10. LOAN PAYABLE

a) Eridanus loan

		Loan Payable
Balance, July 31, 2023	$	1,437,914
Interest expense		299,228
Accretion expense		120,918
Repayment		(200,000	)
Balance, July 31, 2024	$	1,658,060
Interest expense		179,759
Accretion expense		139,667
Issuance costs		(154,351	)
Loss on settlement of loan		24,089
Repayment		(1,847,224	)
Balance, July 31, 2025		-

On September 3, 2019, the Company completed a debt financing with Eridanus Capital LLC ("Eridanus") for $1,000,000. The Eridanus loan has a term of 4 years and an annual interest rate of 10% for the first two years increasing to 20% in year 3 and to 25% in year 4. Interest will accrue and be paid along with the principal upon the maturity date. Eridanus received 1,150,000 bonus share purchase warrants as additional consideration for advancing the Eridanus loan. The fair value of these warrants was calculated to be $444,942 which was netted against the loan payable balance along with $15,000 paid to the lender for a total of $459,942 in issuance costs. Each warrant entitles the holder to acquire one share of common stock at an exercise price of $0.80 (C$1.00) for a period of three years from the date of issuance. The Eridanus loan may be repaid prior to the maturity date, in whole or in part, provided that all accrued interest is paid. In addition, if total interest payments are less than $200,000, the difference will be paid to the Lender as prepayment compensation. The Eridanus loan is secured against the assets of the Company and its subsidiary.

In February 2023, the Company renegotiated its debt agreement with Eridanus whereby the Company agreed to pay $250,000 applied against unpaid and accrued interest and issue 575,000 share purchase warrants to Eridanus. The maturity date of the Eridanus loan has been extended by one year to September 4, 2024 and the interest rate has been reduced to 15% compounding monthly for a period of 12 months after which it reverts to 25% per annum, compounding monthly. The renegotiation of the debt was accounted for as a non - substantial debt modification.

Accordingly, no gain or loss was recorded and a new effective interest rate of 32.67% was established based on the carrying value of the debt and the revised cash flow. Each warrant entitles the holder to acquire one share at an exercise price of $0.60 for a period of two years from the date of issuance. The fair value of these warrants was calculated to be $154,218 which was netted against the loan payable balance.

In September 2024, the Company amended its debt agreement with Eridanus to extend an existing loan by one year to September 4, 2025, along with a reduction in interest rate to 15% per annum for a period of 12 months commencing September 4, 2024. Given that the renegotiation of the debt resulted in a change of the present value of the cash flow of less than 10%, the transaction has been recorded as a non-substantial debt modification for accounting purposes. The Company issued 1,700,000 share purchase warrants at an exercise price of US$0.115 to Eridanus as consideration for the extension. The share purchase warrants have a 4 year expiry period from the date of issuance. The fair value of these warrants was calculated to be $154,351 which was netted against the loan payable balance.

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants:

	September 12, 2024

Risk-free interest rate	2.72%
Expected life of warrants	4 years
Expected annualized volatility	133.99%
Share price at grant date	$0.11
Exercise price	$0.115
Fair value	$0.091
Dividend	Nil
Forfeiture rate	0%

In May 2025, the Company repaid the entire balance of the Eridanus loan.

b) Myrmikan loan

On October 10, 2024, the Company finalized a secured loan agreement with Myrmikan Gold Fund, LLC ("Myrmikan") for a $500,000 loan which will be used for the Company's working capital. The Myrmikan loan has a term of 4 years with an interest rate of 15% per annum with interest accruing and payable along with the principal upon maturity. The Company issued 2,882,514 share purchase warrants at an exercise price of $0.1735 with a 4 year expiry period as additional consideration for advancing the Myrmikan loan. The fair value of these warrants was calculated to be $334,423 which was netted against the loan payable balance. The Myrmikan loan may be repaid prior to the maturity date, in whole or in part, provided that all accrued interest is paid. The Myrmikan loan will be secured against the assets of the Company and its subsidiary.

Balance, July 31, 2024	$	-

Proceeds		500,000
Interest expense		47,346
Accretion expense		45,573
Issuance costs		(334,423	)
Loss on settlement of loan		288,850
Repayment		(547,346	)
Balance, July 31, 2025	$	-

In May 2025, the Company repaid the entire balance of the Myrmikan loan.

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants:

	October 10, 2024

Risk-free interest rate	2.98%
Expected life of warrants	4 years
Expected annualized volatility	139.40%
Share price at grant date	$0.14
Exercise price	$0.1735
Fair value	$0.116
Dividend	Nil
Forfeiture rate	0%