NI FORM 51-102F4
BUSINESS ACQUISITION REPORT

Item 1 Identity of Company

1.1 Name and Address of Company

Talon Metals Corp. (the “Talon” or the “Company”)
Craigmuir Chambers
P.O. Box 71
Road Town, Tortola, VG1110
British Virgin Islands

1.2 Executive Officer

The following executive officer of the Company is knowledgeable about the significant acquisition and this business acquisition report (the “Report”):

Mike Kicis
President
Telephone: 1 (647) 968-0060

Item 2 Details of Acquisition

2.1 Nature of Business Acquired

On January 9, 2026 (the “Closing Date”), Talon, through its subsidiary Talon Metals (USA) Ltd., completed the acquisition of all of the issued and outstanding shares of Eagle Mining US Ltd. (formerly named Lundin Mining US Ltd., “Eagle Mining”) from Lundin Mining Corporation (“Lundin Mining”) pursuant to a share purchase agreement (the “Share Purchase Agreement”) dated December 18, 2025 (the “Transaction”). Eagle Mining, through its subsidiaries, owns the producing Eagle Mine and associated Humboldt Mill in Michigan, USA.

2.2 Date of Acquisition

January 9, 2026

2.3 Consideration

Pursuant to the Share Purchase Agreement, Talon acquired 100% of the issued and outstanding shares of Eagle Mining for the following consideration:

the issuance of 27,515,223 post-Consolidation common shares of Talon (“Talon Shares”) (being the 275,152,232 pre-consolidation Talon Shares issued on the Closing Date adjusted to reflect a 10:1 consolidation of the Talon Shares completed on January 23, 2026); and
a production payment royalty payable to Lundin Mining on ore from sources other than the Eagle Mine that is processed through the Humboldt Mill at a rate of US$1.00 per tonne, up

to a maximum aggregate payment of US$20.0 million (representing 20 million tonnes of ore).

2.4 Effect on Financial Position

Upon completion of the Transaction, Eagle Mining and its subsidiaries became indirect wholly owned subsidiaries of Talon. The Transaction resulted in the Company becoming a multi-asset U.S. nickel-copper company and expanded the Company’s operational portfolio beyond the Tamarack Nickel Project.

In connection with closing of the Transaction, Jack Lundin and Juan Andrés Morel, the CEO and COO, respectively, of Lundin Mining, were appointed to the board of directors of the Company (the “Talon Board”). Darby Stacey, the General Manager of the Eagle Mine under Lundin Mining, was appointed as CEO of the Company and also joined the Talon Board. In addition, Warren Newfield stepped down from the Talon Board and Henri van Rooyen was appointed Executive Chairman.

The expected effect of the acquisition on the Company’s financial position is outlined in the unaudited pro forma consolidated financial statements of the Company included with this Report.

Except as disclosed in this Report or as otherwise publicly disclosed, the Company does not have any current plans or proposals for material changes in the Company’s business affairs or the affairs of the acquired operations which may have a significant effect on the financial performance and financial position of the Company.

2.5 Prior Valuations

To the knowledge of Talon, there has not been any valuation opinion obtained within the last 12 months by Lundin Mining or Talon required by securities legislation or a Canadian exchange or market to support the consideration paid by Talon in connection with the Transaction.

2.6 Parties to Transaction

The Transaction was not with an “informed person” (as such term is defined in Section 1.1 of National Instrument 51-102 – Continuous Disclosure Obligations), associate or affiliate of Talon.

2.7 Date of Report

April 9, 2026

Item 3 Financial Statements

The following is attached as Schedule “A” to this Report:

The audited annual consolidated financial statements of Eagle Mining for the fiscal year ended December 31, 2025, together with the auditor’s report thereon and the notes thereto and the unaudited annual consolidated financial statements of Eagle Mining for the fiscal year ended December 31, 2024, and the notes thereto.

In addition, the following is attached as Schedule "B" to this Report:

The unaudited pro forma consolidated financial statements of Talon as at and for the fiscal year ended December 31, 2025, together with the notes thereto including other information required by Part 8 of NI 51-102, giving effect to the Transaction:

(a) An unaudited pro forma consolidated statement of financial position as at December 31, 2025 combining the audited consolidated statement of financial position of Talon as at December 31, 2025 with the audited consolidated statement of financial position of Eagle Mining as at December 31, 2025. The unaudited pro forma consolidated statement of financial position gives effect to the Transaction as if it had closed on December 31, 2025.

(b) An unaudited pro forma consolidated statement of income of Talon for the year ended December 31, 2025 has been created by combining the audited consolidated statement of loss of Talon for the year ended December 31, 2025 with the audited consolidated statement of income of Eagle Mining for the period ended December 31, 2025. The unaudited pro forma consolidated statement of income gives effect to the Transaction as if it had closed on January 1, 2025.

SCHEDULE “A”

ANNUAL FINANCIAL STATEMENTS OF EAGLE MINING

(YEAR ENDED DECEMBER 31, 2025 AUDITED, YEAR ENDED DECEMBER 31, 2024 UNAUDITED)

See attached.

A-1

Consolidated Financial Statements of

Eagle Mining US Ltd.

(formerly Lundin Mining US Ltd.)

December 31, 2025

pwc

Independent auditor's report

To the Board of Directors of Eagle Mining US Ltd. (formerly Lundin Mining US Ltd.)

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Eagle Mining US Ltd. (formerly Lundin Mining US Ltd.) and its subsidiaries (together, the Company) as at December 31, 2025 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

What we have audited

The Company's consolidated financial statements comprise:

the consolidated statement of financial position as at December 31, 2025;
the consolidated statement of income and comprehensive income for the year then ended;
the consolidated statement of changes in shareholder's equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, comprising material accounting policies and other explanatory information.

PricewaterhouseCoopers LLP
PwC Place, 250 Howe Street, Suite 1400
Vancouver, British Columbia, Canada V6C 3S7
T.: +1 604 806 7000, F.: +1 604 806 7806
Fax to mail: [email protected]

"PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

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. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Comparative information

The consolidated financial statements of the Company as at and for the year ended December 31, 2024 were not audited but were subject to review by us. A review engagement is substantially less in scope than an audit. The review report dated April 9, 2026 expressed an unmodified conclusion.

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 Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditor’s responsibilities for the audit of the consolidated financial statements

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

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

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

Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Company as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes 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.

/s/PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, British Columbia

April 9, 2026

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of US dollars)

| | As at
December 31, 2025 | December 31, 2024
Unaudited |
| --- | --- | --- |
| ASSETS | | |
| Cash and cash equivalents | $ 21,990 | $ 12 |
| Trade and other receivables (Note 4) | 10,403 | 20,440 |
| Inventories (Note 5) | 20,887 | 18,732 |
| Income taxes receivable | - | 4,220 |
| Total current assets | 53,280 | 43,404 |
| Mineral properties, plant and equipment (Note 6) | 170,483 | 106,518 |
| Total assets | $ 223,763 | $ 149,922 |
| LIABILITIES | | |
| Trade and other payables (Note 8) | $ 14,512 | $ 19,794 |
| Employee wages and benefits payable | 4,800 | 4,977 |
| Current portion of loan payable to parent (Note 10) | 33,962 | 33,000 |
| Payable to parent | 232 | 8,808 |
| Current portion of lease liabilities (Note 9) | 1,775 | 6,009 |
| Current portion of reclamation and closure provisions (Note 11) | 3,634 | - |
| Total current liabilities | 58,915 | 72,588 |
| Lease liabilities (Note 9) | 7,208 | 7,420 |
| Reclamation and closure provisions (Note 11) | 70,171 | 91,302 |
| Other long-term liabilities | 1,045 | 321 |
| Deferred tax liabilities (Note 15) | 25,219 | 4,029 |
| Total non-current liabilities | 103,643 | 103,072 |
| Total liabilities | $ 162,558 | $ 175,660 |
| SHAREHOLDERS’ EQUITY | | |
| Share Capital | $ 281,687 | $ 281,687 |
| Retained Earnings (Deficit) | (220,482) | (307,425) |
| Total Shareholders’ Equity | 61,205 | (25,738) |
| Total liabilities and Shareholders’ Equity | $ 223,763 | $ 149,922 |

Commitments and contingencies (Note 17)
Subsequent event (Note 21)

Nature of Operations and Liquidity Risk – Note 1

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

APPROVED BY THE BOARD OF DIRECTORS
(Signed) – Greg Kinross, Director
(Signed) – Darby Stacey, Director

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the years ended December 31, 2025 and 2024
(in thousands of US dollars)

| | 2025 | 2024
Unaudited |
| --- | --- | --- |
| Revenue (Note 12) | $ 208,602 | $ 152,467 |
| Cost of goods sold | | |
| Production costs (Note 13) | (150,704) | (111,919) |
| Mine Suspension Costs (Note 14) | - | (36,100) |
| Depreciation, depletion and amortization (Note 6) | (22,290) | (33,002) |
| Gross profit | 35,608 | (28,554) |
| Exploration and business development | (1,355) | (3,208) |
| Finance (costs) income | (6,135) | (3,709) |
| Other (expense) income | (3,448) | (6,135) |
| Asset impairment and reversals of impairment (Note 7) | 83,751 | (104,857) |
| Earnings (loss) before income taxes | 108,421 | (146,463) |
| Current tax expense (Note 15) | (288) | - |
| Deferred tax recovery (expense) (Note 15) | (21,190) | 26,802 |
| Net earnings (loss) and comprehensive income (loss) | $ 86,943 | $ (119,661) |

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

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
For the years ended December 31, 2025 and 2024
(in thousands of US dollars)

	Shares		Retained Earnings (Deficit)	Shareholder's Equity
	Number	Amount
Balance at January 1, 2024 unaudited	5,000	$ 281,687	$ (177,764)	$ 103,923
Net earnings (loss)			(119,661)	(119,661)
Dividends paid to parent			(10,000)	(10,000)
Balance at December 31, 2024 unaudited	5,000	281,687	(307,425)	(25,738)
Balance at January 1, 2025	5,000	281,687	(307,425)	(25,738)
Net earnings (loss)			86,943	86,943
Balance at December 31, 2025	5,000	$ 281,687	$ (220,482)	$ 61,205

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

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2025 and 2024
(in thousands of US dollars)

| Cash provided by (used in) | 2025 | 2024
Unaudited |
| --- | --- | --- |
| Operating activities | | |
| Net earnings (loss) | $ 86,943 | $ (119,661) |
| Items not involving cash and other adjustments | | |
| Depreciation, depletion and amortization | 22,290 | 33,002 |
| Finance costs, net | 6,168 | 3,631 |
| Deferred tax (recovery) expense | 21,190 | (26,802) |
| Asset impairment (Note 7) | - | 104,857 |
| Reversal of impairment (Note 7) | (83,751) | - |
| Other | 2,225 | 600 |
| Reclamation payments (Note 11) | (2,535) | (7,202) |
| Pension payments | - | - |
| Changes in non-cash working capital items (Note 20) | 6,071 | 4,196 |
| Cash provided by operating activities | 58,601 | (7,379) |
| Investing activities | | |
| Investment in mineral properties, plant and equipment | (20,574) | (19,600) |
| Interest received | 620 | 622 |
| Other | 1,596 | 97 |
| Cash (used in) provided by investing activities | (18,358) | (18,881) |
| Financing activities | | |
| Principal payments of lease liabilities (Note 9) | (5,289) | (6,391) |
| Interest paid | (976) | (711) |
| Funding from (payments to) parent | (12,000) | 33,000 |
| Dividends paid | - | (10,000) |
| Cash used in financing activities | (18,265) | 15,898 |
| (Decrease) increase in cash and cash equivalents during the year | 21,978 | (10,362) |
| Cash and cash equivalents, beginning of year | 12 | 10,374 |
| Cash and cash equivalents, end of year | $ 21,990 | $ 12 |

Supplemental cash flow information (Note 20)

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

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024 (unaudited)

(Tabular amounts in thousands of US dollars)

1. NATURE OF OPERATIONS AND LIQUIDITY RISK

On December 18, 2025, Talon Metals Corp. ("Talon") entered into a definitive agreement (the "Share Purchase Agreement") with Lundin Mining Corporation ("Lundin Mining" or the "Parent") to purchase a 100% interest in Lundin Mining's subsidiary Lundin Mining US Ltd. now known as Eagle Mining US Ltd., which indirectly holds the Eagle mine ("Eagle Mine") and the Humboldt mill ("Humboldt Mill"), together "Eagle", and its subsidiaries defined within the Share Purchase Agreement (together, "Eagle Mining US" or the "Company"). On January 9, 2026, Lundin Mining completed the sale of a 100% interest in Lundin Mining US to Talon.

Eagle Mining US is a nickel-copper mining and exploration company with its operations located in Michigan, United States and incorporated under the laws of the state of Delaware. It's principal place of business is 4547 Co Rd 601, Champion, MI 49814, United States

These consolidated financial statements (the "Consolidated Financial Statements") are prepared for inclusion in Talon's Business Acquisition Report pursuant to National Instrument 51-102 Continuous Disclosure Obligations and, in connection therewith, Form 51-102F4 Business Acquisition Report.

These Consolidated Financial Statements as at and for the year ended December 31, 2025, have been prepared on a going concern basis, which presumes the realization of assets and discharge of liabilities in the normal course of business for at least twelve months from December 31, 2025.

As at December 31, 2025, the Company had cash and cash equivalents of $22.0 million and a working capital (current assets less current liabilities) deficiency of $5.6 million. Current liabilities include a loan payable to the Company's former parent, Lundin Mining, of $34.0 million, which was due on December 31, 2026 and is classified as current at year-end. This loan was settled in January 2026 through a combination of Company shares and $20.4 million in cash. In addition, Talon and Lundin Mining have agreed to a working capital adjustment of $11.5 million which will be paid to Talon by April 30, 2026. This payment reflects the difference between target working capital and actual working capital at closing in accordance with the Share Purchase Agreement.

The Company's ability to continue as a going concern is dependent on current working capital and cash flows from Eagle during its remaining life, to fund operations, mine reclamation obligations and the needs of Talon. There are risks and uncertainties regarding the cash flows from Eagle, including prevailing market prices for nickel and copper, operating costs, capital costs, operational risks and other factors, some of which in turn are impacted by global events such as wars and recessions. Any excess funds generated by the Eagle Mine will be required by Talon, which will need to raise additional capital to develop and construct its Tamarack Project.

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024 (unaudited)
(Tabular amounts in thousands of US dollars)

2. BASIS OF PRESENTATION

(i) Basis of presentation and statement of compliance

These Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). No new accounting standards were adopted as of January 1, 2025. The material accounting policies applied in these Consolidated Financial Statements are presented in Note 3 and have been applied consistently to all years presented, unless otherwise noted.

The accompanying Consolidated Financial Statements include the assets, liabilities, and results of operations of Eagle Mining US Ltd. and its subsidiaries. Material subsidiaries and their principal activities are presented below:

Material Subsidiaries	Percentage Ownership	Principal Activity
Eagle Mine LLC	100%	Nickel and Copper Production

Corporate costs such as insurance, information technology costs, share-based compensation and management fees reside in the Eagle Mining US entities through Lundin Mining’s annual corporate cost allocation methodology. Third party costs such as insurance or information technology costs are recharged at cost with no mark-up. Share-based compensation costs incurred by the Parent are charged to the Company in relation to employees who participate in the Lundin Mining incentive compensation plan. Management fees are charged based on time incurred by personnel employed by the Parent or its subsidiaries for services which benefit the Company.

(ii) Presentation and functional currency

Except as otherwise noted, these Consolidated Financial Statements are presented in United States dollars ("$", "US dollars" or "USD"). The functional currency of the Company and its subsidiaries is the US dollar.

3. MATERIAL ACCOUNTING POLICIES AND ESTIMATION UNCERTAINTY

The Company has consistently applied the accounting policies to all the years presented. The material accounting policies applied in these Consolidated Financial Statements are set out below.

(i) Material accounting policies

(a) Translation of foreign currencies

The functional currency of the Company is the currency of the primary economic environment in which it operates. Transactions denominated in currencies other than the functional currency are recorded using the exchange rates prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items that are measured at historical cost in foreign currency are translated using the exchange rate at the date of the transaction.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognized in the consolidated statements of income and comprehensive income in the period in which they arise.

(b) Cash and cash equivalents

Cash and cash equivalents comprise cash on deposit with banks and highly liquid short-term interest-bearing investments with a term to maturity at the date of purchase of 90 days or less, which are subject to an insignificant risk of change in value.

(c) Inventories

Ore and concentrate stockpiles are valued at the lower of production cost and net realizable value ("NRV"). Production costs include costs of materials and labor related directly to mining and processing activities, including depreciation and amortization of mineral property, plant and equipment directly involved in the related mining and production process, and directly attributable overhead costs.

Materials and supplies inventories are valued at the lower of average cost less allowances for obsolescence and NRV.

If the carrying value of inventories exceeds NRV, a write-down is recognized. The write-down may be reversed in a subsequent period if the circumstances which caused the write-down no longer exist.

Overhead costs associated with suspensions of underground mining operations are unrelated to production and are expensed as incurred.

(d) Mineral properties

Mineral properties are carried at cost, less accumulated depletion and any accumulated impairment charges. Expenditures on mineral properties include:

i. Acquisition costs which consist of payments for property rights and leases, including the estimated fair value of exploration properties acquired as part of a business combination or the acquisition of a group of assets.

ii. Exploration, evaluation and project investigation costs incurred on an area of interest once a determination has been made that a property has economically recoverable Mineral Resources and Mineral Reserves ("R&R") and there is a reasonable expectation that costs can be recovered by future exploitation or sale of the property. Exploration, evaluation and project investigation

expenditures made prior to a determination that a property has economically recoverable R&R are expensed as incurred.

iii. Development costs incurred in an area of interest, once management has determined the technical feasibility and commercial viability of a project, the project presents an appropriate rate of return on investment, and management has demonstrated commitment to advance the project. When additional development expenditures are made on a property after commencement of production, the expenditure is capitalized as mineral property when it is probable that additional economic benefit will be derived from future operations. Development costs are amortized using a unit-of-production basis over the Proven and Probable Mineral Reserve to which they relate.

iv. Interest and financing costs on debt or other liabilities that are directly attributed to the acquisition, construction and development of a qualifying asset. All other borrowing costs are expensed as incurred.

(e) Plant and equipment

Plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment charges. For production plant and equipment, depreciation is recorded on a units-of-production basis over proven and probable mineral reserves. Depreciation on all other plant and equipment is recorded on a straight-line basis over the estimated useful life of the asset or over the estimated remaining life of the mine (LOM), if shorter. Residual values and useful lives are reviewed annually. Gains and losses on disposals are calculated as proceeds received less the carrying amount and are recognized in the consolidated statements of income and comprehensive income.

Useful lives are as follows:

	Number of years
Buildings	Shorter of LOM - 39
Plant and machinery	5 - 20
Mobile Equipment	5 - 20
Support Equipment	3 - 8

(f) Impairment and impairment reversals

At the end of each reporting period, the Company assesses whether there is an indication that an asset or group of assets within a cash generating unit ("CGU") may be impaired. When impairment indicators exist, the Company estimates the recoverable amount of the asset or CGU and compares it against the asset or CGU's carrying amount. The recoverable amount is the higher of the fair value less cost of disposal ("FVLCD") and the asset or CGU's value in use ("VIU"). If the carrying value exceeds the recoverable amount, an impairment loss is recorded in the consolidated statements of income and comprehensive income during the period. If either FVLCD or VIU exceeds the asset or CGU's carrying amount, the asset or CGU is not impaired, and the Company does not estimate the other amount.

In assessing VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU for which the estimates of future cash flows have not been adjusted. The cash flows are based on best estimates of expected future cash flows from the continued use of the asset or the CGU and its eventual disposal.

FVLCD is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, which is best evidenced if obtained from an active market or binding sale agreement. Where neither exists, the fair value is based partly on a discounted cash flow

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024 (unaudited)

(Tabular amounts in thousands of US dollars)

projections model. Costs of disposal, other than those that have been recognized as liabilities, are deducted in measuring FVLCD.

Reversals of impairment are assessed at each reporting period where there is an indication that an impairment loss recognized previously may no longer exist or has decreased. If an impairment reversal indicator exists, the recoverable amount is calculated. If the recoverable amount exceeds the carrying amount, the carrying value of the CGU is increased to the recoverable amount net of depreciation. The increased carrying amount cannot exceed the carrying amount that would have been determined had no impairment loss been recognized for the CGU in prior years. A reversal of an impairment loss is recognized as a gain in the consolidated statements of income and comprehensive income in the period it is determined.

(g) Leases

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

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, and leases of low-value assets. For these leases, the Company recognizes the lease payments as an expense in the consolidated statements of income and comprehensive income on a straight-line basis over the term of the lease.

The Company recognizes a lease liability and a right-of-use asset at the lease commencement date.

The lease liability is initially measured as the present value of future lease payments discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, each operation's applicable incremental borrowing rate. The incremental borrowing rate is the rate which the operation would have to pay to borrow, over a similar term and with a similar security, the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments, less any lease incentives receivable;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable by the Company under residual value guarantees;
the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the Company expects to exercise an option to terminate the lease.

The lease liability is subsequently measured by:

increasing the carrying amount to reflect interest on the lease liability;
reducing the carrying amount to reflect lease payments made; and
remeasuring the carrying amount to reflect any reassessment or lease modifications.

Variable lease payments that do not depend on an index or rate are not included in the measurement of the lease liability.

The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.

Each lease payment is allocated between the lease liability and finance cost. The finance cost is recorded as an expense in the consolidated statements of income and comprehensive income over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

The right-of-use asset is initially measured at cost, which comprises the following:

the amount of the initial measurement of the lease liability;
any lease payments made at or before the commencement date, less any lease incentives received;
any initial direct costs incurred by the Company; and
an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.

The right-of-use asset is subsequently measured at cost, less any accumulated depreciation and any accumulated impairment losses, and adjusted for any remeasurement of the lease liability. It is depreciated in accordance with the Company's accounting policy for plant and equipment, from the commencement date to the earlier of the end of its useful life or the end of the lease term.

On the consolidated statements of financial position, right-of-use assets and lease liabilities are reported in mineral properties, plant and equipment and lease liabilities, respectively.

(h) Reclamation and Closure provisions

The Company incurs reclamation and other closure costs related to its mining properties such as facility decommissioning and dismantling, end of mine life severance, site restoration and ongoing environmental monitoring. These costs are a normal consequence of mining and are dependent on the requirements of the Company's legal and constructive obligations, as well as any other commitments made to stakeholders. The majority of these expenditures will be incurred at the end of the life of mine and are dependent upon a number of factors such as the life and nature of the asset, the operating license conditions and the environment in which the mine operates.

The future obligations for mine closure activities are estimated by the Company using mine closure plans or other similar studies which outline the activities to be undertaken to meet regulatory and internal requirements. Since the obligations are dependent on the laws and regulations of the country in which the mine operates, they are regularly evaluated by management and external experts. Costs included in the obligations encompass all reclamation and other closure activities expected to occur progressively over the life of the operation, at the time of closure and post-closure in connection with disturbances as at the reporting date.

Obligations may change as a result of amendments in laws and regulations relating to environmental protection and/or other legislation affecting resource companies. Included in the estimated obligations are a number of significant assumptions made by management in determining closure provisions. Accordingly, closure provisions are more uncertain the further into the future mine closure activities are expected to be carried out.

The Company records the present value of its reclamation provision as a liability with a corresponding increase in the carrying value of the related asset. The provision is discounted to its net present value using a country specific, current market, pre-tax discount rate. The unwinding of the discount, referred to as an accretion expense, is included in finance costs in the consolidated statements of income and comprehensive income and results in an increase in the carrying amount of the liability. Reclamation obligations settled in the year are offset against the corresponding liability. Unplanned reclamation costs are reported as either part of the cost of inventory or recognized as a cost in the consolidated statements of income and comprehensive income, if they relate to either production activities or a closed site.

10 -

The capitalized cost of the reclamation and other closure activities is recognized in the mineral property and plant & equipment and depreciated on a unit-of-production basis over the expected mine life of the operation or asset to which it relates. Depreciation costs are included in the consolidated statements of income and comprehensive income as part of cost of goods sold.

Changes in obligations resulting from revisions to the timing or amount of expenditures or discount rate are recognized as an increase or decrease in the reclamation provision liability, and a corresponding change in the carrying amount of the related assets.

(i) Revenue recognition

Revenue from contracts with customers is recognized when a customer obtains control of the promised goods and the Company satisfies its performance obligation. Revenue is allocated to each performance obligation. The Company considers the terms of the contract in determining the transaction price. The transaction price is based upon the amount the entity expects to be entitled to in exchange for the transferring of promised goods. The Company earns revenue from contracts with customers related to its concentrate sales.

The Company satisfies its performance obligations for its concentrate sales per specified contract terms which are generally upon delivery of an individual parcel. Revenue from concentrate and sales is recorded based upon forward market prices of the expected final sales price date. The Company recognizes revenue when concentrate has been delivered to a location specified by the customer.

(j) Current and deferred income taxes

Income tax expense represents the sum of current and deferred tax. Current taxes payable is based on taxable earnings for the year. Taxable earnings may differ from earnings before income tax as reported in the consolidated statements of income and comprehensive income because it may exclude items of income or expense that are taxable or deductible in other years and it may further exclude items of income or expense that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.

Income tax assets and liabilities are offset when there is a legally enforceable right to offset the assets and liabilities and when they relate to income taxes levied by the same tax authority on either the same taxable entity or different taxable entities where there is an intention to settle the balance on a net basis.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Consolidated Financial Statements and the corresponding tax bases used in the computation of taxable earnings. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which deductible temporary differences or tax loss carryforwards can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable earnings nor the accounting earnings. Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries and investments in associates, except where the Company is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable earnings will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to earnings, except when it relates to items charged or credited directly to equity, in which case the deferred tax is reflected in equity.

11 -

(k) Financial instruments

Financial instruments are recognized on the consolidated statement of financial position on the trade date, the date on which the Company becomes a party to the contractual provisions of the financial instrument. The Company classifies its financial instruments in the following categories:

Financial Assets at Amortized Cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. The Company intends to hold these receivables until cash flows are collected. The Company recognizes a loss allowance for expected credit losses on a financial asset that is measured at amortized cost.

Financial Assets at Fair Value through Profit or Loss ("FVTPL")

Financial assets measured at FVTPL are assets which do not qualify as financial assets at amortized cost or those not designated in hedge relationships.

Provisionally priced trade receivables are measured at FVTPL as some, or all of the cash flows are dependent on commodity prices. These receivables are initially measured at their transaction price. Subsequent changes to provisionally priced trade receivables are recorded in the consolidated statements of income and comprehensive income as revenue from other sources.

Financial Liabilities at Amortized Cost

Financial liabilities are measured at amortized cost using the effective interest method, unless they are required to be measured at FVTPL, or the Company has opted to measure them at FVTPL. Long-term debt is recognized initially at fair value, net of any transaction costs incurred, and subsequently at amortized cost using the effective interest method.

Financial Liabilities at FVTPL

Financial liabilities at FVTPL are liabilities which include embedded derivatives that cannot be classified as amortized cost or derivative liabilities not designated in hedge relationships. Financial liabilities at FVTPL are initially recognized at fair value with changes to fair values recognized in the consolidated statements of income and comprehensive income.

The Company de-recognizes 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. Gains and losses on derecognition are generally recognized in the consolidated statements of income and comprehensive income.

The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expelled. 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 income and comprehensive income.

12 -

(ii) Estimation uncertainty and judgements in applying the entity’s accounting policies

The preparation of Consolidated Financial Statements in accordance with IFRS Accounting Standards requires the use of certain critical accounting estimates and judgements. These estimates and judgements are based on management’s best knowledge of the relevant facts and circumstances, taking into account previous experience, but actual results may differ materially from the amounts included in the Consolidated Financial Statements.

Areas where estimation uncertainty have the most significant effect on the amounts recognized in the Consolidated Financial Statements include:

Valuation of mineral properties - The Company carries its mineral properties at cost less accumulated depletion and any accumulated provision for impairment. The Company undertakes a review of the carrying values of mineral properties and related expenditures whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net recoverable amounts determined by reference to estimated future operating results and discounted net cash flows. An impairment loss is recognized when the carrying value of those assets is not recoverable. Where a previous impairment has been recorded, the Company analyzes any reverse impairment indicators. Impairment reversals are recognized in subsequent periods when there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. In undertaking this review, management of the Company is required to make significant estimates of, amongst other things, future production and sale volumes, metal prices, R&R quantities, future capital and production costs and reclamation costs to the end of the mine’s life. These estimates are subject to various risks and uncertainties which may ultimately have an effect on the expected recoverability of the carrying values of the mineral properties and related expenditures.

Reclamation provision - The Company incurs reclamation and other closure costs related to its mining property. The future obligations for mine closure activities are estimated by the Company using mine closure plans or other similar studies which outline the activities to be undertaken to meet regulatory and internal requirements. Since the obligations are dependent on the laws and regulations of the country in which the mine operates, they are regularly reviewed by management and external experts and could change as a result of amendments to laws and regulations. Included in the estimated obligations are a number of significant assumptions made by management, including nominal discount rates and inflation rates.

Assessment of impairment and reverse impairment indicators - Management applies significant judgement in assessing whether indicators of impairment or reversal of impairment exist for a CGU which would necessitate impairment testing. Internal and external factors used by management to determine whether indicators exist include, but are not limited to, significant changes in the use of the asset, commodity prices, capital and production forecasts, R&R quantities, and discount rates.

TRADE AND OTHER RECEIVABLES

Trade and other receivables are comprised of the following:

	December 31, 2025	December 31, 2024
Trade receivables	$ 7,700	$ 15,203
Prepaid expenses	2,703	3,068
Other receivables	-	2,169
	$ 10,403	$ 20,440

The Company does not have any significant balances that are past due nor any significant expected credit losses. The Company's credit risk is discussed in Note 19.

13 -

INVENTORIES

Inventories are comprised of the following:

	December 31, 2025	December 31, 2024
Materials and supplies	$ 11,181	$ 10,636
Ore stockpiles	1,930	1,146
Finished goods - concentrate stockpiles	7,776	6,950
	$ 20,887	$ 18,732

As at December 31, 2025, the materials and supplies balance contains inventory reserve for obsolescence of ($3.2) million (December 31, 2024 ($3.2) million).

MINERAL PROPERTIES, PLANT AND EQUIPMENT

Mineral properties, plant and equipment ("MPP&E") are comprised of the following:

Cost	Mineral properties	Plant and equipment	Assets under construction(1)	Software intangible assets	Total
As at December 31, 2023	$ 484,059	$ 511,091	$ 4,703	$ 3,792	$ 1,003,645
Additions		13,600	22,143	555	36,298
Asset Impairment & Reversal (Note 7)	(95,444)	(9,413)			(104,857)
Change in Reclamation & Closure Provision	4,598				4,598
Disposals		(5,259)			(5,259)
Transfers	12,093	7,908	(20,001)		-
As at December 31, 2024	405,306	517,927	6,845	4,347	934,425
Additions		1,443	20,786		22,229
Reversals of impairment (Note 7)	76,334	7,417			83,751
Change in Reclamation & Closure Provision	(18,908)				(18,908)
Disposals		(4,957)			(4,957)
Transfers	10,687	12,776	(23,463)		-
As at December 31, 2025	$ 473,419	$ 534,606	$ 4,168	$ 4,347	$ 1,016,540
Accumulated depreciation, depletion and amortization	Mineral properties	Plant and equipment	Assets under construction(1)	Software intangible assets	Total
As at December 31, 2023	$ 366,272	$ 432,971	$ —	$ 812	$ 800,055
Depreciation and Amortization	14,122	18,147	—	733	33,002
Disposals		(5,150)	—		(5,150)
As at December 31, 2024	380,394	445,968	—	1,545	827,907
Depreciation and Amortization	4,208	17,266	—	816	22,290
Disposals		(4,140)	—		(4,140)
As at December 31, 2025	$ 384,602	$ 459,094	$ —	$ 2,361	$ 846,057

(1) Represent assets under construction at the Company's operating mine site which are currently non-depreciable.

Net book value	Mineral properties	Plant and equipment	Assets under construction	Software intangible assets	Total
As at December 31, 2024	$ 38,744	$ 58,128	$ 6,845	$ 2,801	$ 106,518
As at December 31, 2025	$ 102,649	$ 61,680	$ 4,168	$ 1,986	$ 170,483

The Company leases various assets including railcars, storage facilities, office space, and machinery and equipment. The following table summarizes the changes in right-of-use assets within plant and equipment:

	Net book value
As at December 31, 2023	$ 7,534
Additions	13,600
Depreciation	(6,260)
Disposals	(12)
As at December 31, 2024	14,862
Additions	1,443
Depreciation	(7,465)
Disposals	(8)
As at December 31, 2025	$ 8,832

ASSET IMPAIRMENT & REVERSALS OF IMPAIRMENT

At every reporting period, the Company assesses whether there is an indication that an asset or group of assets may be impaired or whether there is an indication of impairment reversal. When impairment or impairment reversal indicators exist, the Company estimates the recoverable amount of the asset and compares it against the asset's carrying amount. In allocating a reversal of impairment, the carrying amount of a CGU cannot be increased above the lower of its recoverable amount and the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior periods.

2024

During the fourth quarter of 2024, factors including a decline in nickel prices and prolonged rehabilitation of the Eagle East ramp were identified as an impairment indicator for the Eagle Mine CGU, which is substantially all the assets and liabilities of the Company.

For the Eagle CGU impairment review, the Company used a FVLCD model (level 3 measurement). As the recoverable amount determined for the CGU was lower than the carrying value, an impairment of $104.9 million ($82.8 million net of tax) was recorded to reduce the carrying value of underground development, plant and other infrastructure to its recoverable value.

Key assumptions

	2024
Nickel price $/lb	8.50-9.00
Copper price $/lb	4.30-4.70
After-tax discount rate	9.0%
Life of mine	5 years

2025

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024 (unaudited)

(Tabular amounts in thousands of US dollars)

During 2025, the Company identified an indicator of impairment reversal based on the expected sale price of Lundin Mining US to Talon, as established in the Share Purchase Agreement (Note 1). Under the terms of the agreement, the Parent received 27.5 million common shares of Talon, adjusted for Talon's 10:1 share consolidation on January 23, 2026 fair valued at $133.6 million at completion of the transaction. In addition, the Parent received a production payment royalty in favor of Lundin Mining, on ore from other sources other than the Eagle Mine that is processed through the Humboldt Mill at a rate of $1.00 per tonne, up to a maximum of $20.0 million representing 20 million tonnes of ore. The production payment royalty was determined to have a fair value of $3.5 million based on the present value of future expected cash flows.

The Company determined that the recoverable amount was higher than the carrying amount that would have been determined, had no impairment loss been recognized in prior periods. Therefore, the Company recorded an impairment reversal of $83.75 million in December 2025 at the Eagle CGU to recognize mining rights and mineral properties based on their recoverable amount (level 3 measurement).

8. TRADE AND OTHER PAYABLES

Trade and other payables are comprised of the following:

	December 31, 2025	December 31, 2024
Trade payables	$ 4,300	$ 10,504
Unbilled goods and services	1,252	3,082
Royalties payable	2,951	997
Pricing provisions on concentrate sales (a)	525	747
Severance Tax Payable	5,484	4,464
	$ 14,512	$ 19,794

a) Includes balances owing to customers and provisions arising from forward market price adjustments.

9. LEASE LIABILITIES

Lease liabilities are comprised of the following:

	December 31, 2025	December 31, 2024
Lease liabilities (a)	$ 8,983	$ 13,429
Less: current portion	(1,775)	(6,009)
Long-term portion	$ 7,208	$ 7,420

The changes in lease liabilities are comprised of the following:

As at December 31, 2023		$ 6,669
Additions		13,174
Payments		(6,950)
Disposals		(23)
Interest		559
As at December 31, 2024		13,429
Additions		985
Payments		(6,218)
Disposals		(73)
Interest		860
As at December 31, 2025		8,983
Less: current portion		(1,775)
Long-term portion		$ 7,208

16 -

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024 (unaudited)

(Tabular amounts in thousands of US dollars)

a) Lease liabilities relate to leases on buildings and storage facilities, rail cars, vehicles, machinery and equipment, which have remaining lease terms of one to four years and interest rates of 1.7% - 7.1% over the terms of the leases.

The Company has short-term leases related to mining equipment and office space. Short-term lease expense for the period ended December 31, 2025 was $0.22 million (December 31, 2024 - $0.54 million).

The schedule of undiscounted lease payment obligations is as follows:

Less than one year	$ 2,320
One to five years	8,496
More than five years	-
Total undiscounted obligations as at December 31, 2025	$ 10,816

10. PAYABLE TO PARENT

The changes in loan payable to parent are comprised of the following:

As at December 31, 2023	$	-
Additions		43,000
Payments		(10,000)
Interest		-
As at December 31, 2024		33,000
Additions		23,129
Payments		(24,000)
Interest		1,833
As at December 31, 2025		33,962
Less: current portion		33,962
Long-term portion	$	-

11. RECLAMATION AND CLOSURE PROVISIONS

Reclamation and Closure provisions relating to the Company's mining operation are as follows:

Balance, December 31, 2023	$ 90,286
Accretion	3,620
Changes in estimate	5,884
Changes in discount rate	(1,286)
Payments	(7,202)
Balance, December 31, 2024	91,302
Accretion	3,947
Changes in estimate	(23,982)
Changes in discount rate	5,073
Payments	(2,535)
Balance, December 31, 2025	73,805
Less: current portion	3,634
Long-term portion	$ 70,171

The Company expects these liabilities to be settled between 2026 and 2052. The reclamation provisions are discounted using current market pre-tax discount rates of 3.54% (December 31, 2024 – 4.32%).

The schedule of undiscounted reclamation and other closure payments are as follows:

Less than one year	$	3,634
One to five years		48,235
More than five years		27,378
Total undiscounted obligations as at December 31, 2025	$	79,247

The Company previously recorded a constructive obligation to demolish and fully reclaim the Humboldt Mill site. During 2025, the Company de-recognized this liability on the basis that it intends to retain and repurpose the Humboldt Mill after Eagle mine closure as permitted under existing permits.

12. REVENUE

The Company's analysis of revenue from contracts with customers, segmented by product, is as follows:

	2025	2024
Revenue from contracts with customers:
Copper	$ 75,782	$ 47,445
Nickel	114,384	97,167
Silver	213	202
Other	7,598	2,476
Provisional pricing adjustments	10,625	5,177
Revenue	$ 208,602	$ 152,467

In 2025, 100% of the Company's revenue from contracts with customers related to sales with destination points in Canada (2024 – 100% Canada).

13. PRODUCTION COSTS

The Company's production costs are comprised of the following:

	2025	2024
Direct mine and mill cost	$ 95,293	$ 69,306
Transportation	18,186	13,330
Royalties and severance tax	17,762	11,484
General administrative and laboratory	19,463	17,799
Total production costs	$ 150,704	$ 111,919

14. MINE SUSPENSION COSTS

A fall of ground occurred in the lower ramp at Eagle mine in 2024 and limited production while rehabilitation was completed. Mine suspension costs incurred were $36.1 million in 2024 and represent overhead costs unrelated to production. No mine suspension costs were incurred in 2025.

15. CURRENT AND DEFERRED INCOME TAXES

	2025	2024
Current tax on net taxable earnings	$ 288	$ -
Deferred tax expense/(recovery)	21,190	(26,802)
Total tax (recovery) expense	$ 21,478	$ (26,802)

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024 (unaudited)

(Tabular amounts in thousands of US dollars)

The tax on the Company's earnings before income tax differs from the amount that would arise using the statutory income tax rates as follows:

	2025	2024
Earnings excluding income taxes	$ 108,420	$ (146,464)
Combined basic federal and state rates	21.0%	21.0%
Income taxes based on US statutory income tax rates	$ 22,768	$ (30,757)
Tax effects of:
Non-deductible and non-taxable items (a)	(2,461)	13
Adjustments in respect of prior years	-	(543)
Tax losses and temporary differences for which no deferred income tax asset was recognized (b)	1,179	4,357
Other	(8)	128
Total tax expense	$ 21,478	$ (26,802)

(a) Includes $1.7M in tax depletion deduction (2024 - $0)
(b) Deferred tax expense associated with temporary differences not recognized in 2025 was $5.8 million that can be carried forward to offset taxable income in future years. (2024 - $2.1 million deferred tax expense on tax losses not recognized).

Deferred tax assets (liabilities)

	As at December 31,
	2025	2024
Deferred tax assets	$ 3,222	$ 9,784
Deferred tax liabilities	(28,441)	(13,813)
Deferred tax assets (liabilities)	$ (25,219)	$ (4,029)

The movement in deferred income tax liabilities during the year, without taking into consideration the offsetting of balances within the same jurisdiction, is as follows:

	As at December 31,
	2025	(Expensed)/Recovery	2024
Deferred Tax Assets:
Provisions	$ 666	666	$ -
Inventory	556	(45)	601
Loss carryforwards	840	(5,326)	6,166
Exploration and development	787	(968)	1,755
Lease Liability	373	(889)	1,262
Deferred Tax Liabilities:
Mineral properties, plant & equipment	$ (26,274)	(15,966)	$ (10,308)
Section 263 adjustment	(312)	72	(384)
Right-of-use asset	(1,855)	1,266	(3,121)
	$ (25,219)	(21,190)	$ (4,029)

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024 (unaudited)

(Tabular amounts in thousands of US dollars)

16. FINANCIAL INSTRUMENTS

Fair values of financial instruments

The Company's financial assets and financial liabilities have been classified into categories that determine the basis of measurement. The following table shows the carrying values, fair values and fair value hierarchy of the Company's financial instruments as at December 31, 2025 and December 31, 2024:

	Level	December 31, 2025		December 31, 2024
		Carrying value	Fair value	Carrying value	Fair value
Financial assets
Fair value through profit or loss
Trade receivables (provisional)	2	$ 7,700	$ 7,700	$ 15,203	$ 15,203
Financial liabilities
Fair value through profit or loss
Pricing provisions on concentrate sales	2	$ 525	$ 525	$ 747	$ 747

Fair values of financial instruments are determined by valuation methods depending on hierarchy levels as defined below:

Level 1 – Quoted market price in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted market prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. observed prices) or indirectly (i.e. derived from prices).

Level 3 – Inputs for the assets or liabilities are not based on observable market data.

The Company estimates fair values based on the following methods of valuation and assumptions:

Trade receivables/pricing provisions on concentrate sales – The fair value of trade receivables that contain provisional pricing sales arrangements are valued using quoted forward market prices. The Company recognized positive pricing adjustments of $8.2 million in revenue during the year ended December 31, 2025 (December 31, 2024 - $2.0 million negative pricing adjustments).

The carrying values of certain financial instruments maturing in the short-term approximate their fair values. These financial instruments include cash and cash equivalents, trade and other receivables other than those provisionally priced, employee benefits payable, trade and other payables other than those provisionally priced and the loan and other amounts payable to the Parent, which are classified as amortized cost.

17. COMMITMENTS AND CONTINGENCIES

The Company has capital commitments of $3.3 million on various initiatives of which $3.3 million is expected to be paid in 2026.

EAGLE MINING US LTD. (formerly Lundin Mining US Ltd.)
Notes to Consolidated Financial Statements
For the years ended December 31, 2025 and 2024 (unaudited)
(Tabular amounts in thousands of US dollars)

18. RELATED PARTY TRANSACTIONS

During the year ended December 31, 2025, other (expense) income within the consolidated statements of income and comprehensive income includes $2.2 million and $1.2 million for management fees and share-based compensation expenses charged by the Parent, respectively (2024 - $2.2 million and $1.3 million, respectively). These amounts were included in the intercompany balances with outstanding balances of $0.2 million at year end 2025 and $8.5 million year end 2024.

The senior management team of which there are eight members received salaries, bonuses and benefits in the amounts of $3.6 million (2024 - $3.4 million).

During the year, the Company paid $nil in dividends to the Parent (2024 - $10.0 million).

In December 2024, a subsidiary of the Company entered into a loan agreement with the Parent for $33.0 million. The loan bore interest at 7% per annum and was due on December 31, 2025. During the year ended December 31, 2025, finance (costs) income within the consolidated statements of income and comprehensive loss includes interest expense charged by the Parent of $1.7 million (2024 - $nil).

In December 2025, a subsidiary of the Company entered into a loan agreement with the Parent for $34.0 million. The proceeds of the December 2025 loan was used to repay the December 2024 loan in full. The loan bears interest at 6.75% per annum with a repayment date of no later than December 31, 2026. The loan is recorded as a current liability in the consolidated statement of financial position.

On January 8, 2026, a subsidiary of the Company repaid $20.4 million of the December 2025 loan payable to parent. The remaining balance of the loan payable to parent of $13.6 million was settled in shares of Eagle Mine US Ltd prior to the acquisition of Eagle Mining US by Talon.

The related party transactions disclosed above may not be indicative of the costs that would have been incurred had the Company operated as a standalone entity.

19. MANAGEMENT OF FINANCIAL RISK

The Company's financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, foreign exchange risk, and commodity price risk. Interest rate risk is not considered to be material as the Company is not exposed to variable interest rates.

(a) Credit risk

The exposure to credit risk arises through the failure of a customer or another third party to meet its contractual obligations to the Company. The Company believes that its maximum exposure to credit risk as at December 31, 2025 is the carrying value of its trade and other receivables.

Concentrate produced at Eagle is sold primarily to two strategic customers with whom the Company has established a long-term relationship. The strategic customer is a large multi-national mining & metals company and credit risk is not considered to be significant. The failure the Company's strategic customer could have a material adverse effect on the Company's financial position. For the year ended December 31, 2025, the Company has one customer that individually accounts for more than 10% of the Company's total sales. The Company's largest customer represents approximately 91% of total sales (2024 - one customer representing 93% of total sales).

21 -

LUNDIN MINING CORPORATION

Notes to Consolidated financial statements

For the years ended December 31, 2025 and 2024 (unaudited)

(Tabular amounts in thousands of US dollars, except for shares and per share amounts)

(b) Liquidity risk

The Company has in place a planning and forecasting process to help determine the funds required to support the Company's normal operating requirements on an ongoing basis. The Company ensures that there is sufficient available capital to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents (Note 1).

The maturities of the Company's non-current liabilities are disclosed in Note 8 and Note 16. All current liabilities are due to be settled within one year.

The Company is subject to price risk associated with fluctuations in the market prices for metals. A significant change in metal prices could have a material effect on the Company's revenues.

The Company is also subject to price risk on the final settlement of its provisionally priced trade receivables.

The following table illustrates the sensitivity of the Company's risk on final settlement of its provisionally priced trade receivables:

Metal	Payable metal	Provisional price on December 31, 2025	Change	Effect on Revenue ($millions)
Copper	1,760 t	$5.65/lb	+/-10%	+/-$2.2M
Nickel	720 t	$7.50/lb	+/-10%	+/-$1.2M

SUPPLEMENTARY CASH FLOW INFORMATION

	2025	2024
Changes in non-cash working capital items consist of:
Trade and income taxes receivable, and other current assets	$ 10,037	$ 15,157
Inventories	(2,155)	1,987
Trade and income taxes payable, and other current liabilities	(1,811)	(12,948)
	$ 6,071	$ 4,196
Operating activities included the following cash payments:
Income taxes paid	$ 95	$ -

SUBSEQUENT EVENT

On January 9, 2026, Lundin Mining completed the sale of a 100% interest in Lundin Mining US to Talon (Note 1).

B-1

SCHEDULE "B"

UNAUDITED PRO FORMA FINANCIAL STATEMENTS OF TALON

See attached.

TALON
METALS CORP

TALON METALS CORP.

Pro Forma Consolidated Financial Statements

Unaudited

As at and for the year ended December 31, 2025

(Expressed in Canadian dollars)

Talon Metals Corp.

Pro Forma Consolidated Statement of Financial Position

(Unaudited)

As at December 31, 2025

(in thousands of Canadian dollars except where noted)

	Talon Metals Corp. $000's	Eagle Mining US Ltd. $000's	Pro Forma Adjustments $000's	Note	Pro Forma Consolidated $000's	Pro Forma Consolidated US$000's
Assets
Current assets
Cash and cash equivalents	$ 16,427	30,139	(30,139)	4(a)	$ 16,427	11,985
Treasury bills and term deposits	18,348	-	-		18,348	13,387
Accounts and other receivables	31	14,258	15,731	4(b)	30,020	21,903
Prepayments	233	-	-		233	170
Inventories	-	28,628	2,247	4(c)	30,875	22,527
Deferred financing costs	163	-	-		163	119
	$ 35,202	73,025	(12,161)		$ 96,066	70,090
Non-current assets
Prepayments - long term	1,944	-	-		1,944	1,418
Resource properties and deferred expenditures	269,495	-	-		269,495	196,626
Mineral properties, land, plant and equipment	-	233,664	73,360	4(d)	307,024	224,007
Goodwill	-	-	7,640	4(i)	7,640	5,574
Total assets	$ 306,641	306,689	68,839		$ 682,169	497,715
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$ 7,906	19,890	-		$ 27,796	20,281
Employee benefits payable	-	6,579	-		6,579	4,800
Current portion of loan payable to Lundin Mining	-	46,548	(30,139)	4(a)	-	-
			(16,409)	4(a)
Payable to Lundin Mining Corporation	-	318	-		318	232
Current portion of lease liabilities	-	2,433	-		2,433	1,775
Current portion of reclamation and closure provisions	-	4,981	-		4,981	3,634
Current portion of mortgage payable	21	-	-		21	16
Government grant advance payments	849	-	-		849	620
Contingencies	25	-	-		25	18
	$ 8,802	80,749	(46,548)		$ 43,003	31,376
Non-current liabilities
Lease liabilities	-	9,879	-		9,879	7,208
Reclamation provisions	1,928	96,177	-		98,105	71,578
Other long-term liabilities	-	1,432	-		1,432	1,045
Production payment royalty	-	-	5,757	4(e)	5,757	4,200
Mortgage payable	155	-	-		155	113
Deferred tax liabilities	-	34,565	14,669	4(f)	49,234	35,921
Total liabilities	$ 10,885	222,802	(26,123)		$ 207,565	151,441
Shareholders' equity
Share capital	$ 349,556	386,080	178,849	4(g)	$ 528,405	385,528
			(386,080)	4(h)
Warrants	5,301	-	-		5,301	3,868
Contributed surplus	46,794	-	-		46,794	34,141
Accumulated other comprehensive income	8,329	-	-		8,329	6,077
Deficit	(114,225)	(302,193)	302,193	4(h)	(114,225)	(83,340)
Total shareholders' equity	$ 295,755	83,887	94,962		$ 474,604	346,275
Total liabilities and shareholders' equity	$ 306,641	306,689	68,839		$ 682,169	497,715

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

Talon Metals Corp.

Pro Forma Consolidated Statement of Income

(Unaudited)

For the year ended December 31, 2025

(in thousands of Canadian dollars except where noted and except per share amounts)

	Talon Metals Corp. $000's	Eagle Mining US Ltd. $000's	Pro Forma Adjustments $000's	Note	Pro Forma Consolidated $000's	Pro Forma Consolidated US$000's
Revenue	$ -	291,584	-		$ 291,584	208,602
Cost of goods sold
Production costs	-	(210,654)	-		(210,654)	(150,704)
Depreciation, depletion and amortization	-	(31,157)	(10,401)	5(a)	(41,558)	(29,731)
Gross profit	$ -	49,773	(10,401)		$ 39,372	28,167
General and administrative	$ (4,674)	-	-		$ (4,674)	(3,344)
Exploration and business development	-	(1,894)	-		(1,894)	(1,355)
Finance (costs) income	699	(8,576)	2,562	5(b)	202	145
			5,517	5(c)
Other (expense) income	(1,258)	(4,820)	-		(6,078)	(4,348)
Accretion on asset retirement obligation	(71)	-	(5,517)	5(c)	(5,588)	(3,998)
Asset impairment reversal	-	117,067	(117,067)	5(d)	-	-
Foreign currency gain (loss)	251				251	180
Income (loss) before income taxes	$ (5,053)	151,550	(124,906)		$ 21,591	15,447
Current tax recovery (expense)	-	(403)	-		(403)	(288)
Deferred tax recovery (expense)	-	(29,619)	26,230	5(e)	(3,389)	(2,424)
Net income (loss)	$ (5,053)	121,528	(98,676)		$ 17,799	12,734
Basic net income (loss) per share	$ (0.05)				$ 0.13	0.10
Diluted net income (loss) per share	$ (0.05)				$ 0.13	0.09
Weighted average shares outstanding - basic	104,986,760		27,515,223	5(f)	132,501,984	132,501,984
Weighted average shares outstanding - diluted	104,986,760		31,504,663	5(g)	136,491,424	136,491,424

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

Talon Metals Corp.

Notes to the Pro Forma Consolidated Financial Statements

(Unaudited)

As at and for the year ended December 31, 2025

(Expressed in Canadian dollars)

1. Description of transaction

On January 9, 2026 (the "Closing Date"), Talon Metals Corp. ("Talon" or the "Company"), through its subsidiary Talon Metals (USA) Ltd., completed the acquisition of all of the issued and outstanding shares of Eagle Mining US Ltd. (formerly named Lundin Mining US Ltd., "Eagle Mining") from Lundin Mining Corporation ("Lundin Mining") pursuant to a share purchase agreement (the "Share Purchase Agreement") dated December 18, 2025 (the "Transaction"). Eagle Mining, through its subsidiaries, owns the producing Eagle Mine and associated Humboldt Mill ("Eagle") in Michigan, USA.

Pursuant to the Share Purchase Agreement, Talon acquired 100% of the issued and outstanding shares of Eagle Mining for the following consideration:

the issuance of 27,515,223 post-Consolidation common shares of Talon ("Talon Shares") (being the 275,152,232 pre-consolidation Talon Shares issued on the Closing Date adjusted to reflect a 10:1 consolidation of the Talon Shares completed on January 23, 2026); and
a production payment royalty ("Production Payment Royalty") payable to Lundin Mining on ore from sources other than the Eagle Mine that is processed through the Humboldt Mill at a rate of US$1.00 per tonne, up to a maximum aggregate payment of US$20.0 million (representing 20 million tonnes of ore).

2. Basis of preparation

The unaudited pro forma consolidated financial statements of the Company have been prepared for inclusion in the Business Acquisition Report dated April 9, 2026. These pro forma consolidated financial statements are presented for illustrative purposes only and give effect to the acquisition by the Company pursuant to the assumptions and adjustments described herein. The unaudited pro forma consolidated statement of financial position as at December 31, 2025 is presented as if the acquisition occurred on December 31, 2025. The unaudited pro forma consolidated statements of income for the year ended December 31, 2025 are presented as if the business acquisition occurred on January 1, 2025.

The unaudited pro forma consolidated financial statements of the Company have been compiled from the following financial information:

Audited financial statements of the Company for the year ended December 31, 2025 prepared in accordance with IFRS and presented in Canadian dollars; and
Audited financial statements of Eagle Mining for the year ended December 31, 2025 prepared in accordance with IFRS and presented in US dollars.

The accounting policies used in the preparation of the pro forma consolidated financial statements are in accordance with those disclosed in the financial statements of the Company for the year ended December 31, 2025. Where the Company's accounting policies did not cover a transaction included in Eagle's financial statements, the pro forma consolidated financial statements use the accounting policies disclosed in the financial statements of Eagle Mining.

In Note 1 of the financial statements of Talon for the year ended December 31, 2025, a material uncertainty related to going concern is disclosed reflecting the consolidated group's requirements for additional financing to advance Talon's Tamarack Project.

The unaudited pro forma consolidated financial statements are not necessarily indicative of the results or financial position that would have been achieved if the acquisition had actually occurred on the dates indicated or of the results or financial position of the Company that may be achieved in the future. The unaudited pro forma consolidated financial statements should be read in conjunction with the financial information referred to above.

Talon Metals Corp.

Notes to the Pro Forma Consolidated Financial Statements

(Unaudited)

As at and for the year ended December 31, 2025

(Expressed in Canadian dollars)

The unaudited pro forma information presented, including allocation of purchase price, is based on preliminary estimates of fair values of assets acquired and liabilities assumed, available information and assumptions and may be revised as additional information becomes available. The actual adjustments to the consolidated financial statements recorded to reflect the closing of the acquisition will depend on a number of factors, including additional information available and the net assets of Eagle on the closing date of the acquisition. Therefore, the actual adjustments will differ from the preliminary pro forma adjustments and the differences may be material. For example, the final purchase price allocation is dependent on, among other things, the finalization of asset and liability valuations. Any final adjustment may change the allocation of purchase price, which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma consolidated financial statements.

3. Summary financial statements of Eagle Mining US Ltd.

The financial statements of Eagle Mining were converted from US dollars to Canadian dollars. The Eagle Mining Consolidated Statement of Financial Position and Consolidated Statement of Income are summarized below in US dollars and Canadian dollars. The December 31, 2025 year-end and 2025 average exchange rates obtained from the Bank of Canada were 1.3706 CAD/USD and 1.3978 CAD/USD, respectively.

EAGLE MINING US LTD. (formerly known as Lundin Mining US Ltd.)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in thousands of dollars)

| | US$000's
Dec 31, 2025 | C$000's
Dec 31, 2025 |
| --- | --- | --- |
| ASSETS | | |
| Cash and cash equivalents | 21,990 | 30,139 |
| Trade and other receivables | 10,403 | 14,258 |
| Inventories | 20,887 | 28,628 |
| Total current assets | 53,280 | 73,025 |
| Mineral properties, plant and equipment | 170,483 | 233,664 |
| Total assets | 223,763 | 306,689 |
| LIABILITIES | | |
| Trade and other payables | 14,512 | 19,890 |
| Employee benefits payable | 4,800 | 6,579 |
| Current portion of loan payable to parent | 33,962 | 46,548 |
| Payable to parent | 232 | 318 |
| Current portion of lease liabilities | 1,775 | 2,433 |
| Current portion of reclamation and closure provisions | 3,634 | 4,981 |
| Total current liabilities | 58,915 | 80,749 |
| Lease liabilities | 7,208 | 9,879 |
| Reclamation provisions | 70,171 | 96,177 |
| Other long-term liabilities | 1,045 | 1,432 |
| Deferred tax liabilities | 25,219 | 34,565 |
| Total non-current liabilities | 103,643 | 142,053 |
| Total liabilities | 162,558 | 222,802 |
| SHAREHOLDERS' EQUITY | | |
| Share Capital | 281,687 | 386,080 |
| Retained Earnings (Deficit) | (220,482) | (302,193) |
| Total Shareholders' Equity | 61,205 | 83,887 |
| Total liabilities and Shareholders' Equity | 223,763 | 306,689 |

Talon Metals Corp.

Notes to the Pro Forma Consolidated Financial Statements

(Unaudited)

As at and for the year ended December 31, 2025

(Expressed in Canadian dollars)

EAGLE MINING US LTD. (formerly known as Lundin Mining US Ltd.)
CONSOLIDATED STATEMENT OF INCOME
For the year ended December 31, 2025
(in thousands of dollars)

	US$000's 2025	C$000's 2025
Revenue	208,602	291,584
Cost of goods sold
Production costs	(150,704)	(210,654)
Depreciation, depletion and amortization	(22,290)	(31,157)
Gross profit	35,608	49,773
Exploration and business development	(1,355)	(1,894)
Finance (costs) income	(6,135)	(8,576)
Other (expense) income	(3,448)	(4,820)
Asset impairment and reversals of impairment	83,751	117,067
Earnings (loss) before income taxes	108,421	151,550
Current tax expense (Note 15)	(288)	(403)
Deferred tax recovery (expense)	(21,190)	(29,619)
Net earnings (loss)	86,943	121,528

4. Unaudited pro forma consolidated statement of financial position adjustments

a) It was agreed in the Share Purchase Agreement that the acquisition of Eagle Mining would be on a debt-free non-cash basis. Consequently, immediately prior to the transaction, cash of C$30.1 million was used to reduce the Current portion of loan payable to Lundin Mining and the remaining amount of Current portion of loan payable to Lundin Mining of $16.4 million was exchanged for shares of Eagle Mining.

b) It was agreed in the Share Purchase Agreement that the acquisition of Eagle Mining would include a normal amount of working capital which resulted in Lundin Mining agreeing to pay Talon US$11.5 million or C$15.7 million as an adjustment to the purchase price (see note 4(j) – working capital payment). This payment to Talon reduced the purchase price and resulted in a receivable of C$15.7 million at closing.

c) In accordance with IFRS 3, Business Combinations, which requires that the assets and liabilities of an acquisition be recorded at fair value, inventories of Eagle Mining have been adjusted to reflect an estimate of fair value.

d) In accordance with IFRS 3, Business Combinations, which requires that the assets and liabilities of an acquisition be recorded at fair value, Mineral properties, land, plant and equipment of Eagle Mining have been adjusted to reflect an estimate of fair value.

e) As part of the purchase price, Talon agreed to the Production Payment Royalty payable to Lundin Mining. As a result, the fair value of the Production Payment Royalty was estimated and recognized as a liability. The valuation approach used to estimate the fair value of this liability was a probability-adjusted net present value of the expected cash flows.

Talon Metals Corp.

Notes to the Pro Forma Consolidated Financial Statements

(Unaudited)

As at and for the year ended December 31, 2025

(Expressed in Canadian dollars)

f) Deferred tax liabilities have increased due to the fair value adjustments noted in 4(c), 4(d) and 4(e). As the fair value adjustments are preliminary in nature, the deferred tax liability adjustment is also preliminary and may change.

g) Share capital has increased reflecting the purchase price comprised of 275,152,232 pre-consolidation Talon Shares at a price per share of $0.65 for a total share consideration of $178.8 million (or US$130.5 million).

h) The share capital and deficit of Eagle Mining was eliminated against the purchase price, fair value adjustments and goodwill.

i) Goodwill on the acquisition of Eagle Mining has been recognized representing the excess of the purchase price over the identifiable net assets.

j) The preliminary purchase price allocation is as follows:

Preliminary Purchase Price Allocation

Purchase Price	C$000's	US$000's
Share consideration	$ 178,849	$ 130,490
Production Payment Royalty	5,757	4,200
Working capital payment	(15,731)	(11,477)
Total purchase price	$ 168,875	$ 123,212
Allocation of purchase price to net assets at fair value
Accounts and other receivables	$ 14,258	$ 10,403
Inventories	30,875	22,527
Mineral properties, land, plant and equipment	307,024	224,007
Goodwill	7,640	5,574
Current liabilities	(34,201)	(24,953)
Non-current liabilities
Lease liabilities	(9,879)	(7,208)
Reclamation provisions	(96,177)	(70,171)
Other long-term liabilities	(1,432)	(1,045)
Deferred tax liabilities	(49,234)	(35,921)
Net assets at fair value	$ 168,875	$ 123,212

The above allocation of the purchase price is preliminary. The Company continues to assess and review the fair values of the net assets acquired. Since the Company continues to finalize the valuation of assets acquired at the date of the acquisition, the allocation of the purchase price could vary significantly from the amounts used in these unaudited pro forma consolidated financial statements.

5. Unaudited pro forma consolidated statements of income adjustments

a) As a result of the Mineral properties, land, plant and equipment of Eagle Mining being adjusted to reflect an estimate of fair value, the expected amount of annual depreciation has increased. Note that inputs into the depreciation calculation which include the fair value estimates, the useful life of the assets, the depreciation method and residual values, are preliminary in nature.

b) Finance costs which relate to Eagle Mining have been decreased on account of excluding interest expense on the Lunding Mining shareholder loan which was settled and converted to equity of Eagle

Talon Metals Corp.

Notes to the Pro Forma Consolidated Financial Statements

(Unaudited)

As at and for the year ended December 31, 2025

(Expressed in Canadian dollars)

Mining prior to closing of the purchase of Eagle Mining (see note 3(a)). Finance costs have also been decreased on account of a reclassification discussed in 4(d).

c) Eagle Mining accretion on asset retirement obligation has been reclassified from Other expense to Accretion on assets retirement obligation.

d) Eagle Mining reversed a 2024 asset impairment in 2025. As a result of applying purchase accounting, this asset impairment reversal would not exist.

e) Deferred tax expense has decreased as a result of the tax effect of the pro forma adjustments.

f) Weighted average basic shares outstanding of Talon has been increased by the number of shares issued to Lundin Mining by Talon for the purchase of Eagle Mining.

g) Weighted average diluted shares outstanding has been increased by the number of shares referred to in 5(f) as well as dilution from warrants and employe stock options that are "in-the-money" using the treasury method of computing dilution.

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2.4 Effect on Financial Position

2.5 Prior Valuations

2.6 Parties to Transaction

2.7 Date of Report

Item 3 Financial Statements

Eagle Mining US Ltd.

Independent auditor's report

Our opinion

What we have audited

Basis for opinion

Independence

Comparative information

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

1. NATURE OF OPERATIONS AND LIQUIDITY RISK

2. BASIS OF PRESENTATION

(i) Basis of presentation and statement of compliance

(ii) Presentation and functional currency

3. MATERIAL ACCOUNTING POLICIES AND ESTIMATION UNCERTAINTY

(i) Material accounting policies

(a) Translation of foreign currencies

(b) Cash and cash equivalents

(c) Inventories

(d) Mineral properties

8. TRADE AND OTHER PAYABLES

9. LEASE LIABILITIES

10. PAYABLE TO PARENT

11. RECLAMATION AND CLOSURE PROVISIONS

12. REVENUE

13. PRODUCTION COSTS

14. MINE SUSPENSION COSTS

15. CURRENT AND DEFERRED INCOME TAXES

16. FINANCIAL INSTRUMENTS

Fair values of financial instruments

17. COMMITMENTS AND CONTINGENCIES

18. RELATED PARTY TRANSACTIONS

19. MANAGEMENT OF FINANCIAL RISK

(a) Credit risk

TALON METALS CORP.

1. Description of transaction

2. Basis of preparation

3. Summary financial statements of Eagle Mining US Ltd.

4. Unaudited pro forma consolidated statement of financial position adjustments

5. Unaudited pro forma consolidated statements of income adjustments

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