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INCOME TAXES

12 Months Ended

Dec. 31, 2025

22.INCOME TAXES

The income tax expense attributable to earnings differs from the amounts computed by applying the combined federal and provincial statutory income tax rate of 26,5% (26.5% in 2024) to loss before income tax as a result of the following:


	December 31, 2025		December 31, 2024
	$		$
Income (loss) before tax	(104,777)		(72,885)
Tax recovery computed at applicable statutory tax rate	26.50	%	26.50	%
Tax expense (recovery) at combined statutory rate	(27,766)		(19,315)
Increase (decrease) in income taxes resulting from:
Temporary difference not recorded	14,253		11,372
Share-based payments	1,178		1,041
Non-deductible expenses	(506)		450
Loss from revaluation of Derivative warrant liability	17,152		6,599
Gain from Derivative warrant liability settlement	(4,280)		—
Mining royalties	400		400
Non-taxable mining duties	(31)		(143)
Other	—		(4)
Income tax	400		400
Composition of deferred income taxes in the income statement:
Taxes payable	400		400
Income tax	400		400

As at December 31, 2025, temporary differences for which the Company has recognized deferred tax assets and liabilities are as follows:


		Recognized in the	Recognized in other	Recognized in
	Opening balance	net earnings	comprehensive income	Equity	Closing balance
Property, plant and equipment and Intangible assets	(6,391)	4,680	—	—	(1,711)
Right-of-use assets	(1,505)	(46)	—	—	(1,551)
Unrealized foreign exchange gain on convertibles notes	—	—	—	—	—
Convertible notes	—	—	—	—	—
Exploration and evaluation expenses	7,896	(4,634)	—	—	3,262

As at December 31, 2025 and 2024, temporary differences and unused tax losses for which the Company has not recognized deferred tax assets are as follows:


		December 31, 2025		December 31, 2024
		$		$
FEDERAL
Exploration and evaluation expenses		124,151		105,607
Property and equipment		(1,709)		(6,385)
Equity investment		2,696		2,821
Asset retirement obligation		1,584		1,462
Share issue expenses		6,135		6,939
Research and development expenses		34,304		27,930
Non-capital losses		175,303		100,290
Capital losses		1,657		964
Unrealized foreign exchange loss on convertible notes		(361)		1,185
Convertible notes		5,337		2,262
Right-of-use assets		(1,550)		(1,504)
Lease liabilities		1,677		1,710
Others		26		23
		349,250		243,304
PROVINCIAL
Exploration and evaluation expenses		120,995		102,451
Property and equipment		(1,710)		(6,385)
Equity investment		2,696		2,821
Asset retirement obligation		1,584		1,462
Share issue expenses		6,135		6,939
Research and development expenses		44,732		36,403
Non-capital losses		169,607		96,643
Capital losses		1,657		964
Unrealized foreign exchange loss on convertible notes		(361)		1,185
Convertible notes		5,337		2,262
Right-of-use assets		(1,550)		(1,504)
Lease liabilities		1,677		1,710
Others		26		23
		350,825		244,974

The ability to realize the tax benefits is dependent upon several factors, including the future profitability of operations. Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable profits will be available to allow the asset to be recovered.

As at December 31, 2025, the Company’s accumulated non-capital losses for tax purposes which can be used to reduce taxable income in future years as follows:


Year incurred		Expiration date		Federal		Provincial
2025		2045		47,994		47,994
2024		2044		27,084		25,035
2023		2043		29,182		27,557
2022		2042		24,043		23,392
2021		2041		19,469		18,562
2020		2040		10,836		10,546
2019		2039		5,381		5,457
2018		2038		4,137		4,044
2017		2037		2,526		2,578
2016		2036		1,544		1,399
2015		2035		873		844
2014		2034		662		644
2013		2033		747		738
2012		2032		765		757
2011		2031		61		59

The Company has investment tax credit carryovers of $7,090 ($5,789 in 2024) that expire between 2036 and 2045, which are available to reduce income taxes payables in future years.

The Company accumulated capital losses for tax purposes of $1,657 ($964 in 2024) which can be used to reduce capital gains in future years.