StrategX Elements Corp. — Audit Report / Information 2024

Apr 29, 2025

STRATEGX ELEMENTS CORP.

FINANCIAL STATEMENTS

For the Years Ended

December 31, 2024 and 2023

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Crowe

Crowe MacKay LLP
1400 - 1185 West Georgia Street
Vancouver, BC V6E 4E6
Main +1 (604) 687-4511
Fax +1 (604) 687-5805
www.crowemackay.ca

Independent Auditor's Report

To the Shareholders of StrategX Elements Corp.

Opinion

We have audited the financial statements of StrategX Elements Corp. (the "Company"), which comprise the statements of financial position as at December 31, 2024 and December 31, 2023 and the statements of income (loss) and comprehensive income (loss), changes in shareholders' equity and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

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

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 to the financial statements which describes the material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the year ended December 31, 2024. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be a key audit matter to be communicated in our report. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Recoverability of Exploration and Evaluation Assets

As disclosed in Note 7 to the financial statements, the carrying value of Exploration and Evaluation Assets represents a significant asset of the Company. Refer to Note 3 to the financial statements for a description of the accounting policy and significant judgments applied to Exploration and Evaluation Assets.

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At each reporting period end, management applies judgment in assessing whether there are any indicators of impairment relating to mining claims and deferred exploration costs. If there are indicators of impairment, the recoverable amount of the related asset is estimated in order to determine the extent of any impairment. Indicators of impairment may include (i) the period during which the entity has the right to explore in the specific area has expired during the year or will expire in the near future and is not expected to be renewed; (ii) substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned; (iii) exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; and (iv) sufficient data exists to indicate that the carrying amount of the mining claims and deferred exploration costs is unlikely to be recovered in full from successful development or by sale. Indicators of impairment were noted during the year resulting in the full impairment of Project 939. As at December 31, 2024, no impairment indicators were noted for the EA South, Project Tasijuaq or Project NagVaak properties.

Why the matter was determined to be a key audit matter

We considered this a key audit matter due to (i) the significance of the mining claims and deferred exploration costs balance and (ii) the judgments made by management in its assessment of indicators of impairment related to mining claims and deferred exploration costs, which have resulted in a high degree of subjectivity in performing audit procedures related to these judgments applied by management.

How the matter was addressed in our audit

We have evaluated management's assessment of impairment indicators per IFRS 6 Exploration for and Evaluation of Mineral Resources, including but not limited to:

• Obtaining, by reference to government registries, evidence to support (i) the right to explore the area and (ii) claim expiration dates;
• Assessing compliance with option agreements by reviewing agreements and vouching cash payments;
• Enquiring with management and reviewing its future plans and other documentation as evidence that further exploration and evaluation activities in the area of interest will be continued in the future;
• Assessing whether any data exists to suggest that the carrying value of the Exploration and Evaluation assets is unlikely to be recovered through development or sale; and
• Assessing the adequacy of the related disclosures in Note 3 and Note 7 to the financial statements.

Other Information

Management is responsible for the other information. The other information comprises:

• Management's Discussion and Analysis

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

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

We obtained the other information prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditor's Responsibilities for the Audit of the Financial Statements

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

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

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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

Crowe Mackay LLP

Chartered Professional Accountants
Vancouver, Canada
April 25, 2025

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STRATEGY ELEMENTS CORP.
STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian dollars)
AS AT December 31,

	Notes	2024	2023
ASSETS
Current
Cash		$ 108,756	$ 5,766
Restricted cash	4	922,429	-
Receivables		226,659	106,139
Prepaid expenses	12	11,719	13,962
Total current assets		1,269,563	125,867
Due from related party	12	-	131,862
Equipment	6	311,025	14,602
Right-of-use asset	10	28,423	62,530
Long-term deposits	5	21,844	46,100
Exploration advance	7	43,051	3,390
Exploration and evaluation assets	6, 7	5,443,878	2,197,472
Total assets		$ 7,117,784	$ 2,581,823
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities		$ 886,066	$ 770,072
Accounts payable – fixed term	9	1,025,740	-
Due to related parties	12	365,592	211,660
Lease liability – short-term	10	30,726	31,747
Loans – short-term	8	20,751	40,000
Flow-through share premium liabilities	15	441,935	-
Deferred government grant	7	-	100,000
Total current liabilities		2,770,810	1,153,479
Loans – long-term	8	17,298	-
Lease liability – long term	10	-	30,726
Accounts payable – fixed-term	9	-	883,932
Asset retirement obligation	6	258,000	-
Flow-through share premium liabilities	15	-	22,000
Total liabilities		3,046,108	2,090,137
Shareholders' equity
Share capital	11	8,359,738	4,907,738
Subscription received in advance		-	10,000
Contributed surplus		477,716	477,716
Warrant reserve		661	121,180
Accumulated deficit		(4,766,439)	(5,024,948)
Total shareholders' equity		4,071,676	491,686
Total liabilities and shareholders' equity		$ 7,117,784	$ 2,581,823

Nature of operations (Note 1)
Going concern (Note 2)

On behalf of the Board:

“Darren Bahrey” Director “Marcio Fonseca” Director

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

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STRATEGY ELEMENTS CORP.

STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(Expressed in Canadian dollars)

FOR THE YEARS ENDED December 31,

	Notes	2024	2023
EXPENSES
Accretion and interest	9, 10	$ 152,369	$ 45,669
Accounting and auditing		67,975	43,046
Amortization – right-of-use assets	10	34,107	5,685
Corporate and shareholder communication		30,461	194,129
Filing and transfer agent		18,944	18,819
Impairment of exploration and evaluation assets	7	64,350	1,781,870
Insurance		22,648	25,689
Legal		48,600	7,607
Management fee	12	216,208	144,500
Office and miscellaneous		31,391	22,655
Rent		3,300	34,626
Salary and benefits		51,763	51,743
Share-based compensation		-	42,799
Travel		673	15,190
Loss before other items		(742,789)	(2,434,027)
Other items
Foreign exchange gain (loss)		11,042	(3,049)
Discount on fair value of long-term accounts payable	9	-	305,487
Gain on settlement of accounts payable		7,850	-
Impairment of due from related party	12	(143,178)	-
Flow-through tax, interest and penalty	15	-	(196,200)
Flow-through recovery	15	1,005,065	10,161
		880,779	116,399
Income (loss) and comprehensive income (loss) for the year		$ 137,990	$ (2,317,628)
Basic and diluted earnings (loss) per common share		$ 0.00	$ (0.07)
Weighted average number of common shares outstanding - Basic and diluted		44,361,531	32,920,295

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

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STRATEGY ELEMENTS CORP.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
FOR THE YEARS ENDED December 31,

	2024	2023
CASH FLOWS USED IN OPERATING ACTIVITIES
Net income (loss) for the year	$ 137,990	$ (2,317,628)
Items not involving cash:
Accretion and interest	151,260	873
Amortization – right-of-use assets	34,107	5,685
Gain on settlement of accounts payable	(7,850)	-
Impairment of due from related party	143,178	-
Foreign exchange (gain) loss	(11,316)	3,049
Share-based compensation	-	42,799
Discount on fair value of long-term accounts payable	-	(305,487)
Flow-through recovery	(1,005,065)	(10,161)
Impairment of exploration and evaluation assets	64,350	1,781,870
Changes in non-cash working capital items:
Receivables	(120,520)	26,014
Accounts payable and accrued liabilities	10,854	194,538
Prepaid expenses	2,243	11,511
Due to related parties	134,707	70,301
Deferred government grant	-	100,000
Net cash used in operating activities	(466,062)	(396,636)
CASH FLOWS FROM FINANCING ACTIVITIES
Shares issued for cash	4,910,000	170,000
Share issuance costs	(12,000)	(29,951)
Subscription received in advance	-	10,000
Repayment of loan	(3,460)	-
Repayment of lease liability	(39,690)	(6,615)
Net cash from financing activities	4,854,850	143,434
CASH USED IN INVESTING ACTIVITIES
Purchase of capital assets	(71,038)	-
Exploration advance	(39,661)	(3,390)
Long-term deposits refunded (paid)	24,256	26,861
Restricted cash	(922,429)	-
Exploration and evaluation expenditures	(3,276,926)	(303,402)
Net cash used in investing activities	(4,285,798)	(279,931)
Change in cash during the year	102,990	(533,133)
Effect of foreign exchange on cash	-	(122)
Cash, beginning of year	5,766	539,021
Cash, end of year	$ 108,756	$ 5,766

Supplemental disclosures with respect to cash flows (Note 16)

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

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STRATEGX ELEMENTS CORP.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Expressed in Canadian dollars)

	Share Capital
	Number	Amount	Subscription received in advance	Warrant reserve	Contributed surplus	Accumulated deficit	Total
Balance, December 31, 2022	32,652,679	$ 4,719,738	$ -	$ 121,180	$ 434,917	$ (2,707,320)	$ 2,568,515
Private placement	740,000	170,000	-	-	-	-	170,000
Share issuance costs	-	(14,000)	-	-	-	-	(14,000)
Flow-through share premium	-	(22,000)	-	-	-	-	(22,000)
Flow-through share premium reversal	-	54,000	-	-	-	-	54,000
Subscription received in advance	-	-	10,000	-	-	-	10,000
Share-based compensation	-	-	-	-	42,799	-	42,799
Net loss for the year	-	-	-	-	-	(2,317,628)	(2,317,628)
Balance, December 31, 2023	33,392,679	4,907,738	10,000	121,180	477,716	(5,024,948)	491,686
Private placement	17,900,000	4,790,000	-	-	-	-	4,790,000
Share issuance costs	-	(43,000)	-	-	-	-	(43,000)
Flow-through share premium	-	(1,425,000)	-	-	-	-	(1,425,000)
Exercise of warrants	1,300,000	130,000	(10,000)	-	-	-	120,000
Expiry of warrants	-	-	-	(120,519)	-	120,519	-
Net income for the year	-	-	-	-	-	137,990	137,990
Balance, December 31, 2024	52,592,679	$ 8,359,738	$ -	$ 661	$ 477,716	$ (4,766,439)	$ 4,071,676

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

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STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

1. NATURE OF OPERATIONS

StrategX Elements Corp. (“StrategX” or the “Company”) was incorporated on June 28, 2018 under the laws of British Columbia, Canada. On January 10, 2022, the Company’s common shares commenced trading on the Canadian Securities Exchange (“CSE”) under the symbol “STGX”.

The Company’s principal business activity is the acquisition and exploration of mineral property interests. The Company is in the exploration stage and substantially all the Company’s efforts are devoted to financing and developing these property interests. There has been no determination whether the Company’s interests in unproven exploration and evaluation assets contain economically recoverable mineral resources.

The Company’s head office is located at 1500 – 409 Granville Street, Vancouver, British Columbia, Canada.

1. BASIS OF PRESENTATION

Statement of compliance

These financial statements are prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These financial statements were approved and authorized for issue by the Board of Directors on April 25, 2025.

Basis of presentation

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

Functional and presentation currency

The Company’s reporting and functional currency is the Canadian dollar.

Going concern

The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the carrying value of its resource properties and the Company's continued existence is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively, upon the Company's ability to dispose of its interests on an advantageous basis. Changes in future conditions could require material write-downs of the carrying values. Such adjustments could be material.

These financial statements have been prepared in accordance with IFRS on a going concern basis, which contemplates that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. Accordingly, these financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. As at December 31, 2024, the Company has an accumulated deficit of $4,766,439 (2023 – $5,024,948) and has incurred significant losses. These material uncertainties may cast significant doubt as to the ability of the Company to meet its obligations as they come due, and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. The recovery of amounts capitalized for exploration and evaluation assets at December 31, 2024 and 2023 in the statements of financial position is dependent upon the ability of the Company to arrange appropriate financing to complete the development and continued exploration of the properties. The Company plans to raise funds primarily through the issuance of shares or obtain profitable operations. The outcome of these matters cannot be predicted at this time.

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STRATEGY ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

3. MATERIAL ACCOUNTING POLICIES

Exploration and evaluation assets (“E&E” assets)

Pre-exploration costs are expensed in the period in which they are incurred. Once the legal right to explore a property has been acquired, the Company capitalizes costs related to the acquisition and exploration of E&E assets. These costs include purchase cost, mineral lease, staking costs, filing fees, drilling, assaying, geological, geophysical, technical studies and any other exploratory activities. E&E assets for which commercially viable reserves have been identified are reclassified to development assets. They are tested for impairment immediately prior to reclassification out of E&E assets. When an unproven mineral interest is abandoned, all related expenditures are written off to operations for the period.

Impairment of non-current assets

Exploration and evaluation assets are assessed for impairment when events or circumstances indicate that the carrying amounts of the assets may not be recoverable and is assessed at least annually. An impairment loss is recognized for any amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and its value in use.

Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Value in use is determined as the present value of the estimated future pre-tax cash flows expected to arise from the continued use of the asset in its present form and from its ultimate disposal. The Company reviews impairment on non-financial assets for possible reversal when events or circumstances warrant such consideration.

Government grants

Government grants are recognized when there is reasonable assurance that (a) the Company will comply with the conditions attaching to them; and (b) the grant will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes the related costs for which the grants are intended to compensate.

Government grants in relation to the mineral exploration activities are recorded as a deduction of the carrying amount of the exploration and evaluation assets.

A forgivable loan is treated as a government grant when there is reasonable assurance that the Company will meet the terms for forgiveness of the loan. The benefit of a government loan at a below-market rate of interest is treated as a government grant.

Earnings (loss) per share

The Company computes the dilutive effect of options, warrants and similar instruments on loss per common share from the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the period. For the years presented, this calculation proved to be anti-dilutive. Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the year.

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STRATEGY ELEMENTS CORP.
Notes to the financial statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

3. MATERIAL ACCOUNTING POLICIES (cont'd...)

Provision for environmental rehabilitation

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of exploration and evaluation assets and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to E&E assets along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The rehabilitation asset is amortized on the same basis as E&E assets.

The Company’s estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to E&E assets with a corresponding entry to the rehabilitation provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates. Changes in the net present value, excluding changes in the Company’s estimates of reclamation costs, are charged to profit or loss for the period.

Share-based payments

The Company uses the fair value method of accounting for share-based payments on stock option grants. Under this method, the cost of stock options is recorded based on the estimated fair value at the grant date, including an estimate of the forfeiture rate, and charged either to operations or capitalized to E&E asset costs over the vesting period, with a corresponding increase to contributed surplus. The fair value is calculated using the Black-Scholes option pricing model.

Share-based payment transactions for employees and others providing similar services is determined based on the grant date fair value. Share-based payment for non-employees is determined based on the fair value of the goods or services received or option granted measured at the date on which the Company obtains such goods or services.

Each tranche in an option award is considered a separate award with its own vesting period. Share-based payment expense is recognized over each tranche’s vesting period, in earnings or capitalized as appropriate, based on the number of awards expected to vest. Where awards are forfeited, the expense previously recognized is proportionately reversed in the period the forfeiture occurs. If stock options are ultimately exercised, the applicable amounts of contributed surplus are transferred to share capital.

Share purchase warrants

The fair value of warrants issued by the Company as a component of equity financing is bifurcated from the fair value of other securities issued, and is recorded as a component of equity reserves. When warrants are granted as compensation for the receipt of goods or services, their fair value is determined using the Black-Scholes option pricing model when the fair value of goods or services cannot be determined, which is recorded either as an expense or is capitalized to share capital or assets, on the same basis as equivalent cash payments.

When share purchase warrants are exercised, the cash proceeds and any amount previously recorded in equity reserves are recorded as share capital. When share purchase warrants are expired, the fair value of the expired warrants is reversed from warrant reserve and transferred into deficit if the warrants were issued to subscribers or share capital if the warrants were issued to finders.

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STRATEGY ELEMENTS CORP.
Notes to the financial statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

3. MATERIAL ACCOUNTING POLICIES (cont'd...)

Flow-through shares

The Company will, from time to time, issue flow-through common shares to finance a significant portion of its exploration program. Pursuant to the terms of the flow-through share subscription agreements, these shares transfer the tax deductibility of qualifying resource expenditures to investors. On issuance, proceeds are allocated first to share capital up to the fair value of the common shares at the time of issuance, determined by reference to the quoted market price of the common shares on the issuance date, with the residual amount of proceeds, if any, allocated to a flow-through share premium. The flow-through share premium represents the estimated premium investors pay for the flow-through feature and is recognized as a liability. Upon expenses being incurred, the Company derecognizes a deferred tax liability for the amount of tax reduction renounced to the shareholders. The premium is recognized as other income and the related deferred tax is recognized as a tax provision.

Proceeds received from the issuance of flow-through shares are restricted to be used only for Canadian resource property exploration expenditures within a two-year period. The portion of the proceeds received but not yet expended at the end of the Company’s fiscal period is disclosed separately as flow-through share commitment.

The flow-through share program requires the Company to spend an amount equivalent to the proceeds of the issued flow-through common shares on Canadian qualifying exploration expenditures within the timeline specified by the Government of Canada flow-through regulations. If this deadline has passed, the Company would need to amend the tax forms for any unspent exploration expenditures renounced and the related flow-through premium will be reversed to share capital. The Company may be required to indemnify the flow-through shareholders for any tax and other costs payable by them if the required exploration expenditures are not incurred before the deadline. The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Government of Canada flow-through regulations. The related interest and penalties for the Part XII.6 tax and any potential costs to indemnify the shareholders is recorded into flow-through tax, interest and penalty on the statements of income (loss) and comprehensive income (loss).

Financial instruments

Financial instruments classified as fair value through profit or loss (“FVTPL”) are recognized at fair value. Financial instruments classified as at amortized cost are initially recognized at fair value and subsequently measured at amortized cost using the effective rate method. Cash and restricted cash is classified at FVTPL. Due from related party, due to related parties, long-term deposits, accounts payable and accrued liabilities, accounts payable – fixed term, lease liability and loans are classified as at amortized cost.

Impairment

The Company assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Equipment

Equipment are carried at cost less accumulated amortization and any impairment charges. The cost of an item of equipment includes the purchase price and related costs in bringing the item to the location and preparing the condition necessary for its intended use, as well as the estimated costs of dismantling, removing the item and restoring the site on which the item is installed.

Amortization expense of assets used in exploration are capitalized to exploration and evaluation assets. Amortization is recorded on a straight-line basis over the expected useful lives of the assets as follows:

Geological equipment	36 months
Camp	60 months

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STRATEGY ELEMENTS CORP.
Notes to the financial statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

3. MATERIAL ACCOUNTING POLICIES (cont'd...)

Management judgments and estimates

The preparation of these financial statements in accordance with IFRS requires management’s use of estimates, assumptions and judgment that impact the Company’s reported financial results. These estimates are based on past experiences and expectations of future events. Uncertainty on these judgments could result in material differences of the carrying amounts in the Company’s financial position.

The key judgments and estimates that affect the financial statements are:

a) Impairment of exploration and evaluation assets (E&E assets)

The Company carries out an impairment assessment on its E&E assets every period end in accordance with IFRS 6 “Exploration for and Evaluation of Mineral Resources”. The process of determining the impairment involves significant judgment and estimation on the recoverability of the E&E assets as it relies on both an interpretation of geological and technical data as well as market conditions including commodity prices, investor sentiment and global financing. As new information comes up, the recoverable amounts of the assets and the impairment loss may differ from these judgments and estimates.

During the year ended December 31, 2024, management determined that there was no substantive plan to continue exploration on Project 939, which was an indicator of impairment, the property was impaired in full. During the year ended December 31, 2023, the Company impaired the EA South and Project Tasijuaq properties in full as there was no substantive exploration plan. During the year ended December 31, 2024, management developed a substantive exploration plan and began to recapitalize exploration expenditures on the EA South and Tasijuaq properties.

b) Going concern

The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay its ongoing operating expenditures, meet its liabilities for the ensuing year, and to fund planned and contractual exploration programs, involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

c) Interest rates

The Company estimates an incremental borrowing rate in determining the fair value of the accounts payable – fixed term, lease liability and the right-of-use asset. The determination of market interest rate is subjective and could significantly affect the fair value estimate.

d) Estimation of asset retirement obligations

The Company’s provision for asset retirement obligations represents management’s best estimate of the present value of the future cash outflows required to the demolition of its camp. The provision reflects estimates of future costs, inflation and assumptions of risks associated with the future cash outflows, and the applicable interest rates for discounting the future cash outflows. Changes in the above factors can result in a change to the provision recognized by the Company.

---

STRATEGY ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

3. MATERIAL ACCOUNTING POLICIES (cont'd...)

New, amended and future accounting pronouncements

The following standards are effective for future periods:

On April 9, 2024, the IASB issued a new standard – IFRS 18, “Presentation and Disclosure in Financial Statements” with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:

• the structure of the statement of profit or loss;
• required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements (that is, management-defined performance measures); and
• enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.

IFRS 18 will replace IAS 1; many of the other existing principles in IAS 1 are retained, with limited changes. IFRS 18 will apply for reporting periods beginning on or after 1 January 2027. Retrospective application is required and early application is permitted.

The Company is currently assessing the effect of this new standard on our consolidated financial statements.

4. RESTRICTED CASH

On June 24, 2024, the Company closed a non-brokered private placement by issuing 15,000,000 charity flow-through common shares (the "Charity FT Shares") at $0.30 per share for gross proceeds of $4,500,000 (Note 11). The Company received $1,000,000 directly and the remaining $3,500,000 was deposited in a trust account with Fasken Martineau Dumoulin LLP (the "Escrow Agent") as per an escrow agreement entered into with the Escrow Agent and WCPD Advisers Inc. (the "Payment Certifier").

According to the escrow agreement, the proceeds shall only be used for qualified flow-through exploration expenditures. When exploration expenditures are incurred, the Company shall provide detailed documents and information to the Payment Certifier who will review and approve the expenditure. After receiving the approval from the Payment Certifier, the Escrow Agent will make payments to the suppliers directly from the trust account.

During the year ended December 31, 2024, the Company has withdrawn $2,577,571 (2023 - $Nil) from the trust account. As of December 31, 2024, there is $922,429 (December 31, 2023 - $Nil) held in the Escrow Agent’s trust.

5. LONG-TERM DEPOSITS

During the year ended December 31, 2024, the Company received $24,256 (2023 - $26,861) from the Government of Nunavut in regards to various permit and license applications. As at December 31, 2024, the Company has total refundable deposits of $21,844 (2023 - $46,100).

---

STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

6. EQUIPMENT

	Geological equipment	Camp	Total
Cost
Balance, December 31, 2022 and 2023	$ 35,045	$ -	$ 35,045
Additions	15,038	314,000	329,038
Balance, December 31, 2024	$ 50,083	$ 314,000	$ 364,083
Accumulated amortization
Balance, December 31, 2022	$ 8,761	$ -	$ 8,761
Additions	11,682	-	11,682
Balance, December 31, 2023	20,443	-	20,443
Additions	11,682	20,933	32,615
Balance, December 31, 2024	$ 32,125	$ 20,933	$ 53,058
At December 31, 2023	$ 14,602	$ -	$ 14,602
At December 31, 2024	$ 17,958	$ 293,067	$ 311,025

During the year ended December 31, 2024, amortization of $32,615 (2023 - $11,682) was recorded in exploration and evaluation assets.

During the year ended December 31, 2024, the Company paid $56,000 to 10X Minerals Inc. to acquire a camp to assist with future exploration activities (Note 12). The Company assessed the asset retirement costs of demolition and demobilization of the camp as $258,000. The fair value of the reclamation liability was determined to be equal to the estimated reclamation costs, which primarily include costs of labor and transportation. At December 31, 2024, thus the Company is unable to predict with any precision the timing of the cash flows related to the reclamation activities.

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STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

1. EXPLORATION AND EVALUATION ASSETS

| | Project 939
(Northwest Territories) | EA South
(Northwest Territories) | Project Tasijuaq
(Nunavut) | Project NagVaak
(Nunavut) | Project Mel
(Nunavut) | Total |
| --- | --- | --- | --- | --- | --- | --- |
| Balance, December 31, 2022 | $ 1,016,250 | $ 604,049 | $ 39,211 | $ 1,895,644 | $ 68,617 | $ 3,623,771 |
| Exploration | | | | | | |
| Amortization (Note 6) | - | - | - | 11,682 | - | 11,682 |
| Assay | - | - | - | 33,856 | - | 33,856 |
| Consulting (Note 12) | - | 34,875 | 5,350 | 129,967 | - | 170,192 |
| Data | - | - | - | 5,561 | 8,518 | 14,079 |
| License and permitting | - | - | 2,000 | 10,373 | - | 12,373 |
| General exploration | - | - | - | 14,389 | 3,000 | 17,389 |
| Project manager (Note 12) | - | - | - | 96,000 | - | 96,000 |
| Impairment | (1,016,250) | (638,924) | (46,561) | - | (80,135) | (1,781,870) |
| Balance, December 31, 2023 | - | - | - | 2,197,472 | - | 2,197,472 |
| Exploration | | | | | | |
| Amortization (Note 6) | - | - | - | 32,615 | - | 32,615 |
| Assay | - | - | - | 5,379 | - | 5,379 |
| Camp costs | - | - | - | 557,560 | - | 557,560 |
| Consulting | 49,400 | 7,800 | - | 6,300 | - | 63,500 |
| License and permitting | - | - | - | 10,315 | - | 10,315 |
| Data | - | - | - | 107,426 | - | 107,426 |
| Drilling | - | - | - | 498,240 | - | 498,240 |
| General exploration | 14,950 | - | 7,750 | 94,958 | - | 117,658 |
| Flight and helicopter | - | - | - | 1,838,063 | - | 1,838,063 |
| Project manager (Note 12) | - | - | - | 80,000 | - | 80,000 |
| Impairment | (64,350) | - | - | - | - | (64,350) |
| Balance, December 31, 2024 | $ - | $ 7,800 | $ 7,750 | $ 5,428,328 | $ - | $ 5,443,878 |

---

STRATEGX ELEMENTS CORP. Notes to the financial statements (Expressed in Canadian dollars) For the years ended December 31, 2024 and 2023

7. EXPLORATION AND EVALUATION ASSETS (cont'd...)

Project 939 and EA South, Northwest Territories, Canada

On September 24, 2018, the Company entered into a Letter of Agreement (the “Agreement”) with Hunter Exploration Group. Pursuant to the terms of the Agreement, the Company will acquire 100% of interest in the Project 939 and EA South Project located in the Northwest Territory, Canada. Project 939 and EA South comprises 12 prospecting permits (93,821 hectares) and 16 mining claims (12,638 hectares). The Agreement was replaced by a Property Purchase Agreement dated January 11, 2021 and subsequently amended on October 8, 2021, December 20, 2022, and then on October 13, 2023. According to the Property Purchase Agreement and the amendments, the Company will have the following obligations:

Cash payments

$100,000	On or before July 3, 2018 (paid)
100,000	On or before August 17, 2018 (paid)
50,000	On or before July 1, 2019 (paid)
50,000	On or before July 1, 2021 (paid)
50,000	On or before July 1, 2022 (paid)
$350,000

Work Commitment

$300,000	By December 31, 2018
700,000	By December 31, 2019
1,000,000	By December 31, 2020
2,000,000	By December 31, 2021
$4,000,000	(Amended to complete the total amount by December 31, 2025)

As of December 31, 2024, the Company has incurred accumulatively $1,770,324 (December 31, 2023 - $1,698,174) of exploration and evaluation assets.

Share payments

Issue 1,500,000 share units within 10 days of completing the $4,000,000 work commitment (Amended to issue the shares no later than January 10, 2026). Each share unit will be comprised of one common share of the Company and one share purchase warrant. Each warrant will be exercisable into one common share of the Company at a price of $0.50 per share for a period of five years from the date of issuance.

Annual Advanced Royalty Payment (“AARP”)

Commencing July 1, 2023 (Amended to July 1, 2025), a $100,000 AARP to be paid on or before July 1 and that of each subsequent year until the commencement of commercial production.

Royalties

The Project is subject to 2% net smelter royalty and a 2% gross overriding royalty on diamonds.

Government grant

During the year ended December 31, 2022, the Company received government grants of $102,000 from the Government of Northwest Territories (“GNT”). The GNT’s contribution is towards mineral expenditure incurred by the Company on the Project 939 and EA South. The Company recorded the $102,000 as deferred government grant at December 31, 2022 which was transferred to accounts payable and accrued liabilities during the year ended December 31, 2023, as the Company didn’t complete the exploration work as planned.

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STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

7. EXPLORATION AND EVALUATION ASSETS (cont'd...)

Project 939 and EA South, Northwest Territories, Canada (cont'd...)

Impairment

During the year ended December 31, 2024, the Company recognized an impairment of $64,350 (2023 - $1,016,250) on Project 939 and $Nil (2023 - $638,924) on EA South due to the lack of an exploration plan.

During the year ended December 31, 2024, the Company determined that it was going to continue exploration on EA South and began to recapitalize exploration expenditures.

Project Tasijuaq (previously "Project N"), Nunavut, Canada

During the year ended December 31, 2021, the Company staked certain claims ("Project N"), located adject and outside of Project Mel (see note below), at the Melville Peninsula region of Nunavut, Canada. The staking cost is $30,175. In March 2022, the Company staked an additional 4 claims, 1,013 hectares, at a cost of $2,340.

Impairment

As of December 31, 2023, the Company recognized an impairment of $46,561 on Project Tasijuaq due to the lack of an exploration plan for year 2024.

During the year ended December 31, 2024, the Company determined that it was going to continue exploration on the Project Tasijuaq and began to recapitalize exploration expenditures.

Project NagVaak, Nunavut, Canada

Effective August 1, 2021, the Company entered into a Mineral Exploration Agreement with Nunavut Tunngavik Incorporated ("NTI"), pursuant to which, the Company obtained a renewable 20-year lease with an area of approximately 2,665 hectares expiring on July 31, 2041.

Annual fees

Year	Annual fees ($/hectare/year)	Due date
1	1	On signing (paid)
2-5	2	On 1^{st} (paid), 2^{nd} (paid)·3^{rd} (paid) and 4^{th} anniversary dates
6-10	3	On 5^{th}, 6^{th}, 7^{th}, 8^{th} and 9^{th} anniversary dates
11-15	4	On 10^{th}, 11^{th}, 12^{th}, 13^{th} and 14^{th} anniversary dates
16-20	5	On 15^{th}, 16^{th}, 17^{th}, 18^{th} and 19^{th} anniversary dates

Minimum annual exploration work requirement

Year	Minimum annual work requirement ($/hectare/year)
1-2	5 (met)
3-5	10 (year 3 met)
6-10	20
11-15	30
16-20	40

Subsequent to December 31, 2024, the Company staked additional mineral claims expanding the NagVaak mineral claims.

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STRATEGY ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

7. EXPLORATION AND EVALUATION ASSETS (cont'd...)

Project NagVaak, Nunavut, Canada (cont'd...)

Government grant

During the year ended December 31, 2023, the Company received government grants of $100,000 from the Government of Nunavut ("GN"). The GN's contribution is towards mineral expenditures incurred by the Company on the Project NagVaak. The Company recorded the $100,000 as deferred government grant at December 31, 2023 which was transferred to accounts payable and accrued liabilities during the year ended December 31, 2024, as the Company didn't complete the exploration work as planned.

Project Mel, Nunavut, Canada

Pursuant to an agreement with North Arrow Minerals Inc. ("North Arrow") dated January 13, 2021, the Company acquired 100% of the non-diamond mineral rights in respect of 46 mineral claims (covering approximately 56,075 ha of land) in Nunavut, commonly referred to as the "MEL Project", subject to a 1% gross overriding royalty on non-diamond mineral production from the property, half of which royalty may be purchased at any time by the Company for $1,000,000. This royalty applies to any property owned by the Company within an area of interest extending up to 5km from the Mel Project boundary. Pursuant to the same agreement, the Company will be granted a 2% gross overriding diamond royalty (reduced to 1% in areas where there is an existing underlying royalty) over the same property, half of which royalty may be purchased by North Arrow at any time for $2,000,000. As consideration being paid for Mel Project, both the 1% gross overriding royalty on non-diamond mineral production and the 2% gross overriding royalty are valued at $Nil.

Impairment

As of December 31, 2023, the Company recognized an impairment of $80,135 on Project Mel due to a lack of exploration plan for year 2024.

Title to resource properties

Although the Company has taken steps to verify the title to exploration properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects.

Realization of assets

The investment in and expenditures on exploration properties comprise a significant portion of the Company's assets. Realization of the Company's investment in these assets is dependent upon the establishment of legal ownership, the attainment of successful production from the properties or from the proceeds of their disposal. Resource exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored are ultimately developed into producing mines. There can be no assurance that current exploration programs will result in the discovery of economically viable quantities of ore.

The amounts shown for acquisition costs and deferred exploration expenditures represent costs incurred to date and do not necessarily reflect present or future values. These costs will be depleted over the useful lives of the properties upon commencement of commercial production or written off if the properties are abandoned or the claims are permitted to lapse.

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STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

7. EXPLORATION AND EVALUATION ASSETS (cont'd...)

Environmental

The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous material and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest. The Company conducts its mineral exploration activities in compliance with applicable environmental protection legislation. The Company is not aware of any existing environmental problems related to any of its current or former properties that may result in material liability to the Company. Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation on the Company's operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of exploration and development on the resource properties, the potential for production on the property may be diminished or negated.

8. LOANS

Canada Emergency Business Account ("CEBA") loan

On April 30, 2020, the Company received $40,000 of CEBA loan from Bank of Montreal. The loan is interest free, and $10,000 of the loan is eligible for loan forgiveness if $30,000 has been fully repaid on or before December 31, 2022.

In January 2022, the Company received a notice that the Government of Canada declined the Company's application of CEBA loan, and the CEBA loan has been converted into a non-revolving term loan as of January 21, 2022.

On October 24, 2024, the Company entered into a payment agreement with Canada Revenue Agency ("CRA") for the above loan, according to the payment agreement, the Company will repay CRA the loan principal and interest totalling $41,509 by 24 installment of $1,730 per month starting November 1, 2024.

As of December 31, 2024, the Company has a loan balance of $38,049 (2023 - $40,000).

	December 31, 2024	December 31, 2023
Short-term portion of loans	$ 20,751	$ 40,000
Long-term portion of loans	$ 17,298	$ -

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STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

9. ACCOUNTS PAYABLE – FIXED-TERM

Effective December 31, 2023, the Company entered into five forbearance agreements with its vendors. As of December 31, 2023, the Company had accounts payable totalling $1,280,678 with the five vendors. According to the forbearance agreements, the vendors agreed to extend the payment period of the accounts payable totalling $1,189,419 until December 2025.

For accounting purpose, as at December 31, 2023, the Company reclassified the $1,189,419 to long-term accounts payable and measured the present value ($883,932) using a discount rate of 16% as determined from its incremental borrowing rate. The difference of $305,487 is recorded as discount on fair value of long-term accounts payable.

On February 4, 2025, one vendor agreed to extend the repayment period of its accounts payable of $751,697 from December 31, 2025 to April 30, 2026.

A reconciliation of the Company’s fixed term accounts payable for the years ended December 31, 2024 and 2023 is as follows:

	Total
Balance, December 31, 2022	$ -
Initial recognition	883,932
Balance, December 31, 2023	883,932
Accretion of interest	141,808
Balance, December 31, 2024	$ 1,025,740
	December 31, 2024
---	---
Short-term portion of accounts payable	$ 1,025,740
Long-term portion of accounts payable	$ -

10. RIGHT-OF-USE (“ROU”) ASSETS AND LEASE LIABILITY

On September 5, 2023, the Company entered into an office lease agreement for a 24-month lease period starting November 1, 2023. In accordance with IFRS 16 Leases, the Company recorded right-of-use assets of $68,215 and recognized lease liabilities of $68,215 on commencement of the lease. As at September 5, 2023, the Company measured the present value of its lease liabilities using a discount rate of 15% as determined from its incremental borrowing rate.

On February 12, 2025, the lease agreement was taken over by a company controlled by the CEO and all liabilities were terminated as of February 28, 2025.

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STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

10. RIGHT-OF-USE ("ROU") ASSETS AND LEASE LIABILITY (cont'd...)

a) Right-of-use asset

A reconciliation of the Company’s right-of-use asset for the years ended December 31, 2024 and 2023 is as follows:

	Total
Balance, December 31, 2022	$ -
Initial recognition of office lease	68,215
Amortization of ROU	(5,685)
Balance, December 31, 2023	62,530
Amortization of ROU	(34,107)
Balance, December 31, 2024	$ 28,423

b) Lease liability

A reconciliation of the Company’s lease liability for the years ended December 31, 2024 and 2023 is as follows:

	Total
Balance, December 31, 2022	$ -
Addition of new office lease	68,215
Accretion of interest	873
Lease payments	(6,615)
Balance, December 31, 2023	62,473
Accretion of interest	7,943
Lease payments	(39,690)
Balance, December 31, 2024	$ 30,726
	December 31,
---	---
	2024
Short-term portion of lease liability	$ 30,726
Long-term portion of lease liability	$ -

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STRATEGY ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

11. SHARE CAPITAL

Authorized - unlimited number of common shares without par value

Share issuance

At December 31, 2024, the Company had 52,592,679 (2023 – 33,392,679) common shares issued and outstanding.

During the year ended December 31, 2024:

1) On January 10, 2024, the Company issued 1,300,000 shares pursuant to an exercise of 1,300,000 warrants at $0.10 per warrant for gross proceeds of $130,000, $10,000 of which was received in December 2023.

2) On May 3, 2024, the Company closed a non-brokered private placement by issuing 2,900,000 common shares at $0.10 per share for gross proceeds of $290,000. The Company paid a total of $12,000 as finder's fees.

3) On June 24, 2024, the Company closed a non-brokered private placement by issuing 15,000,000 charity flow-through common shares (the "Charity FT Shares") at $0.30 per share for gross proceeds of $4,500,000, of which $1,425,000 is recorded as FT share premium liability (Note 15). The Company deposited $3,500,000 with the Escrow Agent's trust account (Note 4). The Company incurred $31,000 legal fees.

During the year ended December 31, 2023:

On August 21, 2023, the Company closed a non-brokered private placement by issuing 440,000 flow-through common shares (each an "FT Share") at $0.25 per FT Share for gross proceeds of $110,000, and 300,000 non-flow-through units (each an "NFT Unit") at $0.20 per NFT Unit for gross proceeds of $60,000. In relation to the NFT Units, the Company issued 300,000 common share purchase warrants, each entitling the holder to purchase a non-flow-through common share of the Company for $0.30 per share until August 21, 2026. The Company paid finder's fees of $6,000 in relation to this closing and accrued $8,000 legal fees.

Share escrow

In accordance with National Policy 46-201 - Escrow for Initial Public Offerings of the Canadian Securities Administrators, certain principals of the Company entered into escrow agreements with the Company and its transfer agent. Pursuant to the escrow agreements, 3,920,001 shares and 1,650,000 warrants were escrowed for a period of 36 months on December 17, 2021. During the escrowed period, the securityholders are not permitted to sell, transfer, assign, mortgage, or enter into a derivative transaction in regards with the escrowed securities. The escrowed securities were released by 10% on January 10, 2022, the date the Company's shares are listed for trading on CSE, and then 15% every six months thereafter. As of December 31, 2024, 588,000 (December 31, 2023 – 1,764,001) shares remain in escrow.

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STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

11. SHARE CAPITAL (cont'd...)

Stock options

On March 31, 2021, the Company adopted a stock option plan whereby the Board of Directors may, from time to time, grant options to directors, officers, employees and consultants. The term of the option grants is up to ten years and the vesting schedule, if any, will be determined by the Board of Directors. The maximum number of common shares reserved for issue shall not exceed 15% of the total number of common shares issued and outstanding as at the grant date.

There were no stock transaction activities during the years ended December 31, 2024 and 2023.

Stock option transactions are summarized as follows:

	Number of Options	Weighted Average Exercise Price
Balance, December 31, 2022 and 2023, and 2024	2,100,000	$ 0.25
Exercisable, at December 31, 2024	2,100,000	$ 0.25
Weighted average remaining life	2.03 years

At December 31, 2024, the Company has the following outstanding stock options outstanding:

Number of Options	Exercise Price	Expiry Date
2,100,000	$ 0.25	January 10, 2027

Warrants

On January 10, 2024, the Company issued 1,300,000 shares pursuant to the exercise of 1,300,000 warrants at $0.10 per share. The Company transferred $120,519, the fair value of the 2,950,000 expired warrants, from warrant reserve to deficit on the expiry date.

On August 21, 2023, the Company closed a non-brokered private placement by 300,000 share units at $0.20 per unit for gross proceeds of $60,000. Each unit is comprised of one common share and one share purchase warrant, with each warrant being exercisable for one common share at a price of $0.30 per share for three years. The fair value of the 300,000 warrants was $Nil by using the residual value method.

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STRATEGY ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

11. SHARE CAPITAL (cont'd...)

Warrants (cont'd...)

The continuity of the Company's warrants during the years ended December 31, 2024 and 2023 is as follows:

	Number of Warrants	Weighted Average Exercise Price
Balance, December 31, 2022	6,980,624	$ 0.24
Issued	300,000	0.30
Balance, December 31, 2023	7,280,624	0.24
Exercised	(1,300,000)	0.10
Expired	(2,950,000)	0.12
Balance, December 31, 2024	3,030,624	$ 0.41
Weighted average remaining life	0.76 year

As at December 31, 2024, the following warrants are outstanding:

Number of Warrants	Exercise Price	Expiry Date
1,418,024	$ 0.45	June 30, 2025
950,500	$ 0.40	October 25, 2025
330,300	$ 0.40	December 2, 2025
31,800	$ 0.40	December 30, 2025
300,000	$ 0.30	August 21, 2026

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STRATEGY ELEMENTS CORP.
Notes to the financial statements
(Expressed in Canadian dollars)
For the years ended December 31, 2024 and 2023

12. RELATED PARTY TRANSACTIONS

The Company entered into the following transactions with related parties during the year ended December 31, 2024:

a) the Company paid or accrued consulting fees of $Nil (2023 - $51,000) in exploration and evaluation assets, and $102,000 (2023 - $51,000) in management fees to a company controlled by the CEO. As of December 31, 2024, the Company had $77,775 (December 31, 2023 - $60,775) payable to the company controlled by the CEO and $752 (December 31, 2023 - $9,660) payable to the CEO for reimbursement of expenses incurred on behalf of the Company.

As of December 31, 2024, the Company advanced $5,000 (2023 - $Nil) in prepaids to the CEO for his business expenses.

b) the Company paid or accrued management fees of $75,208 (2023 - $Nil) to a company controlled by the interim CFO. As of December 31, 2024, the Company had $69,865 (December 31, 2023 - $Nil) payable to the company controlled by the interim CFO.

c) the Company paid or accrued project management fees of $80,000 (2023 - $96,000) in exploration and evaluation assets and $24,000 (2023 - $Nil) in management fees to a company controlled by the VP Exploration. As of December 31, 2024, the Company had $119,025 (December 31, 2023 - $58,800) payable to the company controlled by the VP Exploration.

d) the Company paid or accrued management fees of $15,000 (2023 - $93,500) to a company controlled by the former CFO. As of December 31, 2024, the Company had $98,175 (December 31, 2023 - $82,425) payable to the company controlled by the former CFO.

e) the Company paid $56,000 (2023 - $Nil) to 10X Minerals Ltd. to purchase the camp (Note 6).

Due to related parties do not bear interest, are unsecured and repayable on demand.

Due from related party

On August 1, 2018, the Company and the CEO entered into a Revolving Line of Credit Agreement ("LOC"). Pursuant to the Agreement, the Company will make payments towards Project Green located in the Republic of Panama, of which the CEO currently holds the mineral property application. The LOC has a maximum funding amount of US$100,000, interest free, and repayable by July 31, 2025.

On June 15, 2021, the Company, the CEO and 10X Minerals Corp. ("10X") entered into a loan Assignment and Assumption Agreement, pursuant to which 10X assumed the LOC from the CEO, and the Company consent to the assignment of the LOC from the CEO to 10X. The Company expects to have the loan settled with common shares of 10X. 10X was incorporated on March 10, 2021 under the laws of British Columbia, Canada, and is also controlled by the CEO. 10X is a junior exploration company focused on exploring diamonds and specialty minerals in Nunavut, Canada.

As of December 31, 2024, the Company assessed there was high uncertainty that the loan may not be repaid by 10X by the due date, and as a result, recorded an impairment of the loan of US$99,543 (December 31, 2024 - $143,178; December 31, 2023 - $Nil) in the statement of income (loss) and comprehensive income (loss).

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STRATEGY ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

13. FAIR VALUE MEASUREMENT AND RISK MANAGEMENT

IFRS 13, Fair Value Measurement, establishes a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table sets forth the Company's financial instruments measured at fair value by level within the fair value hierarchy:

December 31, 2024	Level 1	Level 2	Level 3
Financial assets at FVTPL
Cash	$ 108,756	$ -	$ -
Restricted cash	$ 922,429	$ -	$ -
December 31, 2023	Level 1	Level 2	Level 3
Financial assets at FVTPL
Cash	$ 5,766	$ -	$ -

Financial risk management

The Company's objective in risk management is to maintain its ability to continue as a going concern. It is exposed to the following risks:

Liquidity risk

Liquidity risk is the risk that the Company might not be able to meet its obligations and commitments as they come due. As at December 31, 2024, the Company had cash of $108,756 (2023 - $5,766) and a working capital deficiency of $1,501,247 (2023 - $1,027,612). The Company intends to continue relying on the issuance of securities to finance its future activities; however, there can be no assurance that such financing will be available on a timely basis under terms acceptable to the Company.

For the year ended December 31, 2024, the Company's financial liabilities have contractual maturities as follows:

Due within	1 year	2 years	Total
Accounts payable and accrued liabilities	$ 886,066	$ -	$ 886,066
Accounts payable – fixed term	$ 1,189,419	$ -	$ 1,189,419
Due to related parties	$ 365,592	$ -	$ 365,592
Lease liability	$ 33,075	$ -	$ 33,075
Loans	$ 20,751	$ 17,298	$ 38,049

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STRATEGY ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

13. FAIR VALUE MEASUREMENT AND RISK MANAGEMENT (cont'd...)

Credit risk

Credit risk arises from cash held with financial institutions as well as credit exposure on outstanding receivables. The Company's cash and restricted cash is held at high-credit rating financial institutions. Receivables only consist of refundable government goods and services tax.

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 equity prices.

i. Interest rate risk

Interest rate risk arises from changes in market rates of interest that could adversely affect the Company. The Company's exposure to interest rate risk is insignificant.

ii. Foreign currency risk

Foreign currency risk arises from fluctuations in foreign currencies versus the Canadian dollar that could adversely affect reported balances and transactions denominated in those currencies. The Company does not hold assets or liabilities in foreign currencies and therefore has a low risk on foreign currency.

iii. Equity price risk

Equity price risk arises from market fluctuations in equity prices that could adversely affect the Company's operations. The Company's current exposure to equity price risk is limited to declines in the values and volumes including those of its own shares, which could impede its ability to raise additional funds when required.

14. CAPITAL MANAGEMENT

The Company's capital management objective is to ensure its ability to continue as a going concern to meet its operational obligations and to maintain capital access to fund its mineral exploration activities in the Northwest Territories and Nunavut, Canada.

The capital that the Company manages is the total of liabilities and equity on the statements of financial position. The Company may modify the capital structure to meet its funding needs by issuing new equity shares and/or debt instruments, disposing assets or bringing in joint venture partners. To facilitate the management of its capital, the Company prepares annual budgets approved by the Board of Directors. The budget is reviewed and updated periodically to account for changes in the expenditures and economic conditions. The Company is not subject to any externally imposed capital requirements.

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STRATEGX ELEMENTS CORP. Notes to the financial statements (Expressed in Canadian dollars) For the years ended December 31, 2024 and 2023

15. FLOW-THROUGH SHARE PREMIUM LIABILITIES

Flow-through share premium liabilities include the liability portion of the flow-through shares issued. The following is a continuity schedule of the liability portion of the flow-through shares issuances.

	Issued on December 2, 2022	Issued on December 30, 2022	Issued on August 31, 2023	Issued on June 24, 2024	Total
Balance, December 31, 2022	$ 10,161	$ 54,000	$ -	$ -	$ 64,161
Liability incurred on flow-through shares issued	-	-	22,000	-	22,000
Reversal of flow-through share liability	-	(54,000)	-	-	(54,000)
Settlement of flow-through share liability on incurring expenses	(10,161)	-	-	-	(10,161)
Balance, December 31, 2023	-	-	22,000	-	22,000
Liability incurred on flow-through shares issued	-	-	-	1,425,000	1,425,000
Settlement of flow-through share liability on incurring expenses	-	-	(22,000)	(983,065)	(1,005,065)
Balance, December 31, 2024	$ -	$ -	$ -	$ 441,935	$ 441,935

During the year ended December 31, 2024:

On June 24, 2024, the Company closed a non-brokered private placement by issuing 15,000,000 Charity FT Shares at $0.30 per share for gross proceeds of $4,500,000. A flow-through liability $1,425,000 (premium of $0.095 per share) was recognized on the issuance date. The Company incurred a cumulative of $3,104,415 of qualified expenses as of December 31, 2024. As of December 31, 2024, the Company has a requirement to incur an additional $1,395,585 in qualified expenses.

During the year ended December 31, 2023:

On August 21, 2023, the Company raised $110,000 through the issuance of 440,000 flow-through common shares at $0.25 per share. A flow-through liability $22,000 (premium of $0.05 per share) was recognized on the issuance date. The Company incurred a cumulative of $110,000 (2023 - $Nil) of qualified expenses as of December 31, 2024.

During the year ended December 31, 2022:

On December 2, 2022, the Company raised $100,500 through the issuance of 335,000 flow-through shares at a price of $0.30 per share. A flow-through liability of $20,100 (premium of $0.06 per share) was recognized on the issuance date. The Company incurred a cumulative of $100,500 (2022 - $49,697) of qualified expenses as of December 31, 2023.

On December 30, 2022, the Company raised $360,000 through the issuance of 1,200,000 flow-through shares at a price of $0.30 per share. A flow-through liability of $54,000 (premium of $0.045 per share) was recognized on the issuance date. The Company incurred $Nil of qualified expenses as of December 31, 2023. As a result, the Company accrued $52,200 of Part XII.6 tax and penalty and $144,000 of liabilities on indemnifying the investors as of December 31, 2023.

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STRATEGX ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

16. SUPPLEMENT DISCLOSURE WITH RESPECT TO CASH FLOWS

	December 31, 2024	December 31, 2023
Exploration and evaluation assets included in accounts payable and accrued liabilities	$ 637,960	$ 655,970
Exploration and evaluation assets included in due to related parties	$ 108,413	$ 89,188
Share issuance costs included in accounts payable and accrued liabilities	$ 62,500	$ 31,500
Asset retirement obligations included in equipment	$ 258,000	$ -
Amortization in exploration and evaluation assets	$ 32,615	$ 11,682
Transfer of fair value of expired warrants	$ 120,519	$ -
Initial recognition of right-of-use assets	$ -	$ 68,215
Interest paid	$ -	$ -
Taxes paid	$ -	$ -

Reconciliation of liabilities arising from financing activities for the years ended December 31, 2024 and 2023:

	Non-cash items
	December 31, 2023	Interest	Payments	Accretion	December 31, 2024
	$	$	$	$	$
Loans	40,000	1,509	(3,460)	-	38,049
Lease liability	62,473	-	(39,690)	7,943	30,726
Total	102,473	1,509	(43,150)	7,943	68,775
	Non-cash items
---	---	---	---	---	---
	December 31, 2022	Payments	Addition of new office lease	Accretion	December 31, 2023
	$	$	$	$	$
Loans	40,000	-	-	-	40,000
Lease liability	-	(6,615)	68,215	873	62,473
Total	40,000	(6,615)	68,215	873	102,473

17. SEGMENTED INFORMATION

The Company has one reportable operating segment, being the acquisition and exploration of mineral properties. At December 31, 2024 and 2023, the Company's exploration and evaluation assets are located in Canada. All expenses and cash receipts pertaining to exploration and evaluation activities are capitalized.

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STRATEGY ELEMENTS CORP.

Notes to the financial statements

(Expressed in Canadian dollars)

For the years ended December 31, 2024 and 2023

18. INCOME TAXES

A reconciliation of income taxes at statutory rates (2024 – 27%; 2023 – 27%) with the reported taxes is as follows:

	Year ended December 31, 2024	Year ended December 31, 2023
Income (loss) for the year before income tax	$ 137,990	$ (2,317,628)
Expected income tax (recovery)	$ 37,000	$ (626,000)
Non-deductible (non-taxable) differences	(271,000)	9,000
True up	121,000	-
Change in unrecognized tax benefits	113,000	617,000
Total income tax expenses (recovery)	$ -	$ -

The following is the analysis of recognized deferred tax liabilities and deferred tax assets:

	2024	2023
Deferred tax liabilities
Exploration and evaluation assets	$ (480,000)	$ -
Equipment	(55,000)	-
Accounts payable – fixed term	(44,000)	(82,000)
Deferred tax liabilities	(579,000)	(82,000)
Deferred tax assets
Non-capital losses	579,000	82,000
Deferred tax assets	579,000	82,000
Net deferred tax assets (liabilities)	$ -	$ -

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

	2024	Expiry Date Range	2023
Temporary differences:
Share issue costs	$ 98,000	2025 – 2028	$ 101,000
Equipment	$ -	No expiry date	$ 20,000
Receivables	$ 143,000	No expiry date	$ -
Asset retirement obligation	$ 258,000	No expiry date	$ -
Exploration and evaluation assets	$ -	No expiry date	$ 1,470,000
Non-capital losses available for future periods	$ 1,234,000	2041 – 2044	$ 2,757,000

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