SEDAR Interim Financial Statements

CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2025 (Unaudited - Expressed in Canadian Dollars) NOTICE OF NO AUDITOR REVIEW Under National Instrument 51-102, Part 4 subsection 4.3 (3), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the unaudited condensed interim consolidated financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim consolidated financial statements of Pacific Empire Minerals Corp. have been prepared by and are the responsibility of management. These condensed interim consolidated financial statements for the nine months ended December 31, 2025 have not been reviewed or audited by the Company’s independent auditors in accordance with standards established by the Chartered Professional Accountants of Canada. PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Condensed Interim Statements of Financial Position (Unaudited - Expressed in Canadian Dollars) The accompanying notes are an integral part of these condensed interim financial statements - 3 - ASSETS December 31,2025 March 31, 2025 Current assets Cash $ 402,504 $ 188,347 Receivables (Note 3) 80,502 138,895 Prepaid expenses 311,090 65,420 Marketable securities (Note 4) 44,249 46,074 Total current assets 838,345 438,736 Non-current assets Restricted cash (Note 5) 17,500 17,500 Property and equipment (Note 6) 33,648 63,646 Reclamation deposits (Note 7) 84,742 62,942 Exploration and evaluation assets (Note 8) 12,563 12,563 Total non-current assets 148,453 156,651 TOTAL ASSETS $ 986,798 $ 595,387 LIABILITIES Current liabilities Accounts payables and accrued liabilities $ 80,259 $ 79,287 Due to related parties (Note 7) 205,163 257,750 Lease liability (Note 11) 24,108 23,935 Flow-through share liability - 20,000 Total current liabilities 309,530 380,972 Non-current liabilities Lease liability (Note 11) - 17,719 Total non-current liabilities - 17,719 SHAREHOLDERS’ EQUITY Share capital (Note 12) 9,705,068 7,726,740 Reserves (Note 12) 567,156 265,965 Subscription received in advance (Note 16) 65,000 - Deficit (9,659,956) (7,796,009) TOTAL SHAREHOLDERS’ EQUITY 677,268 196,696 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 986,798 $ 595,387 Nature of Operations and Ability to Continue as a Going Concern (Note 1) Subsequent Events (Note 16) Approved on behalf of the Board of Directors February 27, 2026. "Brad Peters" , Director "Peter Schloo" , Director PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Condensed Interim Statements of Changes in Shareholders' Equity (Unaudited - Expreseed in Canadian Dollars) The accompanying notes are an integral part of these condensed interim financial statements - 4 - Number of Common shares Share capital Reserves Subscriptions received in advance Deficit Total Balance as at March 31, 2024 125,348,195 $ 7,079,510 $ 96,990 $ - $ (6,932,222) $ 244,278 Shares issued for cash 14,450,000 722,500 - - - 722,500 Share issue costs – cash - (48,709) - - - (48,709) Share issue costs – finders warrants - (26,561) 26,561 - - - Share-based compensation - - 119,515 - - 119,515 Loss for the period - - - - (637,128) (637,128) Balance as at December 31, 2024 139,798,195 $ 7,726,740 $ 243,066 $ - $ (7,569,350) $ 400,456 Number of Common shares Share capital Reserves Subscriptions received in advance Deficit Total Balance as at March 31, 2025 139,798,195 $ 7,726,7 --- 40 $ 265,965 $ - $ (7,796,009) $ 196,696 Shares issued for cash 56,049,770 1,826,992 - - - 1,826,992 Share issue costs – cash - (66,202) - - - (66,202) Share issue costs – finders warrants - (52,500) 52,500 - - - Shares issued for options exercise 500,000 46,038 (21,038) - - 25,000 Shares issued for warrants exercise 4,725,000 314,250 - - 314,250 Flow-through premium - (90,250) - - - (90,250) Share-based compensation - - 269,729 - - 269,729 Subscription received in advance - - - 65,000 - 65,000 Loss for the period - - - - (1,863,947) (1,863,947) Balance as at December 31, 2025 201,072,965 $ 9,705,068 $ 567,156 $ 65,000 $ (9,659,956) $ 677,268 PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Condensed Interim Statements of Loss and Comprehensive Loss (Unaudited - Expressed in Canadian Dollars) The accompanying notes are an integral part of these condensed interim financial statements - 5 - Three Months Ended Nine Months Ended December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 EXPLORATION EXPENDITURES (Note 9) $ 1,011,028 $ 4,954 $ 1,062,240 $ 58,155 Less: Recoveries (Note 9) - - - (1,952) Net exploration expenditures 1,011,028 4,954 1,062,240 56,203 GENERAL AND ADMINISTRATIVE EXPENSES Administrative and office 19,136 12,845 80,474 38,019 Amortization (Note 6) 7,560 7,705 24,729 22,442 Consulting and directors’ fees (Note 10) 146,333 66,500 312,083 227,500 Investor relations and shareholder communication 64,665 10,910 94,064 67,769 Management fees (Note 10) 11,500 22,500 64,500 67,500 Professional fees 62,308 30,527 109,097 53,557 Share-based compensation (Notes 10 & 12) 246,447 31,393 269,729 119,515 Total general and administrative expenses 557,949 182,380 954,676 596,302 Loss from operations (1,568,977) (187,334) (2,016,916) (652,505) Foreign exchange loss (827) (151) (737) (807) Interest income - - 1,186 2,121 Interest expense on lease liability (Note 11) (599) - (2,165) - Fair value adjustments on marketable securities (Note 4) 4,963 19,760 (1,825) (16,647) Recovery of flow through expenditure commitment (Note 12) 110,250 - 110,250 30,710 Gain on debt settlement 46,260 - 46,260 - Loss and comprehensive loss for the period $ (1,408,930) $ (167,725) $ (1,863,647) $ (637,128) Basic and diluted loss per common share $ (0.01) $ (0.00) $ (0.01) $ (0.00) Weighted average number of common share outstanding – basic and diluted 193,777,729 139,798,195 160,605,968 137,906,559 PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Condensed Interim Statements of Cash Flows (Unaudited - Expressed in Canadian Dollars) The accompanying notes are an integral part of these condensed interim financial statements - 6 - For the nine months ended December 31 For the nine months ended December 31 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (1,863,947) $ (637,128) Items not involving cash: Amortization 29,998 25,467 Share-based compensation 269,729 119,515 Fair value adjustments on marketable securities 1,825 16,647 Interest income (1,186) (2,121) Interest expense on lease liability 2,165 876 Recovery of flow through share liability (110,250) (30,710) Accrual for exploration tax credits - (1,952) Gain on debt settlement (46,260) - Changes in non-cash working capital items: Receivable 58,393 (4,827) Prepaid expenses (245,670) 38,912 Accounts payable and accrued liabilities 2,158 (92,809) Due to related parties (6,327) 20,288 Net cash used in operating activities (1,909,372) (547,842) CASH FLOWS FROM INVES --- TING ACTIVITIES Reclamation deposits (21,800) - Interest received on cash - 2,121 Purchase of property and equipment, net - (14,396) Refund of restricted cash - 5,500 Net cash used in investing activities (21,800) (6,775) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from private placements 1,826,992 722,500 Share issuance costs (66,202) (48,709) Proceeds from options exercise 25,000 - Proceeds from warrants exercise 314,250 - Subscriptions received in advance 65,000 - Lease payments (19,711) (18,906) Net cash provided by financing activities 2,145,329 654,885 Net change 214,157 100,268 Cash, beginning of period 188,347 256,913 Cash, end of period $ 402,504 $ 357,181 SUPPLEMENTAL CASH FLOW INFORMATION Fair value of brokers’ warrants granted $ 52,500 $ - Fair value of options exercised $ 21,038 $ - Flow-through premium liability $ 90,250 $ - PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 7 - 1. NATURE OF OPERATIONS AND ABILITY TO CONTINUE AS A GOING CONCERN Pacific Empire Minerals Corp. (the "Company") was incorporated on July 13, 2012, under the Business Corporations Act (British Columbia). The Company's principal business activities are the acquisition and exploration of mineral properties in Canada. The Company's common shares are listed on the TSX Venture Exchange ("TSX-V") under the symbol "PEMC". The Company's head office address is at Suite 804, 525 Seymour Street, Vancouver, British Columbia V6B 3H7, Canada and its registered and records office is located at Suite 1700, 1055 West Hastings Street, Vancouver, British Columbia V6E 2E9, Canada. These condensed interim financial statements have been prepared using IFRS Accounting Standards ("IFRS") applicable to a going concern, which assumes that the Company will be able to realize its assets, discharge its liabilities and continue in operation for the following twelve months. Realization values may be substantially different from the carrying values shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company's continuing operations and the ability of the Company to meet mineral property and other commitments are dependent upon the ability of the Company to continue to raise additional equity or debt financing and to find joint venture partners. At the date of these financial statements, the Company has not identified whether any of its properties contain ore reserves that are economically recoverable. At December 31,2025, the Company has not achieved profitable operations and has accumulated losses since inception. As at December 31, 2025, the Company had working capital of $528,815, accumulated deficit of $9,659,956 and cash of $402,504. With its current plans for the year and the budgets associated with those plans, in order to continue funding its administrative and exploration expenditures from the date of these financial statements, the Company will need to obtain additional cash and anticipates either financing or selling one or more of its assets. These material uncertainties may cast significant doubt upon the Company’s ability to continue as a going concern. 2. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION Statement of Compliance These condensed int --- erim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34") using accounting policies consistent with IFRS as issued by the International Accounting Standards Board ("IASB"). These condensed interim financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit or loss, which are stated at their fair value. In addition, these condensed interim financial statements have been prepared using the accrual basis of accounting except for cash flow information. Basis of Measurement and Presentation These condensed interim financial statements have been prepared on a historical cost basis except for assets measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information. These condensed interim financial statements are presented in Canadian dollars ("CAD"), which is also the Company's functional currency. These condensed interim financial statements follow the same accounting policies and methods of application as the Company's most recent annual financial statements, except as described below, and should be read in conjunction with the annual audited financial statements of the Company for the year ended March 31, 2025. Critical Accounting Judgments and Significant Estimates and Uncertainties The critical judgments and estimates applied in the preparation of the Company's unaudited condensed interim financial statements for the nine months ended December 31, 2025, are consistent with those applied in the Company's March 31, 2025 audited financial statements. PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 8 - 2. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued) New Accounting Pronouncements Certain pronouncements have been issued by the International Accounting Standards Board or the International Financial Reporting Interpretations Committee that are effective for accounting periods beginning on or after April 1, 2025. The Company has reviewed these updates and the amendment that is applicable to the Company is discussed below: IFRS 18 Presentation and Disclosure in Financial Statements IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statement aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company is currently assessing the impact of the new standard. 3. RECEIVABLES The Company's receivables arise from goods and services tax ("GST"), mineral exploration tax credits ("METC") from government taxation authorities, and reclamation deposits settled and being returned to the Company. As at December 31, 2025 and March 31, 2025, the current receivables consisted of the following: December 31, 2025 March 31, 2025 Goods --- and services tax receivable $ 80,502 $ 76,166 Mineral exploration tax credits - 62,729 $ 80,502 $ 138,895 During the period ended December 31,2025, the Company received refunds of $78,445 from GST and $61,798 in METC. 4. MARKETABLE SECURITIES As at December 31, 2025 and March 31, 2025, the Company had the following marketable securities: December 31, 2025 March 31, 2025 Fair value through profit or loss Cost $ 81,711 $ 81,711 Accumulated unrealized loss (37,462) (35,637) Fair value $ 44,249 $ 46,074 5. RESTRICTED CASH As at December 31, 2025, the Company classified $17,500 (March 31, 2025 - $17,500) as restricted cash. This amount is comprised of a GIC held as a deposit for its corporate credit cards. PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 9 - 6. PROPERTY AND EQUIPMENT During the nine months period ended December 31, 2025, amortization of $5,269 (2024 - $3,023) has been included in exploration expenditures (Note 9). Office furniture and computer equipment Field equipment Vehicles and related equipment Right-of-use assets Total Cost As at March 31, 2024 $ 44,080 $ 29,906 $ 19,949 $ 45,139 $ 139,074 Additions 14,396 - - 49,063 63,459 As at March 31, 2025 and December 31, 2025 $ 58,476 $ 29,906 $ 19,949 $ 94,202 $ 202,533 Accumulated amortization As at March 31, 2024 $ 33,730 $ 21,291 $ 19,949 $ 30,092 $ 105,062 Additions 7,255 3,346 - 23,224 33,825 As at March 31, 2025 40,985 24,637 19,949 53,316 138,887 Additions 6,327 5,269 - 18,402 29,998 As at December 31, 2025 $ 47,312 $ 29,906 $ 19,949 $ 71,718 $ 168,885 Net Book Value As at March 31, 2025 $ 17,491 $ 5,269 $ - $ 40,886 $ 63,646 As at December 31, 2025 $ 11,164 $ - $ - $ 22,484 $ 33,648 Right-of-use assets consists of leased office space (Note 11) and is amortized on a straight-line basis over the term of the lease. 7. RECLAMATION DEPOSITS Reclamation deposits are held as security towards future exploration work and the related future potential cost of reclamation of the Company's land and unproven mineral interests. Once reclamation of the properties is complete, the deposits will be returned to the Company. As at December 31, 2025, $84,742 (March 31, 2025 - $62,942) is being held as security on the Company's mineral titles. As at December 31, 2025 and March 31, 2025, the Company has no material reclamation obligations. 8. EXPLORATION AND EVALUATION ASSETS There were no changes to the Company’s exploration and evaluation assets during the nine months ended December 31, 2025. PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 10 - 9. EXPLORATION EXPENDITURES During the nine months ended December 31, 2025, the Company incurred the following exploration expenditures, which were expensed as incurred: Trident Pinnacle Total Administrative costs $ 14,840 $ 1,930 $ 16,770 Amortization 5,269 - 5,269 Assays 3,626 - 3,626 Drilling 521,689 521,689 Field costs 502,099 2,902 505,001 Mapping 9,885 - 9,885 Net expenditures $ 1,057,408 $ 4,832 $ 1,062,240 During the nine months ended December 31, 2024, the Company incurred the following exploration expenditures, which were expensed as incurred: Trident Pinnacle Target Generation* Total Administrative costs $ - $ 704 $ 10,871 $ 11,575 Amortization - --- 922 2,101 3,023 Field costs 19,470 550 13,073 33,093 Geophysics 8,245 2,219 - 10,464 Total Expenditures 27,715 4,395 26,045 58,155 Exploration tax credits and reimbursement and adjustment** (1,285) (667) - (1,952) Total recoveries (1,285) (667) - (1,952) Net Expenditures $ 26,430 $ 3,728 $ 26,045 $ 56,203 * Expenditures included in "Target Generation" are not project specific and are general exploratory expenditures for the nine months ended December 31, 2024. ** All of the Company's exploration activities are located in British Columbia, Canada. As such, the Company is eligible for the Mining Exploration Tax Credits on qualifying expenditures. The credit is 20% of the qualifying expenditures, and an enhanced 30% credit is available for expenditures incurred in Mountain Pine Beetle affected areas. All the Company's current projects are in areas qualifying for the 30% enhanced credit. The Company has accrued a credit at the 30% qualifying rate on expected qualifying expenditures. Actual credits and refunds are subject to review and potential adjustment by tax authorities. PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 11 - 10. RELATED PARTYs TRANSACTIONS AND BALANCES The Company entered into certain transactions with key management personnel, which the Company has defined as Officers and Directors of the Company. The aggregate value of these transactions and outstanding balances are as follows: For the nine months ended December 31, 2025 Consulting fees Management fees Director fees Share-based Payments Total Chief Executive Officer * $ 121,500 $ - $ - $ 69,398 $ 190,898 Chief Financial Officer 8,750 - - 12,229 20,979 Outside directors - - 27,000 71,037 98,037 Seabord Management Corp. ** - 35,000 - 660 35,660 Total $ 130,250 $ 35,000 $ 27,000 $ 153,324 $ 345,574 For the nine months ended December 31, 2024 Consulting fees Management fees Director fees Share-based Payments Total Chief Executive Officer * $ 121,500 $ - $ - $ 18,096 $ 139,596 Outside directors - - 26,000 18,820 44,820 Seabord Management Corp. ** - 67,500 - 1,448 68,948 Total $ 121,500 $ 67,500 $ 26,000 $ 38,364 $ 253,364 Amounts due to related parties as of December 31, 2025 and March 31, 2025 are as follows: Related party liabilities December 31, 2025 March 31, 2025 Chief Executive Officer * $ 153,163 $ 135,000 Seabord Management Corp. ** - 78,750 Directors 52,000 44,000 $ 205,163 $ 257,750 *BJP Consulting is controlled by Brad Peters, President and Chief Executive Officer. ** Seabord Management Corp. ("Seabord") is partially controlled by the former Chief Financial Officer (“CFO”) which prior to the former CFO’s resignation provided the following services: A CFO, a Corporate Secretary, accounting and administration staff, and office space to the Company. The former CFO and Corporate Secretary were employees of Seabord and were not paid directly by the Company. On September 15, 2025, concurrent with the resignation of the former CFO, Seabord terminated its services with the Company. The amounts due to related parties are unsecured, non-interest bearing and are due on demand. 11. LEASE LIABILITY The Company's right-of-use asset consists of office space and is included in property and equipment (Note 6). December 31, 2025 March 31, 2025 Lease liability net carry amount – Opening balance $ 41,654 $ 16,205 Additions - 49,063 41, --- 654 65,268 Lease payments made (19,711) (25,441) Interest expense on lease liabilities 2,165 1,827 24,108 41,654 Less: current portion (24,108) (23,935) Non-current – Ending balance $ - $ 17,719 In May 2021, the Company entered into a lease agreement with 525 Seymour Inc. for office space in Vancouver, BC. The lease was for 18 months until November 30, 2022. On December 1, 2022, the Company extended the lease agreement with 525 Seymour Inc. for 2 additional years until November 30, 2024, and on December 1, 2024, the extended the lease for a further 2 additional PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 12 - years until November 30, 2026. As a result of the December 2024 extension, the Company recognized an additional $49,063 in right-of-use assets as at December 1, 2024. As at December 31, 2025, the expected remaining cash commitments were $25,150. 12. EQUITY Authorized The Company is authorized to issue an unlimited number of common shares and preferred shares without par value. Share Capital No preferred shares have been issued from incorporation to December 31, 2025. During the nine months ended December 31, 2025 In August 2025, the Company completed a non-brokered private placement for gross proceeds of $300,000 and issued 15,000,000 units at a price of $0.02 per unit. Each unit consists of one common share in the capital of the Company and one common share purchase warrant. Each warrant entitles the holder to acquire one common share at an exercise price of $0.05 per share for a period of 24 months from the date of closing. In consideration of the private placement, an aggregate total of $9,450 in cash finder’s fees were paid and 475,500 finder’s warrants valued at $9,400 were issued to qualified parties. The finder’s warrants are subject to the same terms as the warrants issued as part of the units. The weighted average fair value of the finder’s warrants issued as part of the private placement was estimated as of the date of the issuance using the Black-Scholes pricing model with the following assumptions: risk-free interest rate of 2.67%, dividend yield of 0%, volatility of 204% and an expected life of two years. In October 2025, the Company completed a private placement raising an aggregate of $1,526,992, of which $804,992 was raised on the issuance of 22,999,770 units at a price per unit of $0.035 and $692,000 was raised on the issuance of 18,050,000 flow- through units at a price of $0.04 per unit. The private placement closed in two tranches. Each unit consists of one common share in the capital of the Company and one common share purchase warrant. Each flow-through unit consists of one common share in the capital of the Company and one common share purchase warrant. Each warrant entitles the holder to acquire one common share at an exercise price of $0.05 per Share for a period of 24 months from the date of closing. Pursuant to the application of the residual value method with respect to the measurement of shares and warrants issued in private placements, and the determination of any flow-through share premium on the issuance of flow-through shares, there was no residual value allocated to the warrant component, and a flow-through premium liability of $90,250 was recognized related to the difference between the subscription price of a flow-through share compared to the u --- nits issued concurrently. Funds raised from the issuance of flow-through shares require the Company to spend the funds from these placements on qualified exploration expenditures and renounce the expenditures and income tax benefits to the flow-through shareholders, resulting in no exploration deductions for tax purposes to the Company. As at December 31, 2025, the Company fulfilled its spending requirements and the full flow-through premium liability has been extinguished. In consideration for arranging the private placement, the Company paid $56,752 in cash commissions and issued 1,539,984 finder’s warrants valued at $43,100 in two tranches. Each of 1,329,830 finder’s warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.05 per share until October 6, 2027. The weighted average fair value of the finder’s warrants issued as part of the private placement was estimated as of the date of the issuance using the Black-Scholes pricing model with the following assumptions: risk-free interest rate of 2.47%, dividend yield of 0%, volatility of 192% and an expected life of two years. Each of 210,154 finder’s warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.05 per share until October 14, 2027. The weighted average fair value of the finder’s warrants issued as part of the private placement was estimated as of the date of the issuance using the Black-Scholes pricing model with the following assumptions: risk- free interest rate of 2.44%, dividend yield of 0%, volatility of 193% and an expected life of two years. The Company issued 4,725,000 common shares valued at $314,250 pursuant to the exercise of warrants. The Company issued 500,000 common shares valued at $46,038 pursuant to the exercise of options, and reallocated $21,038 from contributed surplus to share capital. PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 13 - 12. EQUITY (Continued) During the year ended March 31, 2025: The Company completed a private placement raising an aggregate of $722,500, by issuing 14,450,000 units at a price of $0.05 per unit. Each unit consists of one common share in the capital of the Company and one common share purchase warrant. Each warrant will entitle the holder to acquire one common share at an exercise price of $0.08 per common share for a period of 36 months from the closing date of the offering. In consideration of the private placement, an aggregate total of $26,075 in cash finder’s fees were paid and 521,500 finder’s warrants valued at $26,561 were issued to qualified parties. The finder’s warrants are subject to the same terms as the warrants issued as part of the units. The weighted average fair value of the finder’s warrants issued as part of the private placement was estimated as of the date of the issuance using the Black-Scholes pricing model with the following assumptions: risk-free interest rate of 4.03%, dividend yield of 0%, volatility of 213% and an expected life of 3 years. The Company paid an additional $22,634 in legal and filing fees included in share issue costs. Pursuant to the application of the residual value method with respect to the measurement of shares and warrants issued as private placement units. The Company determined the fair value of the share component to be the more easily measu --- rable component and determined there was no residual fair value to allocate to the warrant component. Stock Option Plan As at December 31, 2025, the Company had a stock option plan that allows the Board of Directors to grant incentive stock options to the Company’s officers, directors, related company employees and consultants to purchase up to that number of common shares equal to 10% of its outstanding shares for a term of up to ten years. The exercise price of each option is to be not less than the fair market value of the Company’s stock as determined by the Plan administrator. The vesting terms are determined at the time of the option grant. During the nine months ended December 31, 2025 and the year ended March 31, 2025, the change in stock options outstanding is as follows: Number of Options Weighted Average Exercise Price Balance, March 31, 2024 5,000,000 $ 0.05 Issued 1,000,000 0.06 Balance, March 31, 2025 6,000,000 0.05 Issued 7,700,000 0.05 Exercised (500,000) 0.05 Balance, December 31, 2025 13,200,000 $ 0.05 The following table summarizes the stock options outstanding and exercisable as at December 31, 2025: * 715,000 options were exercised subsequently. ** 1,000,000 options were exercised subsequently. *** 1,500,000 options were exercised subsequently. The weighted average remaining life of the exercisable stock options is 3.28 years (March 31, 2025 – 1.95 years). Date Granted Number of Options Exercisable Exercise Price Expiry Date March 1, 2024* 4,500,000 2,000,000 $ 0.05 March 1, 2027 May 7, 2024** 1,000,000 1,000,000 0.06 May 7, 2027 October 6, 2025*** 7,700,000 7,700,000 0.05 October 6, 2030 13,200,000 10,700,000 PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 14 - 12. EQUITY (Continued) Share-based Payments During the nine months ended December 31, 2025, the Company recorded share-based compensation expense of $269,729 (2024 - $119,115), which represents the fair value of options vested during the period with the offsetting amount credited to reserves. The weighted average fair value of the stock options granted during the nine months ended December 31,2025 was $0.05 per stock option. The fair value of stock options granted was estimated using the Black-Scholes option pricing model with weighted average assumptions as follows: risk-free interest rate of 2.75%, dividend yield of Nil, volatility of 141%, forfeiture rate of Nil, and an expected life of 5 years. Warrants During the period ended December 31, 2025 and the year ended March 31, 2025, the change in warrants outstanding is as follows: Number of Warrant* Weighted Average Exercise Price Balance, March 31, 2024 1,481,666 $ 0.04 Issued 14,971,500 0.08 Balance, March 31, 2025 16,453,166 0.08 Issued 58,062,254 0.05 Exercised (4,725,000) 0.07 Balance, December 31, 2025 69,790,420 $ 0.06 The following table summarizes the warrants outstanding as at December 31, 2025: Date Granted Number of Warrant Exercise Price Expiry Date December 29, 2023 Finders’ Warrants 466,666 $ 0.10 December 29, 2026 January 16, 2024 Finders’ Warrants 1,015,000 0.10 January 16, 2027 May 7, 2024* 11,850,000 0.08 May 6, 2027 May 7, 2024 Finders’ Warrants 521,500 0.08 May 6, 2027 August 8, 2025** 12,875,000 0.05 August 8, 2027 August 8, 2025 Finders’ Warrants 472,500 0.05 August 8, 2027 October 6, 2025*** 21,122,570 0.05 October 6, 2027 October 6, 20 --- 25 16,175,000 0.06 October 6, 2027 October 6, 2025 Finders’ Warrants 1,329,830 0.05 October 6, 2027 October 14, 2025 1,877,200 0.05 October 14, 2027 October 14, 2025 1,875,000 0.06 October 14, 2027 October 14, 2025 Finders’ Warrants 210,154 0.05 October 14, 2027 69,790,420 * 1,700,000 warrants were exercised subsequently. ** 3,100,000 warrants were exercised subsequently. *** 800,000 warrants were exercised subsequently. 13. SEGMENTED INFORMATION The Company operates in a single reportable operating segment, being the acquisition and exploration of mineral properties. As such, all of the Company's property and equipment and exploration and evaluation assets are located in Canada. PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 15 - 14. FINANCIAL AND CAPITAL RISK MANAGEMENT Financial Risk Management The Company's financial instruments are exposed to certain financial risks, which include currency risk, credit risk, liquidity risk, interest rate risk, and market risk. Currency Risk The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. Although the Company operates only in Canada and all expenditures are incurred in Canadian dollars, U.S. dollars are sometimes held by the Company. As at December 31, 2025, the Company did not hold a significant balance of U.S. dollars. Therefore, a change in the currency exchange rates between the Canadian dollar relative to the U.S. dollar would have an immaterial effect on the Company's results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations. Credit Risk Credit risk arises from cash as well as credit exposures to counterparties of outstanding receivables and committed transactions. There is no concentration of credit risk other than on cash, deposits and receivables. The Company's cash deposits are primarily held with a Canadian chartered bank. Further, receivables comprise amounts due from the federal government. Therefore, credit risk is considered low. Liquidity Risk Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities and the ability to pay obligations as they fall due. Financial liabilities, at December 31, 2025, included $80,259 of accounts payable and accrued liabilities, $205,163 in amounts due to related parties and $24,108 of current lease liabilities. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest Rate Risk When the Company has sufficient cash, it will invest in term deposits which can be reinvested without penalty after thirty days should interest rates rise. As at December 31, 2025, the Company did not have any interest-bearing loans. Accordingly, the Company does not have a significant interest rate risk. Market Risk The Company is exposed to market risk because of the fluctuating values of its publicly traded marketable securities. The markets in which the Company holds equity investments are subject to volatility and price changes. The Company has no control over these fluctuations and does not hedge its investments. Based on the December 31, 2025 value of marketable securities a 10% increase or decrease in the share prices of these companies would have an im --- material impact on loss and comprehensive loss. Management of Capital The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue the development of its mineral properties. The Company relies mainly on equity issuances to raise new capital and on entering into joint venture agreements on certain properties which enables it to conserve capital and to reduce risk. In the management of capital, the Company includes the components of shareholders' equity. The Company also has receivables including mineral exploration tax credits, GST, and reclamation deposits to be received. The Company prepares annual estimates of exploration and administrative expenditures and monitors actual expenditures compared to the estimates. The Company's investment policy is to invest its cash in savings accounts or highly liquid short-term deposits with terms of one year or less and which can be liquidated after thirty days without interest penalty. There have been no changes in the approach to managing capital during the nine months ended December 31, 2025. Management believes that it will still need to seek additional capital to continue its exploration programs and general and administrative costs. The Company is not subject to externally imposed capital requirements. PACIFIC EMPIRE MINERALS CORP. (An Exploration Stage Company) Notes to the Condensed Interim Financial Statements (Unaudited - Expressed in Canadian Dollars) For the Period Ended December 31, 2025 - 16 - 15. FINANCIAL INSTRUMENTS BY CATEGORY The Company classified its financial instruments as follows: December 31, 2025 March 31, 2025 Financial assets Amortized cost: Cash $ 402,504 $ 188,347 Restricted cash 17,500 17,500 Reclamation deposits 84,742 62,942 Fair value through profit or loss: Marketable securities 44,249 46,074 $ 548,995 $ 314,863 Financial liabilities Amortized cost: Accounts payable and accrued liabilities $ 80,259 $ 79,287 Due to related parties 205,163 257,750 $ 285,422 $ 337,037 Fair Values The Company characterizes inputs used in determining fair value using a hierarchy that prioritizes inputs depending on the degree to which they are observable. The three levels of the fair value hierarchy are as follows: • Level 1: inputs represent quoted prices in active markets for identical assets or liabilities. Active markets are those in which transactions occur in sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2: inputs other than quoted prices that are observable, either directly or indirectly. Level 2 valuations are based on inputs, including quoted forward prices for commodities, market interest rates, and volatility factors, which can be observed or corroborated in the marketplace. • Level 3: inputs that are less observable, unavoidable or where the observable data does not support the majority of the instruments' fair value. As at December 31, 2025, there were no changes in the levels in comparison to the year ended March 31, 2025. Financial instruments which are measured using the fair value hierarchy include marketable securities, which are categorized as Level 1. The carrying values of cash, restricted cash, receivables, reclamation deposits, accounts payable and accrued liabilities and due to related parties approximate their fair value because of the short-term nature of these instruments. 16. SUBSEQUENT EVENTS Subsequent to December 31, 2025, the Company: i --- ) issued 5,600,000 common shares pursuant to the exercise of warrants. ii) issued 3,215,000 common shares pursuant to the exercise of options. iii) granted 1,000,000 stock options exercisable at $0.08 and expiring on February 17, 2031.