Tower Resources Ltd. — Interim / Quarterly Report 2026

Apr 2, 2026

TOWER RESOURCES LTD.

CONDENSED INTERIM FINANCIAL STATEMENTS

For the Three Months Ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

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

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)

| | January 31, 2026
$ | October 31, 2025
$ |
| --- | --- | --- |
| ASSETS | | |
| Current | | |
| Cash | 1,603,848 | 2,429,561 |
| Receivables (Note 4) | 34,183 | 16,091 |
| Marketable securities (Note 5) | 43,625 | 32,720 |
| Prepaid expenses and deposits | 43,611 | 74,587 |
| | 1,725,267 | 2,552,959 |
| Exploration and evaluation assets (Note 7) | 7,793,740 | 6,887,233 |
| Reclamation bonds (Note 8) | 90,000 | 90,000 |
| | 9,609,007 | 9,530,192 |
| LIABILITIES | | |
| Current | | |
| Accounts payable and accrued liabilities (Notes 9 and 11) | 71,188 | 210,328 |
| Flow-through share premium (Note 10) | 239,192 | 350,309 |
| | 310,380 | 560,637 |
| SHAREHOLDERS’ EQUITY | | |
| Share capital (Note 10) | 26,060,055 | 25,707,707 |
| Reserves (Note 10) | 1,716,582 | 1,653,233 |
| Deficit | (18,478,010) | (18,391,385) |
| | 9,298,627 | 8,969,555 |
| | 9,609,007 | 9,530,192 |

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

Page 4

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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
January 31, | |
| --- | --- | --- |
| | 2025 | 2025 |
| | $ | $ |
| Expenses | | |
| Accounting and audit fees (Note 11) | 8,570 | 10,843 |
| Consulting fees | 16,500 | - |
| Depreciation (Note 6) | - | 39 |
| Management fees (Note 11) | 51,000 | 30,000 |
| Office and miscellaneous | 32,129 | 42,365 |
| Share-based compensation (Notes 10 and 11) | 87,737 | 165,100 |
| Transfer agent and filing fees | 13,016 | 5,877 |
| | (208,952) | (254,224) |
| Interest income | 305 | 559 |
| Recognition of flow-through premium (Note 10) | 111,117 | 4,862 |
| Recovery on exploration and evaluation assets | - | - |
| Unrealized gain on marketable securities (Note 5) | 10,905 | 10,906 |
| Loss and comprehensive loss for the period | (86,625) | (237,897) |
| Basic and diluted loss per share | (0.00) | (0.00) |
| Weighted average number of common
shares outstanding – basic and diluted | 172,385,362 | 158,928,202 |

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)

| | 2025
$ | 2025
$ |
| --- | --- | --- |
| Cash flows used in operating activities | | |
| Loss for the period | (86,625) | (237,897) |
| Items not affecting cash | | |
| Depreciation | - | 39 |
| Share-based compensation | 87,737 | 165,100 |
| Recognition of flow-through premium | (111,117) | (4,862) |
| Unrealized gain on marketable securities | (10,905) | (10,906) |
| Changes in non-cash working capital items | | |
| Receivables | (18,092) | 13,285 |
| Prepaid expenses and deposits | 30,976 | (18,051) |
| Accounts payable and accrued liabilities | (29,876) | (68,656) |
| | (137,902) | (161,948) |
| Cash flows used in investing activity | | |
| Acquisition of exploration and evaluation assets | (1,006,247) | (362,352) |
| | (1,006,247) | (362,352) |
| Cash flows provided by financing activities | | |
| Proceeds from shares issued | - | 800,000 |
| Proceeds from warrants exercised | 327,960 | - |
| Share issuance costs | (9,524) | (48,000) |
| | 318,436 | 752,000 |
| Net change in cash | (825,713) | 227,700 |
| Cash, beginning of period | 2,429,561 | 672,044 |
| Cash, end of period | 1,603,848 | 899,744 |

SUPPLEMENTAL CASH FLOW INFORMATION (Note 13)

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

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

Balance at October 31, 2024	Number of Shares Issued	Capital Stock	Reserves	Deficit	Total Shareholders' Equity
	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
Share issuance costs	-	(65,612)	17,612	-	(48,000)
Flow-through premium	-	(213,334)	-	-	(213,334)
Share-based compensation	-	-	165,100	-	165,100
Warrants expired	-	15,313	(15,313)	-	-
Loss for the period	-	-	-	(237,897)	(237,897)
Balance at January 31, 2025	161,131,101	23,610,770	1,479,312	(15,450,299)	9,639,783
Shares issued for cash	8,628,000	2,157,000	-	-	2,157,000
Flow-through premium	-	(285,119)	-	-	(285,119)
Share issuance costs	-	(172,291)	34,667	-	(137,624)
Shares issued for options exercised	1,700,000	385,285	(189,785)	-	195,500
Share-based compensation	-	-	357,847	-	357,847
Warrants expired	-	12,062	(12,062)	-	-
Options expired	-	-	(16,746)	16,746	-
Loss for the period	-	-	-	(2,957,832)	(2,957,832)
Balance at October 31, 2025	171,459,101	25,707,707	1,653,233	(18,391,385)	8,969,555
Shares issued for warrants exercised	1,822,000	352,348	(24,388)	-	327,960
Share-based compensation	-	-	87,737	-	87,737
Loss for the period	-	-	-	(86,625)	(86,625)
Balance at January 31, 2026	173,281,101	26,060,055	1,716,582	(18,478,010)	9,298,627

The accompanying notes are an integral part of these condensed interim financial statements
Page 7

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(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, 2025, prepared in accordance with IFRS.

These condensed interim financial statements were approved by the Audit Committee and Board of Directors of the Company on April 1, 2026.

Page 8

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(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.

Page 9

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

2. BASIS OF PRESENTATION (continued)

Significant judgments (continued)

Recovery of deferred tax assets

Judgment is required in determining whether deferred tax assets are recognized in the statement of financial position. Deferred tax assets, including those arising from unutilized tax losses, require management to assess the likelihood that the Company will generate taxable earnings in future periods, in order to utilize recognized deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred tax assets recorded at the date of the statement of financial position could be impacted. Additionally, future changes in tax laws in the jurisdictions in which the Company operates could limit the ability of the Company to obtain tax deductions in future periods. The Company has not recorded any deferred tax assets.

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, 2025.

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 currently effective. 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

	January 31, 2026	October 31, 2025
	$	$
GST receivable	30,638	12,851
Interest receivable	1,121	816
Other receivables	2,424	2,424
	34,183	16,091

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

5. MARKETABLE SECURITIES

As at January 31, 2026, the Company held 2,181,250 (October 31, 2025 - 2,181,250) common shares of Volatus Capital Corp. (“Volatus”), with a fair value of $43,625 (October 31, 2025 - $32,720). The change in market value of the shares resulted in the recording of an unrealized gain on marketable securities for the three months ended January 31, 2026 of $10,905 (January 31, 2025 - $10,906).

6. EQUIPMENT

	Computer software	Equipment and furniture	Total
	$	$	$
Cost
October 31, 2024	76,929	11,451	88,380
Disposals	(76,929)	(11,451)	(88,380)
October 31, 2025 and January 31, 2026	-	-	-
Depreciation
October 31, 2024	76,929	10,677	87,606
Charge for the year	-	774	774
Disposals	(76,929)	(11,451)	(88,380)
October 31, 2025 and January 31, 2026	-	-	-
Net book value
October 31, 2025	-	-	-
January 31, 2026	-	-	-

In fiscal 2025, the Company disposed of equipment that was no longer in use; there was no impact on the financial statements as it had been fully depreciated.

Page 11

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

1. EXPLORATION AND EVALUATION ASSETS

	Rabbit North	Nechako Gold	More Creek	Total
	$	$	$	$
Balance, October 31, 2024	6,142,007	2,484,720	135,258	8,761,985
Acquisition costs	30,000	-	-	30,000
Deferred costs
Drilling	277,837	-	-	277,837
Field travel, meals, and accommodations	44,396	-	-	44,396
Geology	209,810	-	5,659	215,469
Laboratory and analytical	96,370	-	-	96,370
Project supplies and fuel	17,341	-	-	17,341
Additions for the year	675,754	-	5,659	681,413
B.C. mineral exploration tax credit recovery	(63,140)	(206)	(8,305)	(71,651)
Impairment on exploration and evaluation assets	-	(2,484,514)	-	(2,484,514)
Balance, October 31, 2025	6,754,621	-	132,612	6,887,233
Acquisition costs	-	-	-	-
Deferred costs
Drilling	646,509	-	-	646,509
Field travel, meals, and accommodations	11,781	-	-	11,781
Geology	142,397	-	-	142,397
Laboratory and analytical	36,654	-	-	36,654
Project supplies and fuel	69,166	-	-	69,166
Additions for the period	906,507	-	-	906,507
B.C. mineral exploration tax credit recovery	-	-	-	-
Balance, January 31, 2026	7,661,128	-	132,612	7,793,740

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 January 31, 2026, the Company had paid a total of $240,000 in advance annual royalty payments.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(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.

In fiscal 2025, an impairment charge of $2,484,514 was recorded on the Nechako Gold property.

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.

Page 13

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(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 was due on 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 January 31, 2026, the $85,000 remains outstanding.

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 January 31, 2026 (October 31, 2025 - $55,000 and $35,000), respectively.

9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	January 31, 2026	October 31, 2025
	$	$
Accounts payable	49,506	140,795
Accrued liabilities	21,682	69,533
	71,188	210,328

10. SHARE CAPITAL AND RESERVES

Authorized share capital

Unlimited number of common shares without par value.

Issued share capital

During the three months ended January 31, 2026, the Company issued:

a. 1,822,000 common shares for proceeds of $327,960 pursuant to the exercise of warrants.

During the three months ended January 31, 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.

Page 14

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

10. SHARE CAPITAL AND RESERVES (continued)

Flow-through share premium

	Total $
October 31, 2024	-
Flow-through premium additions	498,453
Recognition of flow-through premium	(148,144)
October 31, 2025	350,309
Recognition of flow-through premium	(111,117)
January 31, 2026	239,192

As at January 31, 2026, the Company was obligated to incur $1,494,951 in eligible exploration expenditures by December 31, 2026.

Options

The Company has 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.

During the three months ended January 31, 2026, the Company granted nil (2025 - 3,350,000) incentive stock options with a fair value of $nil (2025 - $366,741) using the Black-Scholes option pricing model.

	For the three months ended January 31,
	2026	2025
Risk-free interest rate	n/a	3.08%
Expected option life in years	n/a	5 years
Expected stock price volatility	n/a	134%
Expected forfeiture rate	n/a	-

During the three months ended January 31, 2026, the Company expensed $87,737 (2025 - $165,100) 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, 2024	9,284,667	0.15
Granted	6,350,000	0.16
Exercised	(1,700,000)	0.12
Expired	(150,000)	0.12
Outstanding as at October 31, 2025 and January 31, 2026	13,784,667	0.16

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

10. SHARE CAPITAL AND RESERVES (continued)

Options (continued)

The Company has outstanding options entitling the holders to purchase common shares as at January 31, 2026 as follows:

Number outstanding	Number exercisable	Exercise price	Remaining life (years)	Expiry date
		$
2,066,667	2,066,667	0.060	0.73	October 26, 2026
2,768,000	2,768,000	0.280	1.25	May 4, 2027
2,600,000	2,600,000	0.120	2.72	October 19, 2028
3,350,000	2,233,333	0.125	3.83	November 28, 2029
3,000,000	1,000,000	0.200	4.65	September 26, 2030
13,784,667	10,668,000

The weighted average exercise price of exercisable options is $0.16.

Warrants

During the three months ended January 31, 2026, 1,822,000 (2025 - nil) share purchase warrants were exercised accordingly, $24,388 (2025 - $nil) was reversed from reserves to share capital.

During the three months ended January 31, 2026, nil (2025 - 4,122,222) share purchase warrants expired unexercised accordingly, $nil (2025 - $15,313) was reversed from reserves to share capital.

The following is a summary of share purchase warrant activities:

	Number of warrants	Weighted average exercise price
		$
Outstanding as at October 31, 2024	15,338,241	0.25
Issued	3,499,067	0.25
Expired	(7,103,472)	0.33
Outstanding as at October 31, 2025	11,733,836	0.20
Exercised	(1,822,000)	0.18
Outstanding as at January 31, 2026	9,911,836	0.20

The Company has outstanding warrants entitling the holders to purchase common shares as at January 31, 2026 as follows:

Number outstanding	Exercise price	Expiry date
	$
630,769	0.18	May 3, 2026
2,280,000	0.18	May 17, 2026
3,502,000	0.18	July 3, 2026
2,986,667	0.25	December 9, 2026
144,000	0.25	October 14, 2026
368,400	0.25	October 30, 2026
9,911,836

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

11. RELATED PARTY TRANSACTIONS

The Company entered into transactions with related parties during the three months ended January 31, 2026 and 2025.

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

	For the three months ended January 31,
	2026	2025
	$	$
Accounting fees	8,250	8,250
Management fees	51,000	30,000
Share-based compensation	56,476	130,055
	115,726	168,305

Amounts owing to related parties (including key management personnel) included in accounts payable and accrued liabilities total $nil as at January 31, 2026 (October 31, 2025 - $nil).

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 three months ended January 31,
	2026	2025
	$	$
Non-cash transactions not included in investing or financing activities:
Exploration and evaluation assets in accounts payable	40,352	11,149
Fair value of agents’ warrants	-	17,612
Warrants exercised	24,388	-
Warrants expired	-	15,313
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.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

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.

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 January 31, 2026, the Company held deposits with a face value of $58,000. A 1% increase or decrease in the interest rates would have a nominal impact in interest income for the three months ended January 31, 2026.

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.

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TOWER RESOURCES LTD.

Notes to the condensed interim financial statements

For the three months ended January 31, 2026

(Expressed in Canadian Dollars - Unaudited)

15. CAPITAL MANAGEMENT (continued)

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 three months ended January 31, 2026.

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