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MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Endeavour Silver Corp.

 

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of Endeavour Silver Corp. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive earnings (loss), changes in shareholders' equity, and cash flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and its financial performance and its cash flows for each of the years then ended, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2026 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 

Fair value measurement of mineral properties, plant and equipment acquired in the acquisition of Minera Kolpa. (“Kolpa Acquisition”)

As discussed in Note 4 to the consolidated financial statements, on May 1, 2025, the Company acquired 100% of the issued and outstanding shares of Minera Kolpa. The Kolpa Acquisition was accounted for as a business combination. The total purchase price of $134.3 million was allocated to the identifiable assets acquired and liabilities assumed based on their acquisition-date fair values. The Company recognized the acquisition-date fair value of mineral properties, plant and equipment of $192.1 million. The fair value of mineral properties was estimated using a discounted cash flow model.  Significant inputs used in determining the fair value of mineral properties include estimates of the appropriate discount rate, future silver, lead, zinc and copper prices (“future metal prices”), expected future production, and anticipated operating costs.

We identified the evaluation of the fair value measurement of the mineral properties acquired in the Kolpa Acquisition as a critical audit matter. A high degree of auditor judgment was required to evaluate the inputs used to estimate the acquisition-date fair value of the mineral properties. Significant assumptions used in the determination of the fair value of the mineral properties included estimates of the appropriate discount rate, future metal prices, expected future production and operating costs. Changes in any of these assumptions could have had a significant effect on the determination of the fair value measurement of the mineral properties acquired.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company's process to determine the fair value measurement of the mineral properties acquired in the Kolpa Acquisition. This included controls over the Company’s development of the significant assumptions used to estimate the fair value of the acquired mineral properties. We evaluated the reasonableness of the operating costs by comparing them to historical information. We evaluated the competence, experience, and objectivity of qualified persons who provided the estimate of future production.  We involved valuation professionals with specialized skills and knowledge, who assisted in (1) assessing the future metal prices by comparing to third party estimates; and (2) evaluating the discount rate by comparing to an estimate independently developed using publicly available third-party sources.

 

/s/ KPMG LLP

Chartered Professional Accountants

We have served as the Company's auditor since 1994.

Vancouver, Canada

February 27, 2026

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Endeavour Silver Corp.

 

Opinion on Internal Control Over Financial Reporting

We have audited Endeavour Silver Corp.’s (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of December 31, 2025 and 2024, the related consolidated statements of comprehensive earnings (loss), changes in shareholders' equity, and cash flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2026 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Compañia Minera Kolpa S.A during 2025, and management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2025, Compañia Minera Kolpa S.A’s internal control over financial reporting associated with 19% of total assets, 28% of net assets, 24% of total revenues, and (12%) of net income (loss) included in the consolidated financial statements of the Company as of and for the year ended December 31, 2025. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Compañia Minera Kolpa S.A.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

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Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

/S/ KPMG LLP

Chartered Professional Accountants

Vancouver, Canada

February 27, 2026 

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ENDEAVOUR SILVER CORP.   |   CONSOLIDATED FINANCIAL STATEMENTS

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ENDEAVOUR SILVER CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2025 and 2024 (expressed in millions of US dollars, unless otherwise stated)

Management periodically reviews the carrying values of its exploration and evaluation assets with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of reserves, forecasts of future metal prices, forecasts of future costs of exploring, developing and operating a producing mine, expiration term and ongoing expense of maintaining leased mineral properties and the general likelihood that the Company will continue exploration. The Company does not set a pre-determined holding period for properties with unproven reserves. However, properties which have not demonstrated suitable mineral concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted and their carrying values are recoverable.

If any area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are recognized in earnings (loss) in the period of abandonment or determination that the carrying value exceeds its fair value. The amounts recorded as mineral properties represent costs eligible for capitalization incurred to date and do not necessarily reflect present or future values.

(f) Provision for reclamation and rehabilitation

The Company recognizes provisions for statutory, contractual, constructive or legal obligations associated with the decommissioning and reclamation of mineral properties, plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. A liability is recognized at the time environmental disturbance occurs and the resulting costs are capitalized to the corresponding asset. The provision for reclamation and rehabilitation obligations is estimated using expected cash flows based on engineering and environmental reports prepared by third-party industry specialists and is discounted at a pre-tax rate specific to the liability. The capitalized amount is amortized on the same basis as the related asset. 

In subsequent periods, the liability is adjusted for any changes in the amount or timing of the estimated future cash costs, changes in the discount or inflation rates, and for the accretion of discounted underlying future cash flows. The unwinding of the effect of discounting the provision is recorded as a finance cost in earnings (loss) for the period.

(g) Derivative financial instruments

The Company may hold derivative financial instruments to hedge its risk exposure to fluctuations in commodity prices and other currencies against the US Dollar and may also recognize embedded derivatives that are separated from host contracts when their economic characteristics are not closely related to those of the host instrument. Derivative financial instruments are measured at fair value at each reporting period. All derivative instruments are classified as financial instruments at fair value through profit or loss. Changes in fair value of non-hedging derivative financial instruments are included in earnings (loss).

(h) Revenue recognition

Revenue is generated from the sale of refined silver and gold or from the sale of these metals contained in doré or concentrate. Revenue for doré is recorded in the consolidated statement of comprehensive earnings (loss) gross of treatment and refining costs paid to counterparties under the terms of the sales agreements. Revenue for concentrate is recorded in the consolidated statement of comprehensive earnings (loss) net of treatment and refining costs paid to counterparties under the terms of the sales agreements. Revenue is recognized when control of the metal is transferred to the customer in an amount that reflects the consideration the Company expects to receive in exchange for the metals. In determining whether the Company has satisfied its performance obligation, it considers the indicators of the transfer of control, which include but are not limited to, whether: the Company has a present right to payment; the customer has a legal title to the asset; the Company has transferred physical possession of the asset to the customer; and the customer controls the risks and rewards of ownership of the asset. 

Revenue from metals in doré

The refiners who receive doré from the Company refine the materials on the Company's behalf. The refiners transfer the refined product to customers according to the Company's instructions. Refined metals are sold at spot prices with sales proceeds collected upon or within several days of the completion of the sales transaction. Revenue from the sale of doré is recognized at the time a metal sale is executed and the Company has irrevocably directed the refiner to deliver the refined metal to the customer.

 

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Revenue from metals in concentrate
Metals in concentrate are sold under pricing arrangements where final prices are determined by market prices subsequent to the date of sale. Revenue from the sale of concentrates is provisionally priced at the date control transfers. On transfer, the Company recognizes revenue on a provisional basis based on current prices and at each period end, re-estimated prices based on period end closing prices for the estimated month of settlement. The final selling price is subject to movements in metal prices up to the final settlement date. Revenue is initially recognized based on the estimated mineral content then adjusted to final settlement adjustments. Final settlement periods range from two to six months after delivery of the product. 

Variations between the sales price recorded at the initial recognition date and the actual final sales price at the settlement date, caused by changes in market metal prices, result in an embedded derivative in the related trade accounts receivable. For each reporting period until final settlement, period end closing prices are used to record revenue. The embedded derivative is recorded at fair value each period until final settlement occurs, with changes in fair value classified as an adjustment to revenue.

Precious metal prepayment obligations

Precious metal prepayments obligation represents the Company's obligation to transfer goods or services to a customer for which consideration has been received. Prepayments obligations arise primarily from advance payments received in respect of future deliveries of metals. Precious metal prepayments obligation is recognized when payment is received by the Company and is subsequently recognized as revenue when the related performance obligations to deliver metal are satisfied. The Company classifies precious metal prepayments obligation as current and does not adjust it for the effects of a significant financing component when the timing of payment and performance is less than one year.

(i) Share-based payments

The Company has a stock option plan and a share unit plan which are described in Note 13 (c) and Note 13 (d), respectively. The share unit plan permits the grant of Performance Share Units ("PSU"s), Deferred Share Units ("DSU"s) and Restricted Share Units ("RSU"s), to its directors, officers, employees.

Equity-settled share-based payment awards to employees and directors, including stock options and RSUs, are measured by reference to the fair value of the equity instruments granted and are charged over the vesting period using the graded vesting method. The amount recognized as an expense is adjusted to reflect the actual number of stock options for which the related service and vesting conditions are met. Equity-settled share-based payment awards to non-employees are measured at the fair value of the goods or services received as the goods or services are received, unless that fair value cannot be measured reliably, in which case they are measured by reference to the fair value of the equity instrument. The offset is credited to contributed surplus. Consideration received on the exercise of stock options or upon the settlement of RSUs through the issuance of common shares is recorded as share capital and the related contributed surplus is transferred to share capital. For those options or RSUs that expire or are forfeited after vesting, the amount previously recorded in contributed surplus is transferred to deficit.

Share-based compensation expense relating to cash-settled awards, including deferred share units and share appreciation rights which are described in Note 13 (e) and Note 13 (f), is recognized over the vesting period of the units based on the fair market value of the units. As these awards will be settled in cash, the expense and liability are adjusted each reporting period for changes in the fair value.

(j) Income taxes

Income tax expense (recovery) comprises current and deferred tax. It is recognized in earnings (loss) except to the extent that it relates to a business combination, or items recognized directly in equity or other comprehensive income.

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

The Company follows the asset and liability method of accounting for deferred income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax losses carried forward. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings (loss) in the period that includes the substantive enactment date. 

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Deferred tax assets are recognized to the extent their recovery is considered probable based on their term to expiry and estimates of future taxable income. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable earnings improve. 

(k) Earnings per share

The Company uses the treasury stock method for calculating diluted earnings per share. Under the treasury stock method, the weighted average number of common shares outstanding used for the calculation of diluted earnings per share assumes that the proceeds to be received on the exercise of dilutive stock options are used to repurchase common shares at the average market price during the year.

(l) Business acquisitions

During the period, the Company completed the acquisition of Minera Kolpa, which was accounted for as a business combination under IFRS 3 Business Combinations (Note 4) using the acquisition method. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of assets transferred, liabilities incurred or assumed, and equity instruments issued by the Company in exchange for control of the acquiree the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred. The identifiable assets acquired, and liabilities assumed are recognized at their fair values as of the acquisition date. Acquisition-related costs are expensed as incurred. The results of Minera Kolpa have been included in consolidated financial statements from May 1, 2025 (the "Acquisition Date").

(m) Financial instruments

The Company recognizes financial assets and financial liabilities on the date the Company becomes party to the contractual provisions of the instruments. On initial recognition, all financial assets and financial liabilities are recorded at fair value, net of attributable transaction costs, except for financial assets and liabilities classified as fair value through profit or loss ("FVTPL").  Transaction costs of financial assets and liabilities classified as FVTPL are expensed in the period in which they are incurred. A financial asset is derecognized either when the Company has transferred substantially all the risks and rewards of ownership of the financial assets or when cash flows expire. A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled, or expired.

On initial recognition, the Company classifies and measures financial assets as either FVTPL, fair value through other comprehensive income ("FVTOCI") or amortized cost. Subsequent measurement of financial assets depends on the classifications of such assets. The basis of classification depends on an entity's business model and the contractual cash flows of the financial asset.

Amortized cost

Financial assets that meet the following conditions are measured subsequently at amortized cost:

• The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and
• The contractual terms of the financial asset provide cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding.

The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount, adjusted for any loss allowance. Interest income is recognized using the effective interest method.

Fair value through profit and loss

All other financial assets are measured at FVTPL.

The Company, at initial recognition, may also irrevocably designate a financial asset as measured at FVTPL if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains or losses on them on a different basis. Financial assets measured at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognized in profit or loss to the extent that they are not part of a designated hedging relationship. Determination of fair value is further described in Note 22. 

ENDEAVOUR SILVER CORP.   |   CONSOLIDATED FINANCIAL STATEMENTS

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ENDEAVOUR SILVER CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2025 and 2024 (expressed in millions of US dollars, unless otherwise stated)

Financial liabilities and equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities. Equity instruments issued by the Company are measured at the proceeds received, net of direct issue costs.

Financial liabilities that are not contingent consideration of an acquirer in a business combination, held for trading or designated as FVTPL, are measured at amortized cost using the effective interest method.

The Company's financial instruments are recognized as:

(n) Convertible debt instruments

Convertible debt instruments are assessed on initial recognition to determine whether they contain a host debt instrument and one or more components that are required to be accounted for separately, including a conversion feature that is classified as equity or as an embedded derivative, and other embedded derivative features such as early redemption, extension, put or call options, contingent settlement features or other contractual terms that may cause the cash flows of the instrument to vary.

Where the conversion feature meets the criteria for equity classification, the instrument is accounted for as a compound financial instrument. The liability component is initially measured at fair value with the residual amount allocated to equity and recognized in contributed surplus. The liability component is subsequently measured at amortized cost using the effective interest method.

Where the conversion feature does not meet the criteria for equity classification, and/or where other embedded derivative features are required to be separated from the host debt instrument the embedded derivative(s) are initially measured at fair value. The host debt liability is subsequently measured at amortized cost using the effective interest method. Embedded derivative assets or liabilities are subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in profit or loss.

Transaction costs directly attributable to the issuance of convertible debt instruments are allocated between the host debt component and any separately recognized components based on their relative initial carrying amounts. Transaction costs allocated to the host debt component are included in the carrying amount of the liability and amortized using the effective interest method. Transaction costs allocated to equity components are recognized as a deduction from equity. Interest expense on the host debt component is recognized using the effective interest method over the expected life of the instrument.

(o) Assets held for sale and discontinued operations

Non-current assets and disposal groups are classified as held for sale when their carrying amounts are expected to be recovered principally through a sale transaction rather than through continuing use. Classification as held for sale occurs when the disposal group is available for immediate sale in its present condition, management has committed to a plan to sell, and the sale is considered highly probable within one year.

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Upon classification as held for sale, the disposal group is measured at the lower of its carrying amount and fair value less costs to sell. Any resulting impairment loss is recognized in profit or loss. Property, plant and equipment and mineral properties included in a disposal group classified as held for sale are not depreciated or depleted while classified as held for sale. Assets and liabilities of the disposal group are presented separately as current items in the consolidated statement of financial position.

(p) New accounting standards issued but not yet adopted

On April 9, 2024, the IASB issued IFRS 18 Presentation and Disclosure in the Financial Statements ("IFRS 18") replacing IAS 1. IFRS 18 introduces categories and defined subtotals in the statement of profit or loss, disclosures on management-defined performance measures, and requirements to improve the aggregation and disaggregation of information in the financial statements. As a result of IFRS 18, amendments to IAS 7 were also issued to require that entities use the operating profit subtotal as the starting point for the indirect method of reporting cash flows from operating activities and also to remove presentation alternatives for interest and dividends paid and received. Similarly, amendments to IAS 33 "Earnings per Share" were issued to permit disclosure of additional earnings per share figures using any other component of the statement of profit or loss, provided the numerator is a total or subtotal defined under IFRS 18. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027 and is to be applied retrospectively, with early adoption permitted. The Company does not expect the impact of this standard to be material.

In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7). These amendments updated classification and measurement requirements in IFRS 9 Financial Instruments and related disclosure requirements in IFRS 7 Financial Instruments: Disclosures. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. The amendments are effective for annual periods beginning on or after January 1, 2026 with early application permitted. The Company is currently assessing the effect of these amendments on its financial statements.

4. ACQUISITION OF MINERA KOLPA

On the Acquisition Date, the Company completed its acquisition of Minera Kolpa pursuant to a share purchase agreement entered into in April 2025. As a result of the acquisition, Minera Kolpa became a wholly-owned subsidiary of the Company.

The total consideration for the acquisition was $134.3. The following table summarizes the consideration paid as part of the purchase price:

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The contingent payment is payable in cash up to an additional $10.0, in increments of $0.5 for each 1 million silver ounce equivalent defined above 100 million silver ounce equivalents, across proven, probable, measured, indicated and inferred categories in a technical report prepared and filed by the Company with respect to Minera Kolpa within 24 months of the closing of the acquisition.

Primary reason for the acquisition of Minera Kolpa was to acquire their primary asset - Huachocolpa Uno Mine and related facilities, located in the districts of Huachocolpa and Santa Ana, approximately 490 kilometers southeast of Lima, Peru. Minera Kolpa has been in operation for 25 years and its assets include Huachocolpa Uno Mine, processing infrastructure, permits, and associated working capital. Management has concluded that Minera Kolpa constitutes a business, and therefore, the acquisition is accounted for in accordance with IFRS 3 Business Combinations.

The Company has consolidated the operating results, cash flows, and net assets of Minera Kolpa from the Acquisition Date. The determination of the fair value of assets acquired and liabilities assumed is based on a detailed valuation utilizing income, market, and cost approaches, conducted with the assistance of an independent third party. The purchase price is allocated based on management's best estimates at the time these consolidated financial statements were prepared, using information available as of the Acquisition Date.

The following table sets out the allocation of the purchase price to assets acquired and liabilities assumed, based on

management's estimates of fair value:

Allocation of Purchase Price

The gross amount of accounts and other receivables approximates the fair value allocated above, and no significant amounts are expected to be uncollectible. The Company determined the fair value of the mineral properties using a discounted cash flow model. This most significant estimates incorporated in the model were: future silver, lead, zinc, and copper prices; expected future production; and anticipated operating costs. A discount rate of 15.8% was applied, reflecting the Company's assessment of country risk, project-specific risk, and other relevant factors.

The significant assumptions used in the determination of the fair value of the mining interests were as follows:

Unaudited Pro Forma Financial Information

The following unaudited pro-forma financial information presents consolidated results assuming acquisition occurred on January 1, 2025:

ENDEAVOUR SILVER CORP.   |   CONSOLIDATED FINANCIAL STATEMENTS

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ENDEAVOUR SILVER CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 2025 and 2024 (expressed in millions of US dollars, unless otherwise stated)

These pro forma amounts have been calculated after applying the Company's accounting policies and adjusting the results of Minera Kolpa to reflect the additional depreciation and depletion that would have been recognized assuming the fair value adjustments to property, plant, and equipment, and mining properties had been applied from January 1, 2025.

5. ACCOUNTS AND OTHER RECEIVABLES

The trade receivables consist of receivables from concentrate sales. The fair value of receivables arising from concentrate sales contracts that contain provisional pricing mechanisms is determined using the appropriate period end closing prices from the exchange that is the principal active market for the particular metal. As such, these receivables, which meet the definition of an embedded derivative, are classified within Level 2 of the fair value hierarchy (Note 22).

The Company has a loan receivable due in cash payments over a five-year period starting from September 2022, of which $2.8 remains unpaid as of December 31, 2025 (December 31, 2024 - $2.9). As of December 31, 2025, the carrying value of the loan receivable is $2.6 (December 31, 2024 - $2.6), consisting of the current portion of $2.3 (December 31, 2024 - $1.4) and the non-current portion of $0.3 (December 31, 2024 - $1.2). 

6. IVA RECEIVABLES

As at December 31, 2025, total Mexican subsidiaries value added tax, Impuesto al Valor Agregado ("IVA") of $66.8 (December 31, 2024 - $36.4) has been allocated between the current portion of $63.8, and the non-current portion of $3.0 (December 31, 2024 - $5.1 and $31.3, respectively). The non-current portion relates to Pitarrilla's claims which will be eligible for submission upon generation of revenue (December 31, 2024 - $1.9). At December 31, 2024, $29.4 of non-current IVA tax receivables were related to Terronera's claims which have become eligible, have been submitted for reimbursement and have been reclassified to current IVA receivables (December 31, 2024 - $29.3). During the current period, the Company has made a change in presentation within its statement of financial position to separately disclose IVA receivables from other receivables, in order to provide greater clarity and disaggregation of tax-related assets. As a result, the comparative figures for IVA receivables as at December 31, 2024 have been reclassified from other receivables to align with the current period presentation. During 2024, IVA receivables recovered included $4.8 of interest income, which was presented in investment and other income (expense) in the consolidated statement of comprehensive loss.

7.  INVENTORIES

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During the pre-commercial production period, Terronera produced stockpile and finished goods inventory at costs exceeding net realizable value. As a result, the Company recorded an inventory impairment of $1.2, before reaching commercial production. The affected inventory was subsequently sold or consumed during the period and as of December 31, 2025, ending inventory balances are carried at cost as their net realizable value exceeds the carrying amount.

8. MINERAL PROPERTIES, PLANT AND EQUIPMENT AND OTHER NON-CURRENT ASSETS

Following the completion of the commissioning phase of the Terronera Project, the Company assessed the grouping of the fully constructed assets and directly attributable development overhead costs. As a result of this assessment, the Company determined that it was appropriate to group plant and buildings together, as this better reflected the nature of its mine site assets, including those at Terronera. Comparative figures have been re-presented accordingly to align with the revised asset groupings.

Included in mineral properties is $nil for acquisition and development costs of development properties (December 31, 2024 - $157.1). During the period from January 1, 2025, to completion of the commissioning phase and achievement of commercial production on October 1, 2025, the Company capitalized borrowing costs related to the Terronera project construction Debt Facility in the amount of $10.2 (December 31, 2024 - $6.8) using a capitalization rate of 11.1%.

Other non-current assets include $3.2 (December 31, 2024 - $18.3) of deposits related to items of property, plant and equipment at Terronera.

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As of December 31, 2025, the Company has $7.4 committed for capital equipment purchases.

The Company is obliged to make certain royalty payments on its mineral properties. The following table includes the significant royalties payable by the Company as of December 31, 2025:

9. PRECIOUS METAL PREPAYMENTS OBLIGATION

On June 11, 2025, Guanaceví entered into a prepayment agreement with Auramet International Inc.("Auramet") for an initial term ending May 31, 2026.

Under the agreement, Auramet advances prepayments of up to $15.0 to the Company in consideration for the future delivery of the Guanaceví's precious metal. The advances are repaid by deliveries adjusted for the interest equivalent to SOFR plus 3.75%. The Company may draw additional amounts under the agreement once prior amounts are settled.

The prepayments amount received is initially recognized as a revenue contract liability and is subsequently being recognized as revenue as control of the metal transfers to Auramet and the related shipment's performance obligations have been satisfied.

During the year ended December 31, 2025, the Company received $59.7 prepayments, all of which were recognized as revenue, with no remaining revenue contract liability as of December 31, 2025.

10. CONVERTIBLE SENIOR NOTES

On December 4, 2025, the Company completed an offering of $350.0 aggregate principal amount of unsecured convertible senior notes ("the Notes") due in 2031. The Notes bear interest at 0.25% per annum, payable semi-annually, and are convertible at the option of the holder into a fixed number of the Company's common shares at a conversion price defined in the offering agreement. The Company used the net proceeds from the offering to repay the majority of the outstanding balance of the ING Terronera project facility (Note 11).

The Notes contain both a host debt component and an equity conversion option and were therefore accounted for as a compound financial instrument. The Company concluded that the conversion feature meets the "fixed-for-fixed" criterion and is classified in equity. The Notes contain an early-redemption feature held by the issuer allowing the Company to redeem the notes subsequent to 2027 if certain share price criteria have been met for a defined period. This feature met the criteria of an embedded derivative and was determined not to be closely related to the host debt contract and accordingly, it was separated and valued at fair value on initial recognition. At initial recognition, the liability component was measured as the present value of the future contractual cash flows discounted at the Company's estimated market borrowing rate for similar non-convertible debt, determined to be 8.9%. The residual amount, representing the equity and embedded derivative component, were recognized in contributed surplus and non-current derivative assets respectively.

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      The Company has allocated proceeds received on note offering as follows:

Transaction costs were allocated to the liability and equity components and the embedded derivative on a proportionate basis with $7.4 allocated to the liability component and $3.5 allocated to the equity component.

As at December 31, 2025, the carrying amount of the liability component, net of allocated issuance costs was $231.2, reflecting the $1.5 accretion of the discount. The remainder of the instrument was allocated to the equity component at $111.1 net of allocated issuance costs, and the embedded derivative related to early redemption option $8.0 due to the $6.1 million revaluation recorded during the period (Note 22). The liability component is measured at amortized cost, with interest expense recognized using the effective interest rate, which reflects the 8.9% discount rate applied at inception. The equity component is not remeasured subsequent to initial recognition. Upon conversion, the liability component will be derecognized, and the equity component will be transferred to share capital together with the value of the shares issued, with no gain or loss recognized.

11. LOANS PAYABLE

Debt Facility

On October 6, 2023, the Company, entered into a debt facility for up to $120.0 (the "Debt Facility"). During the second quarter of 2025, the Company entered into an amendment of the Debt Facility agreement, increasing the facility for an additional $15.0 to a total of $135.0. During December 2025, the Company used the proceeds from the Notes to extinguish $130.0 out of $135.0 of the outstanding Debt Facility. The remaining balance of $5.0 is repayable on June 30, 2026, and remains secured by corporate guarantees from the Company and first ranking securities interest over Terronera mine. As part of the early Debt Facility repayment, the Company has expensed $6.3 of early repayment penalties and previously capitalized deferred financing costs that were presented net of Debt Facility at December 31, 2025 (Note 17). 

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The Debt Facility is secured by corporate guarantees and a first-ranking security over the Terronera project and is subject to customary financial covenants, including minimum cash and coverage ratio requirements and maximum leverage limits. The Company was in compliance with all applicable covenants as at December 31, 2025.

The Debt Facility carries an interest rate equal to US Secured Overnight Financing Rate ("SOFR") + 4.50% per annum prior to of the Terronera Project. Following the completion of the Terronera project (as defined in the Debt Facility), the Debt Facility will carry an interest rate of SOFR + 3.75% per annum until the fifth anniversary of the loan, and SOFR + 4.25% from the fifth anniversary onwards.

Equipment Financing

The Company currently has financing arrangements for equipment totaling $17.6 with terms ranging from one to four years. The agreements require either monthly or quarterly payments of principal and interest with a weighted-average interest rate of 7.6%.

The equipment financing is secured by the underlying equipment purchased and is subject to various non-financial covenants and as at December 31, 2025, the Company was in compliance with these covenants. As at December 31, 2025, the net book value of equipment includes $17.9 (December 31, 2024 - $15.7) of equipment pledged as security for the equipment financing.

Kolpa Loans

As part of the Kolpa acquisition, on May 1, 2025, the Company assumed two syndicated loans originally entered into by Minera Kolpa with Banco BTG Pactual S.A. - Cayman Branch and Banco Santander Perú S.A. As collateral for these loans, Minera Kolpa entered into trust agreements and issued promissory notes to the lender. During December 2025, the Company used the proceeds from the Notes to extinguish these loans in full, and as a result incurred $0.7 of early repayment fees and write off's of deferred financing costs (Note 17).

12. PROVISION FOR RECLAMATION AND REHABILITATION

The Company's environmental permits require that it reclaim certain land it disturbs during mining and development operations. Significant reclamation and closure activities include land rehabilitation, decommissioning of buildings and mine facilities, ongoing care and maintenance and other costs. 

The timing of cash flows has been estimated based on the estimated mine lives using current reserves and the present value of the probability weighted future cash flows. The model assumes a risk-free rate (based on the government bond yields) specific to the liability of 7.5% for Guanaceví, 7.5% for Bolañitos and 9.2% for Terronera and 3.9% for Minera Kolpa, and with estimated inflation rates of 4% in Mexico and 2% in Peru. 

Changes to the reclamation and rehabilitation provision balance during the year are as follows:

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13. SHARE CAPITAL

(a) Management of Capital

The Company considers the items included in the consolidated statement of changes in equity as capital. The Company's objective when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders. 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. In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, convertible debt, asset acquisitions or return capital to shareholders. The Company's authorized share capital consists of an unlimited number of common shares with no par value. As at December 31, 2025, the Company is not subject to externally imposed capital requirements.

(b) Public Offerings

In June 2023, the Company filed a short form base shelf prospectus that qualified for the distribution of up to $200.0 of common shares, debt securities, warrants or units of the Company comprising any combination of common shares and warrants over a 25-month period. During the year ended December 31, 2024, the Company issued 27,540,971 common shares under this at-the-market ("ATM") facility at an average price of $2.00 per share for gross proceeds of $55.2, less commission of $1.1 and recognized $0.3 of other transaction costs related to the ATM financing as share issuance costs, which have been presented net within share capital.

On November 21, 2024, the Company filed a prospectus supplement to the June 2023 Base Shelf for the distribution of 15,825,000 common shares at a price of $4.60 per share through a bought deal financing. On November 27, 2024, the Company completed this prospectus offering for gross proceeds of $72.8, less commission of $3.9 and recognized $0.4 of other transaction costs related to the bought deal financing as share issuance costs, which have been presented net within share capital.

On April 8, 2025, the Company completed a $45.0 bought equity financing in order to finance a portion of cash consideration paid on the acquisition of Minera Kolpa, issuing 11,600,000 common shares at $3.88 per share. On April 16, 2025, underwriters exercised their over-allotment option, issuing an additional 1,285,000 common shares at $3.88 per share. The Company received gross proceeds of $50.0, less commission of $2.8 and recognized $0.6 of other transaction costs related to the financing as share issuance costs, which have been presented net within share capital.

On May 27, 2025, the Company filed an updated Base Shelf prospectus, and on July 10, 2025, issued a prospectus supplement for an offering of up to $60.0 of shares through an ATM facility. During the year ended December 31, 2025, the Company issued 3,838,915 common shares under this facility at an average price of $6.44 per share for gross proceeds of $24.7, less commission of $0.5 and recognized $0.3 of other transaction costs related to the ATM financing as share issuance costs, which have been presented net within share capital.

(c) Stock Options

Options to purchase common shares have been granted to directors, officers, employees and consultants pursuant to the Company's current stock option plan, approved by the Company's shareholders in fiscal 2009 and amended and re-ratified in 2024, at exercise prices determined by reference to the market value on the date of grant. The stock option plan allows for, with approval by the Board, granting of options to its directors, officers, employees and consultants to acquire up to 5.0% of the issued and outstanding shares at any time.

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The following table summarizes the Company's outstanding stock options:

During the year ended December 31, 2025, the weighted-average share price at the date of exercise was C$8.51 (December 31, 2024 - C$5.57).

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

During the year ended December 31, 2025, the Company recognized share-based compensation expense of $1.4 (December 31, 2024 - $1.8) based on the fair value of the vested portion of options granted in the current and prior years.

The weighted-average fair values of stock options granted and the assumptions used to calculate the related compensation expense have been estimated using the Black-Scholes Option Pricing Model with the following assumptions:

Option pricing models require the input of highly subjective assumptions. The expected life of the options considered such factors as the average length of time similar option grants in the past have remained outstanding prior to exercise, expiry or cancellation and the vesting period of options granted. Volatility was estimated based on average daily volatility based on historical share price observations over the expected term of the option grant. Changes in the subjective input assumptions can materially affect the estimated fair value of the options. The Company amortizes the fair value of stock options on a graded basis over the respective vesting period of each tranche of stock options awarded. As at December 31, 2025, the unvested stock option expense not yet recognized was $0.4 (December 31, 2024 - $0.5) which is expected to be recognized over the next 17 months.

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(d) Share Units Plan

On March 23, 2021, the Company adopted an equity-based Share Unit Plan (“SUP”), which was approved by the Company’s shareholders on May 12, 2021. The SUP allows for, with approval by the Board, granting of PSUs, DSUs and RSUs, to its directors, officers, and employees to acquire up to 1.5% of the issued and outstanding shares. The SUP incorporates all existing PSUs under the former PSU plan and any new share units granted will be settled by cash, shares, or a combination of cash and shares at the discretion of the Board of Directors..

Performance Share Units (PSUs)

The PSUs granted are subject to a performance payout multiplier between 0% and 200% based on the Company's total shareholder return at the end of a three-year period, relative to the total shareholder return of the Company's peer group. 

Performance criteria are based on the Company's share price performance relative to a representative group of other mining companies. On March 24, 2025, 163,000 PSUs were cancelled as the performance criteria were not met. Of the outstanding PSUs, 320,000 vest on March 6, 2026, 595,000 vest on March 12, 2027, and 299,900 vest on April 1, 2028 once certain performance criteria are met.

During the year ended December 31, 2025, the Company recognized share-based compensation expense of $1.4 related to the PSUs (December 31, 2024 - $0.9).

Deferred share units (DSUs) - Equity Settled

The DSUs granted are vested immediately and are redeemable for shares at the time of a director's retirement.

During the year ended December 31, 2025, the Company recognized share-based compensation expense of $0.6 related to the DSUs (December 31, 2024 - $0.5).

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Restricted Share Units (RSUs)

The Company may award to its directors and employees non-transferable RSUs. The awards typically vest over a three-year period and at the election of the Company can be settled in equity upon vesting.

During the year ended December 31, 2025, the Company recognized share-based compensation expense of $0.5 related to the RSUs (December 31, 2024 - $0).

(e) Historical Cash Settled Deferred Share Units

The Company previously had a deferred share unit plan whereby deferred share units were granted to independent directors of the Company. These cash settled deferred share units vested immediately and are redeemable for cash, based on the market value of the units at the time of a director's retirement. Upon adoption of the SUP plan in March 2021, no new cash settled deferred share units will be granted.

The fair value per unit at December 31, 2025, was C$12.91 (December 31, 2024 - C$5.27).

During the year ended December 31, 2025, the Company recognized a mark to market expense on directors' compensation related to these DSUs, which is included in general and administrative salaries, wages and benefits, of $5.0 (December 31, 2024 - a recovery of $1.8) based on the change in the fair value of the DSUs granted in prior years.

As of December 31, 2025, there are 942,628 deferred share units outstanding (December 31, 2024 - 1,044,204) with a fair market value of $8.9 (December 31, 2024 - $3.8) recognized in accounts payable, accrued liabilities and other current liabilities.

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(f) Diluted Earnings per Share

As of December 31, 2025, there are 31,949,801 anti-dilutive instruments (December 31, 2024 – 949,291).

14. REVENUE

Changes in fair value from provisional pricing are included in silver, gold, lead, zinc and copper sales. Revenue per product type was as follows:

Provisional pricing adjustments on sales of concentrate are pricing adjustments made upon finalization of the sales contract. The Company's concentrate sales contracts are initially priced with provisional pricing periods lasting typically two to six months, with provisional pricing adjustments recorded to revenue as market prices vary. As at December 31, 2025, a 10% change to the underlying metals prices would result in a change in revenue and accounts receivable of $2.8 (December 31, 2024 - $0.3) based on the total quantities of metals in sales contracts for which the provisional pricing periods were not yet closed.

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The Company had eight customers representing 100% of concentrate and refined metal sales in 2025, with three customers accounting for 42%, 30%, and 20% of total sales respectively. In 2024, three customers represented 100% of concentrate and refined metal sales, accounting for 68%, 17%, and 16% of total sales respectively.

15. EXPLORATION, EVALUATION AND DEVELOPMENT

16. GENERAL AND ADMINISTRATIVE

17. FINANCE COSTS

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18. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

19. SEGMENT DISCLOSURES

The Company's operating segments are based on internal management reports that are reviewed by the Company's executives (the chief operating decision makers) in assessing performance. The Company has three operating mining segments: Guanaceví and Terronera in Mexico, and Minera Kolpa in Peru as well as Exploration and Corporate segments. As of December 31, 2025, previously operating mine Bolañitos, in Mexico, has been classified as held for sale (Note 24). The Exploration segment consists of projects in the exploration and evaluation phases in Mexico, Chile and the USA. Exploration projects that are in the local district surrounding a mine are included in the mine's segments. All three mines located in Mexico produce silver and gold, while Minera Kolpa produces silver, led, zinc and copper. Refined metal sales come from Guanaceví while other three mines sell concentrate.

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The Exploration segment included $2.2 of costs incurred in Chile for the year ended December 31, 2025 (December 31, 2024 - $1.1) and $0.1 of costs incurred in USA (December 31, 2024 - $nil).

20. INCOME TAXES

(a) Tax Assessments

Due to the nature of the Company's activities, various legal and tax matters are outstanding from time to time. The Company is

routinely subject to audit by tax authorities in the countries in which it operates and has received a number of tax assessments in various locations, which are currently at various stages of progress with the relevant authorities. The outcomes of these audits and assessments are uncertain however, the Company is confident of its position on the various matters under review.

Minera Santa Cruz y Garibaldi S.A. de C.V. ("MSCG"), a subsidiary of the Company, received an MXN 238 million assessment on October 12, 2010 by Mexican fiscal authorities for failure to provide the appropriate support for certain expense deductions taken in MSCG's 2006 tax return, failure to provide appropriate support for loans made to MSCG from affiliated companies, and deemed an unrecorded distribution of dividends to shareholders, among other individually immaterial items. MSCG immediately initiated a Nullity action and filed an administrative attachment to dispute the assessment.

In June 2015, the Superior Court ruled in favour of MSCG on a number of the matters under appeal; however, the Superior Court ruled against MSCG for failure to provide appropriate support for certain deductions taken in MSCG's 2006 tax return. In June 2016, the Company received an MXN 122.9 million ($6.8) tax assessment based on the June 2015 ruling. The 2016 tax assessment comprised of MXN 41.8 million owed ($2.3) in taxes, MXN 17.7 million ($1.0) in inflationary charges, MXN 40.4 million ($2.2) in interest and MXN 23.0 million ($1.3) in penalties. The 2016 tax assessment was issued for failure to provide the appropriate support for certain expense deductions taken in MSCG's 2006 tax return and failure to provide appropriate support for loans made to MSCG from affiliated companies.

The Company filed an appeal against the June 2016 tax assessment on the basis certain items rejected by the courts were included in the new tax assessment, and a number of deficiencies exist within the tax assessment. Since issuance of the tax assessment interest charges of MXN 24.4 million ($1.4) and inflationary charges of MXN 36.5 million ($2.0) have accumulated.

Included in the Company's consolidated financial statements are net assets of $1.0 held by MSCG. Following the Tax Court's rulings, MSCG is in discussions with the tax authorities with regards to the shortfall of assets within MSCG to settle its estimated tax liability. An alternative settlement option would be to transfer the shares and assets of MSCG to the tax authorities. As of December 31, 2025, the Company's income tax payable includes an allowance for transferring the shares and assets of MSCG amounting to $1.0. The Company is currently assessing MSCG's settlement options based on ongoing court proceedings and discussion with the tax authorities. The Company has been advised that the appeal filed with the Federal Tax Court, against the June 2016 tax assessment has been rejected. The Company continues to assess MSCG's settlement options. 

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Compania Minera Del Cubo S.A. de C.V. ("Cubo"), a subsidiary of the Company, received an MXN 58.5 million ($3.3) tax assessment in 2019 by Mexican fiscal authorities for alleged failure to provide the appropriate support for depreciation deductions taken in the Cubo 2016 tax return and denied eligibility of deductions of certain suppliers. The tax assessment consisted of MXN 24.1 million ($1.3) for taxes, MXN 21.0 million ($1.2) for penalties, MXN 10.4 million ($0.6) for interest and MXN 3.0 million ($0.2) for inflation. At the time of the tax assessment the Cubo entity had and continues to have sufficient loss carry forwards which would be applied against the assessed difference of taxable income. The Mexican tax authorities did not consider these losses in the assessment. 

Due to the denial of certain suppliers for income tax purposes in the Cubo assessment, the invoices from these suppliers have been assessed as ineligible for refunds of IVA paid on the invoices. The tax assessment includes MXN 14.7 million ($0.8) for re-payment of IVA (value added taxes) refunded on these supplier payments. In the Company's judgment the suppliers and invoices meet the necessary requirements to be deductible for income tax purposes and the recovery of IVA.

The Company has filed an administrative appeal related to the 2016 Cubo tax assessment. The Company had previously provided a lien on certain El Cubo mining concessions during the appeal process. To facilitate the sale of the El Cubo mine and related assets, the Company elected to pay the assessed amount of $3.6 during Q1, 2021. During the appeal process the amount paid has been classified as a non-current income tax receivable. As of December 31, 2025, amount receivable is $4.0. Since issuance of the assessment interest charges of MXN 9.9 ($0.5) and inflationary charges of MXN 1.6 ($0.1) have accumulated.

In March 2024, the Company was notified that Cubo was subject to a tax audit by the relevant taxation authorities. Following an extended period of correspondence, information requests and discussions with the authorities, Cubo has received a formal assessment relating to certain tax positions taken in prior periods and in November 2025 filed a notice of objection and formally appealed the assessment. The appeal remains under review with tax authority, and no final determination has been made.

The Company continues to assess that it is probable that its appeal will prevail, and no provision is recognized in respect of the Cubo tax assessments. Cubo has no significant assets beyond the income tax receivable of $4.0, paid in 2021.

(b) Mexico Taxes

The Company's Mexican operations are subject to an Environmental Royalty Tax of 1% of gross sales and in 2025, the Company recognized $3.0 in royalty expense for the Environmental Royalty Tax (2024 - $1.1), included in cost of sales.

The Company's Mexican operations are subject to an annual Special Mining Duty of 8.5% on the profit resulting from subtracting the allowed deductions from the income on the sales of extractive activities with the exception of the annual inflation adjustment, interests and investments, aside from those performed for exploration.

(c) Deferred Income Tax Assets and Liabilities

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As of December 31, 2025, $2.0 of the deferred tax assets at Bolañitos are classified as assets held for sale (Note 24). 

(d) Income Tax Expense

The reconciliation of the income tax provision computed at statutory tax rates to the reported income tax provision is as follows:

(e) Unrecognized Deferred Tax Assets

Management believes that sufficient uncertainty exists regarding the realization of certain deferred tax assets such that they have not been fully recognized. The tax benefits not recognized reflect management's assessment regarding the future realization of Canadian, Peruvian, Chilean and certain Mexican tax assets and estimates of future earnings and taxable income in these jurisdictions as of December 31, 2025. When circumstances cause a change in management's judgment about the recoverability of deferred tax assets, the impact of the change will be reflected in current income.

Deductible temporary differences, unused tax losses, and unused tax credits for which no deferred tax assets have been recognized are attributable to the following: