optionors. Sparton received a cash payment of $150,000 as partial compensation for past expenditures that was recorded as recovery of exploration expenses in the consolidated statements of (loss). Eldorado, having made all cash payments and funded all expenditures required now has the right to have Sparton participate in a new joint-venture in which Sparton will hold a 25% interest, or buy-out Sparton’s 25% interest for $1.8 million adjusted for the Consumer Price Index at the time Eldorado makes the election, in which case Sparton will be granted a 2% Net Smelter Return Production Royalty (“NSR”), and 50% of the NSR can be purchased by Eldorado for $2.5 million at any time.

The Company has completed the earn-in and exercised its option to acquire 100% of the 51-claim Bruell Property. It did so by issuing a total of 1.5 million common shares of the Company, making $300,000 in cash payments to the vendors, and incurring $1.5 million in exploration expenditures on the claims.

In 2022, Eldorado completed 11 diamond drill holes totaling 4,745 meters. In 2023 Eldorado planned approximately 8000 meters of additional drilling at Bruell in 21 holes and completed an additional 9,430 meters of drilling in 18 holes in the first quarter of 2023 with some positive results. On February 13, 2024 the Company and Eldorado executed an agreement extending the Option Agreement decision date for the Bruell gold project until April 19, 2024.

SPARTON RESOURCES INC.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Unless otherwise stated, all amounts are in Canadian dollars)

6. EXPLORATION AND EVALUATION PROJECTS (Continued)

On April 22, 2024, the Company announced that Eldorado Gold Corporation (“Eldorado”) has, effective April 18, 2024, exercised its option to acquire from Sparton an initial 75% (seventy five percent) interest in the Bruell gold project, east of Val D’Or, Québec.

Sparton and Eldorado also executed, effective April 18, 2024, a further amendment to the original Option Agreement to delete the twenty (20) business day further option period and replace it with a seventy-five (75) business day option period for Eldorado to implement the joint venture or decide if it wishes to acquire all of the remaining Sparton 25% interest for a combination of a $1.8 million cash payment (adjusted for CPI) and a residual 2% Net Smelter Return (“NSR”) royalty. Fifty percent (50%) of the NSR can be purchased by Eldorado for $2.5 million at any time. This extension will enable transferring of the Bruell claim titles to Eldorado, preparation of joint venture documents and the efficient implementation of other things necessary for the property ownership change. See also Note14.

Mineral Claims, Canada

In late 2015 and early 2016 the Company, jointly with an independent consultant (as to 50% ownership each) staked a number of mineral claims (29) totalling 1,388 hectares in the Wemindji diamond exploration area of Northern Quebec. On May 9, 2016, the Company executed an agreement with Honey Badger Exploration Inc. where under it sold its 50% interest in these claims for a total consideration of $5,000 cash and 1,000,000 common shares of Honey Badger. The Company and the Consultant each retain a 1% Net Smelter Return Royalty on any mineral production from these claims. These royalties can be purchased at any time for a total of $1,000,000 each.

Pense Property, Canada

On November 3, 2022 the Company announced that it entered into an option agreement with three independent prospectors (collectively, the “Vendors”) to explore the 39 claim (865 hectare) Pense Property (“the Property”) in Pense Township, Ontario. The claims are located near the Quebec provincial border, approximately 25 kilometers east of Englehart, Ontario, in the Larder Lake Mining Division.

Under the terms of the 3-year option agreement, Sparton will issue a total of 400,000 common shares, incur a total of $250,000 in exploration expenditures on the Property, and make cash payments totaling $175,000 over the 3-year period, to earn a 100% interest in the Property, detailed as follows:

Upon Receipt of Regulatory Approval: a cash payment of $25,000, issuance of a total of 100,000 common shares to the Vendors, and a commitment to incur exploration expenditures of $50,000 in first year. (Completed)

In Year 2: Cash payment of $50,000, 150,000 common shares to be issued to the Vendors (issued in October 2023 valued at $4,500), and exploration expenditures of $100,000. (Completed)

In Year 3: Cash payment of $75,000, 150,000 common shares to be issued to the Vendors (issued October 2024 valued at $7,500), and exploration expenditures of $100,000. (completed)

Production Royalty: If commercial production takes place on the Pense Property, the Vendors, will be entitled to receive an annual production royalty (the “Royalty”) equal to 2% of Net Smelter Returns, as customarily defined. At any time after a feasibility study is completed for development of any part of the Property, ½ of this Royalty (or 1%) may be purchased by the Company for the sum of $2,000,000. The Company will also have a right of first refusal to purchase the remaining 1% NSR Royalty. All cash payments, share issuances and royalty payments, if any, will be paid or issued as to 33.333% of the totals to each vendor.

On December 17, 2024 the Company has exercised option to acquire 100% interest in the Pense Property.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

7. BANK INDEBTEDNESS AND LOANS PAYABLE

1) As of December 31, 2024, the Company had a bank indebtedness of $50,000 line of credit, that bears annual interest rate of prime plus 1.3% (6.5% as at December 31, 2024), unsecured and due on demand.

2) As at December 31, 2024 there was a short-term loan of $52,000 (December 31, 2023 - $52,000) bearing an annual interest of 6% payable on a quarterly basis in arrears, unsecured, and due on demand. As at December 31, 2024 there was $148,275 (December 31, 2023 - $145,155) interest payable accrued for this loan.

3) The Company had a non-interest government loan payable of $30,000 as of December 31, 2023. Effective January 18, 2024, any outstanding balance on the term loan shall bear interest at a rate of 5% per annum and is due on demand as of December 31, 2024. As of December 31, 2024, interest payable was $1,426.

8. CAPITAL STOCK

(a) Common Shares

Authorized: Unlimited common shares

Issued: 169,941,537 common shares

Date	Description	No. of shares	Amount
December 31, 2022		148,241,537	$19,679,721
	Shares issued for property (1)	250,000	8,500
	Shares issued in private placement (2)	14,800,000	531,844
	Share issuance costs (2)	-	(63,018)
December 31, 2023		163,391,537	$20,157,047
	Shares issued in private placement (3)	6,400,000	256,000
	Share issuance costs (3)	-	(45,160)
	Shares issued for property (1)	150,000	7,500
December 31, 2024		169,941,537	$20,375,387

1) On March 15, 2023, total of 100,000 common shares were issued to the Pense property as described in Note 6 that were valued at $4,000. On October 25, 2023, 150,000 common shares were issued to the Vendor for $4,500. On October 21, 2024, 150,000 common shares were issued to the Vendor for $7,500.

2) On December 29, 2023 the Company closed a private placement financing through the sale of 11,500,000 Flow Through Share Units ("FTSU") at a price of $0.05 per FTSU and 3,300,000 Non-Flow Through Share Units (NFTSU) at a price of $0.04 per NFTSU. $500,000 of the total proceeds of $707,000 was received in 2023, and $207,000 was received in 2024. Each FTSU or NFTSU consists of one common share of the Company and one-half Share Purchase Warrant. Each Share Purchase Warrant from FTSU entitles the holder to purchase one additional common share of the Company at a price of $0.08 until December 29, 2025. Each Share Purchase Warrant from NFTSU entitles the holder to purchase one additional common share of the Company at a price of $0.06 until December 29, 2025. The proceeds of $575,000 for the FTSU were allocated $433,815 to shares and $141,185 to warrants. The warrants from FTSU were valued at grant date at December 29, 2023 using a Black-Scholes model. Assumptions used to determine the value of the options using the Black-Scholes model were stock price $0.04; dividend yield 0%; risk-free interest rate 4.07%; expected annual volatility 158%; and expected life of 2 years. The proceeds of $132,000 for the NFTSU were allocated $98,029 to shares and $33,971 to warrants. The warrants from NFTSU were valued at grant date at December 29, 2023 using a Black-Scholes model. Assumptions used to determine the value of the options using the Black-Scholes model were stock price $0.04; dividend yield 0%; risk-free interest rate 4.07%; expected annual volatility 158%; and expected life of 2 years. The Company paid cash finders fee of $50,000 and issued 500,000 warrants (valued at $13,018) to finders for the FTSU that were recorded as share issue costs.

SPARTON RESOURCES INC.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Unless otherwise stated, all amounts are in Canadian dollars)

8. CAPITAL STOCK (continued)

3) On June 20, 2024 the Company closed the first tranche of a private placement financing through the sale of 2,400,000 Flow Through Shares (“FTS”) at a price of $0.05 per FTS. On June 26, 2024 the Company closed the second tranche of the private placement financing through the sale of 4,000,000 Flow Through Shares at a price of $0.05. The fair value of the common share price was $0.04 on the dates. The Company paid $28,000 cash finders fees, and issued 560,000 finders warrants, each entitles the holder to purchase one common share of the Company at a price of $0.05 within 24 months from the closing. The proceeds of $320,000 were allocated $256,000 to shares and $64,000 as flow through share premium. The finders warrants were valued at grant date at June 26, 2024 as $17,160 using a Black-Scholes model. Assumptions used to determine the value of the options using the Black-Scholes model were stock price $0.04; dividend yield 0%; risk-free interest rate 4.07%; expected annual volatility 174%; and expected life of 2 years. $45,160 were recorded as share issue costs. The $64,000 flow through share premium was recorded as deferred tax recovery on the renunciation of the flow through expenditures.

(b) Share-based payment reserve

The Company, under its shareholder approved stock-option plan, has granted options for the purchase of common shares to employees, directors, officers and other service providers. The aggregate number of common shares reserved for issuance under this plan is limited to 10% of the aggregate number of common shares outstanding. The plan provides that the exercise price of an option granted under the plan shall not be less than the market price at the time of granting the option. Options have a maximum term of 5 years, vest immediately upon issue, unless otherwise stated, and terminate on the 90th day after the optionee ceases to be any of, an employee, director or consultant of the Company.

On May 9, 2023, the Company granted 300,000 stock options to a director; each option entitles the holder to acquire one common share of the Company at an exercise price of $0.05 before May 8, 2026. The option vested immediately on the grant date. The options were valued at grant at May 9, 2023 for $15,337 using a Black-Scholes model. Assumptions used to determine the value of the options using the Black-Scholes model were stock price $0.05; dividend yield 0%; risk-free interest rate 4.07%; expected annual volatility 157%; and expected life of 3 years. $15,337 stock-based compensation expenses were recognized on the statement of loss for the year 2024 (2023 - $49,648).

2,700,000 options issued in 2021 with a grant value of $248,355 expired in August 2024. On December 31, 2024 there were 300,000 (2023 - 3,000,000) options outstanding and exercisable.

(c) Warrants

Pursuant to the MOU, as disclosed in Note 6, 50,000 warrants were issued. Each warrant entitled the holder to purchase one common share of the Company at an exercise price of $0.10 until December 1, 2023. These 50,000 warrants expired December 1, 2023.

Pursuant to the December 2022 private placement, 550,000 warrants were issued. Each warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.12 until December 30, 2024. Such warrants expired unexercised on December 30, 2024.

Pursuant to the December 2023 private placement as described in Note 8(a), 7,900,000 warrants were issued. Each of the 6,250,000 warrants entitles the holder to purchase one common share of the Company at an exercise price of $0.08 until December 29, 2025. Each of the 1,650,000 warrants entitles the holder to purchase one common share of the Company at an exercise price of $0.06 until December 29, 2025.

Pursuant to the June 2024 private placement as described in Note 8(a), 560,000 finders warrants were issued, each entitles the holder to purchase one common share of the Company at an exercise price of $0.05 until June 26, 2026.

As of December 31, 2024, there were 8,460,000 (2023 - 8,450,000) warrants outstanding.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

9. RELATED PARTY TRANSACTIONS

The Company's related parties consist of the following:

Related parties	Relationship
A. Lee Barker	CEO and President; minority shareholder of VanSpar
Wes Roberts	Director
Richard D. Williams	Director; minority shareholder of VanSpar
Oriental Sources Inc.	A company controlled by the Company's CFO
	December 31, 2024
---	---
Due to related parties	$
Consulting fees payable to Oriental Sources Inc. (i)	32,864
Rent and fees payable to Lee Barker (i)	99,292
Total	132,156

(i) During 2024, $18,000 (2023 - $18,000) office space rent expenses were accrued for property owned by the President of the Company. The Company was also billed and paid $38,500 plus HST (2023 - $37,500) by Oriental Sources Inc., a company controlled by the CFO of the Company for consulting fees which were recorded as management and consulting fees on the consolidated statement of loss.

(ii) In December 2023 an officer of the Company subscribed for 1,000,000 FTSU and 1,250,000 NFTSU in the financing as described in Note 8(a)(2). The $100,000 proceeds were received in January 2024.

The compensation expense associated with key management and directors for employment services or similar during the years in 2024 and 2023 are as the follows:

	2024	2023
Salaries, consultant fees and other benefits	$ 38,500	$ 41,250
Stock-based payments	15,337	34,937
	$ 53,837	$ 76,187

10. COMMITMENTS AND CONTINGENCIES

(a) The Company's exploration activities are subject to various federal, provincial and international laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

(b) See Note 12 the Company's commitment on the profit sharing with the private investor upon the sale of the Additional Shares in VRB.

SPARTON RESOURCES INC.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023
(Unless otherwise stated, all amounts are in Canadian dollars)

11. CAPITAL MANAGEMENT

The Company considers its capital structure to consist of common shares and share-based payment reserve. The Company manages its capital based on the acquisition and investment opportunities in the course of its business to support the on-going operations of the business. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business.

The Company's primary sources of capital were funds generated from issuance of common shares, debentures and debts, and the exercise of stock options and warrants, and revenues provided by the drilling business.

There were no changes in the Company's approach to capital management during the periods presented. The Company and its subsidiaries are not subject to externally imposed capital requirements.

Management reviews its capital management approach on an ongoing basis and believes that this approach is reasonable given the relative size of the Company.

12. THE VANSPAR VRB ENERGY TRANSACTION

The Company's 90% owned subsidiary, VanSpar Mining Inc. ("VanSpar") in 2016 received 18,000,000 common shares of VRB Energy Solutions Inc. ("VRB") a Cayman Islands company and manufacturer of vanadium flow batteries with a factory in Tongzhou (Beijing) China.

In 2017, VanSpar executed a profit-sharing agreement with a private investor to acquire Additional Shares in VRB. Under the profit-sharing agreement, the private investor will provide funds required for VanSpar to participate and acquire more shares ("Additional Shares") in VRB Energy's future financing, to maintain VanSpar's percentage of interest in VRB. Once the Additional Shares are sold in a liquidation event, the investor will be entitled to 80% of the profit (calculated as proceeds of sales minus transaction costs minus the principal fund provided by the private investor plus 7% annual interest) and VanSpar will be entitled to 20% of the profit. In case there is no profit or even a loss, VanSpar will not be responsible for repayment of the principal funds provided by the investor. In 2017, VanSpar had received a total of US$900,000 from the private investor to participate in acquisition of 13,953,488 VRB shares. The Company has determined this profit-sharing agreement is a joint operation. There is no downside risk to the Company as VanSpar does not have obligation to repay the full principal fund, therefore the Company has not recorded the funding provided by the private investor as a financial liability and has not recorded the Additional Shares as a financial asset.

VanSpar's total 31,953,482 VRB shares represent about 9.8% share interest in VRB. Ivanhoe Electric Inc., a company listing in New York Stock Exchange, owns the other 91.2% of VRB. The Company valued the 18,000,000 VRB shares it owned as at December 31, 2024 to be $1,547,442 (US$1,170,000) (December 31, 2023 - $1,547,442, US$1,170,000)).

On August 16, 2024, the United States Department of Energy ("DOE") released the results of a 3-year study of 10 various energy storage options. Part of this work involved a study of various battery technologies for large grid style applications and the DOE concluded that Flow Batteries rated the highest in terms of overall cost and efficiency for lifetime cost of service in large scale electricity storage applications. Sparton Management regards this, when coupled with the various testing and safety features of the VRB Energy battery systems, as a significant endorsement of Vanadium Flow Batteries, which could translate into future product sales.

On September 23, 2024, Ivanhoe Electric Inc. announced that VRB Energy Inc., ("VRB Energy") is planning to expand vanadium flow battery manufacturing into the United States and that its existing operations in China will become subject to a 51/49 Joint-Venture following an investment from Red Sun, a leading Asian new energy group.

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

12. THE VANSPAR VRB ENERGY TRANSACTION (continued)

VRB Energy will establish VRB USA, located in Arizona, to pursue domestic manufacturing of vanadium redox flow battery systems. The domestic facility will be capable of producing 50 megawatts per year of VRB-Energy Storage Systems vanadium flow batteries. The VRB Energy battery system cell stacks have received an Underwriters Laboratories 1973 safety certificate which is recognized as a global standard for commercially available battery energy storage.

A Cooperation Agreement will ensure patent protection and will allow VRB USA to maintain access to intellectual property and associated rights as well as obtain the benefits of product improvements. The Chinese operations will also become a preferred supplier of certain key components.

Also announced, is an investment by Red Sun of US$55 Million, of which US$35 Million is towards a 51% participation in the existing VRB Energy operations in China. The Joint-Venture is being formed to manufacture and sell vanadium redox flow battery systems with a market focus in Asia, the Middle East and Africa. US$20 Million of the transaction proceeds will support the establishment of the VRB USA operations.

Red Sun is a private investment group based in Shanxi province, China, which focuses on investments in new energy and energy storage technology, biomedicine and high-end agriculture.

On October 15, 2024 Ivanhoe Electric Inc. announced that definitive agreements have been signed between VRB Energy Inc. ("VRB Energy"), and a subsidiary of privately held Shanxi Red Sun Co., Ltd. ("Red Sun"), and certain other affiliates, finalizing the terms of the transaction.

13. INCOME TAXES

(a) Provision for income taxes

Major items causing the Company's income tax rate to differ from the Canadian federal statutory rate of approximately 26.5% (2023 – 26.5%) are as follows:

	2024	2023
(Loss) before income taxes	$(771,662)	$(333,366)
Combined federal and provincial statutory income tax rate	26.5%	26.5%
Adjustment to expected income tax benefit:	(204,000)	(88,000)
(Deductible) Non-deductible expenses	20,700	89,800
Change in tax benefits not recognized	119,300	(1,800)
Income tax provision (recovery)	(64,000)	-

SPARTON RESOURCES INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

(Unless otherwise stated, all amounts are in Canadian dollars)

13. INCOME TAXES (Continued)

(b) Deferred income tax balances

	2024	2023
Non-capital loss carried forward	$2,473,900	$2,448,600
Marketable securities	-	-
Net capital loss	959,900	959,900
Mineral properties and equipment	498,100	402,300
	3,931,900	3,810,800
Deferred tax asset not recognized	(3,931,900)	(3,810,800)
Total	-	-

(c) Tax loss carry-forwards

The Company has approximately $1,795,000 of resource expenditures which, may be utilized under certain circumstances to reduce Canadian taxable income of future years.

As at December 31, 2024, the Company has approximately $9,336,000 of non-capital losses in Canada, which can be used to reduce taxable income of future years. These losses expire as follows:

Year of expiry	Canada
2026	74,000
2027	458,000
2028	317,000
2029	1,490,000
2030	1,150,000
2031	464,000
2032	1,440,000
2033	409,000
2034	320,000
2035	387,000
2036	672,000
2037	30,000
2038	547,000
2039	308,000
2040	75,000
2041	173,000
2042	474,000
2043	428,000
2044	119,000
	$ 9,336,000

14. SUBSEQUENT EVENT

On November 20, 2024, the Company executed a further amendment to the agreement with Eldorado for Bruell Property, where Eldorad has an additional option to acquire the Company's 25% beneficial interest in the Bruell Property free and clear of all Encumbrances for a price of $275,000 (inclusive of all applicable tax). On January 15, 2025, Eldorado has exercised this option to acquire from the Company 25% of Bruell Property for $275,000. $20,000 legal fees were incurred for the transaction by the Company.

AI assistant

Sparton Resources Inc. — Audit Report / Information 2024

42498_rns_2025-04-29_623b0671-c84e-417d-898c-addb8e853b2d.pdf

INDEPENDENT AUDITOR'S REPORT

Opinion

Basis for Opinion

Key Audit Matters

Material Uncertainty Related to Going Concern

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

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

SPARTON RESOURCES INC.

Consolidated Statements of Financial Position

SPARTON RESOURCES INC.

SPARTON RESOURCES INC.

Consolidated Statement of Loss

SPARTON RESOURCES INC.

Consolidated Statements of Comprehensive Loss

SPARTON RESOURCES INC.

SPARTON RESOURCES INC.

1. NATURE OF OPERATIONS AND GOING CONCERN

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Consolidation:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition:

Property, Plant and Equipment and Depreciation:

Exploration and evaluation expenditures:

Impairment of Non-financial Assets:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Share-based Payments:

Other Provisions:

Income (Loss) Per Share:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans payable:

Units Issuance:

Flow-through Shares:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Translation of Foreign Currencies:

Income Taxes:

Current income tax

Deferred income tax

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Financial Instruments:

Equity instruments

Financial assets designated at FVTPL

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Expected Credit Losses

Derecognition

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Government grant

Leases under IFRS 16

Amendments to IFRS that are mandatorily effective for the period:

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

Income Taxes

Long term investment

Stock-based compensation, warrants

Profit Sharing Agreement

Going Concern

Equity vs Liability

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)

Fair Value

4. FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT

Fair Value

4. FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (Continued)

Credit Risk

Liquidity Risk

Market Risk

Interest Rate Risk

Foreign Currency Risk

4. FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT (Continued)

Securities Price Risk

Sensitivity Analysis

6. EXPLORATION AND EVALUATION PROJECTS (Continued)

Bruell Property, Canada

6. EXPLORATION AND EVALUATION PROJECTS (Continued)

Mineral Claims, Canada

Pense Property, Canada

7. BANK INDEBTEDNESS AND LOANS PAYABLE

Sparton Resources Inc. Audit Report / Information 2024