Xcite Resources Inc. — Audit Report / Information 2024

Mar 1, 2025

XCITE RESOURCES INC.

FINANCIAL STATEMENTS

For the Years Ended October 31, 2024 and 2023

Stated in Canadian Dollars

---

XCITE RESOURCES INC.

INDEX TO THE AUDITED FINANCIAL STATEMENTS

For the Years Ended October 31, 2024 and 2023

	Page
INDEPENDENT AUDITOR'S REPORT	1-2
FINANCIAL STATEMENTS
Statements of Financial Position	3
Statements of Loss and Comprehensive Loss	4
Statements of Changes in Shareholders' Equity	5
Statements of Cash Flows	6
Notes to the Financial Statements	7-22

---

K. R. MARGETSON LTD.
331 East 5th Street
North Vancouver BC, V7L 1M1
Chartered Professional Accountant
Tel: 604.220.7704
Fax: 1.855.603.3228

INDEPENDENT AUDITOR'S REPORT

To the Shareholders and Directors of Xcite Resources Inc.:

I have audited the accompanying financial statements of Xcite Resources Inc. (the “Company”) which comprise the statements of financial position as at October 31, 2024 and 2023, and the statements of loss and comprehensive loss and changes in shareholders’ equity and cash flows for the years ended October 31, 2024 and 2023, including a summary of significant accounting policies and other explanatory information.

In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at October 31, 2024 and 2023, and its financial performance and its cash flows for the year ended October 31, 2024 and 2023 in accordance with International Financial reporting Standards.

Basis for Opinion

I conducted my audit in accordance with Canadian generally accepted auditing standards. My responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of my reports. I am independent of the Company in accordance with the ethical requirements that are relevant to my audits of the financial statements in Canada, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Material Uncertainty Related to Going Concern

I draw attention to Note 1 in the financial statements, which indicates that the Company, as of that date, had an accumulated deficit of $1,170,061. As stated in Note 1, this condition, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. My opinion is not modified in respect of this matter.

Key Audit Matters

The key audit matters communicated below are matters arising from the current audit period of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective or complex judgments. The communication of key audit matters does not alter in any way my opinion on the consolidated financial statements, taken as a whole, and I am not, by communicating the key audit matters below, providing separate opinions on the key audit matters or on the accounts or disclosures to which they relate.

Except for the matter described in the Material uncertainty related to Going Concern section of our report, there were no key audit matters that required communication with the audit committee.

Other information

Management is responsible for the other information. The other information comprises Management’s Discussion and Analysis.

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

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audits or otherwise appears to be materially misstated. I obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work I have performed on this other information, I conclude that there is a material misstatement of this other information, I are required to report that fact. I have nothing to report in this regard.

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

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

---

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

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

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my 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 I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that I identify during my audits. I also provide those charged with governance with a statement that I 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 my independence, and where applicable, related safeguards.

Rnngutn Ltd.

Chartered Professional Accountant

February 28, 2024

North Vancouver, Canada

---

XCITE RESOURCES INC.

Statements of Financial Position

(Stated in Canadian dollars)

As at October 31, 2024 and 2023

| | 2024 | Restated
(Note 12)
2023 |
| --- | --- | --- |
| Assets | | |
| Current assets: | | |
| Cash | $ 4,807 | $ 106,992 |
| Goods and services taxes receivable | 29,975 | 21,122 |
| Total current assets | 34,782 | 128,114 |
| Exploration and evaluation assets (Note 4) | 286,000 | 286,000 |
| Option to purchase exploration and evaluation assets (Note 5) | 64,500 | - |
| Total assets | $ 385,282 | $ 414,114 |
| Liabilities and Shareholders’ Equity | | |
| Current liabilities: | | |
| Accounts payable and accrued liabilities (Note 6) | $ 156,795 | $ 141,274 |
| Due to related parties (Note 9) | 225,453 | 45,175 |
| Demand promissory notes payable (Note 7) | 30,000 | - |
| Total current liabilities | 412,248 | 186,449 |
| Shareholders’ equity: | | |
| Share capital (Note 8) | 901,615 | 739,161 |
| Share subscriptions received (Note 8) | 8,000 | - |
| Reserves (Note 8) | 233,480 | 77,290 |
| Deficit | (1,170,061) | (588,786) |
| Total shareholder’s equity | (26,966) | 227,665 |
| Total liabilities and shareholder’s equity | $ 385,282 | $ 414,114 |

Nature of operations and continuance of business (Note 1)

Subsequent events (Note 13)

Approved on behalf of the Board of Directors by:

“Chris Cooper”

Chris Cooper, Director

“Jean-Francois Meilleur”

Jean-Francois Meilleur, Director

The accompanying notes form and integral part of these financial statements

---

XCITE RESOURCES INC.

Statements of Loss and Comprehensive Loss

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

	2024	Restated (Note 12) 2023
Expenses
Exploration and evaluation expenditures	$ 187,070	$ 15,635
Management fees (Note 9)	168,000	69,000
Consulting fees (Note 9)	74,586	99,049
Share-based compensation (Note 8 (b))	70,952	37,694
Professional fees	38,440	75,925
General and administrative expenses	19,392	9,157
Investor relations and filing fees	14,726	47,712
Travel expenses	7,402	-
Bank charges	1,026	1,108
	581,594	355,280
Interest income	319	-
Net loss and comprehensive loss	$ (581,275)	$ (355,280)
Weighted average shares outstanding	16,510,920	13,474,615
Loss per share, basic and diluted	$ (0.04)	$ (0.03)

The accompanying notes form and integral part of these financial statements

---

XCITE RESOURCES INC.

Statements of Changes in Shareholders' Equity

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

	Number of Shares Issued	Share Capital	Share Subscriptions Received	Reserves	Deficit	Total Shareholders' Equity
		$	$	$	$	$
Balance at October 31, 2022	8,510,000	250,000	-	14,875	(233,506)	31,369
Shares on private placement	850,000	85,000	-	-	-	85,000
Shares on initial public offering	4,200,000	420,000	-	-	-	420,000
Share issued to broker	420,000	42,000	-	-	-	42,000
Share issue costs	-	(223,839)	-	24,721	-	(199,118)
Share-based compensation	-	-	-	37,694	-	37,694
Shares issued for acquisition of exploration and evaluation assets	1,600,000	166,000	-	-	-	166,000
Net loss for the year (as restated, Note 12)	-	-	-	-	(355,280)	(355,280)
Balance at October 31, 2023	15,580,000	739,161	-	77,290	(588,786)	227,665
Shares issued on exercise of warrants	392,600	40,260	8,000	-	-	48,260
Shares issued on exercise of options	500,000	87,694	-	(37,694)	-	50,000
Share-based compensation	-	-	-	70,952	-	70,952
Warrants issued for debt and services	-	-	-	122,932	-	122,932
Shares issued for acquisition of exploration and evaluation assets	300,000	34,500	-	-	-	34,500
Net loss for the year	-	-	-	-	(581,275)	(581,275)
Balance at October 31, 2024	16,772,600	901,615	8,000	233,480	(1,170,061)	(26,966)

The accompanying notes form and integral part of these financial statements

---

XCITE RESOURCES INC.

Statement of Cash Flows

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

| | 2024 | Restated
(Note12)
2023 |
| --- | --- | --- |
| Cash provided by (used in): | | |
| Operating activities | | |
| Net loss | $ (581,275) | $ (355,280) |
| Adjust for non-cash items | | |
| Share-based compensation | 70,952 | 37,694 |
| Consulting fees paid with warrants | 24,587 | - |
| Change in non-cash working capital | | |
| Goods and services taxes receivable | (8,853) | (12,824) |
| Prepaid and deposits | - | 55,977 |
| Accounts payable and accrued liabilities | 113,866 | 88,910 |
| Due to related parties | 180,278 | 28,480 |
| Short term debt | 30,000 | - |
| Net cash used in operations | (170,445) | (157,043) |
| Investing activities | | |
| Acquisition payments for option on exploration and evaluation assets | (30,000) | - |
| Acquisition payment on exploration and evaluation assets | - | (90,000) |
| Net cash used in investing activities | (30,000) | (90,000) |
| Financing activities | | |
| Cash received on share subscriptions issued, net of costs | - | 347,882 |
| Cash received on option exercised | 50,000 | - |
| Cash issued on warrants exercised | 40,260 | - |
| Cash received for warrants not issued | 8,000 | - |
| Net cash provided by financing activities | 98,260 | 347,882 |
| Increase (decrease) in cash | (102,185) | 100,839 |
| Cash, beginning of year | 106,992 | 6,153 |
| Cash, end of year | $ 4,807 | $ 106,992 |
| Supplemental information | | |
| Value of options issued on private placement | $ - | $ 24,721 |
| Value of shares issued for exploration and evaluation assets | $ 34,500 | $ 166,000 |
| Value of warrants issued for debt | $ 98,345 | $ - |

The accompanying notes form and integral part of these financial statements

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

1. NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS

Xcite Resources Inc. (“Xcite” or the “Company”) is an exploration company incorporated on February 8, 2022 under the laws of the Province of British Columbia, Canada. The Company’s head office and principal address is Suite 1910, 1030 West Georgia Street, Vancouver, British Columbia, Canada, V6E 2Y3. On February 22, 2023, pursuant to the acceptance of a prospectus, the Company became a listed entity on the Canadian Securities Exchange (“CSE”) with the trading symbol XRI.CN.

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. The Company has incurred losses from inception of $1,170,061 and does not currently have the financial resources to sustain operations in the long-term. While the Company has been successful in obtaining its required funding for this year, there is no assurance that such future financing will be available or be available on favourable terms. These material uncertainties may cast significant doubt about the Company’s ability to continue as a going concern.

The 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. Continued operations of the Company are dependent on the Company’s ability to receive financial support, necessary financing, or generate profitable operations in the future.

1. MATERIAL ACCOUNTING POLICY DISCLOSURE INFORMATION

Basis of presentation

These financial statements have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board (“IASB”) and the interpretations of the IFRS interpretations committee (“IFRIC”) and in effect at October 31, 2024.

These financial statements have been prepared on a historical cost basis and presented in Canadian Dollars, which is the Company’s functional and presentation currency. They were approved and authorized for issuance by the Board of Directors on February 28, 2025.

Use of accounting estimates and judgments

The preparation of these 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 the financial statements and the reported expenses during the reporting period. Actual results could differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the revision affects both current and future periods. Assumptions about the future and other sources of estimation and judgment uncertainty that management has made at the end of the reporting year, relate to:

(i) Going concern

The assessment of the Company’s ability to execute its strategy by funding future working capital involves judgment. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstance. There is a material uncertainty regarding the Company’s ability to continue as a going concern. The Company’s principal source of cash is from private placements. The Company is dependent on raising funds in order to have sufficient capital to be able to identify, evaluate and then acquire an interest in assets or a business.

7 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

2. MATERIAL ACCOUNTING POLICY DISCLOSURE INFORMATION (continued)

Use of accounting estimates and judgments (continued)

(ii) The recoverability and measurement of deferred tax assets and liabilities

Tax interpretations, regulations, and legislation are subject to change. The determination of income tax expense and deferred tax involves judgment and estimates as to the future taxable earnings, expected timing of reversals of deferred tax assets and liabilities, and interpretations of laws in the countries in which the Company operates. The Company is subject to assessments by tax authorities who may interpret the tax law differently. Changes in these estimates may materially affect the final amount of deferred taxes or the timing of tax payments.

(iii) Share-based payment transactions

For equity-settled share-based payment transactions, the Company measures the goods or services received, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If the Company cannot estimate reliably the fair value of the goods or services received, the Company measures their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted.

The fair value of share-based compensation is determined using the Black-Scholes option pricing model. Such option pricing models require the input of subjective assumptions, including the expected price volatility, option life, dividend yield, risk-free rate and estimated forfeitures at the initial grant date.

(iv) Impairment of exploration and evaluation assets

The Company is required to make certain judgments in assessing indicators of impairment of exploration and evaluation properties. Judgment is required to determine if the right to explore will expire in the near future or is not expected to be renewed, to determine whether substantive expenditures on further exploration for and evaluation of mineral resources in specific areas will not be planned or budgeted, to determine if the exploration for and evaluation of mineral resources in specific areas have not led to the commercially viable quantities of mineral resources and the Company will discontinue such activities, and is required to determine whether there are indications that the carrying amount of an exploration and evaluation property is unlikely to be recovered in full from successful development of the project or by sale.

Financial instruments

The Company follows IFRS 9, Financial Instruments, which applies a single approach to determine whether a financial asset is measured at amortized cost or fair value. The classification is based on two criteria: the Company's business objectives for managing the assets; and whether the financial instruments' contractual cash flows represent "solely payments of principal and interest" on the principal amount outstanding (the "SPPI test"). Financial assets are required to be reclassified only when the business model under which they are managed has changed. All reclassifications are to be applied prospectively from the reclassification date.

Financial liabilities under IFRS 9 are generally classified and measured at fair value at initial recognition and subsequently measured at amortized cost.

8 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

2. MATERIAL ACCOUNTING POLICY DISCLOSURE INFORMATION (continued)

Financial instruments (continued)

Financial assets

The Company initially recognizes financial assets at fair value on the date that the Company becomes a party to the contractual provisions of the instrument. The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.

Classification and measurement under IFRS 9, requires financial assets to be initially measured at fair value. In the case of a financial asset not categorized as fair value through profit or loss ("FVTPL"), transaction costs are included. Transaction costs of financial assets carried at FVTPL are expensed in net income (loss). Subsequent classification and measurement of financial assets depends on the Company's business objective for managing the asset and the cash flow characteristics of the asset:

(i) Amortized cost – Financial assets held for collection of contractual cash flows that meet the SPPI test are measured at amortized cost. Interest income is recognized as Other income (expense) in the financial statements, and gains/losses are recognized in net income (loss) when the asset is derecognized or impaired.

(ii) Fair value through other comprehensive income ("FVOCI") – Financial assets held to achieve a particular business objective other than short-term trading are designated at FVOCI. IFRS 9 also provides the ability to make an irrevocable election at initial recognition of a financial asset, on an instrument-by-instrument basis, to designate an equity investment that would otherwise be classified as FVTPL and that is neither held for trading nor contingent consideration arising from a business combination to be classified as FVOCI. There is no recycling of gains or losses through net income (loss). Upon derecognition of the asset, accumulated gains or losses are transferred from other comprehensive income ("OCI") directly to Deficit.

(iii) FVTPL – Financial assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL.

The Company measures cash at amortized cost.

Financial liabilities

The Company initially recognizes financial liabilities at fair value on the date at which the Company becomes a party to the contractual provisions of the instrument. The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. The subsequent measurement of financial liabilities is determined based on their classification as follows:

(i) FVTPL Derivative financial instruments entered into by the Company that do not meet hedge accounting criteria are classified as FVTPL. Gains or losses on these types of financial liabilities are recognized in net income (loss).

(ii) Amortized cost – All other financial liabilities are classified as amortized cost using the effective interest method. Gains and losses are recognized in net income (loss) when the liabilities are derecognized as well as through the amortization process.

The Company measures accounts payable and accrued liabilities, due to related parties and short-term debt at amortized cost.

9 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

2. MATERIAL ACCOUNTING POLICY DISCLOSURE INFORMATION (continued)

Financial instruments (continued)

Classification of financial instruments

IFRS 7, Financial instruments: disclosures, establishes a fair value hierarchy that reflects the significance of inputs in measuring fair value as the following:

• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices); and
• Level 3 – inputs for the assets or liability that are not based on observable market data (unobservable inputs).

The classification of a financial instrument in the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of fair value.

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

Exploration and evaluation assets

Exploration and evaluation assets include the costs of acquiring mineral concession and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. All costs related to the acquisition of mineral properties are capitalized by property as an intangible asset. Costs incurred before the Company has obtained the legal rights to explore an area are recognized in the statement of loss and comprehensive loss. In addition, all costs incurred until an appropriate economic assessment has been completed and there is confidence that permits can be obtained to develop the project are expensed. Afterwards, all costs incurred for the development of mineral properties are capitalized.

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

Related party 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 or operating decisions. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

10 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

2. MATERIAL ACCOUNTING POLICY DISCLOSURE INFORMATION (continued)

Impairment of assets

At the end of each reporting period, the carrying amounts of the Company’s assets are reviewed to determine whether there is any indication that those assets are impaired. If any 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 is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a 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 inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

Where an impairment subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate and its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.

Taxes

Tax expense comprises current and deferred tax. Current tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity. Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recorded using the liability method, whereby deferred tax is recognized in respect of temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse based on the laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is not recognized for temporary differences which arise on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss.

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. To the extent that the Company does not consider it probable that a deferred tax asset will be recovered, it does not recognize the asset. The Company has assessed that it is improbable that such assets will be realized and has accordingly not recognized a value for deferred taxes as at October 31, 2024 and 2023.

Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

11 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

2. MATERIAL ACCOUNTING POLICY DISCLOSURE INFORMATION (continued)

Warrants

When the Company issues private placement units, the value attributed to the warrants is measured using the residual method. This method allocates value first to the more easily measurable component based on fair value and the residual to the less easily measurable component, if any. The Company considers the fair value of its shares to be the more easily measurable component and is valued with reference to the market price. The residual value is attributed to the warrants, if any is recorded as a separate component of equity.

Share-based compensation

The Company recognizes share-based compensation expense for the estimated fair value of equity-based instruments granted to both employees and non-employees. Compensation costs attributable to stock option or similar equity instruments granted to employees are measured at their value at the grant date using the Block-Sholes option -pricing model and expensed over the expected vesting period. Transactions in which goods or services are received from non-employees in exchange for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

Loss per share

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted loss per share is calculated using the treasury stock method

Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the reporting periods.

However, in periods where a net loss is reported, outstanding options and warrants are excluded from the calculation of diluted loss per share, as they are anti-dilutive and as a result diluted loss per share is equal to the basic loss per share.

Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the obligation. An amount equivalent to the discounted provision is capitalized within tangible fixed assets and is depreciated over the useful lives of the related assets. The increase in the provision due to passage of time is recognized as interest expense.

3. RECENT ACCOUNTING PRONOUNCEMENTS AND ADOPTED POLICIES

The Company adopted IAS 1 effective November 1, 2022. This standard clarifies how an entity classifies debt and other financial liabilities as current or non-current in particular circumstances. The adoption of this new standard did not impact the Company's financial statements.

12 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

3. RECENT ACCOUNTING PRONOUNCEMENTS AND ADOPTED POLICIES (continued)

Issued but not yet effective, in April 2024, the IASB issued a new IFRS accounting standard to improve the reporting of financial performance. IFRS 18 Presentation and Disclosure in Financial Statements replaces IAS 1 Presentation of Financial Statements. The standard will become effective January 1, 2027, with early adoption permitted. The Company is in the process of assessing the impact of this new standard on the Company's consolidated financial statements.

4. EXPLORATION AND EVALUATION ASSET

Turgeon Lake, Quebec

On April 12, 2021, the Company entered into a purchase and sale agreement to acquire 100% interest in the Turgeon Lake Gold Project located in the province of Quebec, consisting of 39 mineral claims covering 2,203.28 hectares. After further amendments, the transaction was completed on April 12, 2023, with the Company having made the following payments and share issuances:

• Cash payments totaling $120,000, and
• 1,600,000 common share issuances valued at $166,000.

The Company is also required to grant a 2% Net Smelter Returns Royalty ("NSR") to the vendor. The Company maintains the right to purchase half of the royalty from the vendor by making a payment of $1,000,000 to the vendor. In addition, the Turgeon Lake Property is subject to an additional 2% NSR in favour of the prospectors who staked the property.

The carrying value of the asset is as follows:

	2024	2023
Acquisition costs	$ 286,000	$ 286,000

5. OPTIONS ON EXPLORATION AND EVALUATION ASSETS

On December 14, 2023 and as amended subsequent to the year end on December 18, 2024, the Company entered into six individual option agreements with Eagle Plains Resources Ltd. ("EPL"), whereby the Company may earn up to an 80% interest in each of the following properties in northern Saskatchewan. In order to maintain the option agreement in good standing, the Company must:

(a) pay to EPL on each of the individual option agreements, an aggregate of $55,000 in cash ($330,000 in total for all six claims) according to the following schedule:

• $5,000 in cash on the execution of the agreement ($30,000 in total paid)
• an additional $10,000 in cash on or before June 30, 2025; ($60,000 in total) and
• an additional $10,000 in cash on or before December 31, 2025; ($60,000 in total) and
• an additional $10,000 in cash on or before December 31, 2026; ($60,000 in total) and
• an additional $20,000 in cash on or before December 31, 2027; ($120,000 in total) and

13 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

5. OPTIONS ON EXPLORATION AND EVALUATION ASSETS (continued)

(b) issue to EPL on each of the individual option agreements an aggregate of 750,000 shares (4,500,000 shares in total for all six claims) according to the following schedule:

• 50,000 shares on the execution of this agreement (300,000 issued in total), and
• an additional 100,000 shares on or before December 31, 2024 (600,000 in total issued subsequent to the year end); and
• an additional 150,000 shares on or before December 31, 2025; (900,000 in total) and
• an additional 200,000 shares on or before December 31, 2026; 1,200,000 in total) and
• an additional 250,000 shares on or before December 31, 2027; 1,500,000 in total and

(c) incur aggregate exploration expenditures on the property on each of the individual option agreements of $3,200,000 ($19,200,000 in total for all six claim) according to the following schedule:

• $50,000 on or before June 30, 2025 (300,000 in total); and
• an additional $150,000 on or before December 31, 2025; $900,000 in total) and
• an additional $1,000,000 on or before December 31, 2026; (6,000,000 in total) and
• an additional $2,000,000 on or before December 31, 2027. (12,000,000 in total).

The Company is also required to grant a 2% Net Smelter Returns Royalty ("NSR") to the vendor. The Company maintains the right to purchase half of the royalty from the vendor by making a payment of $2,000,000 to the vendor.

The six properties are:

Gulch – 1,685 hectares, Beaver River – 1,455 hectares, Black Bay – 1,114 hectares, Don Lake – 524 hectares, Lardo – 245 hectares and Smitty – 882 hectares. The payments made and shares issued for each property are as follows:

	Gulch Property	Beaver River Property	Don Lake Property	Larado Property	Blackbay Property	Smitty Property	Total
	$	$	$	$	$	$	$
Balance, October 31, 2023	-	-	-	-	-	-	-
Acquisition costs
Cash deposits	5,000	5,000	5,000	5,000	5,000	5,000	30,000
Shares issued	5,750	5,750	5,750	5,750	5,750	5,750	34,500
Balance, October 31, 2024	10,750	10,750	10,750	10,750	10,750	10,750	64,500

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company's accounts payable and accrued liabilities are non-interest bearing and detailed below:

	2024	2023
Trade accounts payable	$ 139,095	$ 32,729
Accrued liabilities	17,700	108,545
	$ 156,795	$ 141,274

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

7. DEMAND PROMISSORY NOTES PAYABLE

As at October 31, 2024, the Company owed $30,000 on unsecured, non-interest bearing demand promissory notes. $6,000 of the notes were provided by a director of the Company.

8. SHARE CAPITAL

(a) Common shares

The company is authorized to issue an unlimited number of common shares without par value.

As at October 31, 2024, the Company had 16,772,600 common shares issued and outstanding. Transactions in the Company's shares were as follows for the year ended October 31, 2024 and 2023:

For the year ended October 31, 2024

• On December 21, 2023, the Company issued 300,000 common shares on the acquisition of the six Eagle Lake properties with a fair value of $34,500. (See Note 5.)
• On January 10, 2024, the Company issued 500,000 common shares for gross proceeds of $50,000 resulting from the exercise of stock options. When the stock options were granted, the fair value of those options recorded as a reserve was $37,694 and upon exercise, that amount was transferred to share capital.
• During the year ended October 31, 2024, the Company issued 392,600 common shares for gross proceeds $40,260 on the exercise of share purchase warrants.
• During the year ended October 31, 2024, the Company collected $8,000 on the exercise of share purchase warrants that have not yet been issued.

For the year ended October 31, 2023:

• On December 5, 2022, the Company closed a private placement for gross proceeds of $85,000 by issuing 850,000 units of the Company. Each unit consists of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant is exercisable for one common share at an exercise price of $0.30 for 12 months.
• On February 22, 2023, concurrent with it becoming a listed entity on the CSE, the Company closed a public offering for gross proceeds of $420,000 by issuing 4,200,000 units of the Company. Each unit consists of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant is exercisable for one common share at an exercise price of $0.30 for 12 months.

The Company incurred $223,839 of share issuance costs associated with the above share issuance. Included in the share issuance costs are 420,000 broker fee units with a value of $42,000. Each unit consists of one common share and one common share purchase warrant. Each warrant is exercisable for one common share at an exercise price of $0.10 for 24 months. In addition, 420,000 broker compensation options were issued allowing the broker to purchase 420,000 shares of the Company with an exercise price of $0.10 per share. The compensation options carry a fair value of $42,721 using the Black-Scholes option pricing model using the following assumptions: risk-free interest rate – 4.20%;

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

8. SHARE CAPITAL (continued)

(a) Common shares (continued)

expected life of the options – 2.0 years; Annualized volatility – 111.82%; dividend rate – 0%. The weighted average fair value per option granted was calculated as $0.0589.

• On February 23, 2023, the Company issued 1,000,000 common shares for the acquisition of the Turgeon Lake property with a value of $100,000. (See Note 4.)
• On April 19, 2023, the Company completed its purchase of the Turgeon Lake property with the issuance of 600,000 common shares with a fair value of $66,000. (See Note 4.)

(b) Stock Options

The Company has adopted an incentive stock option plan (the "Plan"). The essential elements of the Plan provide that the aggregate number of shares of the Company's capital stock issuable pursuant to options granted under the Plan may not exceed 10% of the Company's issued and outstanding shares at the date of grant of the options. Options granted under the Plan may have a maximum term of five years. The exercise price of options granted under the Plan will not be less than the greater of the closing market price of the Company's shares on the CSE on (a) the date on which the Board of Directors grants and announces options (the "Award Date") and (b) the day prior to the Award Date. The Board of Directors may at any time and from time to time, fix limits, vesting requirements or restrictions in respect of which an Option Holder may exercise part of any Option held by him/her.

On January 11, 2024, the Company granted 500,000 to an officer and director with each option allowing the holder to purchase one common share at a price of $0.13 for five years. On May 3, 2024, the Company granted 100,000 to a director with each option allowing the holder to purchase one common share at a price of $0.20 for five years. Share-based compensation of $70,952 (2023 - $37,694) was recognized and included in reserves using the Black Scholes option pricing model and the following weighted average assumptions noted below:

For the year ended October 31,	2024	2023
Annualized volatility	119.72%	97.17%
Dividend rate	0.00%	0.00%
Risk free interest rate	3.39%	3.38%
Expected life of options	5 years	5 years

The weighted fair value of the options was calculated as $0.1183 (2023 - $0.0754)

The continuity of share purchase options for the year ended October 31, 2024 is as follows:

	Number of Options	Weighted Average Exercise Price
		$
Balance, October 31, 2022	400,000	0.10
Issued as compensation for broker's fees	420,000	0.10
Issued as compensation to officer/director	500,000	0.10
Balance, October 31, 2023	1,320,000	0.10
Exercised	(500,000)	0.10
Issued as compensation to officer/directors	600,000	0.13
Balance, October 31, 2024	1,420,000	0.11

Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

8. SHARE CAPITAL (continued)

(b) Stock Options

The following share purchase options were outstanding as at October 31, 2024:

Expiry date	Number of options	Exercise price $	Remaining contractual life (years)
February 22, 2028	400,000	0.10	3.31
February 22, 2025	420,000	0.10	0.31
January 10, 2029	500,000	0.13	4.20
May 3, 2029	100,000	0.20	4.51
	1,420,000	0.11	2.86

(c) Warrants

On January 11, 2024, the Company granted 1,200,000 warrants in payment for advisory fees provided from March 1, 2023 to December 31, 2023. The warrants were valued at $122,932 using the Black-Scholes option pricing model using the following assumptions: risk-free interest rate – 4.20%; expected life of the options – 4.0 years; Annualized volatility – 119.26%; dividend rate – 0%. The weighted average fair value per option granted was calculated as $0.1024.

Each warrant is exercisable for one common share in the Company at a price of $0.13 for four years. The warrants are subject to a 4-month hold period and are subject to contractual vesting as follows: 300,000 warrants vest on issuance, and an additional 300,000 warrants will vest three, six and nine months thereafter, with the result that all warrants vested in the year ended October 31, 2024.

The company recognized consulting expenses of $24,586 in 2024. ($98,345 in 2023).

The continuity of share purchase warrants for the year ended October 31, 2024 is as follows:

	Number of Shares Upon exercise	Number of Warrants	Weighted Average Exercise Price
Balance, October 31, 2021 and 2022	3,900,000	3,900,000	0.10
Issued	2,945,000	2,945,000	0.27
Balance, October 31, 2023	6,845,000	6,845,000	0.17
Granted	1,200,000	1,200,000	0.13
Exercised	(392,600)	(392,600)	0.10
Expired	(2,940,000)	(2,940,000)	0.27
Balance, October 31, 2024	4,712,400	4,712,400	0.11

17 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

8. SHARE CAPITAL (continued)

(c) Warrants (continued)

The following share purchase warrants were outstanding as at October 31, 2024:

Expiry date	Number of warrants	Exercise price	Remaining contractual life (years)
		$
February 8, 2026	3,512,400	0.10	1.27
January 10, 2028	1,200,000	0.13	3.19
	4,712,400	0.11	1.76

9. RELATED PARTY TRANSACTIONS

Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined the key personnel to be officers and directors of the Company.

Payments and accruals were made to the following officers and directors or to companies controlled by these officer and directors.

	2024	2023
	Management fees	Management fees
Former CEO and Directors (a and b)	$ 30,000	$ 51,000
CEO and Director	150,000	33,000
CFO and former Director	18,000	18,000
	$ 198,000	$ 44,900

(a) Resigned as CEO August 1, 2023; current director.
(b) Resigned as CEO and director December 21, 2023. 2024 fees are included in consulting expense.

As at October 31, 2024, the Company owed $225,453 (2023 - $45,175) to related parties for the above services and miscellaneous advances. Additionally, a $6,000 promissory note is owing to a director. (Note 7).

10. RISK AND CAPITAL MANAGEMENT

The Company's primary objectives in capital management are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and to maintain sufficient funds to finance the development of mineral property assets. Capital is comprised of the Company's shareholders' equity. The Company manages its capital structure to maximize its financial flexibility making adjustments to it in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital and is not subject to externally imposed capital requirements. There have been no changes from the prior year. The Company's risk exposures and the impact on the Company's financial instruments are summarized below:

Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

10. RISK AND CAPITAL MANAGEMENT

Credit risk

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets including cash. The Company limits exposure to credit risk on liquid financial assets through maintaining its cash with high-credit quality financial institutions.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at October 31, 2024, the Company had a cash balance of $4,807 (2023 - $106,992) to settle current liabilities of $412,248 (2023 - $186,449). All of the Company's accounts payable and accrued liabilities have contractual maturities of 30 days or due on demand and are subject to normal trade terms. To maintain liquidity, the Company is currently investigating financing opportunities.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. The Company does not have a practice of trading derivatives.

Interest rate risk

The Company's financial assets exposed to interest rate risk consist of cash balances. The Company's current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks. As at October 31, 2024 and 2023, the Company did not have any investments in investment-grade short-term deposit certificates.

Price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to significant other price risk.

11. INCOME TAXES

The Company's income tax provision differs from that which would be expected from applying the combined effective federal and provincial tax rate of 27% (2023 – 27%) to the net loss before income taxes as follows:

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

11. INCOME TAXES (continued)

	2024	Restated (Note 12) 2023
Net loss before tax for the period	$ (581,275)	$ (355,280)
Expected income tax recovery at statutory rate	(157,000)	(96,000)
Share-based payments	19,000	10,000
Share issue expense	-	(54,000)
Other	1,000	1,000
Deferred tax assets not recognized	137,000	139,000
Income tax recovery recognized	$ -	$ -

A summary of the gross tax balances in which a deferred tax asset was not recognized is as follows:

	2024	Restated (Note 12) 2023
Non-capital loss carryforward	$ 228,000	$ 131,000
Exploration and evaluation assets	55,000	4,000
Share issue costs	32,000	43,000
Valuation allowance	(315,000)	(178,000)
Deferred tax asset recognized	$ -	$ -

The Company has non-capital losses carry-forward of approximately $845,000. The ability to utilize these losses will expire as follows: expiring in 2041 - $53,000; in 2042 - $91,000, in 2043 - $340,000, and in 2044 - $361,000.

In addition, the Company has $202,705 in Cumulative Canadian Exploration Expenditures ("CEE") and $350,500 in Cumulative Canadian Development Expenditures ("CDE") that may be used in future year to reduce future years taxable income.

12. CORRECTION OF PRIOR YEAR ERROR

For the year ended October 31, 2023, an exploration expenditure of $15,635 was erroneously capitalized and included as an exploration and evaluation asset when it should have been expensed according to the Company's accounting policy for exploration and evaluation expenditures. In order to be capitalized, exploration and evaluation expenditures must be incurred on mineral property where the Company has a legal right to explore and where professional studies have been carried out and concluded that development of the property would be economically feasible. The Company had not yet reached that milestone.

The following changes reflect the adjustment of $15,635 made retroactively to the prior year's financial statements.

Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

12. CORRECTION OF PRIOR YEAR ERROR (continued)

Statement of Changes in Financial Position
Account	Previously Reported $	Restated Balance $
Exploration and evaluation asset	301,635	(286,000)
Total assets	429,749	414,114
Deficit	(575,151)	(588,786)
Total shareholders’ equity	243,300	227,665
Total liabilities and shareholders’ equity	429,749	414,114
Statement of Loss and Comprehensive Loss
---	---	---
Account	Previously Reported $	Restated Balance $
Exploration and evaluation expenses	-	15,635
Total expenses	339,645	355,280
Net loss and comprehensive loss	(339,645)	(355,280)
Statement of Changes in Shareholders’ Equity
---	---	---
Account	Previously Reported $	Restated Balance $
Net loss for the year	(339,645)	(355,280)
Deficit, end of year	(573,151)	(588,786)
Total shareholders’ equity, end of year	243,300	227,665
Statement of Cash Flows
---	---	---
Account	Previously Reported $	Restated Balance $
Net loss for the year	(339,645)	(355,280)
Accounts payable and accrued charges	78,654	88,910
Net cash used in operations	(151,664)	(157,043)
Expenditure on exploration and evaluation assets	(5,379)	-
Net cash used in investing activities	(95,379)	(90,000)

21 | Page

---

XCITE RESOURCES INC.

Notes to the Financial Statements

(Stated in Canadian dollars)

For the Years Ended October 31, 2024 and 2023

13. SUBSEQUENT EVENTS

On December 31, 2024, the Company issued 600,000 common shares related to the Eagle Lake property acquisition agreement.

On December 31, 2024, the Company entered into six amending agreements with Eagle Plains Resources Ltd. which postponed required cash payment ($60,000 in aggregate) and the work commitments ($300,000 in aggregate) from December 31, 2024 to June 30, 2025. This change was reflected retroactively in Note 6, Options on Exploration and Evaluation Assets.

Subsequent to the year end and up to February 26, 2025, 2,152,340 warrants were exercised for gross proceeds of $201,359.

22 | Page