Consolidated Financial Statements

Stroud Resources Ltd. December 31, 2025 and 2024

Management's Responsibility for the Consolidated Financial Statements

The accompanying annual consolidated financial statements of Stroud Resources Ltd. (the "Company") are the responsibility of management and have been approved by the Board of Directors.

The annual consolidated financial statements have been prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the annual consolidated financial statements. Where necessary, management has made informed judgments and estimates in accounting for transactions which were not complete at the date of the consolidated statements of financial position. In the opinion of management, the annual consolidated financial statements have been prepared within acceptable limits of materiality and are in accordance with IFRS Accounting Standards.

Management has established systems of internal control over the financial reporting process, which are designed to provide reasonable assurance that relevant and reliable financial information is produced.

The Board of Directors is responsible for reviewing and approving the annual consolidated financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the annual consolidated financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the annual consolidated financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company ' s affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

"Jeff Kennedy" Jeff Kennedy Director

"Mirsad Jakubovic" Mirsad Jakubovic Chief Financial Officer

Independent Auditor’s Report

To the Shareholders of Stroud Resources Ltd.

Opinion

We have audited the consolidated financial statements of Stroud Resources Ltd. and its subsidiaries (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2025 and 2024, and the consolidated statements of loss and comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).

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. We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 2 in the consolidated financial statements, which indicates that the Company incurred a net loss during the year ended December 31, 2025, and, as of that date, the Company’s current liabilities exceeded its current assets. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that material uncertainties exist that cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, 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.

Except for the matter described in the material uncertainty related to going concern section, we have determined that there were no additional key audit matters to communicate in our report.

Other information

Management is responsible for the other information. The other information comprises 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 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.

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

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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 period 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 of the audit resulting in this independent auditor’s report is Chris Milios.

McGovern Hurley LLP

Chartered Professional Accountants Licensed Public Accountants

Toronto, Ontario April 30, 2026

Page 4

Stroud Resources Ltd.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

[Expressed in Canadian dollars]

As at December 31 2025 $	2024 $
ASSETS
Current
Cash and cash equivalents 119,035	37,319
Accounts receivable 5,015	28,305
Prepaid expenses and sundry assets 9,983	9,983
Total current assets 134,033	75,607
Oil and gas interests, net of accumulated depletion of $516,405 [2023 - $516,405][note 5] —	—
Total assets 134,033	75,607
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current
Accounts payable and accrued liabilities_[note 7]_ 168,549	138,457
Total current liabilities 168,549	138,457
Total Liabilities 168,549	138,457
Shareholders' deficiency[notes 8]
Share capital 26,474,661	26,054,468
Reserves 4,233,655	4,243,848
Deficit (30,744,563)	(30,362,897)
Accumulated other comprehensive income 1,731	1,731
Total shareholders' deficiency (34,516)	(62,850)
Total liabilities and shareholders' equity 134,033	75,607

Going Concern [note 2] Contingencies [note 12]

See accompanying notes

Stroud Resources Ltd.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

[Expressed in Canadian dollars]

For the year ended December 31

	2025 $	2024 $
OIL AND GAS OPERATIONS
Revenue, net of royalties	24,620	26,070
Operating expenses	21,699	25,408
Income from oil and gas operations	2,921	662
EXPENSES
Administrative fees_[note 7]_	60,000	60,000
Business development	704	358
Director fees_[note 7]_	48,750	45,000
Interest expense	7,991	—
Licences and fees	14,048	23,591
Exploration costs_[notes 6]_	18,084	21,582
Share-based compensation_[note 8 (b)]_	110,000	—
Office and general	17,995	20,414
Professional fees	100,098	147,492
Foreign exchange loss	2,449	—
Rent	4,724	4,497
Total administrative expenses	384,843	322,934
Net loss before other income	(381,922)	(322,272)
Interest income	256	6,535
Net loss and comprehensive loss for the year	(381,666)	(315,737)
Basic and diluted loss per share[note 8(d)]	($0.007)	($0.005)
Weighted average number
of common shares outstanding[000's]
Basic	58,026	57,623
Diluted	58,026	57,623

See accompanying notes

Stroud Resources Ltd.

CONSOLIDATED STATEMENTS OF CASH FLOWS

[Expressed in Canadian dollars]

For the year ended December 31

	2025 $	2024 $
OPERATING ACTIVITIES
Net loss for the year	(381,666)	(315,737)
Add items not involving cash:
Non-cash share based compensation	110,000	—
	(271,666)	(315,737)
Net change in non-cash working capital balances
related to operations_[note 9]_	53,382	15,953
Cash provided by (used in) operating activities	(218,284)	(299,784)
FINANCING ACTIVITIES
Shareholder loan proceeds	75,000	—
Shareholder loan repayments	(75,000)	—
Proceeds from exercise of warrants	300,000	—
Cash provided by financing activities	300,000	—
Net increase (decrease) in cash and cash equivalents
during the year	81,716	(299,784)
Cash and cash equivalents, beginning of year	37,319	337,103
Cash and cash equivalents, end of year	119,035	37,319

See accompanying notes

Stroud Resources Ltd.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICENCY)

[Expressed in Canadian dollars]

	Common	shares	Other reserves	Deficit	Accumulated other comprehensive income	Total shareholders' equity (deficiency)
	#	$	$	$	$	$
December 31, 2023	57,623,199	26,054,468	4,243,848	(30,047,160)	1,731	252,887
Net loss for the year	—	—	—	(315,737)	—	(315,737)
December 31, 2024	57,623,199	26,054,468	4,243,848	(30,362,897)	1,731	(62,850)
Issuance of shares on exercise of warrants	3,000,000	420,193	(120,193)	—	—	300,000
Stock-based compensation expense	—	—	110,000	—	—	110,000
Net loss for the year	—	—	—	(381,666)	—	(381,666)
December 31, 2025	60,623,199	26,474,661	4,233,655	(30,744,563)	1,731	(34,516)

See accompanying notes

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

1. CORPORATE INFORMATION

Stroud Resources Ltd. [the "Company" or "Stroud"] was incorporated on March 18, 1983, under the laws of the Province of Ontario. The Corporation’s common shares are listed on the TSX Venture Exchange (“TSX-V) under the trading symbol SDR. Stroud is an international mineral exploration company engaged in the acquisition, exploration, and development of mineral resource properties in Mexico. The Company holds its interests in its Mexican mineral properties through its wholly owned subsidiary, Compañía Minera San Diego y La Española S.A. de C.V. (“Compañía Minera”), which holds the applicable prospecting and exploration permits related to those properties. The Company’s registered office is located at 1090 Don Mills Road, Suite 404, Toronto, Ontario, M3C 3R6, Canada.

2. CONTINUANCE OF OPERATIONS AND GOING CONCERN

The Company has not yet determined whether its mineral properties contain economically recoverable mineral reserves. The recoverability of exploration and evaluation expenditures is dependent upon the discovery of economically recoverable resources, the Company’s ability to obtain the necessary permits and regulatory approvals, the availability of financing to complete exploration and development activities, and upon future profitable production or proceeds from the disposition of such properties.

Although the Company has taken steps to verify title to the mineral properties in which it has an interest in accordance with industry standards for the current stage of exploration, such procedures do not guarantee title. Property interests may be subject to government licensing requirements, social licensing considerations, unregistered prior agreements, unregistered claims, Indigenous land claims, and non-compliance with regulatory and environmental requirements. In addition, the Company’s mineral property interests may be affected by changes in taxation and royalty regimes, renegotiation of contracts, expropriation, currency fluctuations and restrictions, and political or economic instability. These risks could adversely affect the Company’s investment in its mineral properties and may result in the loss of all or part of its interests therein.

These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue its operations and realize its assets and discharge its liabilities in the normal course of business.

As at December 31, 2025, the Company had an accumulated deficit of $30,744,563 (December 31, 2024 – $30,362,897) and incurred a net loss of $381,666 for the year ended December 31, 2025 (2024 – $315,737). At December 31, 2025, the Company had working capital deficiency of $34,516 (December 31, 2024 – deficiency of $62,850).

These conditions indicate the existence of a material uncertainty that may cast significant doubt upon the Company’s ability to continue as a going concern.

The Company is dependent upon equity financings, debt financings, the exercise of outstanding warrants and options, or the sale or joint venture of mineral property interests to fund its activities and meet its obligations as they become due. There can be no assurance that such financing will be available on terms acceptable to the Company, or at all.

If the going concern assumption were not appropriate, adjustments to the carrying amounts and classification of assets and liabilities would be necessary. Such adjustments could be material.

1

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

3. BASIS OF PRESENTATION

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”) and the interpretations issued by the IFRS Interpretations Committee (“IFRIC”) that were effective for the year ended December 31, 2025.

Certain comparative figures have been reclassified to conform with the current year’s presentation.

The consolidated financial statements for the year ended December 31, 2025 were authorized for issue by the Board of Directors on April 30, 2026.

Basis of measurement

These consolidated financial statements have been prepared on a going concern basis and in accordance with the historical cost convention, except for certain financial instruments that are measured at fair value, as described in the accounting policies set out below.

Functional and presentation currency

These consolidated financial statements are presented in Canadian dollars (“CAD”), which is the Company’s functional currency. The functional currency of the Company’s Mexican subsidiary is the Mexican peso, reflecting the primary economic environment in which it operates. The financial statements of the subsidiary are translated into Canadian dollars for presentation purposes. Assets and liabilities are translated at the closing exchange rate at the reporting date, while income and expenses are translated at exchange rates prevailing at the dates of the transactions. Resulting translation differences are recognized in other comprehensive income (loss).

Principles of consolidation

These consolidated financial statements include the accounts of Stroud Resources Ltd. (the “Company”) and its wholly owned subsidiary, Compañía Minera San Diego y La Española S.A. de C.V. (“Compañía Minera”). Subsidiaries are entities over which the Company has control. Control exists when the Company is exposed, or has rights, to variable returns from its involvement with an investee and has the ability to affect those returns through its power over the investee.

Subsidiaries are fully consolidated from the date on which control is obtained by the Company and continue to be consolidated until the date that control ceases. All intercompany balances, transactions, revenues, and expenses have been eliminated on consolidation.

4. MATERIAL ACCOUNTING POLICIES

The following material accounting policies have been applied consistently in the preparation of these consolidated financial statements .

[a] Comprehensive income (loss)

Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes items that are recognized outside of profit or loss in accordance with IFRS

2

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

Accounting Standards. For the Company, other comprehensive income (loss) is comprised of foreign currency translation differences arising on the translation of the financial statements of its wholly owned foreign subsidiary, Compañía Minera San Diego y La Española S.A. de C.V., whose functional currency differs from that of the Company. The components of comprehensive income (loss) are presented in the consolidated statements of loss and comprehensive loss.

[b] Cash and cash equivalents

Cash and cash equivalents include cash on hand, balances held with financial institutions, and short-term highly liquid investments with original maturities of three months or less from the date of acquisition that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

[c] Foreign currency

The Company’s functional currency is the Canadian dollar (“CAD”). The functional currency of its subsidiary is the Mexican peso (“MXN”). The consolidated financial statements are presented in CAD, which is the Company’s presentation currency.

Foreign currency transactions are translated into the relevant functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rates in effect at the reporting date. Foreign exchange gains and losses arising on settlement of foreign currency transactions, and from the retranslation of monetary assets and liabilities, are recognized in the consolidated statements of loss. Non-monetary items measured at historical cost are translated at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are translated at the exchange rate at the date when the fair value was determined.

The results and financial position of subsidiaries with a functional currency different from the presentation currency are translated into CAD as follows:

• Assets and liabilities are translated at the closing exchange rate at the reporting date;

• Income and expenses are translated at average exchange rates for the period, unless such rates do not approximate the actual exchange rates at the dates of the transactions, in which case transactions are translated at the exchange rates at their respective dates; and

• All resulting exchange differences are recognized in other comprehensive income (“OCI”) and accumulated in equity within accumulated other comprehensive income (loss) (“AOCI”).

Exchange differences arising on the translation of the Company’s net investment in foreign operations are recognized in OCI and accumulated in AOCI. Upon disposal or partial disposal of a foreign operation, the cumulative amount of the exchange differences relating to that operation is reclassified from equity to the consolidated statements of loss as part of the gain or loss on disposal.

[d] Exploration and evaluation assets

Exploration and evaluation expenditures are expensed as incurred until such time as the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated.

3

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

When a project is determined to be technically feasible and commercially viable, and the Company has decided to proceed with development, the related exploration and evaluation assets are tested for impairment and, if recoverable, reclassified to property, plant and equipment within development assets.

Technical feasibility and commercial viability are considered to be established when a comprehensive technical report has been completed, construction financing has been arranged, and the Board of Directors has approved the development of the project.

[e] Determination of reserves and resources

The estimation of mineral resources is inherently uncertain and involves the application of judgment and assumptions. The Company engages independent qualified persons to prepare estimates of mineral resources for its mineral properties in Mexico in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).

Mineral resource estimates are based on geological and engineering data, including assumptions regarding commodity prices, recovery factors, production costs, and other technical and economic factors. These estimates are reviewed and approved by management and are considered to be current and complete as at the date of the respective technical reports.

Mineral resource estimates are used in assessing the recoverability of exploration and evaluation assets, determining whether indicators of impairment exist, and, where applicable, estimating future cash flows. Changes in mineral resource estimates or in the assumptions underlying such estimates could materially affect the carrying value of the Company’s mineral properties.

[f] Impairment of long-lived assets

At each reporting date, the Company reviews the carrying amounts of its long-lived assets to determine whether there are indicators of impairment. If such indicators exist, the Company estimates the recoverable amount of the asset to determine whether an impairment loss should be recognized. The recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use. Value in use is determined as the present value of the estimated future cash flows expected to be derived from the asset. If the recoverable amount of an asset is less than its carrying amount, the carrying amount is reduced to its recoverable amount and an impairment loss is recognized in profit or loss.

For the purposes of impairment testing, assets are grouped at the lowest level for which there are separately identifiable cash inflows (cash-generating units or “CGUs”). Where an asset does not generate largely independent cash inflows, the recoverable amount is determined for the CGU to which the asset belongs.

An impairment loss is reversed if there has been a change in the estimates used to determine the asset’s recoverable amount. The carrying amount of the asset (or CGU) is increased to the revised recoverable amount, but not to an amount exceeding the carrying amount that would have been determined had no impairment loss been recognized in prior periods. A reversal of an impairment loss is recognized immediately in profit or loss

[g] Equipment

Equipment is recorded at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes the purchase price and all costs directly attributable to bringing the asset to the location and condition

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Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

necessary for its intended use. Cost also includes an initial estimate of the costs of dismantling and removing the asset and restoring the site on which it is located, where applicable.

Subsequent to initial recognition, equipment is depreciated over its estimated useful life using a method that reflects the pattern in which the asset’s future economic benefits are expected to be consumed. The depreciation method, useful lives, and residual values are reviewed at least annually and adjusted prospectively, if appropriate. At each reporting date, the Company assesses whether there are indicators that an asset may be impaired. If such indicators exist, the Company estimates the recoverable amount of the asset, being the higher of its fair value less costs of disposal and its value in use and recognizes an impairment loss if the carrying amount exceeds the recoverable amount.

[h] Provision for environmental rehabilitation

The Company recognizes a provision for asset retirement, restoration, and environmental rehabilitation obligations in the period in which a legal or constructive obligation is incurred as a result of past activities.

The provision represents the present value of the estimated future costs required to dismantle and remove assets, remediate disturbed areas, and restore sites. The estimated costs are based on current legal and regulatory requirements and available information at the reporting date. The provision is discounted using a current pre-tax discount rate that reflects the time value of money and risks specific to the obligation. The unwinding of the discount is recognized as accretion expense in profit or loss.

When the provision gives rise to a future economic benefit, a corresponding asset retirement cost is capitalized as part of the carrying amount of the related asset and depreciated over its useful life.

The provision is reviewed at each reporting date and adjusted for changes in estimated cash flows, timing of settlement, applicable legislation, or discount rates. Changes in the estimated obligation are added to or deducted from the carrying amount of the related asset and depreciated prospectively.

As at December 31, 2025 and 2024, management has determined that no material provision for environmental rehabilitation is required.

[i] Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

The amount recognized as a provision represents management’s best estimate of the expenditure required to settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, provisions are measured at the present value of the expected future cash flows using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Changes in estimates are recognized in profit or loss in the period in which they occur.

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Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

[j] Financial instruments and liabilities

Financial Assets

Initial recognition and measurement

Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, financial assets are measured at fair value plus, in the case of financial assets not classified at fair value through profit or loss (FVTPL”), as directly attributable transaction costs.

Under IFRS 9, financial assets are classified at initial recognition as measured at amortized cost, fair value through other comprehensive income (“FVOCI”), or fair value through profit or loss (“FVTPL”). The classification of financial assets is determined based on both the Company’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. Financial assets containing embedded derivatives are assessed in their entirety when determining their classification.

Cash and cash equivalents and accounts receivable are classified and measured at amortized cost using the effective interest method, as they are held within a business model whose objective is to collect contractual cash flows and those cash flows represent solely payments of principal and interest.

Subsequent measurement – financial assets at amortized cost

After initial recognition, financial assets classified at amortized cost are subsequently measured using the Effective Interest Rate (“EIR”) method. Amortized cost is calculated by applying any discount or premium on acquisition and any fees or transaction costs that are an integral part of the EIR. The amortization of such amounts is recognized in finance income in the consolidated statements of income (loss).

Financial assets measured at amortized cost are also subject to the expected credit loss impairment model described below.

Subsequent measurement – financial assets at fair value through profit or loss (“FVTPL”)

Financial assets classified at FVTPL include financial assets held for trading and derivative financial instruments that are not designated in an effective hedging relationship. Financial assets at FVTPL are measured at fair value at each reporting period date, with changes in fair value recognized in profit or loss within other income (expense). The Company does not have any financial assets classified at FVTPL as at the reporting date.

Subsequent measurement – financial assets at fair value through Other Comprehensive Income (“FVOCI”)

Financial assets classified at FVOCI are non-derivative financial assets that are not held for trading and for which the Company has made an irrevocable election at initial recognition to present subsequent changes in fair value in other comprehensive income. Subsequent to initial recognition, such investments are measured at fair value with unrealized gains or losses recognized in other comprehensive income and accumulated in equity. Upon disposal, cumulative gains or losses previously recognized in other comprehensive income are not reclassified to profit or loss. Dividends are recognized in profit and loss within other when the Company’s right to receive payment is established. The Company does not have any financial assets classified at FVOCI as at the reporting date.

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Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

Derecognition

A financial asset is derecognized when the contractual rights to receive the cash flows from the asset expire, or when the Company transfers the financial asset and substantially all the risks and rewards of ownership. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay.

Impairment of financial assets

Financial assets measured at amortized cost are subject to the expected credit loss (“ECL”) model under IFRS 9. The Company’s financial assets subject to impairment consist primarily of accounts receivable and deposits and advances. The Company applies the simplified approach permitted by IFRS 9, which requires lifetime expected credit losses to be recognized from initial recognition of the receivable. Expected credit losses are measured using a provision matrix based on historical credit loss experience, adjusted for current conditions and forward-looking information. Receivables are grouped based on shared credit risk characteristics, including ageing.

An impairment loss is reversed in subsequent periods if the amount of expected credit losses decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized. The reversal is recognized in profit and loss.

Financial liabilities

Initial recognition and measurement

Financial liabilities are recognized when the Company become a party to the contractual provisions of the instrument and are initially measured at fair value. Financial liabilities are subsequently measured at amortized cost unless they are required to be measured at fair value through profit or loss (“FVTPL”), such as liabilities held for trading or derivative instruments, or where the Company has elected the fair value option at initial recognition. The Company’s financial liabilities consist of accounts payable and accrual liabilities and advances from shareholders which are each measured at amortized cost.

Subsequent measurement – financial liabilities at amortized cost

After initial recognition, financial liabilities measured at amortized cost are subsequently measured using the EIR method. Amortized cost is calculated by taking into account any discount or premium on issuance and any fees or transaction costs that are integral to the EIR. The amortization of such amounts is recognized in finance costs in the consolidated statements of loss.

Derecognition

A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires. Any difference between the carrying amount of the financial liability extinguished and the consideration paid is recognized in profit or loss within other income (expense).

[k] Loss per share

Basic loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that would occur if securities or other contracts to issue common shares, such as stock options and share purchase warrants, were exercised or converted into common shares, to the extent they are dilutive. The Company

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Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

applies the treasury stock method in determining the dilutive effect of stock options and warrants. Under this method, the assumed proceeds from the exercise of such instruments are used to repurchase common shares at the average market price during the period. For periods in which the Company reports a net loss, all potentially dilutive instruments are anti-dilutive and are therefore excluded from the calculation of diluted loss per share.

[l] Share-based payments

The Company accounts for share-based payment arrangements in accordance with IFRS 2 Share-based Payment . Equity-settled share-based payments to employees and directors are measured at the fair value of the equity instruments granted at the grant date and are recognized as an expense over the applicable vesting period, with a corresponding increase in contributed surplus. The expense is recognized on a graded or straight-line basis over the vesting period, as appropriate, with an estimate of the number of awards expected to vest.

Share-based payments to non-employees are measured at the fair value of the goods or services received, unless that fair value cannot be reliably measured, in which case the fair value of the equity instruments granted is used. The expense is recognized when the goods or services are received.

The fair value of stock options is estimated at the grant date using the Black-Scholes option pricing model, which requires the use of subjective assumptions, including expected share price volatility, expected option life, riskfree interest rate, and expected dividend yield. Changes in these assumptions can materially affect the calculated fair value.

Upon exercise of stock options, the consideration received together with the amount previously recognized in contributed surplus is recorded as share capital. Upon expiry or forfeiture of stock options, the amount previously recognized in contributed surplus remains in equity.

[m] Flow-through shares

Flow-through shares are recognized in share capital based on the quoted market price of the Company’s common shares at the date of issuance. The premium received by the Company, representing the difference between the subscription price and the fair value of the common shares issued, is recognized as a flow-through share premium liability.

The flow-through share premium liability is reduced and recognized as income in the consolidated statements of loss and comprehensive loss as the Company incurs eligible expenditures and renounces the associated tax deductions to the investors.

The Company is obligated to incur qualifying Canadian exploration expenditures within prescribed timelines and to renounce such expenditures to investors in accordance with applicable tax legislation. The Company may be subject to indemnification obligations for any tax-related amounts payable by investors in the event that the Company does not fulfill its commitments under the flow-through share agreements.

8

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

[n] Income taxes

Income tax expense comprises current and deferred income taxes.

Current income tax is recognized for the estimated income taxes payable or recoverable in respect of the taxable income or loss for the current year and any adjustments to income taxes payable in respect of previous years.

Deferred income taxes are recognized using the liability method on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding tax bases, as well as for unused tax losses and tax credits carried forward. Deferred tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted at the reporting date and are expected to apply in the period in which the asset is realized or the liability is settled.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

• when the deferred tax liability arises from the initial recognition of goodwill; or

• when it arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries, associates, and joint arrangements where the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognized for deductible temporary differences, unused tax losses, and unused tax credits to the extent that it is probable that future taxable profit will be available against which such amounts can be utilized, except:

• when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit or loss; and

• in respect of deductible temporary differences associated with investments in subsidiaries, associates, and joint arrangements, unless it is probable that the temporary difference will reverse in the foreseeable future and sufficient taxable profit will be available.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority on the same taxable entity, and the Company intends to settle on a net basis.

Uncertain Tax Positions

The Company is subject to income taxes, value-added taxes, withholding taxes, and other taxes in the jurisdictions in which it operates. Significant judgment is required in determining tax provisions and deferred tax balances, as the ultimate tax treatment of certain transactions may be uncertain. The Company recognizes liabilities for uncertain tax positions when it is probable that additional taxes will be payable, based on management’s best estimate of the expected outcome. Tax filings are subject to audit and potential reassessment by taxation authorities. Where the final tax outcome differs from amounts previously recorded, such differences are recognized in profit or loss in the period in which the determination is made.

9

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

[o] Oil and gas interests

The Company holds certain legacy oil and gas interests.

Subsequent to initial recognition, oil and gas interests are depleted and amortized on a unit-of-production basis over the estimated proved and probable reserves, where applicable.

The Company assesses oil and gas interests for indicators of impairment at each reporting date. Where indicators of impairment exist, the recoverable amount is estimated as the higher of fair value less costs of disposal and value in use. These calculations require the use of estimates and assumptions, including future commodity prices, production volumes, operating and capital costs, and discount rates. An impairment loss is recognized when the carrying amount exceeds the recoverable amount.

Given the legacy nature of these assets, the Company does not anticipate significant future capital expenditures related to oil and gas activities. The carrying value of these assets is not material to the consolidated financial statements.

[p] Material judgements and estimates

The preparation of these consolidated financial statements in accordance with IFRS Accounting Standards requires management to exercise judgment and to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosures. Actual results may differ from these estimates. Revisions to accounting estimates are recognized prospectively in the period in which the estimate is revised and in any future periods affected.

Material judgements

The critical judgments, apart from those involving estimates, that have the most significant effect on the amounts recognized in the consolidated financial statements include:

• the determination of the functional currency of the Company and its subsidiary (note 3[c]);

• the recognition and measurement of provisions, including environmental rehabilitation obligations (note 3[h]);

• the determination of income and other tax positions (note 3[n]);

• the evaluation of contingent liabilities and provisions; and

• the assessment of the Company’s ability to continue as a going concern (note 2)

Key sources of estimation uncertainty

The key assumptions concerning the future and other sources of estimation uncertainty at the reporting date that could result in a material adjustment to the carrying amounts of assets and liabilities in future periods include, but are not limited to: going concern assumptions regarding the Company’s ability to obtain additional financing and generate future cash flows; share-based payments, including assumptions used in option pricing models such as expected volatility, expected life, forfeiture rates, and risk-free interest rates; useful lives of assets and related depreciation or amortization; income taxes, including the recognition and measurement of deferred tax assets and liabilities; and commitments and contingencies, including assumptions used in measuring provisions and assessing contingent liabilities and the determination of the liability and equity components of convertible debt. Because these estimates are based on management’s best judgment, actual results may differ, and such differences could be material to the consolidated financial statements

10

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

[q] Other accounting changes

In April 2024, the International Accounting Standards Board issued IFRS 18, Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements. The new standard introduces enhanced requirements for the presentation and disclosure of financial performance, including the introduction of defined subtotals in the statement of profit or loss, new categories of income and expenses, and expanded disclosures relating to management-defined performance measures. IFRS 18 also includes new requirements relating to the location, aggregation and disaggregation of financial information.

This standard is effective for annual reporting periods beginning on or after January 1, 2027 including interim financial statements. Retrospective adoption is required and early adoption is permitted.

4. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and advances from shareholders. Unless otherwise noted, the Company is not exposed to significant interest rate, currency or credit risks arising from these financial instruments.

Fair value

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and advances from shareholders approximate their fair values due to the short-term nature and maturity of these instruments.

Credit risk

Credit risk is the risk that a counterparty will fail to fulfill its contractual obligations, resulting in a financial loss to the Company. This risk arises principally from the Company’s financial assets, including cash and cash equivalents and accounts receivable, and represents the potential reduction in future cash inflows as at the consolidated statement of financial position date.

(i) Cash and cash equivalents

The Company’s cash and cash equivalents are held with a major Canadian chartered bank. The Company manages credit risk related to cash and cash equivalents by maintaining deposits with high-credit-quality financial institutions. As at the reporting date, the maximum exposure to credit risk related to cash and cash equivalents equals their carrying amount. Management does not expect any significant credit losses arising from these balances.

(ii) Receivables

The Company’s receivables consist primarily of receivables arising in the normal course of business. As at December 31, 2025, management expects that counterparties will meet their contractual obligations and has assessed the expected credit losses on receivables to be immaterial. Accordingly, no allowance for expected credit losses has been recognized. The maximum exposure to credit risk at the reporting date is equal to the carrying amount of receivables.

11

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

Foreign currency risk

The Company is exposed to foreign currency risk to the extent that certain transactions and financing activities are denominated in United States dollars (“USD”).

The Company monitors its exposure to foreign exchange fluctuations on an ongoing basis. As at December 31, 2025, management has assessed the Company’s exposure to foreign currency risk to be limited and not material. Accordingly, the Company has not entered into any foreign currency hedging arrangements.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. As at December 31, 2025, management has assessed the Company’s exposure to interest rate risk to be minimal.

Liquidity risk

Liquidity risk is the risk that the Company will be unable to meet its financial obligations as they become due. The Company’s objective is to manage liquidity risk by monitoring its cash requirements and maintaining sufficient cash resources to meet its operational needs. As at December 31, 2025, the Company had cash and cash equivalents of $119,035 [2024 - $37,319]. The Company will need to raise additional funds to meet its obligations and fund operations beyond 2026. (See note 2).

Capital risk

The Company’s objectives when managing capital are: (i) to safeguard the Company’s ability to continue as a going concern in order to support its manufacturing operations and provide returns for shareholders; and (ii) to maintain a flexible capital structure that optimizes the cost of capital at an acceptable level of risk. For the purposes of capital management, the Company defines capital as shareholders’ equity and debt, net of cash and cash equivalents, and includes short-term investments, if any.

The Company manages its capital structure and makes adjustments in response to changes in economic conditions, operating performance, working capital requirements, and the risk characteristics of its operations. To maintain or adjust its capital structure, the Company may issue additional equity or debt, refinance existing obligations, or adjust the level of cash and cash equivalents.

To facilitate the management of its capital requirements, the Company prepares annual operating budgets and cash flow forecasts, which are reviewed and approved by the Board of Directors. Actual results are monitored against approved budgets, and variances are evaluated in light of operational and market conditions.

The Company’s capital management objectives, policies, and processes remained unchanged during the years ended December 31, 2025 and 2024.

The Company’s investment policy is to invest surplus cash in highly liquid, short-term, interest-bearing instruments with original maturities of less than one year, taking into consideration the expected timing of operational expenditures.

12

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

Commodity price risk

The Company’s ability to carry out exploration and evaluation activities, as well as the future economic viability of its mineral properties, is influenced by fluctuations in commodity prices.

Commodity prices are subject to significant volatility and are affected by numerous factors beyond the Company’s control, including global economic conditions, supply and demand dynamics, currency fluctuations, and geopolitical developments. Declines in commodity prices may impact the Company’s ability to finance exploration activities and could result in the impairment of exploration and evaluation assets.

The Company monitors commodity price trends on an ongoing basis and evaluates the potential impact on its operations and asset values in determining its strategic course of action.

5. OIL AND GAS INTERESTS

The Company holds a 3.75% working interest in six producing oil and gas properties located in Alberta, Canada. These assets are operated by Gran Tierra Canada Ltd. The Company’s interests are non-operated and entitle it to its proportionate share of production revenues, net of royalties, operating expenses, and capital expenditures.

The Company accounts for these interests as legacy assets. Revenue is recognized in accordance with the Company’s revenue recognition policy based on its share of production, measured using volumes delivered and realized commodity prices, as reported by the operator. Cash receipts are typically received on a monthly basis.

6. MINERAL PROPERTIES

The Company holds exploration and royalty interests in the following mineral properties.

Santo Domingo Silver–Gold Project

The Company holds a 100% interest in Compañia Minera San Diego Y La Espana S.A. de C.V (“Compañia Minera”), which owns certain mineral concessions located in the State of Jalisco, Mexico.

The Company is subject to the following obligations in respect of the Santo Domingo property:

• A 2.5% net smelter return (“NSR”) royalty payable to Amerix Precious Metals Inc., capped at a maximum aggregate amount of $500,000; and

• Contingent consideration payable to a prior owner totaling USD $1,160,000 (approximately CAD $1,624,000), payable in quarterly installments, conditional upon the commencement of commercial production. Following the start of commercial production, quarterly payments will equal 0.5% of net smelter returns, defined as gross revenues actually received from the sale of mineral products, net of applicable smelting and refining charges. Payments commence three months after the start of commercial production and continue until the total obligation has been satisfied. These amounts are contingent upon future production and, accordingly, have not been recognized as liabilities in the consolidated financial statements.

13

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

Concession Requirements

To maintain its mineral concessions in good standing, the Company is required to:

• Incur prescribed minimum annual exploration expenditures; and

• Pay semi-annual concession fees to the Secretaría de Economía (Mexico) .

• The annual concession fee for 2026 is expected to be approximately MXN $60,000 (approximately CAD $4,700)

Failure to meet these requirements may result in the cancellation or forfeiture of the concessions. Management believes that all required expenditures and payments have been made and that the concessions are in good standing as at the reporting date.

Surface Rights Agreement

The Company has entered into an agreement with the local landowners (Ejido) granting access to the Santo Domingo property through 2033, with provisions for renewal. Annual payments under this agreement are approximately USD $8,141, subject to annual increases of approximately 10%.

Hislop Project

The Company holds a 0.5% net smelter return (“NSR”) royalty on certain mineral properties located in Hislop Township, Ontario. Under the terms of the underlying agreement, the property owner has the option to repurchase the NSR royalty for a cash payment of $1,000,000.

Leckie Project

The Company holds a 1.0% net smelter return (“NSR”) royalty on the Leckie Project, owned by Temagami Gold Inc. (“Temagami”). Under the terms of the agreement, Temagami has the option to repurchase the NSR royalty at a price of $500,000 for each 0.5% interest, for a total potential consideration of $1,000,000 for the full 1.0% NSR.

In addition, the Company holds 750,000 common shares of Temagami. As at December 31, 2025 and 2024, Temagami is a privately held company and the fair value of the shares was estimated to be nominal. The Company attributed a value of $Nil to the shares of Temagami as at December 31m 2025 and 2024.

7. RELATED PARTY TRANSACTIONS

In accordance with IAS 24 – Related Party Disclosures , key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company, directly or indirectly, including the Company’s directors (executive and non-executive).

During the year ended December 31, 2025, the Company received a loan of $75,000 from a shareholder. The loan was unsecured, bore interest at 12% per annum, and was originally due in five years. The loan was fully repaid during the year. As at December 31, 2025, no balance was outstanding (2024 – $nil). During the year ended December 3. 2025 the Company paid interest of $6,182 (2024-$Nil) on this loan.

During the year ended December 31, 2025, the Company issued stock options to directors and officers of the company totalling 1,005,000 and with an estimated grant date fair value of $110,000.

14

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

Included in accounts payable as at December 31, 2025 are $75,516 (2024 - $4,914) owing to officers and directors of the company. These amounts are unsecured, non-interest bearing and due on demand.

Related party payments and compensation of key management personnel for the years ended December 31, 2025 and 2024 was as follows:

	2025 $	2024 $
Administrative and professional fees	60,000	60,000
Director fees	48,750	45,000
	108,750	105,000

8. SHAREHOLDERS' EQUITY

[a] Share capital

The company is authorized to issue an unlimited number of common shares.

The continuity of share capital is as follows:

	Shares	Amount
	#	$
Balance, December 31, 2023 and 2024	57,623,199	26,054,468
Issuance of common shares on exercise of warrants	3,000,000	420,193
Balance, December 31, 2025	60,623,199	26,474,661

[b] Stock options

The Company maintains a stock option plan (the “Plan”) to attract and retain directors, officers, employees, and consultants. Under the terms of the Plan, the Board of Directors may grant options to acquire common shares of the Company at an exercise price not less than the market price of the shares at the date of grant. Options granted under the Plan have a maximum term of up to 5 years and vest in accordance with the terms determined by the Board at the time of grant.

On September 24, 2025, the Company granted 1,000,500 stock options to certain officers and directors of the Company. The options are exercisable at $0.12 per share , being equal to the estimated fair market value of the Company’s common shares on the date of grant and have a contractual life of five years .

The fair value of the options granted on the date of grant was estimated at $110,000 , using the Black-Scholes option pricing model. The following weighted average assumptions were used in estimating the fair value of options granted:

Assumption	Amount
Share price at grant date	$0.12
Exercise price	$0.12
Risk-free interest rate	2.80%

15

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

Assumption	Amount
Expected life	5.0 years
Expected volatility	160%
Expected dividend yield	0.0%

The continuity of the options outstanding is as follows:

	2 Number #	025 Weighted average exercise price $	2 Number #	024 Weighted average exercise price $
Outstanding, beginning of year	150,000	0.55	150,000	0.55
Granted	1,000,500	0.12	—	—
Outstanding, end of year	1,150,500	0.176	150,000	0.55
Exercisable, end of year	1,150,500	0.176	150,000	0.55

As at December 31, 2025, the following options were outstanding:

	Weighted Average		Stock Options	Stock Options	Remaining
Date of Issue	Exercise Price	Expiry Date	Outstanding	Exercisable	Life
January 12, 2021	$0.55	September 12, 2026	150,000	150,000	0.7 years
September 24,2025	$0.12	September 24,2030	1,000,500	1,000,500	4.75 years

The remaining weighted average contractual life of the options is 4.8 years.

[c] Warrants

The continuity of share purchase warrants outstanding, is as follows:

	Number	Value ($)
Balance at December 31, 2023 and 2024	6,000,000	240,386
Exercise of warrants	(3,000,000)	(120,193)
Balance at December 31, 2025	3,000,000	120,193

As at December 31, 2025, the following warrants were outstanding:

	Weighted Average		Warrants	Warrants	Remaining
Date of Issue	Exercise Price	Expiry Date	Outstanding	Exercisable	Life
September 13, 2023	$0.10	September 13, 2026	3,000,000	3,000,000	0.7 years

16

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

[d] Diluted loss per share

Basic net loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by adjusting the weighted average number of common shares outstanding for the effects of all potentially dilutive instruments. Potentially dilutive instruments include stock options and share purchase warrants. However, where the Company is in a net loss position, such instruments are considered anti-dilutive and are therefore excluded from the calculation of diluted net loss per share.

Accordingly, for the years presented, basic and diluted net loss per share are the same.

	2025	2024
Net loss	($381,666)	($315,737)
Weighted average common shares outstanding - basic	58,025,939	57,623,199
Weighted average common shares outstanding - diluted	58,025,939	57,623,199
Net loss per share – basic	($0.006)	($0.005)
Net loss per share – diluted	($0.006)	($0.005)

9. CONSOLIDATED STATEMENTS OF CASH FLOWS

The net change in non-cash working capital related to operations consists of the following:

	2025 $	2024 $
Accounts receivable	23,290	(3,886)
Prepaid expenses	—	9,893
Accounts payable and accrued liabilities	30,092	24,908
	53,382	11,129

The Company paid interest of $7,991 during the year ended December 31, 2025 (2024 – $nil). As at December 31, 2025, cash and cash equivalents of $119,035 (December 31, 2024 – $37,319) consisted of cash held with a Canadian financial institution.

10. INCOME TAXES

The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% to the Company’s effective income tax rate for the year is as follows:

	2025 $	2024 $
Loss before income taxes	(381,666)	(315,737)
Statutory tax rate	26.50%	26.50%
Expected income tax expense	(101,140)	(83,670)
Change in benefit of tax assets not recognized	101,140	83,670
Total income tax expense	—	—

17

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

Deferred tax assets not recognized

Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable profits will be available against which deductible temporary differences and tax loss carryforwards can be utilized.

As at December 31, 2025, the Company had deductible temporary differences primarily related to share issuance costs, accrued liabilities, share-based compensation, and differences between the carrying amounts and tax bases of certain capital and intangible assets. No deferred tax assets have been recognized in respect of these items in the consolidated statement of financial position.

	2025 $	2024 $
Non-capital losses carried forward	9,111,000	8,802,000
Mineral properties and deferred costs	3,257,000	3,239,000
Share issue costs	—	142,000
Total	12,368,000	12,183,000

The Company also has losses in Mexico. In addition, the Company has non-capital losses for Canadian tax purposes that have not been benefited and expire as follows:

	$
2026	355,000
2028	469,000
2029	185,000
2030	634,000
2031	568,000
2032	488,000
2033	497,000
2034	168,000
2035	228,000
2036	3,297,000
2037	119,000
2038	219,000
2039	193,000
2040	235,000
2041	317,000
2042	200,000
2043	243,000
2044	294,000
2045	402,000
	9,111,000

11. SEGMENTED INFORMATION

The Company operates in two reportable segments: (i) mineral exploration and (ii) oil and gas interests. These segments are based on the manner in which management monitors and assesses the Company’s operations and

18

Stroud Resources Ltd.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

[Expressed in Canadian dollars unless otherwise noted]

December 31, 2025 and 2024

allocates resources. Segment information, including revenues, expenses, and asset balances, is reflected in the consolidated financial statements and related notes, including Notes 5 and 6.

12. CONTINGENCIES

The Company’s exploration and evaluation activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are subject to change and may become more restrictive over time.

Management believes that the Company is, in all material respects, in compliance with applicable environmental laws and regulations. The Company has made, and expects to continue to make, expenditures to comply with such requirements.

Legal Matters

From time to time, the Company may be subject to claims and legal, regulatory, or tax proceedings arising in the ordinary course of business. The outcome of such matters is inherently uncertain. Where it is probable that an outflow of economic resources will be required and a reliable estimate can be made, the Company recognizes a provision for the estimated obligation. Where such conditions are not met, the matter is disclosed as a contingent liability, if material. If the final outcome of any claims or proceedings differs from the amounts previously recognized, such differences are recognized in profit or loss in the period in which the outcome is determined.

Legal Claim

The Company has been named as a defendant in a legal claim in which the plaintiff alleges that the Company guaranteed a loan entered into by a third party based in Morocco in connection with the potential acquisition of certain mining claims. The amount claimed against the Company is $400,000 (USD). No provision has been recognized in these consolidated financial statements in respect of this matter, as management has determined that it is not probable that an outflow of economic resources will be required and a reliable estimate of any potential obligation cannot be made at this time. The plaintiff has proposed a settlement for an amount lower than the claim; however, management has rejected the offer and intends to vigorously defend the claim.

13. SUBSEQUENT EVENTS

On March 27, 2026, the Company issued 3,000,000 common shares for proceeds of $300,000 pursuant to an exercise of warrants.

19