Regulus Resources : Second Quarter Report - Mar 31, 2025

Published: 2025-05-30 13:37:04 ET REG.V

Published on 05/30/2025 at 13:37

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim condensed consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these interim condensed consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.

As at

March 31, 2025

September 30, 2024

ASSETS

Current

Cash and cash equivalents

$ 11,110,775

$ 13,347,664

Receivables

149,285

119,938

Prepaid expenses and deposits

170,929

103,532

Due from related party (Note 6)

42,424

29,727

11,473,413

13,600,861

Long-term investments

702,250

502,250

Property and equipment

841,209

581,088

Exploration and evaluation assets (Note 4)

60,973,871

54,811,319

$ 73,990,743

$ 69,495,518

LIABILITIES AND EQUITY

Current

Accounts payable and accrued liabilities (Notes 6)

$ 1,074,452

$ 546,135

Decommissioning liability

360,476

356,000

1,434,928

902,135

Equity

Capital stock (Note 5)

137,937,764

Accumulated other comprehensive loss

(1,177,306)

(5,516,450)

Share compensation reserve (Note 5)

21,069,375

20,278,315

Deficit

(85,274,018)

(84,106,246)

72,555,815

68,593,383

$ 73,990,743

$ 69,495,518

Nature and continuance of operations (Note 1)

Approved by the Board: Director:

Director:

"John Black"

"Mark Wayne"

John Black

Mark Wayne

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

Three months

Ended March 31, 2025

Three months

Ended March 31, 2024

Six months

Ended March 31, 2025

Six months

Ended March 31, 2024

EXPENSES

Accounting and audit

$ 72,630

$ 31,560

$ 152,541

$ 113,456

Amortization

25,364

26,418

50,729

44,381

Bank charges and interest

17,911

1,628

35,822

7,011

Insurance

3,548

5,191

8,185

11,515

Investor relations and shareholder information

143,071

70,205

213,228

122,530

Legal (Note 6)

19,603

13,464

36,312

73,786

Management fees (Note 6)

202,208

188,131

397,275

385,333

Office and administration

74,917

147,781

257,148

281,815

Share-based compensation (Notes 5, 6)

319,981

671,952

791,060

958,098

Transfer agent and listing fees

66,904

74,105

78,039

83,025

Travel

12,021 13,864 46,752 28,238

(958,158)

(1,244,299)

(2,067,091)

(2,109,188)

OTHER ITEMS

Gain on foreign exchange

356,799

330,980

727,884

227,673

Write-off of receivables

(65,684)

(55,028)

(119,290)

(176,503)

Interest income 136,245 216,207 290,725 430,073

LOSS FOR THE PERIOD

(530,798)

(752,140)

(1,167,772)

(1,627,945)

Items that may be reclassified subsequently to profit and loss:

Change in fair market value of long-term investment

440,000

62,250

200,000

(6,750)

Items that will not be reclassified subsequently

to profit and loss:

Translation adjustment

(324,806)

1,156,224

4,139,144

(218,727)

Comprehensive income (loss) for the period

$(415,604)

$ 466,334

$ 3,171,372

$ (1,853,422)

Loss per common share - basic and diluted

$ (0.00)

$ (0.01)

Weighted average number of common shares 124,658,818

124,517,015

124,658,818

124,514,273

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

(Unaudited - Prepared by Management) (Expressed in Canadian Dollars)

Number of

Capital Stock

Accumulated

Other Comprehensive

Loss

Share Compensation

Reserve

Deficit

Total

Balance, September 30, 2023

124,508,818

$ 137,721,097

$ (5,612,177)

$ 17,873,116

$ (79,894,554)

$ 70,087,482

Share issued on exercise of options

150,000

205,859

(60,859)

145,000

Share-based compensation

958,098

Fair value adjustment to long-term investment

(6,750)

Foreign exchange adjustment

(218,727)

Loss for the period

(1,627,945)

Balance, March 31, 2024 124,658,818 $ 137,926,956 $ (5,837,654) $ 18,770,355 $ (81,522,499) $ 69,337,158

Balance, September 30, 2024

124,658,818

$ 137,937,764

$ (5,516,450)

$ 20,278,315

$ (84,106,246)

$ 68,593,383

Share-based compensation

791,060

Fair value adjustment to long-term investment

200,000

Foreign exchange adjustment

4,139,144

Loss for the period

(1,167,772)

Balance, March 31, 2025

124,658,818

$ 137,937,764

$ (1,177,306)

$ 21,069,375

$ (85,274,018)

$ 72,555,815

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

Regulus Resources Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - Prepared by Management)

(Expressed in Canadian Dollars)

For the Six Months Ended March 31,

2025

2024

Cash Flows from Operating Activities

Loss for the period

$ (1,167,772)

$ (1,627,945)

Items not affecting cash: Amortization

50,729

44,381

Share-based compensation

791,060

958,098

Write-off of receivables

119,290

176,503

Unrealized foreign exchange

(227,673)

Changes in non-cash working capital items: Receivables

(145,299)

(181,282)

Prepaid expenses and deposits

(67,275)

4,027

Accounts payable and accrued liabilities

182,435

(214,077)

Due from related party

(12,697)

(20,262)

Net cash and cash equivalents used in operating activities (249,529) (1,088,230)

Acquisition of property and equipment

(1,179)

Lease payments

(34,397)

Exploration and evaluation assets

(1,981,170)

(1,459,437)

Decommissioning liability payments

(129,199)

Net cash and cash equivalents used in investing activities

(1,981,170)

(1,624,212)

Cash Flows from Financing Activities

Share issued on exercise of options

145,000

Net cash provided by financing activities

145,000

Effect of foreign exchange on cash and cash equivalents

(6,190)

42,055

Change in cash and cash equivalents for the period

(2,236,889)

(2,525,387)

Cash and cash equivalents, beginning

13,347,664

18,423,544

Cash and cash equivalents, ending

$ 11,110,775

$ 15,898,157

Supplemental disclosures with respect to cash flows (Note 7)

Regulus Resources Inc. ("Regulus" or the "Company") is a mineral exploration company formed on December 16, 2010.

The Company is domiciled and incorporated in Canada, and its registered and records office is located at 15th Floor, Bankers Court, 850 -2nd St SW Calgary, Alberta T2P 0R8.

The Company owns interests in multiple mineral titles and claims in Peru. The recoverability of amounts shown for exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves and confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements and to complete the development of properties, and upon future profitable production or proceeds from the disposition thereof. At the date of these interim condensed consolidated financial statements, the Company has not been able to identify a known body of commercial grade ore on any of its exploration and evaluation assets. The ability of the Company to realize the costs it has incurred to date on these exploration and evaluation assets is dependent upon the Company being able to identify a commercial ore body, to finance its exploration costs and to resolve any environmental, regulatory or other constraints which may hinder the successful development of the exploration and evaluation assets. To date, the Company has not earned revenues and is considered to be in the exploration stage. As at March 31, 2025 the Company had working capital of $10,038,485 (September 30, 2024 - $12,698,726). Management believes that the Company has sufficient working capital to maintain its operations and activities for the next fiscal year.

At the date of these interim condensed consolidated financial statements, the Company has not been able to identify a known body of commercial grade ore on any of its exploration and evaluation assets. The ability of the Company to realize the costs it has incurred to date on these exploration and evaluation assets is dependent upon the Company being able to identify a commercial ore body, to finance its exploration costs and to resolve any environmental, regulatory or other constraints which may hinder the successful development of the exploration and evaluation assets. To date, the Company has not earned revenues and is considered to be in the exploration stage.

The Company's business may be affected by changes in political and market conditions, such as interest rates, availability of credit, inflation rates, changes in laws, and national and international circumstances. Recent geopolitical events, including, relations between NATO and the Russian Federation regarding the situation in Ukraine, the ongoing conflict in the Middle East and potential economic global challenges, such as the risk of higher inflation and interest rates, may create further uncertainty and risk with respect to the prospects of the Company's business.

These interim condensed consolidated financial statements were authorized by the audit committee and approved by the board of directors of the Company on May 30, 2025.

These interim condensed consolidated financial statements, including comparatives have been prepared using accounting policies consistent with IFRS Accounting Standards ("IFRS") and as issued by the International Accounting Standards Board ("IASB").

The interim condensed consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, these interim condensed consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.

The preparation of these interim condensed consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the interim condensed consolidated financial statements and the reported expenses during the year. Actual results could differ from these estimates.

Judgments

In the process of applying the Company's accounting policies, management has made the following judgments which have the most significant effect on the amounts recognized in the interim condensed consolidated financial statements:

Functional currencies

The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and its subsidiaries was determined by conducting an analysis of the consideration factors identified in IAS 21, the Effects of Changes in Foreign Exchange Rates. The functional currency of each entity is disclosed below under "Foreign Exchange".

Impairment of exploration and evaluation assets

Determining if there are any facts and circumstances indicating impairment loss or reversal of impairment losses is a subjective process involving judgment and a number of estimates and interpretations. Determining whether to test for impairment of exploration and evaluation assets requires management's judgment, and consideration of whether the period for which the Company has the right to explore in the specific area has expired or will expire in the near future, and is not expected to be renewed; substantive expenditure on further exploration and evaluation of mineral resources in a specific area is neither budgeted nor planned; exploration for and evaluation of mineral resources in a specific area have not led to the discovery of commercially viable quantities of mineral resources and the Company has decided to discontinue such activities in the specific area; or sufficient data exists to indicate that, although a development in a specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

Estimates

Significant estimates, made by management, about the future and other sources of estimation uncertainty at the end of the reporting period that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made relate to, but are not limited to, the following:

Carrying value and recoverability of exploration and evaluation assets

The carrying amount of Company's exploration and evaluation assets does not necessarily represent present or future values and the Company's exploration and evaluation assets have been accounted for under the assumption that the carrying amount will be recoverable. Recoverability is dependent on various factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development and upon future profitable production or disposition of the mineral properties. Additionally, there are numerous geological, economic, environmental and regulatory factors and uncertainties that could affect management's assessment of the overall viability of its properties or to the likelihood of generating future cash flows necessary to recover the carrying value of the Company's exploration and evaluation assets.

To the extent that any of management's assumptions change there could be a significant effect on the Company's future financial position, operating results and cash flows.

Fair value of stock options and warrants

Determining the fair value of warrants and stock options requires judgments related to the choice of a pricing model, the estimation of stock price volatility, the expected forfeiture rate and the expected term of the underlying instruments. Any changes in the estimates or inputs utilized to determine fair value could result in a significant effect on the Company's future operating results or on other components of shareholders' equity.

Income taxes

The estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the Company's ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income, which in turn is dependent upon the successful discovery, extraction, development or commercialization of mineral reserves. To the extent that management's assessment of the Company's ability to utilize future tax deductions changes, the Company would be required to recognize more or fewer deferred tax assets and deferred income tax provisions or recoveries could be affected.

Decommissioning costs

Upon retirement of the Company's exploration and evaluation assets, decommissioning costs will be incurred by the Company. Estimates of these costs are subject to uncertainty associated with the method, timing and extent of future decommissioning activities. The liability, the related asset and the corresponding expense are affected by estimates with respect to the costs and timing of decommissioning.

Basis of consolidation

These interim condensed consolidated financial statements include the financial statements of the Company and the entities controlled by the Company (Note 6). Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the interim condensed consolidated financial statements from the date that control commences until the date that control ceases. All intercompany transactions and balances have been eliminated.

Foreign exchange

The functional currency is the currency of the primary economic environment in which the entity operates and is determined for each entity within the Company. The functional currency for the entities within the Company are: the Canadian dollar for the parent and the United States dollar ("US$") for Southern Legacy Minerals Inc., Regulus Resources Peru S.A.C., KoriAnta S.A.C., Anta Norte S.A.C., SMRL El Sinchao de Cajamara and Centaurus Holding S.A.C. The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates.

Transactions in currencies other than the entities' functional currency are recorded at exchange rates prevailing on the dates of the transactions. At the end of each reporting period, monetary assets and liabilities of an entity that are denominated in foreign currencies are translated at the rate of exchange at the consolidated statement of financial position date while non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at the exchange rates approximating those in effect on the date of the transactions. At the end of each reporting period, functional currency is translated into presentation currency at the period end rate. Exchange gains and losses arising on translation are included in the consolidated statements of operations and comprehensive (loss) income.

The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited annual consolidated financial statements as at September 30, 2024. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended September 30, 2024

Title to exploration and evaluation assets involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mining properties. The Company has investigated title to its exploration and evaluation assets and, to the best of its knowledge, title to its property is in good standing.

The exploration and evaluation assets in which the Company has an interest are located in Peru therefore, the Company is relying on title opinions by legal counsel who are basing such opinions on the laws of Peru.

EXPLORATION AND EVALUATION ASSETS (cont'd…)

AntaKori,

Peru

Balance, September 30, 2023

$ 51,723,583

Additions:

Change in estimates related to decommissioning liability

93,600

Field operations

1,782,513

Labour

1,081,407

Third party services

136,439

3,093,959

Foreign exchange movement

(6,223)

Balance, September 30, 2024

$ 54,811,319

Additions:

Field operations

1,384,784

Labour

621,399

Third party services

71,355

2,077,538

Foreign exchange movement

4,085,014

Balance, March 31, 2025

$ 60,973,871

The Company has acquired the AntaKori project through the execution of option agreements between its 100% owned subsidiary, Regulus Resources Peru S.A.C. ("Regulus Peru"), and various land owners. Option payments in the amount of US$7,460,062 were completed by the year ended September 30, 2017, with no payments remaining.

During the year ended September 30, 2017, the Company finalized the execution of a definitive agreement (the "Colquirummi DA") with Compañía Minera Colquirrumi S.A. ("Colquirrumi"), which holds mineral concessions immediately adjacent to, and inter-fingering with the Company's AntaKori project.The Colquirummi DA allowed the Company to earn-in to a 70% interest in ground held by Colquirrumi by completing 7,500 m of drilling within 3 years from obtaining necessary permits to drill. The Company received the drilling permits in Q4-2019. The agreement assigned certain mining concessions to the Company's Peruvian subsidiary, Anta Norte S.A.C., to allow for exploration work to be performed on those claims by the Company during the term of the agreement. Upon notification that the Company had completed 7,500 m of drilling and elected to obtain a 70% interest in the property, Colquirrumi had a one-time option (the "Claw-back Option") to claw-back to a 70% interest in the property (leaving 30% to the Company) by paying the Company the sum of US$9,000,000. During the year ended September 30, 2023, the Company notified Colquirrumi that it had completed the 7,500 m of drilling and Colquirummi decided not to exercise its Claw-back Option, leaving the Company with a 70% interest in the property. During the year ended September 30, 2024, the Company executed a further agreement with Colquirrumi (the "Second Colquirummi Agreement") to acquire the remaining 30% interest in the property in exchange for granting Colquirummi a 2% net smelter return royalty ("NSR") (the "Colquirummi NSR"), of which 0.5% can be repurchased within 10 years in exchange for US$1,000,000. The Second Colquirrumi Agreement replaced the Colquirummi DA.

In addition to the Colquirummi NSR, the Company is subject to paying NSRs ranging from 0.1875% - 2% to underlying holders of the AntaKori claims. As at September 30, 2024, accounts payable include $nil (2024 - $nil) relating to these royalties.

During the year ended September 30, 2024, the Company executed a collaboration agreement (the "Coimolache MOU") with Compañía Minera Coimolache S.A. ("Coimolache") to evaluate the viability of an integrated Coimolache Sulphides/AntaKori copper-gold project.

The evaluation will consist of a mineral resource estimate ("MRE") with the option, upon mutual agreement of the parties following the completion of the MRE, to complete a preliminary economic assessment. Costs of the evaluation program will be split with the Company paying 50% and Coimolache paying 50%.

During the year ended September 30, 2021, the Company closed a previously announced strategic partnership whereby it agreed to grant certain rights to Osisko Gold Royalties Ltd. ("Osisko") in exchange for an upfront cash payment (the "Upfront Payment") of US$12,500,000 ($16,198,751). These rights include the following: (i) in the event Regulus acquires any existing royalties within the current AntaKori project area or within a 1 km area of interest surrounding the project on claims owned 100% by Regulus, Osisko has the option to acquire 50% of the acquired royalty by paying 75% of the Company's purchase price for the royalty; (ii) Osisko will have a right of first refusal on all future royalty or stream transactions in relation to claims on the AntaKori project where the Company has 100% ownership, or on any additional claims the Company might acquire with 100% ownership within the area of interest described above; and

should the Company receive a royalty or stream as consideration for the sale of AntaKori, Osisko will have a right of first refusal should the Company later choose to sell that royalty or stream. Under the Osisko agreement, Osisko elected to acquire 50% of a royalty on the Mina Volare claim of the AntaKori project, which represents a 1.5% or 3% NSR, depending on location royalty, for 75% of the Company's purchase price for the royalty, with Osisko's acquisition cost for the royalty included in the Upfront Payment. The Company has retired the remaining 50% of the royalty. As such, the Royalty on the Mina Volare claim is now reduced to a 0.75% or 1.5%, depending on location, in favour of Osisko. In addition, the Company issued Osisko 5,500,000 warrants having a term of three years and an exercise price equal to $2.25 per share. The Company recorded a fair value of $1,177,236 for the 5,500,000 warrants to share compensation reserve, and the residual value of the remaining consideration to $15,021,515 to exploration and evaluation assets. The warrants were valued using the Black-Scholes pricing model with the following assumptions: term of 3 years; expected volatility of 62.33%; risk-free rate of 0.30%; and expected dividends of Nil. These warrants expired December 1, 2023.

During the year ended September 30, 2023, the Company and Osisko amended the agreement for additional royalties whereby the Company received a $6,903,000 (US$ 5,000,000) investment from Osisko Gold Royalties in exchange for an NSR ranging from 0.125% to 1.5% on certain claims of the Company's AntaKori project as well as a right held by to buy back a 1% NSR from a third party on certain claims of AntaKori.

The parties agreed that the obligations of the Company would be secured by the following:

a pledge of all the shares in the capital of Regulus Resources Peru S.A.C. ("Regulus Peru");

an assignment by the Company and Southern Legacy Minerals, Inc. of all intercompany loans and other amounts owing by Regulus Peru; and

a fiduciary trust or first mortgage in respect of the royalty and any surface rights or other rights relating thereto. The trust or mortgage is expected to be created in fiscal 2025, at which time the share pledge referred to above will terminate.

During the year ended September 30, 2021, the Company entered into an option agreement whereby the Company can earn up to a 60% interest in certain claims from Gold Fields La Cima S.A., a subsidiary company of Gold Fields Ltd (the "GF Claims").

The terms of the option agreement are summarized as follows:

The Company can earn a 60% interest in the GF Claims by incurring US$3,500,000 in exploration expenditures over a 3-year term, including completing at least 2,500 m of diamond drilling and producing a 43-101 resource estimate incorporating the GF Claims. Upon completion, the Company and Gold Fields will form a joint venture with the Company having a 60% interest and Gold Fields a 40% interest. The 3-year term commences on the earlier of the date on which the Company receives all necessary drill program permits or within 2 years of the date of assignment of the concessions. The concessions were assigned on December 14, 2022 and the 3 year term commenced on December 14, 2024.

Upon formation of the joint venture, Gold Fields will have a 60-day window to decide if they wish to acquire an additional 20% interest in the joint venture (the "Claw Back Right"), bringing their total interest to 60% and the Company's position to 40%, in exchange for:

A cash payment of US$7,500,000 to be paid to the Company.

Sole funding US$5,000,000 in exploration commitments over a 5-year period.

Upon finalizing the ownership structure of the joint venture, both parties will be required to fund their respective portions towards future exploration activities, and standard dilution policies will apply.

Any party that dilutes below a 10% interest in the joint venture will effectively relinquish their pro rata ownership and will maintain a 1.5% Net Smelter Return Royalty ("NSR") interest, 0.5% of which can be bought back by the other party for US$2,500,000 within 60 days of the announcement of commercial production on the property.

If Gold Fields exercises its Claw Back Right, the Company will maintain a right to expand a mining operation from its existing claims onto the GF Claims (the "Development Right") subject to the general principle that it does not interfere with current or planned mining activities of the joint venture at the time.

Upon exercising the Development Right, the Company would pay the joint venture a 5% NSR (effectively a 3% NSR payable to Gold Fields, and a 2% NSR payable to the Company) for any minerals processed from the GF Claims.

In addition, the Company would be responsible for all development costs, all operating costs, and all environmental and closure costs (closure costs and environmental costs for any stand-alone mining operation on the GF claims, would be paid by the joint venture).

The Development Right will also be available to the Company if Gold Fields does not exercise its Claw-Back Right, with a 5% NSR payable by the Company to the joint venture (effectively 2% NSR payable to Gold Fields and 3% NSR payable to the Company) on any minerals processed from the GF Claims, and the Company will be responsible for all development costs, all operating costs and all environmental and closure costs.

The Company holds a 0.5% NSR on the Fireweed project located in central British Columbia, Canada The royalty will increase to 1.5% upon the pay out of an underlying 2% NSR to a third party, which is capped at $5,000,000.

There were no share transactions for the period ended March 31, 2025.

During the year ended September 30, 2024, the Company issued 150,000 shares for total proceeds of $145,000 on the exercise of options.

The Company has a stock option plan (the "Plan") for directors, officers, employees and consultants of the Company and its subsidiaries. The number of common shares subject to the stock options granted under the Plan is limited to 10% of the issued and outstanding common shares of the Company. The Plan provides for a maximum term of five years for stock options and sets the most favorable vesting terms as one-third of the total stock options granted on the day of the grant and on each of the first and second anniversaries of the date of grant.

The following table summarized movements in stock options outstanding for the period ended March 31, 2025:

Number of Options

Weighted Average Exercise Price

Balance, September 30, 2023

11,375,000

$ 1.28

Options granted

5,475,000

0.92

Options Exercised

(150,000)

0.97

Options expired/forfeited

(5,425,000)

1.61

Balance, September 30, 2024 and March 31, 2025

11,275,000

0.95

Number of options currently exercisable

8,537,500

$ 0.97

The Company recognizes compensation expense for all stock options granted and vested using the fair value based method of accounting. During the period ended March 31, 2025, the Company recognized $791,060 (2024 - $958,098) in share-based compensation expense with respect to options granted and vested during the period.

The following table summarizes information about stock options outstanding at March 31, 2025:

Exercise Price Number Outstanding Number Exercisable Expiry Date

$ 0.86

1,450,000

June 29, 2025

1.49

200,000

October 19, 2025

0.89

200,000

April 13, 2026

0.76

100,000

July 22, 2027

1.02

3,850,000

February 6, 2028

0.93

50,000

25,000

January 23, 2029

0.92

5,225,000

2,612,500

February 6, 2029

0.92

200,000

100,000

March 4, 2029

11,275,000

8,537,500

The following weighted average assumptions were used for the Black-Scholes valuation of stock options granted:

Period ended Year ended

March 31, 2025 September 30, 2024

Risk-free interest rate

Expected life of grant

3.53%

5 years

Volatility

68.01%

Dividend

0.00%

Weighted average fair value per option

$0.57

Warrants

The following table summarizes movements in warrants outstanding.

Number of Warrants

Weighted Average Exercise Price

Balance, September 30, 2023

5,500,000

$ 2.25

Warrants expired/forfeited

(5,500,000)

2.25

Balance September 30, 2024 and March 31, 2025

$ -

The interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries listed in the following table:

Name of Subsidiary

Country of Incorporation

Proportion of

Ownership Interest Principal Activity

Southern Legacy Minerals Inc.

USA

100%

Holding company

Regulus Resources Peru S.A.C.

Peru

100%

Mineral exploration

KoriAnta S.A.C.

Peru

100%

Holding company

Anta Norte S.A.C.

Peru

99.90%

Mineral exploration

Centaurus Holding S.A.C.

Peru

100%

Holding company

During the period ended March 31, 2025, the Company entered into the following transactions with key management personnel and related parties.

Double Black Diamond Resources LLC. ("DBD Resources") is a private company controlled by Mr. John Black, CEO and a director of the Company. For the period ended March 31, 2025, DBD Resources was paid $124,827 (2024 - $118,335). Amounts paid to DBD Resources are classified as management fees expense in the condensed consolidated interim statements of profit and loss.

At March 31, 2025, the Company owed $Nil (September 30, 2024 - $nil) to DBD Resources.

$54,950) for legal services. Legal fees paid to Mr. Pickmann's law firm are classified as legal expenses in the interim condensed consolidated statements of profit and loss.

At March 31, 2025, the Company owed $Nil (September 30, 2024 - $Nil) to Mr. Pickmann and owed $nil (September 30, 2024 -

$970) to the law firm at which Mr. Pickmann was a partner.

Unicus Funds Ltd. ("Unicus") is a private company controlled by Mr. Mark Wayne, CFO and a director of the Company. For the period ended March 31, 2025, Unicus was paid $40,625 (2024 - $37,500). Amounts paid to Unicus are classified as management fees expense in the interim condensed consolidated statements of profit and loss.

At March 31, 2025, the Company owed $Nil (September 30, 2024 - $ Nil) to Unicus.

$101,430). Amounts paid to K.B. Heather are classified as management fees in the interim condensed consolidated statements of profit and loss.

At March 31, 2025, the Company owed $Nil (September 30, 2024 - $Nil) to K.B. Heather.

At March 31, 2025, the Company was owed $42,424 (September 30, 2024 - $29,727) from Aldebaran Resources Inc., a company with common directors and management.

The Company holds 1,000,000 common shares (September 30, 2024 - 2,000,000 common shares) of Highway 50 Gold Corp. ("HWY"), a company with a director in common, included within long term investments. HWY consolidated its share capital on a 2:1 basis in February 2025.

Key Management Personnel: Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company's Board of Directors.

The remuneration of directors and other members of key management personnel during the period ended March 31, 2025 and 2024 are as follows:

Fees and Bonus

Share-based

Benefits

Total

Period ended March 31, 2025

Chief Executive Officer

$ 124,827

$ 116,906

$ 241,733

Chief Geological Officer

106,995

115,911

222,906

Chief Financial Officer

40,625

115,911

156,536

Chief Operating Officer

124,827

115,911

240,738

Non-executive directors

64,454

$ 397,274

$ 529,093

$ 926,367

Period ended March 31, 2024

Chief Executive Officer

$ 118,335

$ 135,479

$ 253,814

Chief Geological Officer

101,430

130,214

231,644

Chief Financial Officer

37,500

130,214

167,714

Chief Operating Officer

118,335

130,214

248,549

Non-executive directors

88,205

$ 375,600

$ 614,326

$ 989,926

Other than disclosed elsewhere in these interim condensed consolidated financial statements, the significant non-cash transactions for the period ended March 31, 2025 and 2024 included:

$360,365 (2024 - $581,029) in accounts payable and accrued liabilities related to exploration and evaluation assets.

$200,000 increase (2024 - $6,750 decrease) in fair value of long-term investment.

The Company operates under one segment, that being the exploration and development of exploration and evaluation assets. Geographical information is as follows:

Total Assets

Property and Equipment

Exploration and Evaluation Assets

Other Assets

March 31, 2025 Canada

$ 12,059,755

$ -

$ 12,059,755

Peru

61,930,988

841,209

60,973,871

115,908

$ 73,990,743

$ 841,209

$ 60,973,871

$ 12,175,663

Total Assets

Property, Plant and Equipment

Exploration and Evaluation Assets

Other Assets

September 30, 2024

Canada

$ 13,842,236

$ -

$ 13,842,236

Peru

55,653,282

581,088

54,811,319

260,875

$ 69,495,518

$ 581,088

$ 54,811,319

$ 14,103,111

2025 2024

Loss for the period ended March 31

Canada

$ 760,695

$ 1,374,325

Peru

407,077

253,620

$ 1,167,772

$ 1,627,945

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 - Inputs that are not based on observable market data.

The fair value of the Company's cash and cash equivalents, receivables, due from related parties, and accounts payable and accrued liabilities approximate carrying value, which is the amount recorded on the interim condensed consolidated statements of financial position. The Company's long-term investments, under the fair value hierarchy, are based on level one quoted prices in active markets for identical assets or liabilities.

The Company is exposed to varying degrees to a variety of financial instrument related risks:

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.

The Company's cash is held at large Canadian financial institutions in interest-bearing accounts. The Company has no investment in asset backed commercial paper.

The Company's receivables consist mainly of tax credits and advances receivable. The Company does not believe it is subject to significant credit risk.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at March 31, 2025, the Company had a cash balance of $11,110,775 to settle current liabilities of $1,434,928. Management believes that it has sufficient funds to meet its current liabilities as they become due.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

Interest rate risk

The Company has cash balances. The interest earned on the cash balances approximates fair value rates, and the Company is not at significant risk to fluctuating interest rates.

Foreign currency risk

The Company is exposed to foreign currency risk on fluctuations related to cash, receivables and accounts payable and accrued liabilities that are denominated in US$, the Chilean peso ("C-Peso") and the Peruvian nuevo sol ("PEN"). A 10% fluctuation in the US$, PEN against the Canadian dollar would affect accumulated other comprehensive loss for the period by approximately $1,010,000.

Price risk

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company. The Company currently maintains investments in certain publicly listed companies. There can be no assurance that the Company can exit these positions if required resulting in proceeds, which approximate the carrying amount of these investments. A 10% fluctuation in market prices would not have a significant affect on comprehensive (loss) income.

Capital management

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 exploration and development of its exploration and evaluation assets, acquire additional mineral property interests and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes components of shareholders' equity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or dispose of assets or adjust the amount of cash and investments. The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company's approach to capital management during the period ended March 31, 2025.

General

The following Management Discussion and Analysis ("MD&A") of Regulus Resources Inc. (the "Company" or "Regulus") has been prepared by management, in accordance with the requirements of National Instrument 51-102 ("NI 51-102") as of March 30, 2025 and should be read in conjunction with the interim condensed consolidated financial statements for the six months ended March 31, 2025, the audited consolidated financial statements for the years ended September 30, 2024 and 2023, the related notes contained therein, and all other disclosure documents of the Company. The information contained herein is not a substitute for detailed investigation or analysis on any particular issue. The information provided in this document is not intended to be a comprehensive review of all matters and developments concerning the Company. The Company is presently a "Venture Issuer" as defined in NI 51-102. Additional information relevant to the Company's activities can be found on SEDAR+ at https://www.sedarplus.ca and the Company's website at https://www.regulusresources.com.

All financial information in this MD&A has been prepared in accordance with IFRS Accounting Standards ("IFRS"), and all dollar amounts are quoted in Canadian dollars, the reporting currency of the Company, unless specifically noted.

Management is responsible for the preparation and integrity of the financial statements, including the maintenance of appropriate information systems, procedures, and internal controls and to ensure that information used internally or disclosed externally, including the financial statements and MD&A, is complete and reliable. The Company's Board of Directors follows recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders. The Board of Directors' audit committee meets with management quarterly to review the financial statements including the MD&A and to discuss other financial, operating and internal control matters.

Description of Business and Overview

Regulus was formed in December 2010 in connection with the sale of Antares Minerals Inc. to First Quantum Minerals Ltd. Regulus is managed by the Antares team responsible for the discovery of the Haquira East porphyry copper deposit, which led to the sale of Antares. The goal of the Company is to discover and de-risk a large-scale deposit that could ultimately be sold to a major mining company, like what was achieved with Antares. Regulus was initially established to continue exploration at its Rio Grande Au-Cu-Mo porphyry project in northern Argentina. The Company put the Rio Grande project on hold in 2012 in response to challenging market conditions and began pursuing opportunities for new mineral projects with good potential for significant discoveries. In September 2014, the Company completed a merger with Southern Legacy Minerals Inc. The primary objective of the merger was to acquire the AntaKori Cu-Au project in northern Peru, which is now the flagship project for Regulus. The AntaKori project is located in a region with several large-scale gold and copper mines and deposits and adjacent to two operating mines (Tantahuatay and Cerro Corona). In March 2019, the Company released an updated NI 43-101 resource for AntaKori containing Indicated Resources of 250 million tonnes with a copper grade of 0.48%, gold grade of 0.29 grams per tonne and silver grade of 7.5 grams per tonne, and Inferred Resources of 267 million tonnes with a copper grade of 0.41%, gold grade of 0.26 grams per tonne and silver grade of 7.8 grams per tonne. Management is confident that further work will expand the current deposit to a size that will be of interest to major mining companies. In November 2018, all of the Company's assets in Argentina, including the Rio Grande project, were transferred to Aldebaran Resources Inc. as part of a "spin-out" transaction by way of a statutory plan of arrangement.

Significant Events from October 1, 2024 to the Date of this Report

In October 2024, the Company announced that it had executed an agreement with Compañia Minera Colquirrumi S.A. ("Colquirrumi") dated effective August 26, 2024 to acquire the remaining 30% interest in the Colquirrumi claims that the Company did not already own (see news releases dated February 15, 2023 and October 10, 2024 and "Outlook for 2025" section below").

In November 2024, the Company announced that it has engaged the services of ICP Securities Inc. ("ICP") to provide automated market making services, including use of its proprietary algorithm, ICP Premium™, in compliance with the policies and guidelines of the TSX Venture Exchange and other applicable legislation. ICP will be paid a monthly fee of C$7,500, plus applicable taxes (see news release dated November 4, 2024).

In May 2025, the Company provided an update on the Phase 2 metallurgical test program with Nuton LLC ("Nuton"), a Rio Tinto venture. In addition, the Company provided an update on the integrated resource estimate currently being completed with Compañía Minera Coimolache S.A., to evaluate the integrated Coimolache Sulphide/AntaKori copper-gold project (see news release dated May 20, 2025).

Outlook for 2025

Regulus is continuing to pursue various pathways to unlock value at the AntaKori deposit. The Company currently believes the best pathway forward is to integrate the AntaKori deposit with the neighbouring Tantahuatay mine and sulphide project. As the Company actively pursues these opportunities, work continues on several fronts to set the stage for the development of the project in the most efficient and profitable manner for the benefit of all stakeholders. This work is influenced by input from major companies that are engaged with Regulus to review the

AntaKori project. As previously disclosed, Regulus and Nuton (a Rio Tinto venture) are jointly undertaking copper sulphide leach testing utilizing NutonTMcopper sulphide leach technologies with samples from the AntaKori project. In November 2023, the Company delivered samples to Nuton to begin the Phase 2 metallurgical program. The Phase 2 program is designed to expand on the results from Phase 1 and refine the understanding regarding metallurgical recoveries for various styles of mineralization.

Samples were selected and composited from each of the main mineralization styles at the AntaKori project: high sulphidation, skarn and porphyry. A total of eight composite samples were taken totaling 1,448.7 kg (see news release dated November 7, 2023). All samples were taken from Regulus drill hole core stored in the Company's Cajamarca warehouse. The samples were shipped to SGS laboratories in Lima Peru for further sample preparation according to Nuton specifications and protocols, under the supervision of Transmin Metallurgical Consultants S.A.C. Upon completion of sample preparation at SGS Lima, a small representative sample split was sent to Nuton for detailed chemical and mineralogical analyses of each of the composite samples before commencement of the main Phase 2 column test work. Chemical and mineralogical data will be used to predict column test results.

The remaining prepared samples were shipped from SGS Lima to Nuton's test facilities in Bundarra, Australia for Phase 2 test work, which entails samples being placed in columns with a height of 1 m, each under different controlled Nuton operating conditions. A total of seven one-metre columns are currently in progress and two columns have been completed. The Company has received inflight results on four columns. Three of the four columns were focused on testing different Nuton technology conditions for enargite-rich high-sulphidation style mineralization, while the other column was utilized to test chalcopyrite-dominant porphyry mineralization. The results thus far from the Phase 2 program are very encouraging, as Nuton was able to achieve attractive copper extractions utilizing its Nuton bio-leaching technology on both styles of mineralization. As well, this test work has refined the understanding of which set of conditions produces attractive copper extractions for enargite-rich high-sulphidation mineralization. To date, the highest copper extraction for enargite-rich high-sulphidation mineralization is 88.3%. To date, the highest copper extraction for porphyry-hosted chalcopyrite mineralization is 87.9%. As mentioned previously, this phase of test work is designed to evaluate various conditions to establish the optimum additives for bio-leaching enargite-rich high-sulphidation mineralization. As such, two of the columns identified conditions that produced slower extraction rates and hence less favourable conditions than the column conditions that produced the 88.3% extraction. However, copper extractions in both of these columns continue to trend upwards. Four additional columns have since been started to further refine the optimal conditions achieved and reported here for leaching AntaKori's enargite-rich high-sulphidation mineralization with Nuton's bio-leaching technology. The Company will report on these additional columns when they are at or nearing completion.

The Company continues to complete exploration activities to the east, north and northwest of the main AntaKori project area. Surface geologic mapping, surface rock geochemical sampling and ground magnetic geophysical surveys were completed in 2023 immediately to the east of the Tantahuatay Mine in the Tingo community. Negotiations are underway to allow IP/Resistivity geophysical surveys to be initiated. The goal of this work is to augment the mapping and geochemical work completed, with the goal of delineating potential targets in these areas that could warrant follow-up drilling. The Tingo area has extensive historic small-scale mine workings but relatively little modern exploration. This work is being completed on Regulus mineral concessions and on ground held by Goldfields, where Regulus has an agreement to earn-in to a 60% interest. Work to the north and northwest of the main AntaKori project area has also identified areas with potential for additional mineralization, and surface access agreements were recently established and preliminary geologic mapping, geochemical sampling and a ground magnetic geophysical survey were completed in H2-2024. Permitting is underway to allow for the drill testing of more promising areas to the east, north and northwest of the main AntaKori project area in 2025, if warranted.

The Phase II drill program that was completed at the end of 2022 consisted of 34 holes totalling 31,664.99 m of drilling. The results of Phase II were reported in 2022 and 2023. The program was undertaken as a step toward completing an updated resource estimate at AntaKori. The timing of the resource update may be impacted by the Company's property consolidation efforts and accordingly, an estimated timeline for completing an updated resource estimate cannot be provided.

The Company is also significantly engaged with local communities to complete programs and projects that emphasize improving education, health, and economic opportunity in the area surrounding the project. The number of communities and families that are positively impacted by these programs increased notably during 2023 and will continue to do so as AntaKori moves towards potential development.

In July 2024, the Company executed an agreement with Compania Minera Coimolache S.A. ("Coimolache") (the "Collaboration Agreement") to evaluate the viability of an integrated Coimolache Sulphides / AntaKori copper-gold project (the "Integrated Sulphide Project"). The evaluation will consist of a mineral resource estimate ("MRE") with the option, upon mutual agreement of Regulus and Coimolache (the "Parties") following the completion of a MRE, to complete a preliminary economic assessment ("PEA"). Costs of the evaluation program will be split with Regulus paying 50% and Coimolache paying 50%. The Parties have worked collaboratively over the past several months to develop an integrated geological model effectively blending views on geology, structure, and mineralization styles, which was a critical step before moving towards an integrated resource estimate. The Parties have hired SRK Peru to develop the resource estimate on the Integrated Sulphide Project, and it is anticipated that the study will be completed mid-year. The results of the MRE and PEA can only be publicly released or shared with third parties upon mutual agreement of the Parties.

In October 2024, the Company announced that it had executed an agreement with Colquirrumi to acquire the remaining 30% interest in the Colquirrumi claims that the Company did not already own. In exchange for the remaining 30% interest, Regulus has granted Colquirrumi a

2% NSR over the Colquirrumi claims, of which 0.5% can be repurchased within 10 years in exchange for US$ 1 Million. The Colquirrumi claims represent approximately 2,571 hectares of mineral rights adjacent to and interfingered with Regulus' AntaKori property. Less than 5% of the Colquirrumi claims have been properly explored, however, several encouraging mineralized areas were discovered in Regulus' previous drill programs.

The only firm commitments for the AntaKori project in 2025 include 2025 annual concession fees of US$230,000 and remediation maintenance and monitoring costs estimated at US$65,000. The Company is also responsible for developing and implementing a plan to further treat acidic surface waters draining from the Tres Mosqueteros mineral concessions. This obligation is being coordinated with the appropriate government authorities and may eventually become part of a larger multi-party effort to tackle water treatment in the area. The cost for this is currently not well defined but estimated at $250,000 with no current time frame for execution.

Mineral Property Review

This review has been prepared by John Black, CEO and Director of the Company. The scientific and technical data contained in the section has been reviewed and approved by Dr. Kevin B. Heather, BSc (Hons), MSc, PhD, FAusIMM, Chief Geological Officer of the Company, who serves as a qualified person (QP) under the definitions of National Instrument 43-101.

AntaKori Project

The flagship project for Regulus is the AntaKori Cu-Au-Ag project located in northern Peru. A NI 43-101 technical report entitled "AntaKori Project, Cajamarca Province, Peru, NI 43-101 Technical Report" (the "AntaKori Technical Report"), dated February 22, 2019 and prepared by Amec Foster Wheeler (Perú) S. A., a Wood company, was filed on SEDAR and can be viewed at sedarplus.ca under the profile REGULUS RESOURCES INC. The AntaKori Technical Report reports Indicated Resources of 250 million tonnes grading 0.48% Cu, 0.29g/t Au and 7.5g/t Ag, and Inferred Resources of 267 million tonnes grading 0.41% Cu, 0.26g/t Au and 7.8g/t Ag (please refer to Regulus news release of March 1, 2019 and table below). The estimate is based on historical drilling completed by El Misti Gold (1997-98) and Sinchao Metals (2007-08), as well as new drilling completed through November 2018 by Regulus (22,140.89 m in 29 holes) and drilling data provided through a collaborative agreement established in 2017 with the adjoining property holder (see press release by Regulus dated January 24, 2017). The reported resource is only reported for the portion of the mineralization system that is owned or controlled by Regulus and is open for expansion in several directions.

Table 1 - Summary of AntaKori Mineral Resource Estimate at a 0.3% CuEq Cut-off

Resource Category

Million Tonnes

Cu Grade (%)

Au Grade (g/t)

Ag Grade (g/t)

CuEq Grade (%)

Cu B lbs

Au M oz

Ag M oz

CuEq B lbs

Indicated

250

0.48

0.29

7.5

0.74

2.6

2.3

4.1

Inferred

267

0.41

0.26

7.8

0.66

2.4

2.2

3.9

Notes to accompany Indicated and Inferred Mineral Resource table assuming open pit mining methods for AntaKori Project:

Mineral Resources have an effective date of 22 February 2019; Douglas Reid, P. Eng., a Wood employee, is the Qualified Person responsible for the Mineral Resource estimate.

Inputs to costs for cut-off grade assumes a conventional truck and shovel open pit mine handling and feeding a 60,000 t/d concentrator and producing a copper-gold concentrate with arsenic for sale to specialists in concentrate trading, third-party smelters and refineries.

Mineral Resources are reported based on a CuEq cut-off of 0.30% constrained within a pit shell.

Mineral Resources are only reported within Regulus concessions.

CuEq and AuEq grades and metal contents in this table are mutually exclusive and are not additive.

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

Copper price used is US$6,614/t (US$3.00/lb), gold price is US$1,400/oz, silver price is US$18.00/oz.

Assumed metallurgical recoveries: copper 85%, gold 55%, silver 50%.

Assumed pit slope of 45 degrees.

Assumed open pit mining cost of US$1.85/t plus lift charge to average US$2.00/t, processing cost of US$7.18/t, G&A cost US$1.00/t.

AntaKori Overview

The AntaKori project hosts a large Cu-Au-Ag skarn system with associated breccias and porphyry-style mineralization developed in sedimentary and intrusive rocks, with a later overprint of epithermal, high-sulphidation mineralization associated with the overlying Miocene volcanic rocks, and locally a late epithermal, intermediate sulphidation base-metal carbonate style of Au-Cu-Zn mineralization. The project is located 60 km north of the city of Cajamarca in the Hualgayoc District, in a world-class Au-Cu province which hosts a number of nearby deposits, as described below.

Immediately adjacent to the producing Tantahuatay Gold-Silver Mine (Buenaventura-Southern Copper-ESPRO)

7 km to the NW of the Cerro Corona Gold-Copper Mine (Goldfields)

35 km to the NNW of the Yanacocha Gold Mine (Newmont)

40 km to the SE of the La Granja Porphyry Copper deposit (Rio Tinto)

50 km to the NW of the Michiquillay Porphyry Copper deposit (Southern Copper) Highlights of the AntaKori project include the following:

The Company owns or controls 53 mineral concessions, for a total of 3,303 hectares, which cover most, but not all of the currently known AntaKori mineralized system. Further consolidation of mineral tenure is in process, primarily by means of an earn-in agreement with Gold Fields La Cima S.A. ("Gold Fields"), a subsidiary company of Gold Fields Ltd. (see summary of agreement below).

A total of 17,954 m of drilling was completed in 70 drill holes (22 reverse circulation drill holes and 48 diamond drill holes ) by previous operators El Misti Gold (1997-98) and Sinchao Metals (2007-08).

A total of 53,805.88 m of diamond drilling in 63 holes has been completed by Regulus to date.

The AntaKori Technical Report has documented a large Cu-Au-Ag skarn system with associated mineralized breccias and porphyry-style mineralization hosted in sedimentary and intrusive rocks, and associated epithermal, high-sulphidation mineralization in the overlying volcanic rocks.

Indication that the mineralized system is open in several directions and has potential for expansion through future exploration programs.

Access to infrastructure as property is located adjacent to two operating mines.

The scope of the mineralized system at AntaKori offers significant upside potential but additional drilling is required to better define this project.

The AntaKori project has been explored under definitive agreements with Coimolache (the "Coimolache DA" - now terminated) and Colquirrumi (the "Colquirrumi DA" - now terminated), companies that hold mineral concessions immediately adjacent to, and inter-fingering with, Regulus AntaKori mineral concessions. These agreements have allowed for mutual access, mutual rights of expansion and collaborative exploration of the project area, providing benefit to all three parties. Coimolache is a mining company that owns and operates the Tantahuatay gold-silver mine immediately adjacent to the southern margin of AntaKori. The principal shareholders of Coimolache are Buenaventura (40% and operator) and Southern Peru Copper S.A.A. (44%). The Coimolache DA allowed for mutual access, mutual rights of expansion and collaborative exploration with a principal objective of determining the size and nature of the AntaKori deposit and a secondary objective of allowing the expansion of Coimolache's Tantahuatay oxide gold mine by way of lay-back onto Regulus' mining concessions. The Coimolache DA has now terminated but Regulus maintains communication and interaction with Coimolache. Colquirrumi is a wholly owned subsidiary of Buenaventura.

The Colquirrumi DA allowed the Company to earn-in to a 70% interest in ground held by Colquirrumi by completing 7,500 m of drilling within 3 years from obtaining necessary permits to drill. The Company received the drilling permits in Q4-2019. The agreement assigned certain mining concessions to the Company's Peruvian subsidiary, Anta Norte S.A.C., to allow for exploration work to be performed on those claims by the Company during the term of the agreement. Upon notification that the Company had completed 7,500 m of drilling and elected to obtain a 70% interest in the property, Colquirrumi had a one-time option to claw-back to a 70% interest in the property (leaving 30% to the Company) by paying the Company the sum of US$9 million. During the year ended September 30, 2023, Colquirrumi opted not to exercise its clawback option, thereby leaving the Company with a 70% interest in the property. During the year ended September 30, 2024, the Company executed an agreement with Colquirrumi to acquire the remaining 30% interest in the Colquirrumi claims that the Company did not already own. In exchange for the remaining 30% interest, the Company has granted Colquirrumi a 2% NSR over the Colquirrumi claims, of which 0.5% can be repurchased within 10 years for US$1,000,000.

In 2020, the Company entered into an option agreement whereby the Company can earn up to a 60% interest in certain claims ("GF Claims") from Gold Fields (see news release of April 16, 2020). The addition of the GF claims will grow the Company's land position in the AntaKori copper-gold project, will increase future resource estimations via the ability to deepen and pushback the current conceptual resource pit on to these claims, and provide additional exploration opportunities to increase the mineralized footprint at the AntaKori project. The Company can earn a 60% interest in the GF Claims by incurring US$3.5 M in exploration expenditures over a 3-year term, including completing at least 2,500 m of diamond drilling and producing a 43-101 resource estimate incorporating the GF Claims. The 3-year term commences on the earlier of the date on which the Company receives all necessary drill program permits or within 2 years of the date of assignment of the concessions. The concessions were assigned on December 14, 2022 so the 3 year term commenced on December 14, 2024. Upon completion, the Company and Gold Fields will form a joint venture with the Company having a 60% interest and Gold Fields a 40% interest. Upon formation of the joint venture, Gold Fields will have a 60-day window to decide if they wish to acquire an additional 20% interest in the joint venture ("Claw Back Right"), bringing their total interest to 60% and the Company's position to 40%, in exchange for a cash payment of US$7.5 M to be paid to the Company and sole funding US$5 M in exploration commitments over a 5-year period.

Collaboration Agreement - see Outlook for 2025 section above. Operations and Financial Condition

Results of Operations for the Six Months Ended March 31, 2025 Compared to the Six Months Ended March 31, 2024

During the six months ended March 31, 2025, loss from operating activities was $1,167,772 compared to loss from operating activities of

$1,627,945 for the six months ended March 31, 2024. Significant variances from the same period in the prior year are as follows

Share-based compensation was $791,060 for the six months ended March 31, 2025 compared to $958,098 for the six months ended March 31, 2024. The difference is due to options vested and granted in the comparable periods.

During the six months ended March 31, 2025, the Company earned interest income of $290,725 (2024 - $430,073) as the Company had less cash available to invest in various cashable GICs.

A gain of $727,884 on foreign exchange for the six months ended March 31, 2025 compared to a gain of $227,673 for the six months ended March 31, 2024. The difference was mainly the result of fluctuations of the US$, the Peruvian Nuevo Sol and the CAD$.

During the six months ended March 31, 2025, the Company wrote-off receivables of $119,290 (2024 - $176,503) related to Peru's value-added tax. The Company's accounting practice is to write these receivables off until they are actually collected. If and when these receivables are collected, the write-off will be reversed to the extent of such collection.

Results of Operations for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

During the three months ended March 31, 2025, loss from operating activities was $530,798 compared to loss from operating activities of

$752,140 for the three months ended March 31, 2024. Significant variances from the same period in the prior year are as follows:

Share-based compensation was $319,981 for the three months ended March 31, 2025 compared to $671,952 for the three months ended March 31, 2024. The difference is due to options vested and granted in the comparable periods.

During the three months ended March 31, 2025, the Company earned interest income of $136,245 (2024 - $216,207) as the Company had less cash to invest in various cashable GICs.

A gain of $356,799 on foreign exchange for the three months ended March 31, 2025 compared to a gain of $330,980 for the three months ended March 31, 2024. The difference was mainly the result of fluctuations of the US$, the Peruvian Nuevo Sol and the CAD$.

During the three months ended March 31, 2025, the Company wrote-off receivables of $65,684 (2024 - $55,028) related to Peru's value-added tax. The Company's accounting practice is to write these receivables off until they are actually collected. If and when these receivables are collected, the write-off will be reversed to the extent of such collection.

Cash Flow

Operating Activities

Cash outflow from operating activities was $249,529 for the period ended March 31, 2025 compared to $1,088,230 for the period ended March 31, 2024. The change was the cumulative result of several variations in the items affecting cash flow from operations as discussed above under "Results from Operations" plus an increase of $528,317 in accounts payable and accrued liabilities at March 31, 2025 ($1,074,452 vs $546,135 at Secptember 30, 2024).

Investing Activities

Cash outflow from investing activities was $1,981,170 for the period ended March 31, 2025 compared to cash outflow of $1,624,212 for the period ended March 31, 2024, mainly from costs associated with the Company's exploration and evaluation assets.

Financing Activities

Cash inflow from financing activities was $Nil in the period ended March 31, 2025 compared to an inflow of $145,000 for the period ended March 31, 2024. In the comparative period the Company received funds from the exercise of options.

Summary of Quarterly Results

The following is a summary of certain selected financial information for the most recent eight fiscal quarters:

All in $1,000's except loss (gain) per share

March 31,

2025

December 31,

2024

September 30,

2024

June 30,

2024

Working capital

$10,038

$11,797

$12,699

$14,358

Loss

$531

$637

$1,084

$1,499

Loss per share

$0.00

$0.01

Loss per common share (diluted)

$0.00

$0.01

Total assets

$73,991

$73,492

$69,496

$70,106

Total liabilities

$1,435

$841

$902

$910

Deficit

$85,274

$84,743

$84,106

$83,022

March 31,

December 31,

September 30,

June 30,

All in $1,000's except loss (gain) per share

2024

2023

Working capital

$15,374

$15,908

$17,714

$18,835

Loss

$752

$876

$(556)

$1,217

Loss per share

$0.01

$0.00

$0.01

Loss per common share (diluted)

$0.01

$0.00

$0.01

Total assets

$70,367

$69,163

$71,303

$71,628

Total liabilities

$1,029

$1,109

$1,215

$1,508

Deficit

$81,522

$80,770

$79,894

$80,451

Liquidity and Capital Resources

Cash and cash equivalents at March 31, 2025 totaled $11,110,775 compared to $13,347,664 at September 30, 2024. Working capital at March 31, 2025 was $10,038,485 compared to working capital of $12,698,726 as at September 30, 2024.

During the year ended September 30, 2023, the Company completed a $6,903,000 (USD $5M) investment from Osisko Gold Royalties in exchange for a net smelter return (NSR) ranging from 0.125% to 1.5% on certain claims of the Company's AntaKori project as well as the transfer of a right held by the Company to buy back a 1% NSR from a third party on certain claims of AntaKori.

During the year ended September 30, 2023, the Company also closed a $23,112,153 non-brokered private placement of 22,658,974 common shares at a price of $1.02 per common share. No finder's fee was payable in connection with the private placement. Proceeds from the investment are being used for exploration activities at AntaKori and for general corporate purposes.

Exploration and evaluation of assets at March 31, 2025 totaled $60,973,871 compared to $54,811,319 as at September 30, 2024. The Company incurred a total of $2,077,538 in exploration expenditures on the property during the period ended March 31, 2025.

The ability of the Company to recover the costs it has incurred to date on its exploration and evaluation assets is dependent upon the Company being able to finance its exploration and development expenditures and to resolve any environmental, regulatory or other constraints which may hinder the successful exploitation or disposal of its exploration and evaluation assets. To date, the Company has not earned revenues and is considered to be in the exploration stage.

Share Capital

The Company's authorized capital consists of an unlimited number of common shares without par value.

As at March 31, 2025 and as at the date of this report, the Company had 124,658,818 common shares issued and outstanding and the following stock options:

Stock Options

Exercise Price Number outstanding Expiry Date

$ 0.86

1,450,000

June 29, 2025

1.49

200,000

October 19, 2025

0.89

200,000

April 13, 2026

0.76

100,000

July 22, 2027

1.02

3,850,000

February 6, 2028

0.93

50,000

January 23, 2029

0.92

5,225,000

February 6, 2029

0.92

200,000

March 4, 2029

11,275,000

As at March 31, 2025 and as at the date of this report, the Company had no warrants outstanding. Related Party Transactions

During the period ended March 31, 2025, the Company entered into the following transactions with key management personnel and related parties.

At March 31, 2025, the Company owed $Nil (September 30, 2024 - $nil) to DBD Resources.

For the period ended March 31, 2025, Mr. Fernando Pickmann, President, COO and a director of the Company, was paid $124,827 in consulting fees (2024 - $118,335). Amounts paid to Mr. Pickmann are classified as management fees in the condensed consolidated interim statements of profit and loss. A law firm at which Mr. Pickmann was a partner was also paid or accrued $17,317 (2024 - $54,950) for legal services. Legal fees paid to Mr. Pickmann's law firm are classified as legal expenses in the interim condensed consolidated statements of profit and loss.

At March 31, 2025, the Company owed $Nil (September 30, 2024 - $Nil) to Mr. Pickmann and owed $nil (September 30, 2024 - $970) to the law firm at which Mr. Pickmann was a partner.

At March 31, 2025, the Company owed $Nil (September 30, 2024 - $ Nil) to Unicus.

K.B. Heather & Socios Limitada (The Rock Doctor Limitada) ("K.B. Heather") is a private company controlled by Dr. Kevin B. Heather, Chief Geological Officer of the Company. For the period ended March 31, 2025, K.B. Heather was paid $106,995 (2024 - $101,430). Amounts paid to K.B. Heather are classified as management fees in the interim condensed consolidated statements of profit and loss.

At March 31, 2025, the Company owed $Nil (September 30, 2024 - $Nil) to K.B. Heather.

At March 31, 2025, the Company was owed $42,424 (September 30, 2024 - $29,727) from Aldebaran Resources Inc., a company with common directors and management.

The remuneration of directors and other members of key management personnel during the period ended March 31, 2025 and 2024 are as follows:

Fees and Bonus

Share-based

Benefits

Total

Period ended March 31, 2025 Chief Executive Officer

$ 124,827

$ 116,906

$ 241,733

Chief Geological Officer

106,995

115,911

222,906

Chief Financial Officer

40,625

115,911

156,536

Chief Operating Officer

124,827

115,911

240,738

Non-executive directors

64,454

$ 397,274

$ 529,093

$ 926,367

Period ended March 31, 2024

Chief Executive Officer

$ 118,335

$ 135,479

$ 253,814

Chief Geological Officer

101,430

130,214

231,644

Chief Financial Officer

37,500

130,214

167,714

Chief Operating Officer

118,335

130,214

248,549

Non-executive directors

88,205

$ 375,600

$ 614,326

$ 989,926

Financial and Capital Risk Management

Please refer to the March 31, 2025 interim condensed consolidated financial statements on https://www.sedarplus.ca.

Recent Accounting Policies

Please refer to the September 30, 2024 consolidated financial statements on https://www.sedarplus.ca.

Proposed Transactions

There are no proposed transactions that have not been disclosed herein.

The users of this information, including but not limited to investors and prospective investors, should read it in conjunction with all other disclosure documents provided including but not limited to all documents filed on SEDAR+ (https://www.sedarplus.ca).

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements. Critical Accounting Estimates

The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual reports could differ from management's estimates.

Contingencies

There are no contingent liabilities.

Internal Controls Over Financial Reporting

Changes in Internal Control over Financial Reporting ("ICFR")

In connection with National Instrument 52-109, Certification of Disclosure in Issuer's Annual and Interim Filings ("NI 52-109") adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer and Chief Financial Officer of the Company

will file a Venture Issuer Basic Certificate with respect to financial information contained in the unaudited interim financial statements and the audited annual financial statements and respective accompanying Management's Discussion and Analysis. The Venture Issue Basic Certification does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI52-109.

Other MD&A Requirements

Additional disclosure of the Company's technical reports, material change reports, news releases and other information can be obtained on SEDAR+ at https://www.sedarplus.ca.

Disclosure for Venture Issuers without Significant Revenue

A breakdown of the components of the Company's general and administrative expenses is disclosed in the interim condensed consolidated financial statements for the period ended March 31, 2025 to which this MD&A relates. A breakdown of the components of the exploration and evaluation assets of the Company is disclosed in the interim condensed consolidated financial statements for the period ended March 31, 2025 to which this MD&A relates.

The operations of the Company are speculative due to the high-risk nature of its business which includes the acquisition, financing, exploration, development and operation of mining properties. There are a number of factors that could negatively affect the Company's business and the value of its common shares, including the factors listed below. The following information pertains to the outlook and conditions currently known to the Company that could have a material impact on the financial condition of the Company. Other factors may arise that are not currently foreseen by management of the Company that may present additional risks in the future. Current and prospective security holders of the Company should carefully consider these risk factors, as they could materially affect the Company's future operations and could cause actual events to differ materially from those described in forward-looking statements relating to the Company.

The more significant risks, as they relate to the Company's interim condensed consolidated financial statements for the period ended March 31, 2025 and this MD&A, include the following.

Exploration and Development Risk

The Company's properties are in the exploration stage and are without a known body of commercial ore. Exploration for mineral resources involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. The risks and uncertainties inherent in exploration activities include but are not limited to: legal and political risk arising from operating in certain developing countries, civil unrest, general economic, market and business conditions, the regulatory process and actions, failure to obtain necessary permits and approvals, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management's capacity to execute and implement its future plans. Discovery of mineral deposits is dependent upon a number of factors, not the least of which are the technical skills of the exploration personnel involved and the capital required for the programs. The cost of conducting programs may be substantial and the likelihood of success is difficult to assess. There is no assurance that the Company's mineral exploration activities will result in any discoveries of new bodies of commercial ore. There is also no assurance that even if commercial quantities of ore are discovered that a new ore body would be developed and brought into commercial production. The commercial viability of a mineral deposit once discovered is also dependent upon a number of factors, some of which are the particular attributes of the deposit (such as size, grade, metallurgy and proximity to infrastructure and labour), the interpretation of geological data obtained from drilling and sampling, feasibility studies, the cost of water and power; anticipated climatic conditions; cyclical metal prices; fluctuations in inflation and currency exchange rates; higher input commodity and labour costs, commodity prices, government regulations, including regulations relating to prices, taxes, royalties, land tenure and use, allowable production, importing and exporting of minerals, and environmental protection. Most of the above factors are beyond the control of the Company. Development projects will also be subject to the successful completion of final feasibility studies, issuance of necessary permits and other governmental approvals and receipt of adequate financing. The exact effect of these factors cannot be accurately predicted, but the combination of any of these factors may adversely affect the Company's business.

Negative Operating Cash Flow

The Company is an exploration stage company and has not generated cash flow from operations. The Company is devoting significant resources to the development and acquisition of its properties; however, there can be no assurance that it will generate positive cash flow from operations

in the future. The Company expects to continue to incur negative consolidated operating cash flow and losses until such time as it achieves commercial production at a particular project. The Company currently has negative cash flow from operating activities.

Mineral Resource Estimates

The Company's reported mineral resources are estimations only. No assurance can be given that the estimated mineral resources will be recovered. By their nature, mineral resource estimations are imprecise and depend, to a certain extent, upon statistical inferences, which may ultimately prove unreliable because, among other factors, they are based on limited sampling, and, consequently, are uncertain because the samples may not be representative. mineral resource estimations may require revision (either up or down). There are numerous uncertainties inherent in estimating mineral resources, including many factors beyond the Company's control. Such estimation is a subjective process, and the accuracy of any mineral resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. There can be no assurance that recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions. In particular, factors that may affect mineral resource estimates include:

changes in interpretations of mineralization geometry and continuity of mineralization zones;

input parameters used in the Whittle shell that constrains the mineral resources amenable to open pit mining methods;

metallurgical and mining recoveries;

operating and capital cost assumptions;

metal price and exchange rate assumptions;

confidence in modifying factors, including assumptions that surface rights to allow infrastructure to be constructed will be forthcoming;

delays or other issues in reaching agreements with local or regulatory authorities and stakeholders;

changes in land tenure requirements or permitting requirements from those discussed in the report; and

changes in the environmental regulations or laws governing the property.

Changes in key assumptions and parameters could result in a restatement of mineral resource estimates. mineral resources that are not mineral reserves do not have demonstrated economic viability and there is no assurance that they will ever be mined or processed profitably. Due to the uncertainty which may attach to mineral resources, there is no assurance that all or any part of Measured or Indicated mineral resources will ever be converted into mineral reserves. Any material reductions in estimates of mineral resources could have a material adverse effect on the Company's results of operations and financial condition.

Title Risk

The Company has investigated its right to explore and exploit its properties and, to the best of its knowledge, those rights are in good standing. The results of the Company's investigations should not be construed as a guarantee of title. Other parties may dispute the title to a property, or the property may be subject to prior unregistered agreements or liens and transfers or land claims by aboriginal, native, or indigenous peoples. The title may be affected by undetected encumbrances or defects or governmental actions. The Company has not conducted surveys of all of its properties, and the precise area and location of claims or the properties may be challenged and no assurances can be given that there are no title defects affecting such properties. Any defects in the title to the Company's properties could have a material and adverse effect on the Company.

No assurance can be given that applicable governments will not revoke or significantly alter the conditions of the applicable exploration and mining authorizations nor that such exploration and mining authorizations will not be challenged or impugned by third parties. Although the Company has not had any problem renewing its licenses in the past there is no guarantee that it will always be able to do so. Inability to renew a license could result in the loss of any project located within that license.

Foreign Operations Risk

The Company conducts exploration activities in Peru. Operating in a foreign country exposes the Company to risks that may not otherwise be experienced if all operations were located in Canada. The risks vary from country to country and for Peru in particular include, but are not limited to, civil unrest or war, terrorism, illegal mining, changing political conditions, fluctuations in currency exchange rates, expropriation or nationalization without adequate compensation, changes to royalty and tax regimes, high rates of inflation, labour unrest and difficulty in understanding and complying with the regulatory and legal framework respecting ownership and maintenance of mineral properties. Changes in mining or investment policies or shifts in political attitudes may also adversely affect the Company's existing assets and operations. Real and perceived political risk may also affect the Company's ability to finance exploration programs and attract joint venture or option partners, and future mine development opportunities.

Numerous countries have introduced changes to mining regimes that reflect increased government control or participation in the mining sector, including, but not limited to, changes of law affecting foreign ownership, mandatory government participation, taxation and royalties, exploration licensing, export duties, and repatriation of income or return of capital. There can be no assurance that industries, which are deemed

of national or strategic importance in countries in which the Company has assets, including mineral exploration, will not be nationalized. There is a risk that further government limitations, restrictions or requirements, not presently foreseen, will be implemented. Changes in policy that alter laws regulating the mining industry could have a material adverse effect on the Company. There can be no assurance that the Company's assets in these countries will not be subject to nationalization, requisition or confiscation, whether legitimate or not, by an authority or body.

In addition, in the event of a dispute arising from foreign operations, the Company may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction of courts in Canada. The Company also may be hindered or prevented from enforcing its rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity. It is not possible for the Company to accurately predict such developments or changes in laws or policy or to what extent any such developments or changes may have a material adverse effect on the Company.

Metal Price Risk

The Company's portfolios of properties and investments have exposure to predominantly copper, gold, and silver. Commodity prices fluctuate widely and are affected by numerous factors beyond the Company's control, such as the sale or purchase of metals by various central banks and financial institutions, interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of major metals-producing and metals-consuming countries throughout the world. The prices of these metals greatly affect the value of the Company, the price of the common shares of the Company and the potential value of its properties and investments. This, in turn, greatly affects its ability to form joint ventures, option agreements and the structure of any joint ventures formed. This is due, at least in part, to the underlying value of the Company's assets at different metal prices.

Uncertainty of Funding

The exploration and development of mineral properties requires a substantial amount of capital and depends on the Company's ability to obtain financing through joint ventures, debt financing, equity financing or other means. General market conditions, volatile metals prices, a claim against the Company, a significant disruption to the Company's business, or other factors may make it difficult to secure the necessary financing. There is no assurance that the Company will be successful in obtaining required financing as and when needed on acceptable terms. Failure to obtain any necessary additional financing may result in delaying or indefinite postponement of exploration or development or even a loss of property interest. If the Company needs to raise additional funds, such financing may substantially dilute the interests of shareholders of the Company and reduce the value of their investment. Recent geopolitical events, including relations between NATO and the Russian Federation regarding the situation in Ukraine, the ongoing conflict in the Middle East, and potential economic global challenges such as the risk of higher inflation and interest rates, may create further uncertainty and risk with respect to the prospects of the Company's business.

Future Offerings of Debt or Equity Securities

The Company may require additional funds to finance further exploration, development and production activities, or to take advantage of unanticipated opportunities. If the Company raises additional funds by issuing additional equity securities, such financing would dilute the economic and voting rights of the Company's shareholders. Since the Company's capital needs depend on market conditions and other factors beyond its control, it cannot predict or estimate the amount, timing or nature of any such future offering of securities. Thus, holders of common shares of the Company bear the risk of any future offerings reducing the market price of the common shares and diluting their shareholdings in the Company.

Currency Risk

The Company transacts business in a number of currencies including but not limited to the Canadian Dollar, the US Dollar, and the Peruvian Nuevo Sol. Fluctuations in exchange rates may have a significant effect on the cash flows of the Company. Future changes in exchange rates could materially affect the Company's results in either a positive or a negative direction. The Company does not currently engage in foreign currency hedging activities.

Social License

The ability to carry out exploration programs on our mineral claims in Peru is conditional on the Company obtaining all the necessary permits, which usually requires the Company to engage with the local communities to obtain their consent. There can be no assurance that the Company will always be able to obtain these consents when requested. Even when all necessary consents are obtained, there is still a risk that local opposition might arise which could hinder the Company's ability to carry out its intended exploration programs. The Company attempts to mitigate these risks by following all required protocols and by maintaining a robust program of engagement with local communities, which often includes social benefit programs funded by the Company.

Internal Controls

Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation.

Information Systems and Cyber Security

The Company's operations depend on information technology ("IT") systems. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyberattacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company's operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company's reputation and results of operations. Although to date the Company has not experienced any material losses relating to cyber attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company's risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

Corruption and Bribery

The Company is required to comply with anti-corruption and anti-bribery laws, including the Canadian Extractive Sector Transparency Measures Act, the Canadian Corruption of Foreign Public Officials Act and the U.S. Foreign Corrupt Practices Act, as well as similar laws in the countries in which the Company conducts its business. If the Company finds itself subject to an enforcement action or is found to be in violation of such laws, this may result in significant penalties, fines and/or sanctions imposed on the Company resulting in a material adverse effect on the Company. The Company has adopted a comprehensive Anti-Corruption Policy in order to mitigate this risk.

Competition

There is aggressive competition within the mining industry for the discovery and acquisition of properties considered to have commercial potential, as well as the necessary labour and supplies required to develop such properties. The Company competes with other exploration and mining companies, many of which have greater financial resources, operational experience and technical capabilities than the Company, for the acquisition of mineral claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees and other personnel. The Company may not be able to maintain or acquire attractive mining properties on terms it considers acceptable, or at all. Consequently, its financial condition could be materially adversely affected.

Uninsurable Risks

Exploration, development and production operations on mineral properties involve numerous risks, including unexpected or unusual geological operating conditions, rock bursts, cave-ins, fires, floods, earthquakes and other environmental occurrences, as well as political and social instability. It is not always possible to obtain insurance against all such risks and the Company may decide not to insure against certain risks because of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any further profitability and result in increasing costs and a decline in the value of the securities of the Company. The Company does not maintain insurance against political risks.

Environmental Risks

It is possible that future regulatory developments, such as increasingly strict environmental protection laws, climate change policies, regulations and enforcement policies, and claims for damages to property and persons resulting from the Company's operations, could result in additional costs and liabilities, restrictions on or suspension of the Company's activities and delays in the exploration of and development of its properties.

The physical effects of climate change, which may include extreme weather events, resource shortages, changes in rainfall and storm patterns, water shortages and extreme weather events, may have an adverse effect on our operations. Events or conditions such as flooding or inadequate water supplies could disrupt exploration activities and rehabilitation efforts, could create resource shortages and could damage our property or equipment and increase health and safety risks on our properties. Such events or conditions could also have other adverse effects on our operations, our workforce and on the local communities surrounding our properties, such as an increased risk of food, water scarcity and civil unrest.

Disclaimer

Regulus Resources Inc. published this content on May 30, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 30, 2025 at 17:36 UTC.