Tower Resources Ltd. — Interim / Quarterly Report 2025

Jun 28, 2025

TOWER

RESOURCES LTD.

CONDENSED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

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TOWER RESOURCES LTD.
INDEX TO CONDENSED INTERIM FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)

PAGE(S)

CONTENTS

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS 3
CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION 4
CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS 5
CONDENSED INTERIM STATEMENTS OF CASH FLOWS 6
CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 7
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS 8 - 19

Page 2

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Page 3

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice indicating that an auditor has not reviewed the financial statements.

The Company’s independent auditor has not performed a review of these condensed interim financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.

The accompanying condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

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TOWER RESOURCES LTD.
CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian Dollars - Unaudited)

	April 30, 2025	October 31, 2024
	$	$
ASSETS
Current
Cash	765,800	672,044
Receivables (Note 4)	14,172	27,083
Marketable securities (Note 5)	21,813	21,813
Prepaid expenses and deposits	21,435	3,713
	823,220	724,653
Equipment (Note 6)	696	774
Exploration and evaluation assets (Note 7)	8,875,321	8,761,985
Reclamation bonds (Note 8)	90,000	90,000
	9,789,237	9,577,412
LIABILITIES
Current
Accounts payable and accrued liabilities (Notes 9 and 11)	31,130	403,498
Flow-through share premium (Note 10)	195,318	-
	226,448	403,498
SHAREHOLDERS’ EQUITY
Share capital (Note 10)	23,610,770	23,074,403
Reserves (Note 10)	1,534,376	1,311,913
Deficit	(15,582,357)	(15,212,402)
	9,562,789	9,173,914
	9,789,237	9,577,412

NATURE OF OPERATIONS AND GOING CONCERN (Note 1)

Approved and authorized on behalf of the Board:

/s/ “Joe Dhami”
Joe Dhami, Director

/s/ “Gerald Shields”
Gerald Shields, Director

The accompanying notes are an integral part of these condensed interim financial statements

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TOWER RESOURCES LTD.
CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Expressed in Canadian Dollars - Unaudited)

	For the three months ended April 30,		For the six months ended April 30,
	2025	2024	2025	2024
Expenses	$	$	$	$
Accounting and audit fees (Note 11)	16,183	21,813	27,026	33,366
Depreciation (Note 6)	39	48	78	97
Legal fees	-	-	-	214
Management fees (Note 11)	30,000	30,000	60,000	60,000
Office and miscellaneous	24,006	24,918	66,371	50,451
Share-based compensation (Notes 10 and 11)	55,064	59,342	220,164	120,002
Transfer agent and filing fees	7,671	4,604	13,548	9,436
Travel	-	2,007	-	2,007
Wages and benefits	1,691	2,191	1,691	2,191
	(134,654)	(144,923)	(388,878)	(277,764)
Interest income	348	686	907	1,504
Recognition of flow-through premium (Note 10)	13,154	-	18,016	3,197
Recovery on exploration and evaluation assets	-	-	-	8,640
Unrealized gain (loss) on marketable securities (Note 5)	(10,906)	10,907	-	10,907
Loss and comprehensive loss for the period	(132,058)	(133,330)	(369,955)	(253,516)
Basic and diluted loss per share	(0.00)	(0.00)	(0.00)	(0.00)
Weighted average number of common shares outstanding – basic and diluted	161,131,101	145,159,305	160,011,396	145,159,305

The accompanying notes are an integral part of these condensed interim financial statements

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TOWER RESOURCES LTD.
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars - Unaudited)

| | For the six months ended
April 30, | |
| --- | --- | --- |
| | 2025
$ | 2024
$ |
| Cash flows used in operating activities | | |
| Loss for the period | (369,955) | (253,516) |
| Items not affecting cash | | |
| Depreciation | 78 | 97 |
| Share-based compensation | 220,164 | 120,002 |
| Recognition of flow-through premium | (18,016) | (3,197) |
| Recovery on exploration and evaluation assets | - | (8,640) |
| Unrealized gain on marketable securities | - | (10,907) |
| Changes in non-cash working capital items | | |
| Receivables | 12,911 | 24,453 |
| Prepaid expenses and deposits | (17,722) | (7,163) |
| Accounts payable and accrued liabilities | (75,299) | (27,288) |
| | (247,839) | (166,159) |
| Cash flows used in investing activities | | |
| Acquisition of exploration and evaluation assets | (410,405) | (299,158) |
| Reclamation bonds | - | (10,000) |
| | (410,405) | (309,158) |
| Cash flows provided by financing activities | | |
| Proceeds from shares issued | 800,000 | - |
| Share subscriptions received in advance | - | 90,000 |
| Share issuance costs | (48,000) | - |
| | 752,000 | 90,000 |
| Net change in cash | 93,756 | (385,317) |
| Cash, beginning of period | 672,044 | 723,775 |
| Cash, end of period | 765,800 | 338,458 |

SUPPLEMENTAL CASH FLOW INFORMATION (Note 13)

The accompanying notes are an integral part of these condensed interim financial statements
Page 6

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TOWER RESOURCES LTD.
CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in Canadian Dollars - Unaudited)

	Number of Shares Issued	Capital Stock	Reserves	Share subscriptions received in advance	Deficit	Total Shareholders' Equity
Balance at October 31, 2023	145,159,305	$ 22,121,759	$ 1,183,344	-	$(14,809,418)	$ 8,495,685
Share subscriptions received in advance	-	-	-	90,000	-	90,000
Share-based compensation	-	-	120,002	-	-	120,002
Warrants expired	-	-	(8,640)	-	-	(8,640)
Loss for the period	-	-	-	-	(253,516)	(253,516)
Balance at April 30, 2024	145,159,305	22,121,759	1,294,706	90,000	(15,062,934)	8,443,531
Shares issued for cash	7,938,462	833,000	75,000	(90,000)	-	882,000
Flow-through premium	-	(112,538)	-	-	-	(112,538)
Share issuance costs	-	(53,881)	17,401	-	-	(36,480)
Shares issued for options exercised	2,700,000	286,063	(137,563)	-	-	148,500
Share-based compensation	-	-	62,369	-	-	62,369
Warrants expired	-	-	-	-	8,640	8,640
Loss for the period	-	-	-	-	(158,108)	(158,108)
Balance at October 31, 2024	155,797,767	23,074,403	1,311,913	-	(15,212,402)	9,173,914
Shares issued for cash	5,333,334	800,000	-	-	-	800,000
Flow-through premium	-	(213,334)	-	-	-	(213,334)
Share issuance costs	-	(65,612)	17,612	-	-	(48,000)
Share-based compensation	-	-	220,164	-	-	220,164
Warrants expired	-	15,313	(15,313)	-	-	-
Loss for the period	-	-	-	-	(369,955)	(369,955)
Balance at April 30, 2025	161,131,101	23,610,770	1,534,376	-	(15,582,357)	9,562,789

The accompanying notes are an integral part of these condensed interim financial statements

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

1. NATURE OF OPERATIONS AND GOING CONCERN

Nature of operations

Tower Resources Ltd. (the “Company”) is incorporated under the laws of British Columbia, Canada. The Company’s common shares are listed for trading on the TSX Venture Exchange ("TSX-V") under the symbol TWR. The Company’s head office and principal address and registered and records office is located at 2054 Dowad Drive, Squamish, BC, V8B 0Y8.

Going concern

The Company’s principal business activity is the acquisition and exploration of mineral exploration and evaluation assets domiciled in Canada. The Company has not yet determined whether any of these exploration and evaluation assets contain ore reserves that are economically recoverable. The recoverability of the amounts shown for exploration and evaluation assets is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and future profitable production. To date, the Company has not earned any revenues and is considered to be in the exploration stage.

These condensed interim financial statements have been prepared assuming the Company will continue on a going concern basis. The Company has incurred losses since inception, and the ability of the Company to continue as a going concern depends upon its ability to raise adequate financing and/or to achieve profitable operations. These condensed interim financial statements do not include adjustments to the carrying value of assets and liabilities, the reported expenses, and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The continuation of the Company’s operations is dependent on obtaining sufficient additional financing in order to realize the recoverability of the Company’s investments in exploration and evaluation assets, which in turn is dependent upon the existence of economically recoverable reserves and market prices for the underlying minerals. These events and conditions indicate the existence of a material uncertainty that may cast significant doubt as to the ability of the Company to continue as a going concern. Management closely monitors commodity prices of precious metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company if favourable or adverse market conditions occur.

There are many external factors that can adversely affect general workforces, economies and financial markets globally. Examples include, but are not limited to, political conflict in other regions. It is not possible for the Company to predict the duration or magnitude of the adverse results of these factors and their effects on the Company’s business or results of operations or its ability to raise funds.

2. BASIS OF PRESENTATION

Statement of compliance

These condensed interim financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”) applicable to interim financial reports, including International Accounting Standard 34, Interim Financial Reporting. They do not include all the information and note disclosures required by IFRS for annual financial statements and, therefore, should be read in conjunction with the Company’s audited financial statements for the year ended October 31, 2024, prepared in accordance with IFRS.

These condensed interim financial statements were approved by the Audit Committee and Board of Directors of the Company on June 27, 2025.

Page 8

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

2. BASIS OF PRESENTATION (continued)

Basis of presentation

These condensed interim financial statements have been prepared on a historical cost basis, using the accrual basis of accounting, except for cash flow information and certain financial assets that are measured at fair value.

Functional currency

The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company is the Canadian dollar. The reporting currency of the Company is the Canadian dollar.

Significant estimates

The preparation of these condensed interim financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of these financial statements and the reported revenues and expenses during the period.

Although management uses historical experience and its best knowledge of the amounts, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in material adjustments are as follows:

Economic recoverability and probability of future economic benefits of exploration and evaluation assets

Management has determined that exploration, evaluation, and related costs incurred which were capitalized may have future economic benefits and may be economically recoverable. Management uses several criteria in its assessment of economic recoverability and probability of future economic benefits, including geologic and other technical information, a history of conversion of mineral deposits with similar characteristics to its own properties to proven and probable mineral reserves, the quality and capacity of existing infrastructure facilities, evaluation of permitting and environmental issues and local support for the project.

Valuation of share-based compensation

The Company uses the Black-Scholes option pricing model for valuation of share-based compensation. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company's earnings and equity reserves.

Significant judgments

Going concern

The Company has exercised judgment in determining if additional funds are likely to be required to continue operations for the ensuing twelve months.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

3. MATERIAL ACCOUNTING POLICY INFORMATION

These condensed interim financial statements were prepared using the same accounting policies and methods of computation as in the Company’s financial statements for the year ended October 31, 2024, except as noted below.

IAS 1, Presentation of Financial Statements

The amendments clarify the requirements for classifying liabilities as current or non-current. The amendments provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date. The impact of adopting these amendments did not have a material impact on the financial statements.

New standards, interpretations and amendments to existing standards not yet effective

A number of new standards and amendments to standards and interpretations have been issued by the IASB but are not effective during the year ended October 31, 2024. These have not been applied in preparing these condensed interim financial statements. The standards and amendments to standards that would be applicable to the financial statements of the Company are the following:

IFRS 18, Presentation and Disclosure in Financial Statements

IFRS 18 will replace IAS 1; many of the existing principles in IAS 1 are retained, with limited changes. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its operating profit or loss. The Company is currently assessing the impact of this new accounting standard.

4. RECEIVABLES

	April 30, 2025	October 31, 2024
	$	$
GST receivable	10,579	25,640
Interest receivable	1,169	1,443
Other receivables	2,424	-
	14,172	27,083

5. MARKETABLE SECURITIES

As at April 30, 2025, the Company held 2,181,250 (October 31, 2024 - 2,181,250) common shares of Volatus Capital Corp. (“Volatus”), with a fair value of $21,813 (October 31, 2024 - $21,813). The change in market value of the shares resulted in the recording of an unrealized gain on marketable securities for the six months ended April 30, 2025 of $nil (April 30, 2024 - $10,907).

Page 10

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

6. EQUIPMENT

	Computer software	Equipment and furniture	Total
	$	$	$
Cost
October 31, 2023, October 31, 2024, and April 30, 2025	76,929	11,451	88,380
Depreciation
October 31, 2023	76,929	10,484	87,413
Charge for the year	-	193	193
October 31, 2024	76,929	10,677	87,606
Charge for the period	-	78	78
April 30, 2025	76,929	10,755	87,684
Net book value
October 31, 2024	-	774	774
April 30, 2025	-	696	696

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

1. EXPLORATION AND EVALUATION ASSETS

	Rabbit North	Nechako Gold	More Creek	Belle	Total
	$	$	$	$	$
Balance, October 31, 2023	5,389,981	2,484,162	53,706	-	7,927,849
Acquisition costs	30,000	-	-	-	30,000
Deferred costs
Drilling	491,764	-	-	-	491,764
Field travel, meals, and accommodations	31,408	-	8,322	-	39,730
Geology	152,576	-	30,399	-	182,975
Helicopter	-	-	40,896	-	40,896
Laboratory and analytical	44,019	687	597	-	45,303
Project supplies and fuel	55,062	-	1,338	-	56,400
Additions for the year	804,829	687	81,552	-	887,068
B.C. mineral exploration tax credit recovery	(52,803)	(129)	-	-	(52,932)
Balance, October 31, 2024	6,142,007	2,484,720	135,258	-	8,761,985
Acquisition costs	-	-	-	-	-
Deferred costs
Field travel, meals, and accommodations	7,628	-	-	-	7,628
Geology	56,255	-	459	-	56,714
Laboratory and analytical	41,864	-	-	-	41,864
Project supplies and fuel	7,130	-	-	-	7,130
Additions for the period	112,877	-	459	-	113,336
B.C. mineral exploration tax credit recovery	-	-	-	-	-
Balance, April 30, 2025	6,254,884	2,484,720	135,717	-	8,875,321

RABBIT NORTH PROPERTY

The Company owns a 100% interest in the Rabbit North property, comprised of certain mineral claims, located in the Kamloops mining division of British Columbia. The Company acquired the property by making cash payments of $170,000, issuing 1,300,000 common shares, and funding aggregate exploration expenditures of $2,150,000.

The property is subject to a 3% NSR in favour of the optionors, of which 1% of the 3% may be purchased by the Company for $2,000,000 and the second 1% of the 3% may be purchased by the Company for $1,500,000. In March 2017, the Company entered into a royalty buyback assignment agreement with Sandstorm Gold Ltd. ("Sandstorm") pursuant to which it assigned to Sandstorm the Company's right to purchase the second 1% of the Company's 2% buyback rights with respect to the optionors' NSR. If the Company makes a decision to develop the Rabbit North property and put it into production, the Company has agreed to exercise its right to buy back 1% of the NSR, contingent upon Sandstorm exercising its right to buy back the second 1% (as assigned to it), whereupon the Company will grant directly to Sandstorm a 1% NSR. As at April 30, 2025, the Company had paid a total of $210,000 in advance annual royalty payments.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

7. EXPLORATION AND EVALUATION ASSETS (continued)

RABBIT NORTH PROPERTY (continued)

The Company acquired additional claims contiguous to the Rabbit North property by staking, known collectively as the Rabbit North Extension property. In March 2017, the Company entered into an agreement with Sandstorm and granted Sandstorm a 2% NSR on the Rabbit North Extension property. The Company has the option to buy back 1% of the NSR from Sandstorm for cash consideration of $500,000.

In fiscal 2022, the Company entered into a property purchase agreement and acquired a 100% interest in the West Afton Property, comprised of certain mineral claims contiguous to the Rabbit North property, by making cash payments totaling $20,000 and issuing 200,000 common shares, valued at $29,000.

NECHAKO GOLD PROPERTY

In July 2016, the Company entered into two property option agreements (Porphyry and Chutanli) under which it was granted the right to acquire mineral tenures in the Nechako Plateau region of central British Columbia. The Company fully exercised the options and now owns a 100% interest in these property properties. Details are as follows:

Porphyry Property Option Agreement

In fiscal 2018, the Company fulfilled its obligations under the Porphyry Property option agreement and earned the right to acquire a 100% interest in the Porphyry Property by making cash payments totaling $40,000 and issuing 400,000 common shares, in addition to funding aggregate exploration expenditures of $250,000.

The agreement is subject to a 1.5% NSR, which can be purchased by the Company for $1,000,000.

Chutanli Property Option Agreement

In fiscal 2019, the Company fulfilled its obligations under the Chutanli Property option agreement and earned the right to acquire a 100% interest in the Chutanli Property by making cash payments totaling $60,000 and issuing 600,000 common shares, in addition to funding aggregate exploration expenditures of $225,000.

The agreement is subject to a 1.5% NSR, which can be purchased by the Company for $1,000,000.

In March 2017, the Company entered into certain NSR agreements with Sandstorm and granted Sandstorm a 2% NSR on the Nechako Gold property. The Company has the option to buy back 1% of the NSR from Sandstorm for cash consideration of $500,000.

MORE CREEK PROPERTY

This property is located in the Golden Triangle district of northwest British Columbia and was acquired by staking.

In March 2017, the Company entered into an NSR agreement with Sandstorm and granted Sandstorm a 2% NSR on the Company's More Creek property. The Company has the option to buy back 1% of the NSR from Sandstorm for cash consideration of $500,000.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

7. EXPLORATION AND EVALUATION ASSETS (continued)

MORE CREEK PROPERTY (continued)

In fiscal 2020, subsequently terminated in fiscal 2023, the Company entered into an option agreement with Volatus. Volatus made payments of $50,000 and issued 1,025,000 common shares, valued at $74,000. In accordance with the termination of the More Option, Volatus agreed to issue 1,000,000 shares (received, valued at $10,000) and pay $85,000. The $85,000 bears interest at 10% per annum and is due on or before November 1, 2025 and is guaranteed by a promissory note. The amount has been recorded; however, the Company has taken a full allowance against it due to the uncertainty of collection. As at April 30, 2025, the $85,000 remains outstanding.

BELLE PROPERTY

The Company owns a 100% interest in the Belle property located in the Omineca mining division of British Columbia.

The property is subject to a 2% net smelter return royalty ("NSR"), of which 1% can be purchased by the Company for $2,000,000.

In fiscal 2020, the Company entered into an option agreement with Volatus, pursuant to which the Company granted to Volatus the option to acquire its 100% interests in and to the Belle property (the "Belle Option"). In fiscal 2023, Volatus completed the terms of the Belle Option through cash payments of $100,000 and issuance of 125,000 common shares, valued at $63,438. The property was transferred to Volatus, and the Company recorded an amount of $1 in exploration and evaluation assets option agreement. In fiscal 2023, the Company received 31,250 shares of Volatus, valued at $312, for a right of first refusal on the property

8. RECLAMATION BONDS

In relation to the Rabbit North and Nechako properties, the Company has posted reclamation bonds totaling $55,000 and $35,000 as at April 30, 2025 (October 31, 2024 - $55,000 and $35,000), respectively.

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	April 30, 2025	October 31, 2024
	$	$
Accounts payable	14,867	323,630
Accrued liabilities	16,263	79,868
	31,130	403,498

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

10. SHARE CAPITAL AND RESERVES

Authorized share capital

Unlimited number of common shares without par value.

Issued share capital

During the six months ended April 30, 2025, the Company issued:

a. 5,333,334 units at a price of $0.15 per unit for gross proceeds of $800,000. Each unit was comprised of one flow-through common share and one-half of one share purchase warrant, with each warrant entitling the holder to acquire one additional common share of the Company at an exercise price of $0.25 per share for a period of 24 months. The Company paid a total of $48,000 in cash for fees and issued 320,000 finder's warrants. Each finder's warrant entitles the holder to acquire one additional common share of the Company at an exercise price of $0.25 per share for a period of 24 months. The finder's warrants were valued at $17,612, calculated using the Black-Scholes option pricing model assuming a life expectancy of two years, a risk-free interest rate of 2.91%, a dividend rate of nil%, a forfeiture rate of nil% and volatility of 131%. The flow-through shares were issued at a premium of $213,334.

During the six months ended April 30, 2024, the Company did not issue any shares.

Flow-through share premium

	Total
	$
October 31, 2023	3,197
Flow-through premium additions	112,538
Recognition of flow-through premium	(115,735)
October 31, 2024
Flow-through premium additions	213,334
Recognition of flow-through premium	(18,016)
April 30, 2025	195,318

As at April 30, 2025, the Company was obligated to incur $732,442 in eligible exploration expenditures by December 31, 2025.

Options

On November 19, 2010, the Company adopted an incentive stock option plan (the "Plan"). The Plan provides that the aggregate number of shares of the Company's capital stock issuable pursuant to options granted under the Plan may not exceed ten percent of the issued and outstanding common shares of the Company at the time an option is granted. Options granted under the Plan will have a maximum term of 10 years. The exercise price of options granted under the Plan shall be set by the Board of Directors on the effective date of the options and will not be less than the Discounted Market Price as defined under the policies of the TSX-V. Vesting of the options shall be at the discretion of the Board of Directors.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

10. SHARE CAPITAL AND RESERVES (continued)

Options (continued)

During the six months ended April 30, 2025, the Company granted 3,350,000 (2024 - nil) incentive stock options with a fair value of $366,741 (2024 - $nil) using the Black-Scholes option pricing model.

	For the six months ended April 30,
	2025	2024
Risk-free interest rate	3.08%	n/a
Expected option life in years	5 years	n/a
Expected stock price volatility	134%	n/a
Expected forfeiture rate	-	n/a

During the six months ended April 30, 2025, the Company expensed $220,164 (2024 - $120,002) as share-based compensation for the fair value of vesting stock options.

The following is a summary of stock options activities:

	Number of options	Weighted average exercise price
		$
Outstanding as at October 31, 2023	11,984,667	0.13
Exercised	(2,700,000)	0.06
Outstanding as at October 31, 2024	9,284,667	0.15
Granted	3,350,000	0.13
Outstanding as at April 30, 2025	12,634,667	0.15

The Company has outstanding options entitling the holders to purchase common shares as at April 30, 2025 as follows:

Number outstanding	Number exercisable	Exercise price	Remaining life (years)	Expiry date
		$
1,850,000	1,850,000	0.115	0.23	July 22, 2025
2,066,667	2,066,667	0.060	1.49	October 26, 2026
2,768,000	2,768,000	0.280	2.01	May 4, 2027
2,600,000	1,733,334	0.120	3.47	October 19, 2028
3,350,000	1,116,667	0.125	4.58	November 28, 2029
12,634,667	9,534,668

The weighted average exercise price of exercisable options is $0.15.

Warrants

During the six months ended April 30, 2025, 4,122,222 (2024 - nil) share purchase warrants expired unexercised accordingly, $15,313 (2024 - $nil) was reversed from reserves to share capital.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

10. SHARE CAPITAL AND RESERVES (continued)

Warrants (continued)

The following is a summary of share purchase warrant activities:

	Number of warrants	Weighted average exercise price
		$
Outstanding as at October 31, 2023	7,415,972	0.32
Issued	8,234,769	0.18
Expired	(312,500)	0.04
Outstanding as at October 31, 2024	15,338,241	0.25
Issued	2,986,667	0.25
Expired	(4,122,222)	0.35
Outstanding as at April 30, 2025	14,202,686	0.22

The Company has outstanding warrants entitling the holders to purchase common shares as at April 30, 2025 as follows:

Number outstanding	Exercise price	Expiry date
	$
2,812,500	0.32	July 6, 2025
168,750	0.16	July 6, 2025
1,630,769	0.18	May 3, 2026
3,000,000	0.18	May 17, 2026
3,604,000	0.18	July 3, 2025
2,986,667	0.25	December 9, 2026
14,202,686

11. RELATED PARTY TRANSACTIONS

The Company entered into transactions with related parties during the six months ended April 30, 2025 and 2024.

Summary of key management personnel compensation (includes officers and directors of the Company):

	For the six months ended April 30,
	2025	2024
	$	$
Accounting fees	16,500	16,500
Management fees	60,000	60,000
Share-based compensation	172,460	82,326
	248,960	158,826

Amounts owing to related parties (including key management personnel) included in accounts payable and accrued liabilities total $nil as at April 30, 2025 (October 31, 2024 - $13,388).

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

12. SEGMENTED INFORMATION

The Company has one geographic segment, being Canada, and one operating segment, being the acquisition and exploration of mineral exploration and evaluation assets.

13. SUPPLEMENTAL CASH FLOW INFORMATION

The significant non-cash investing and financing transactions are as follows:

	For the six months ended April 30,
	2025	2024
	$	$
Non-cash transactions not included in investing or financing activities:
Exploration and evaluation assets in accounts payable	16,263	33,359
Fair value of agents’ warrants	17,612	-
Warrants expired	15,313	8,640
Flow-through share premium	213,334	-

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
• Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
• Level 3 – Inputs that are not based on observable market data.

The Company’s financial instruments consist of cash, receivables, marketable securities, reclamation bonds, and accounts payable and accrued liabilities. The fair value of these financial instruments approximates their carrying values, except for marketable securities, which are measured at fair value using level 1 inputs.

The Company is exposed to a variety of financial risks by virtue of its activities including credit, liquidity, interest rate, foreign currency and price risk.

Credit risk

The Company is exposed to industry credit risks arising from its cash holdings and receivables. The Company manages credit risk by placing cash with major Canadian financial institutions. The Company’s receivables are primarily due from a government agency. The Company’s receivables also include an amount owed from Volatus; an allowance for the full balance has been recorded. Management believes that credit risk related to these amounts is nominal.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient funds to meet its financial obligations when they are due. To manage liquidity risk, the Company reviews additional sources of capital and financing to continue its operations and discharge its commitments. The Company is exposed to liquidity risk.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the six months ended April 30, 2025

(Expressed in Canadian Dollars - Unaudited)

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As of April 30, 2025, the Company held deposits with a face value of $68,000. A 1% increase or decrease in the interest rates would have a nominal impact in interest income for the six months ended April 30, 2025.

Foreign currency risk

The Company is not significantly exposed to foreign currency risk on fluctuations related to items that are denominated in a foreign currency.

Price risk

The Company has limited exposure to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities.

15. CAPITAL MANAGEMENT

The Company manages its capital structure and makes adjustments to it based on the funds available to the Company, in order to support the acquisition and exploration of exploration and evaluation assets. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company defines capital that it manages as share capital, options and warrants.

The properties in which the Company currently has an interest are in the exploration stage; as such the Company has historically relied on the equity markets to fund its activities. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company is not subject to externally imposed capital restrictions. There have been no significant changes in the Company’s objectives, policies, and processes for managing its capital during the six months ended April 30, 2025.

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