Valhalla Metals Inc. — Audit Report / Information 2025

Apr 10, 2026

VALHALLA METALS INC.

VALHALLA METALS INC.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (Expressed in US Dollars)

---

DAVIDSON

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of
Valhalla Metals Inc.

Opinion

We have audited the accompanying consolidated financial statements of Valhalla Metals Inc. (the "Company"), which comprise the consolidated statement of financial position as at December 31, 2025, and the consolidated statements of loss and comprehensive loss, cash flows, and changes in equity for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2025, and its financial performance and its cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

Basis for Opinion

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

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the consolidated financial statements, which indicates that the Company has incurred operating losses since inception, incurred a loss of $697,382 during the year ended December 31, 2025, and as of that date had an accumulated deficit of $15,842,448. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Matters

The consolidated financial statements of Valhalla Metals Inc. for the year ended December 31, 2024 were audited by another auditor who expressed an unmodified opinion on those statements on April 17, 2025.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matter described below to be the key audit matter to be communicated in our auditor's report.

DAVIDSON & COMPANY LLP

1200 - 609 Granville Street

PO BOX 10372, Pacific Centre

Vancouver, BC V7Y 1G6

604 687 0947

davidson-co.com

---

Assessment of Impairment Indicators of Exploration and Evaluation Assets ("E&E Assets")

As described in Note 5 to the consolidated financial statements, the carrying amount of the Company's E&E Assets was $50,000 as of December 31, 2025. As more fully described in Note 3 to the consolidated financial statements, management assesses E&E Assets for indicators of impairment at each reporting period.

The principal consideration for our determination that the assessment of impairment indicators of the E&E Assets is a key audit matter was that there was judgment made by management when assessing whether there were indicators of impairment for the E&E Assets, specifically relating to the assets' carrying amount which is impacted by the Company's intent and ability to continue to explore and evaluate these assets. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of impairment that could give rise to the requirement to prepare an estimate of the recoverable amount of the E&E Assets.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures included, among others:

• Evaluating management's assessment of impairment indicators.
• Evaluating the intent for the E&E Assets through discussion and communication with management.
• Reviewing the Company's recent expenditure activity and expenditure budgets for future periods.
• Obtaining, on a test basis through government websites, confirmation of title to ensure mineral rights underlying the E&E Assets are in good standing.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management's Discussion and Analysis.

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

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

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

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 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 activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

---

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

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

Chartered Professional Accountants

Vancouver, Canada

April 10, 2026

---

VALHALLA METALS INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in US Dollars)

| | | December 31
2025 | December 31
2024 |
| --- | --- | --- | --- |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 411,658 | $ 835,414 |
| Amounts receivable | | 862 | 2,652 |
| Prepaid expense | | 105,940 | 109,600 |
| Total current assets | | 518,460 | 947,666 |
| Exploration and evaluation assets | (Note 5) | 50,000 | 50,000 |
| | $ | 568,460 | $ 997,666 |
| LIABILITIES | | | |
| --- | --- | --- | --- |
| Current liabilities | | | |
| Accounts payable and accrued liabilities | (Note 8) | 338,086 | 95,775 |
| Total current liabilities | | 338,086 | 95,775 |
| Long term liabilities | | | |
| Reclamation provision | (Note 6) | 106,833 | 103,833 |
| Total long term liabilities | | 106,833 | 103,833 |
| | | 444,919 | 199,608 |
| EQUITY | | | |
| Share capital | (Note 7) | 15,154,548 | 15,154,548 |
| Contributed surplus | (Note 7) | 988,446 | 988,446 |
| Deficit | | (15,842,448) | (15,145,066) |
| Accumulated other comprehensive loss | | (177,005) | (199,870) |
| | | 123,541 | 798,058 |
| | $ | 568,460 | $ 997,666 |

CORPORATE INFORMATION AND NATURE OF CONTINUANCE OF OPERATIONS (Note 1)

Approved by the Board of Directors on April 10, 2026

"Curt Freeman" "Rick Van Nieuwenhuyse"
Curt Freeman, Director Rick Van Nieuwenhuyse, Director

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

---

VALHALLA METALS INC.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

		2025	2024
Operating expenses
Corporate development		$ 21,255	$ 46,528
Exploration and evaluation expenses	(Notes 5 and 8)	377,774	348,958
Management fees	(Note 8)	143,082	146,040
Office and miscellaneous		22,197	29,232
Professional fees	(Note 8)	110,597	142,612
Regulatory and transfer agent		32,736	27,679
Camp reclamation provision	(Note 6)	3,000	3,000
Shareholder communications and investor relations		1,831	13,463
Operating loss		712,472	757,512
Interest Income		(15,090)	(46,434)
Loss for the year		697,382	711,078
Other comprehensive loss
Items that may be reclassified subsequently to income or loss:
Currency translation differences of foreign operations		(22,865)	96,431
Total comprehensive loss for the year		$ 674,517	$ 807,509
Basic and diluted loss per share		$ (0.01)	$ (0.01)
Weighted average number of shares outstanding (basic and diluted)	(Note 9)	83,225,336	83,225,336

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

---

VALHALLA METALS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

	2025	2024
Cash provided by (used for):
Operating activities
Loss for the year	$ (697,382)	$ (711,078)
Items not involving cash
Camp reclamation provision	3,000	3,000
Change in non-cash working capital:
Amounts receivable	1,726	2,500
Prepaid expenses	3,529	13,733
Accounts payable and accrued liabilities	233,646	(58,196)
	(455,481)	(750,041)
Investing activities	-	-
Financing activities	-	-
Unrealized foreign exchange gain/loss cash	31,725	(96,430)
Change in cash during the year	(455,481)	(750,041)
Cash, beginning of the year	835,414	1,681,885
Cash, end of the year	$ 411,658	$ 835,414

SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOW

Cash paid for:
Interest	$	-	$ -
Taxes	$	-	$ -

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

---

VALHALLA METALS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

	Number of Subordinate Voting Shares	Number of Multiple Voting Shares	Share Capital	Contributed surplus	Deficit	Accumulated other comprehensive income	Total Equity
Balance, December 31, 2023	35,016,636	482,087	$ 15,154,548	$ 988,446	$ (14,433,988)	$ (103,439)	$ 1,605,567
Loss for the year	-	-	-	-	(711,078)	-	(711,078)
Currency translation differences for foreign operations	-	-	-	-	-	(96,431)	(96,431)
Balance, December 31, 2024	35,016,636	482,087	$ 15,154,548	$ 988,446	$ (15,145,066)	$ (199,870)	$ 798,058
Conversion of multiple voting shares to subordinate voting shares	2,296,100	(22,961)	-	-	-	-	-
Loss for the year	-	-	-	-	(697,382)	-	(697,382)
Currency translation differences for foreign operations	-	-	-	-	-	22,865	22,865
Balance, December 31, 2025	37,312,736	459,126	$ 15,154,548	$ 988,446	$ (15,842,448)	$ (177,005)	$ 123,541

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

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

1. CORPORATE INFORMATION AND NATURE OF CONTINUANCE OF OPERATIONS

Valhalla Metals Inc. (the "Company" or "Valhalla"), was incorporated on April 13, 2011 under the laws of British Columbia. The Company trades on the TSX Venture Exchange ("TSX-V") under the symbol VMXX.

The principal business activity of the Company acquiring and exploring mineral properties. The address of the Company's corporate office and its principal place of business is Suite 2700, 1133 Melville Street Vancouver, British Columbia, V6E 4E5, Canada.

These consolidated financial statements were prepared on a going concern basis with the assumption that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has incurred operating losses since inception, including $697,382 in the current year, resulting in a deficit of $15,842,448 at December 31, 2025. While the Company has been successful in obtaining funding in the past through the issuance of additional equity, there is no assurance that such funding will be available in the future. An inability to raise additional funds would adversely impact the future assessment of the Company as a going concern. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

The Company is dependent upon its ability to finance its operations and exploration programs through financing activities that may include issuances of additional equity securities or possibly debt in the future. The recoverability of the carrying value exploration and evaluation assets and, ultimately, the Company's ability to continue as a going concern, is dependent upon the Company's ability to raise financing, the realization of which is uncertain. These consolidated financial statements do not include adjustments to amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue operations. These adjustments could be material.

• 10 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

2. BASIS OF PRESENTATION

(a) Statement of compliance:

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").

(b) Approval of consolidated financial statements:

These consolidated financial statements were approved by the Company's Board of Directors on April 10, 2026.

(c) Basis of presentation:

These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value, as disclosed in Note 4. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. Certain comparative disclosures (i.e. camp reclamation provision) have been reclassified to conform with current year presentation.

(d) Functional currency and presentation currency:

The functional currency is the Canadian dollar for the Canadian parent entity and US dollar for the US subsidiary. The presentation currency of the Company and its subsidiaries is the US dollar, and accounts denominated in currencies other than the functional currency have been translated as follows:

1. Monetary assets and liabilities at the exchange rate at the consolidated statement of financial position date;
2. Non-monetary assets and liabilities at the historical exchange rates, unless such items are carried at fair value, in which case they are translated at the date when the fair value was determined;
3. Shareholders' equity items at historical exchange rates; and
4. Expense items at the rate of exchange on the transaction date.

Exchange gains and losses arising from translation of the Canadian operations to the Company's US dollar presentation currency are recorded as currency translation adjustments in other comprehensive income (loss), which is included in accumulated other comprehensive loss.

(e) Critical accounting estimates and judgements:

The preparation of these consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of expenses, assets and liabilities, the accompanying disclosures, and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

• 11 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

2. BASIS OF PRESENTATION (continued)

(e) Critical accounting estimates and judgements: (continued)

In particular, the Company has identified a number of areas where critical judgements, estimates and assumptions are required. These areas include, but are not limited to, the following:

Critical accounting estimates

Significant accounting estimates are estimates and assumptions made by management that may result in a material adjustment to the carrying amounts of assets and liabilities within the next financial year and include, but are not limited to, the following:

• Reclamation provision:

The Company's provision for reclamation represents management's best estimate of the present value of the future cash outflows required to settle estimated reclamation costs at the Sun property. The provision reflects estimates of future reclamation costs, inflation and the applicable risk-free interest rates for discounting the future cash outflows. Changes in the above factors could result in a change to the provision recognized by the Company.

Critical accounting judgements

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements include, but are not limited to, the following:

• Going concern

The assessment of the Company's ability to continue as a going concern and to raise sufficient funds to pay for its ongoing operating expenditures, meet its liabilities for the ensuing year, and to fund planned project-acquisitions, involves significant judgement based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances (Note 1).

• Exploration and Evaluation assets impairment

The assessment of evidence of impairment in respect of exploration and evaluation assets (capitalized mineral property acquisition costs) requires management to make judgements regarding the status of each project and the future exploration plans. The facts and circumstances indicating that the Company should test its exploration and evaluation assets for impairment are defined in IFRS 6. The nature of exploration and evaluation activities is such that only a proportion of projects are ultimately successful, and some assets are likely to become impaired in future periods.

• 12 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

2. BASIS OF PRESENTATION (continued)

(e) Critical accounting estimates and judgements: (continued)

• Recovery of deferred tax assets:

Judgement is required to determine whether deferred tax assets are recognized in the consolidated statements of financial position. Deferred tax assets, including those arising from unutilized tax losses, require the Company to assess the likelihood that it will generate sufficient taxable earnings in future periods, in order to utilize recognized deferred tax assets. Judgement is also required in respect of the application of existing tax laws in each jurisdiction.

Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows. These estimates of future taxable income are based on forecast cash flows from operations (which are impacted by production and sales volumes, commodity prices, reserves, operating costs, closure and rehabilitation costs, capital expenditure, dividends and other capital management transactions). 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 reporting date could be impacted. In addition, 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.

3. MATERIAL ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

(a) Currency

These consolidated financial statements are presented in United States dollars. The functional currency of each entity in the consolidated group is determined with reference to the currency of the primary economic environment in which that entity operates. Accordingly, the functional currency of entities operating principally in the United States will be the United States dollar, while the functional currency of entities operating principally in Canada will be the Canadian dollar.

(b) Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Valhalla Metals AK Inc. The financial statements of subsidiaries are included in the consolidated financial statements from the date control commences until the date control ceases. All significant intercompany transactions and balances are eliminated on consolidation.

• 13 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

(c) Income taxes

Income tax on profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss, except to the extent that it relates to items recognized directly in equity or other comprehensive loss, in which case the income tax is recognized in equity or other comprehensive loss.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax is provided for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for the initial recognition of assets or liabilities in a transaction that is not a business combination and affects neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amounts of assets and liabilities, on a non-discounted basis using tax rates at the end of the reporting period applicable to the period of expected realization.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

(d) Cash and cash equivalents

Cash and cash equivalents consist of cash on deposit with banks or highly liquid short-term interest-bearing securities that are readily convertible to known amounts of cash and those that have original maturities of three months or less or are fully redeemable without penalty prior to maturity.

(e) Financial instruments

(i) Classification

The Company classifies its financial instruments in the following categories: at fair value through profit or loss ("FVTPL"), at fair value through other comprehensive income ("FVTOCI") or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company's business model for managing the financial assets and their contractual cash flow characteristics. Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

(ii) Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

• 14 -

---

VALHALLA METALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024
(Expressed in US Dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in profit or loss in the period in which they arise.

Financial assets at FVTOCI

Financial assets carried at FVTOCI are initially recorded at fair value. Unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTOCI are included in other comprehensive income or loss in the period in which they arise.

(iii) Impairment of Financial Assets at Amortized Cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. Regardless of whether credit risk has increased significantly, the loss allowances for trade receivables without a significant financing component classified at amortized cost, are measured using the lifetime expected credit loss approach. The Company shall recognize in the consolidated statements of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit loss (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

(iv) Derecognition

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the consolidated statements of loss and comprehensive loss.

(f) Share capital

Common shares issued by the Company are classified as equity. Share issuance costs that are directly attributable to the issuance of common shares are recognized as a deduction from equity.

(g) Loss per share

Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during the reporting year. Diluted loss per share is computed using the treasury stock method, under which the weighted average number of shares outstanding is increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants are exercised. Shares held in escrow, other than where their release is subject to the passage of time, are not included in the calculation of the weighted average number of common shares outstanding.

• 15 -

---

VALHALLA METALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024
(Expressed in US Dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

(h) Exploration and evaluation assets

Acquisition costs for exploration and evaluation assets are capitalized and exploration and evaluation expenditures are expensed. When economically viable reserves have been determined, technical feasibility has been determined and the decision to proceed with development has been approved, the capitalized mineral property interests for that project are reclassified as mining properties, a component of property, plant and equipment.

Exploration and evaluation expenses are comprised of costs that are directly attributable to:

• Researching and analysing exploration data;
• Conducting geological studies, exploratory drilling and sampling;
• Examining and testing extraction and treatment methods; and
• Activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral resource including personnel, community engagement, resource reporting, as well as indirect project support expenses such as flights, fuel, and other camp operation costs.

All exploration and evaluation expenditures directly related to exploration are expensed until properties are determined to contain economically viable reserves.

Development expenditures capitalized as mining properties are net of the proceeds of the sale of or extracted during the development phase. Interest on borrowings related to the construction and development of assets is capitalized until substantially all the activities required to make the asset ready for its intended use are complete. The costs of removing overburden to access ore are capitalized as pre-production stripping costs and classified as mining properties.

(i) Impairment of exploration and evaluation assets

At the end of each reporting period, the Company's assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value less costs to sell is determined as the amount that would be obtained from the sale of the asset price received to sell an asset in an orderly transaction between market participants. In assessing value in use, 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 asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cash generating unit ("CGU") to which the asset belongs. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

(j) Restoration and environmental obligations

The Company recognizes liabilities for legal or constructive obligations associated with the retirement of exploration and evaluation assets. The net present value of future rehabilitation costs is recorded to exploration expenses with a corresponding increase in the rehabilitation provision in the period incurred. A pre-tax discount rate that reflects the time value of money is used to calculate the net present value.

• 16 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

The Company's estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to exploration and evaluation assets with a corresponding entry to the rehabilitation provision.

(k) Fixed assets other than exploration and evaluation assets

Fixed assets are measured initially at cost, unless they are acquired as part of a business combination, in which case they are initially measured at fair value. Thereafter, the fixed assets are recorded net of accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, estimated decommissioning provisions and borrowing costs on qualifying assets.

The gain or loss on disposal of an item fixed assets is determined by comparing the proceeds from disposal with the carrying amount of the fixed asset and are recognized within other expense or income in earnings. During the usage period, the fixed assets are reviewed for impairment and if the carrying amount exceeds the recoverable amount, the asset is described as impaired.

(l) Share-based compensation

The Company may grant stock options to acquire common shares of the Company to directors, officers, employees and consultants. An individual is classified as an employee when the individual is an employee for legal or tax purposes, or provides services similar to those performed by an employee. Stock options granted to directors, officers and employees are measured at their fair values determined on their grant date, using the Black-Scholes option pricing model, and are recognized as an expense over the vesting periods of the options on a graded basis. Options granted to consultants or other non-insiders are measured at the fair value of goods or services received from these parties, or at their Black-Scholes fair values if the fair value of goods or services received cannot be measured. A corresponding increase is recorded to contributed surplus for share-based compensation recorded. When stock options are exercised, the cash proceeds along with the amount previously recorded as contributed surplus are recorded as share capital. When the right to receive options is forfeited before the options have vested, any expense previously recorded is reversed.

(m) New and amended accounting pronouncements

The IASB issued certain new or amended accounting standards that are mandatory for accounting periods on or after January 1, 2025. The effect of such new or amended accounting standards did not have a material impact on the Company's consolidated financial statements.

IFRS 18, issued by the IASB in April 2024, is a new standard on "Presentation and Disclosure in Financial Statements" that replaces IAS 1 and is effective from January 1, 2027, with earlier application permitted. The Company has not early adopted IFRS 18 and is currently assessing the impact of the adoption of this standard

• 17 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

4. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

Financial instruments are agreements between two parties that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The Company classifies its financial instruments as follows: cash and cash equivalents are classified as fair value through profit or loss ("FVTPL"); and accounts payable and accrued liabilities, as amortized cost. The carrying values of these instruments approximate their fair values due to their short term to maturity.

Capital management

The Company does not generate cash flows from operations. The Company's primary source of funds comes from the issuance of share capital. The Company does not use other sources of financing that require fixed payments of interest and principal due to lack of cash flow from current operations and is not subject to any externally imposed capital requirements.

The Company's objective when managing capital is to advance its exploration and evaluation assets while safeguarding the Company's ability to continue as a going concern.

The Company defines its capital as equity. Capital requirements are driven by the Company's general operations. To effectively manage the Company's capital requirements, the Company monitors expenses and overhead to ensure costs and commitments are being paid. There were no changes to the Company's capital management approach during the years ended December 31, 2025 and 2024. The Company is not subject to any externally imposed capital requirements.

Management of financial risk

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 does not have any financial instruments classified and measured at fair value. Cash and cash equivalents, and accounts payable and accrued liabilities approximate their fair value due to the short-term nature of these financial instruments.

The Company's risk exposure and the impact on the Company's consolidated financial instruments are summarized below:

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk consists of interest rate risk, foreign currency risk and other price risk. As at December 31, 2025, the Company is not exposed to significant market risk.

• 18 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

4. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (continued)

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company's approach to managing liquidity risk is to attempt to ensure that it will have sufficient cash or credit available to meet liabilities when due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. All of the Company's cash and cash equivalents are held in reputable financial institutions and as such, the Company believes credit risk is negligible. All of the liabilities presented as accounts payable and accrued liabilities are due within 90 days of December 31, 2025.

Foreign exchange risk

Currency risk is the risk to the Company's earnings that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk. The Company is exposed to foreign exchange risk with respect to these transactions. The Company is exposed to currency risk through the following assets and liabilities denominated in Canadian dollars:

	December 31, 2025	December 31, 2024
Cash and cash equivalents	394,852	819,123
Accounts payable	(237,543)	(66,043)

At December 31, 2025, Canadian dollar amounts were converted at a rate of CAD 1.00 to USD 0.7296. A 10% increase or decrease in the Canadian dollar relative to the US dollar would result in a change of approximately $15,731 (December 31, 2024 - $75,308) in the Company's comprehensive loss for the year. Cash equivalents at December 31, 2025 consist of Canadian Guaranteed Investment Certificates of CAD$5,000 (December 31, 2024 – CAD$5,000).

Categories of financial assets and financial liabilities

The carrying values of the Company's financial instruments are classified into the following categories:

Financial instrument	Category	December		December
		31, 2025	31, 2024
Cash and cash equivalents	Amortized cost	$	411,658	$ 835,414
Accounts payable	Amortized cost	$	338,086	$ 95,775

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

5. EXPLORATION AND EVALUATION ASSETS

a. Sun Property

On May 15, 2018, Valhalla Mining Inc, a company controlled by a director of the Company, transferred its 100% interest in certain mineral rights to the Company in exchange of common shares with a fair value of $800,000. The mineral rights ("Sun Property") are located in the Ambler Mining District of Alaska.

During the year ended December 31, 2023, given the delay and uncertainty surrounding the approval by the Bureau of Land Management of the road that would provide access to the Ambler Mining District, the Company wrote off the accounting cost of the Sun Property to $25,000. An impairment loss of $775,000 was recorded on the statement of loss and comprehensive loss for year ended December 31, 2023).

b. Smucker Property

On May 15, 2018, Valhalla Mining, LLC, a company controlled by a director of Valhalla US, transferred its 100% interest in certain mineral rights to the Company in exchange of common shares with a fair value of $800,000. The mineral rights ("Smucker Property") are located in the Ambler Mining District of Alaska.

During the year ended December 31, 2022, the Company spent $50,615 on staking additional mining claims immediately adjacent to the original Smucker claim block. During 2023, the Company spent an additional of $2,700 on staking claims.

During the year ended December 31, 2023, given the delay and uncertainty surrounding the approval by the Bureau of Land Management of the road that would provide access to the Ambler Mining District, the Company wrote off the accounting cost of the Smucker Property to $25,000. An impairment loss of $676,591 was recorded on the statement of loss and comprehensive loss for year ended December 31, 2023.

• 20 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

5. EXPLORATION AND EVALUATION ASSETS (continued)

The following tables present a summary of the exploration and evaluation assets as of December 31, 2025 as well as exploration expenses incurred during the year ended December 31, 2025 and December 31, 2024:

Exploration and evaluation assets continuity:

	Sun	Smucker	TOTAL
Balance, December 31, 2023, 2024 and December 31, 2025	$25,000	$25,000	$50,000

Exploration expenses

December 31, 2025	Sun	Smucker	Total
Community	27,758	-	27,758
Geology	74,800	21,200	96,000
Mineral claims rents	102,630	29,700	132,330
Other	5,373	-	5,373
Professional services	116,313	-	116,313
December 31, 2025	$ 326,874	$ 50,900	$ 377,774
December 31, 2024	Sun	Smucker	Total
---	---	---	---
Community	25,886	-	25,886
Geology	23,100	-	23,100
Labour	3,195	-	3,195
Mineral claims rents	102,630	24,420	127,050
Other	19,727	-	19,727
Professional services	150,000	-	150,000
December 31, 2024	$ 324,538	$ 24,420	$ 348,958

---

VALHALLA METALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024
(Expressed in US Dollars)

6. RECLAMATION PROVISION

During the year ended December 31, 2023, the Company recognized a reclamation provision at with a present value of $100,833. As at December 31, 2025, the present value of the reclamation obligation was calculated using a risk-free interest rate of 3.1% (December 31, 2024 – 3.1%), an inflation rate of 2.0% (December 31, 2024 – 2.0%), and a discount period of 8 years (December 31, 2024 – 9 years). The undiscounted value of the obligation was $136,832.

A reconciliation of the changes in the Company's reclamation provision is as follows:

Balance at December 31, 2023	$ 100,833
Accretion expense in 2024	3,000
Balance at December 31, 2024	$ 103,833
Accretion expense in 2025	3,000
Balance at December 31, 2025	$ 106,833

7. SHARE CAPITAL

a) Authorized:

The Company is authorized to issue an unlimited number of subordinate voting shares without nominal or par value and unlimited number of multiple voting shares without nominal or par value.

During the year ended December 31, 2022, the Company issued 482,087 multiple voting shares. These multiple voting shares are restricted and provide the holder the option to covert to subordinate voting shares with a multiplying factor of 100 (resulting in 48,208,700 subordinate voting shares) when the following conditions are met: (1) vesting from escrow (2) US investors (multiple voting share holders) cumulative ownership of the Company cannot exceed 40% of the issued and outstanding subordinate voting shares.

(b) Reconciliation of changes in share capital

On September 2, 2025, 22,961 multiple voting shares were converted into 2,296,100 subordinate voting shares. No additional multiple voting shares or subordinate voting shares were issued during the years ended December 31, 2025 and 2024.

• 22 -

---

VALHALLA METALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024
(Expressed in US Dollars)

7. SHARE CAPITAL (continued)

Escrow

During the year ended December 31, 2022, 5,586,538 Subordinate Voting Shares and 367,299 Multiple Voting Shares were held in escrow. Under the terms of the escrow agreements, 10% of such escrowed securities were released upon the date of the exchange bulletin from the TSXV, with the balance being released in six tranches of 15% every six months thereafter. As at December 31, 2025, all the RTO related Multiple Voting Shares and Subordinate Voting Shares are released from escrow (2024 – 110,194 Multiple Voting Shares and 1,675,960 Subordinate Voting Shares).

Warrants

The following table summarizes the continuity of the Company's warrants:

Issue Date	Expiry Date	Weighted average exercise price	Balance December 31, 2023	Expired in 2024	Balance at December 31, 2024 and 2025
October 8, 2020	October 8, 2024	CAD$0.60	1,333,422	(1,333,422)	-
			1,333,422	(1,333,422)	-

Stock Option Plan

The Share Compensation Plan is a "rolling up to 10%" omnibus plan pursuant to which the total number of Subordinate Voting Shares which may be issued pursuant to RSUs and Options granted under the Share Compensation Plan, in the aggregate, is equal to up to a maximum of 10% of the issued and outstanding Subordinate Voting Shares, assuming the conversion of all Multiple Voting Shares (1 multiple voting share to 100 to Subordinate Voting Shares), at the time of the grant or award.

The following table summarizes the continuity of the Company's stock options:

Exercise Price	Balance December 31, 2023	Expiry Date	Weighted average exercise price	Expired during 2024	Balance December 31, 2024 and 2025
CAD$0.50	4,375,000	November 7, 2027	CAD$0.50	-	4,375,000
CAD$1.25	55,000	August 15, 2024	CAD$1.25	(55,000)	-
	4,430,000		CAD$0.51	CAD$1.25	CAD$0.50

All of the 4,375,000 outstanding stock options are fully vested and exercisable.

• 23 -

---

VALHALLA METALS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024
(Expressed in US Dollars)

8. RELATED PARTY BALANCES AND TRANSACTIONS

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is a related party transaction when there is a transfer of resources or obligations between related parties.

The Company had the following related party balances at December 31:

	2025	2024
Due to Directors and Officer	314,610	51,334
Total due to related parties	$ 314,610	$ 51,334

The amounts due to related parties were incurred in the normal course of business and have been included in accounts payable. The balances are non-interest bearing, unsecured and are due on demand.

Currently, key management personnel receive cash-based compensation in the form of management and consulting fees. In the future, they may receive salaries, short-term employee benefits, share-based payments, and post-employment benefits. Key management personnel include the Chief Executive Officer, Chief Financial Officer, VP of Exploration, and directors of the Company. The remuneration of key management in 2025 and 2024 was as follows:

	2025	2024
Remuneration officers	282,007	224,052
Total remuneration	$ 282,007	$ 224,052

The higher fees in 2025 compared to 2024 are due to fees charged by the VP of Exploration, who is now on a monthly fee contract. The fees for CEO and CFO of the Company remained unchanged in 2025. Fees for the VP of Exploration are reported as exploration expenses, CEO fees are reported as management fees, and CFO fees are reported as professional fees in the consolidated statements of loss and comprehensive loss. The breakout of management fees is as follows:

	2025	2024
Exploration and evaluation expenses	$ 96,000	$ 34,200
Management fees	143,082	146,040
Professional fees	42,925	43,812
	$ 282,007	$ 224,052

9. BASIC AND DILUTED LOSS PER SHARE

The calculation of basic and diluted loss per share for the years ended December 31, 2025 and 2024 was based on the loss attributable to common shareholders of $697,382 (2024 – $711,078) and the weighted average number of Subordinated Voting Shares and Multiple Voting Shares (on a converted basis) outstanding of 83,225,336 in 2025 (2024 – 83,225,336).

10. SEGMENTED INFORMATION

The Company operates in one reportable segment, being the exploration and evaluation of minerals properties. All of the Company's non-current assets were located in the United States as at December 31, 2025 and 2024.

• 24 -

---

VALHALLA METALS INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024

(Expressed in US Dollars)

11. INCOME TAX

The following table reconciles the amount of income tax expense on application of the combined statutory Canadian federal and provincial income tax rates:

	2025	2024
Combined statutory income tax rate	27.00%	27.00%
Expected income tax recovery at statutory rates	$ (188,000)	$ (192,000)
Change in statutory, foreign tax, foreign exchange rates and other	(20,000)	-
Adjustment to prior years provision versus statutory tax returns and expiry of non-capital losses	(1,045,000)	-
Change in unrecognized deductible temporary differences	1,253,000	-
Permanent and other differences	-	89,000
Change in tax benefits not recognized	-	103,000
Provision for income tax expense	$ -	$ -

The significant components of deferred income tax assets not recognized are presented below:

	2025	2024
Non-capital loss carry-forwards	$ 1,390,000	$ 2,392,000
Exploration and evaluation assets	51,000	453,000
Capital loss carry-forwards	-	48,000
	1,441,000	2,893,000
Unrecognized deferred tax assets	(1,441,000)	(2,893,000)
	$ -	$ -

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

	2025	Expiry Date Range	2024	Expiry Date Range
Temporary Differences
Exploration and evaluation assets	190,000	No expiry date		No expiry date
Non-capital losses	5,149,000	2029 to 2045		2028 to 2044
Canada	3,648,000	2029 to 2045		2028 to 2044
USA	1,501,000	No expiry date		No expiry date

• 25 -