Unaudited Condensed Consolidated Interim Financial Statements

(In US dollars)

HUDBAY MINERALS INC.

For the three and six months ended June 30, 2026 and 2025

1. Reporting entity

Hudbay Minerals Inc. ("HMI" or the "Company") is a company existing under the Canada Business Corporations Act. The address of the Company's principal executive office is 25 York Street, Suite 800, Toronto, Ontario. The unaudited condensed consolidated interim financial statements ("interim financial statements") of the Company for the three and six months ended June 30, 2026 and 2025 represent the financial position and the financial performance of the Company and its subsidiaries (together referred to as "Hudbay").

Wholly owned subsidiaries as at June 30, 2026 included, without limitation, Copper Mountain Mine (BC) Ltd. ("CMBC"), HudBay Peru Inc., HudBay Peru S.A.C. ("Hudbay Peru"), HudBay (BVI) Inc., and Hudbay Arizona ULC. Hudbay Arizona ULC indirectly owns (i) Mason Resources (US) Inc. ("Mason"), Arizona Sonoran Copper Company Inc. ("ASCU"), and (ii) 70% of Copper World LLC ("Copper World"), the entity that owns the Copper World project. Mitsubishi Corporation ("Mitsubishi"), an arms length party, owns the remaining 30% interest in Copper World.

Hudbay is a diversified mining company with long-life assets in North and South America. Hudbay's operations in Cusco (Peru) produce copper with gold, silver and molybdenum by-products. Hudbay's operations in Manitoba (Canada) produce gold with copper, zinc and silver by-products. Hudbay's operations in British Columbia (Canada) produce copper with gold and silver by-products. Hudbay has a development pipeline that includes copper development projects in Arizona and Nevada (United States), and a focused growth strategy on exploration, development, operation, and optimization of properties that Hudbay already controls, as well as other mineral assets that Hudbay may acquire that fit the Company's strategic criteria. The Company's common shares are listed under the symbol "HBM" on the Toronto Stock Exchange, New York Stock Exchange and Bolsa de Valores de Lima.

2. Basis of preparation

(a) Statement of compliance:

These interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting as issued by the International Accounting Standards Board ("IASB") and do not include all of the information required for annual financial statements prepared in accordance with IFRS^® Accounting Standards as issued by the IASB.

These interim financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2025 which includes information necessary or useful to understanding the Company's business and financial statement presentation. In particular, the Company's material accounting policies are presented in note 3 in the Company's audited consolidated financial statements for the year ended December 31, 2025 and have been consistently applied in the preparation of these interim financial statements, except as noted below.

Deferred consideration receivable from the sale of non-controlling interest

Deferred consideration receivables arising from the sale of non-controlling interest are initially recognized as a financial asset at their fair value on the date the obligation arises. The fair value is determined by discounting the expected cash inflows to its present value using a company credit adjusted discount rate that reflects current market assessments of the time value of money and the risks specific to the company. The deferred consideration will be classified as a financial asset at amortized cost, with subsequent remeasurements recognized in profit or loss. Additionally, the asset will then be accreted and amortized until the maturity date, with the accretion expense flowing through profit or loss (note 5).

The Board of Directors approved these interim financial statements on July 28, 2026.

(b) Use of judgements and estimates:

The preparation of the interim financial statements in conformity with IFRS Accounting Standards requires Hudbay to make judgements, estimates and assumptions, in applying accounting policies that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements, as well as reported amounts of revenue and expenses during the reporting period. Actual results may differ from these judgements, estimates and assumptions. The interim financial statements reflect the judgements and estimates outlined by Hudbay in its audited consolidated financial statements for the year ended December 31, 2025, except as noted below.

- Valuation of assets in an asset acquisition (note 4) - As the Company acquired ASCU through the issuance of the Company's common shares and the Company concluded that the acquisition of ASCU is an asset acquisition, a valuation was required to the fair value of the net assets acquired. The fair values of the net assets acquired were calculated using significant estimates and judgements. In particular, the fair value of the exploration property has been determined using an independent valuation involving discounted cash flow calculations. Such calculations and models were required to estimate, amongst other items, future production, future commodity prices, operating and capital input costs, discount rates and currency rates.

3. New standards

New standards and interpretations adopted

(a) Amendments to IFRS 9 - Financial Instruments and IFRS 7 - Financial Instruments: Disclosures

In May 2024, the IASB issued amendments to IFRS 9 and 7 to clarify the recognition or derecognition of a financial asset or liability, with a new exception for some financial liabilities settled through an electronic cash transfer system. The amendments also add guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion, by introducing an additional SPPI test for financial assets with contingent features that are not related directly to a change in basic lending risks or costs. In addition, the amendments will add new disclosures for certain instruments with contractual terms that can change cash flows. Lastly, the amendments will require additional disclosures for equity instruments designated at fair value through other comprehensive income. The amendments are effective for reporting periods beginning on or after January 1, 2026, with early application permitted. The amendments have been adopted by the Company and the amendments did not result in any material changes to the condensed consolidated financial statements.

In December 2024, the IASB issued amendments to IFRS 9 and 7 to clarify the application of the 'own-use' exemption and provide guidance on hedge accounting for companies that hedge their purchase or sales of electricity using renewable power purchase agreements. The amendments also introduce new disclosure requirements. The amendments are effective for reporting periods beginning on or after January 1, 2026. The amendments have been adopted by the Company and the amendments did not result in any material changes to the condensed consolidated financial statements.

New standards issued but not yet effective

(a) IFRS 18 - Presentation and Disclosure in Financial Statements

In April 2024, the IASB released IFRS 18 Presentation and Disclosure in Financial Statements. IFRS 18 will replace IAS 1 Presentation of Financial Statements. The standard amends the presentation of the statement of income by introducing a newly defined 'operating profit' subtotal and a requirement for income and expenses to be allocated between three new distinct categories based on a company's main business activities, which are Operating, Financing and Investing. In addition, organizations will need to disclose certain 'non-GAAP' measures known as management-defined performance measures. The standard will be effective from January 1, 2027 with early adoption permitted and requires retrospective application. The Company is assessing the impact of adoption of this amendment on its condensed consolidated financial statements.

4. Acquisition of Arizona Sonoran

On June 24, 2026, Hudbay acquired all the issued and outstanding common shares of ASCU not already owned by Hudbay by way of a court-approved plan of arrangement (the "ASCU Transaction"). Former ASCU shareholders (other than Hudbay) received 0.242 of a common share of Hudbay for each common share of ASCU held immediately prior to the effective time of the ASCU Transaction. In doing so, Hudbay obtained control of ASCU on June 24, 2026, and ASCU is now a wholly owned subsidiary of Hudbay.

Management determined that substantially all of the fair value of the gross assets acquired is concentrated in the Cactus project and therefore accounted for the ASCU Transaction as an asset acquisition.

The aggregate number of common shares issued by Hudbay as consideration was 46,794,082 Hudbay common shares (note 21b). In addition, as of the effective time of the ASCU Transaction, 20,844,771 ASCU common shares were held by Hudbay with a value of $123.1 million. For an asset acquisition settled with equity, entities are required to record the net assets acquired based on the fair value of the assets received in exchange for the equity issued, unless fair value cannot be estimated reliably. Hudbay incurred acquisition related costs of $8.3 million during 2026, mainly related to external legal and advisory fees and due diligence costs, which were capitalized and included as cost of acquiring the net assets. During the six months ended June 30, 2026, $1.8 million of these costs were paid in cash, while $6.5 million remained accrued at period end.

The fair value of net assets acquired was determined using a combination of income and cost methods. In particular, the fair values of Cactus project have been calculated using significant judgements and estimates. The following presents the fair value amount of identifiable assets acquired and liabilities assumed as at June 24, 2026:

During the period of June 24, 2026 to June 30, 2026, ASCU paid transaction and closing payments that amounted to $49.3 million. These transaction and closing payments were accrued for prior to the effective time of the ASCU Transaction.

5. Sale of non-controlling interest in Copper World

In January 2026, Hudbay closed its Copper World joint venture transaction with Mitsubishi, pursuant to which Mitsubishi completed its strategic investment for a 30% minority interest in Copper World, which owns the fully-permitted Copper World project in Arizona (the "JV Transaction"). On closing, Mitsubishi contributed approximately $420 million of cash to Copper World, and it will contribute an additional $180 million in cash to Copper World within 18 months of the closing date of the JV Transaction, in accordance with the terms of the definitive subscription agreement dated August 12, 2025. Following the completion of the JV Transaction, Hudbay retained a 70% controlling interest in Copper World and continues to consolidate Copper World. The JV Transaction was accounted for as an equity transaction resulting in the recognition of a non-controlling interest.

The Company recorded $581.5 million of total consideration for the JV Transaction which included the cash consideration of $422.7 million received on the closing date, $169.8 million of deferred consideration recorded as a long term receivable and $11.0 million of transaction costs recorded within equity. The carrying value of the non-controlling interest was increased by $461.6 million to reflect the change in the proportionate share of Copper World's net assets.

As a result of the JV Transaction, the Company recorded an increase to equity as follows:

The deferred consideration of $169.8 million will be accreted up to $180 million over the 18 month period. For the three and six months ended June 30, 2026, the Company recorded $1.7 million and $3.2 million, respectively, in accretion in long term receivable related to the deferred consideration within finance income (note 7d). The cash consideration received as part of the JV Transaction is designated for exclusive use by Copper World and is not available for general use by the Hudbay consolidated group.

6. Copper Mountain non-controlling interest acquisition

On April 30, 2025, Hudbay completed the acquisition of Mitsubishi Materials Corporation's ("MMC") 25% minority interest in CMBC (the "CMBC Transaction"). The cash consideration of the CMBC Transaction consisted of:

• $4.5 million on the closing date of the CMBC Transaction,

• $21.0 million in seven annual deferred payments of $3.0 million each, commencing on the 12-month anniversary of the closing date of the CMBC Transaction, and

• up to $18.75 million in five additional contingent payments of $3.75 million each, payable in the years following New Ingerbelle achieving certain minimum annual operating thresholds. MMC's right to the contingent payments concludes on the 15-year anniversary of the closing date of the CMBC Transaction.

As a result of the CMBC Transaction, Hudbay increased its ownership of the Copper Mountain mine from 75% to 100%. CMBC is now a wholly owned subsidiary of Hudbay.

The Company recorded $35.9 million of total consideration for the CMBC Transaction which included the cash payment of $4.5 million on the closing date, $16.6 million of deferred payments and $13.3 million of contingent consideration recorded as financial liability at amortized cost (note 15) and $1.5 million of transaction costs recorded within equity. 

As a result of the CMBC Transaction, the Company recorded an increase to equity as follows:

7. Revenue and expenses

(a) Revenue

Hudbay's revenue by significant product types:

Consideration from the Company's stream agreements is considered variable (note 18). Gold and silver stream revenue can be subject to cumulative adjustments when the amount of precious metals to be delivered under the contract changes. As a result of changes in the Company's mineral reserve and resource estimate in the first quarter of 2026, the amortization rate by which deferred revenue is drawn down into income was adjusted and, as required, a variable consideration adjustment was made for all prior year stream revenues since the stream agreement inception date. This variable consideration adjustment for the six months ended June 30, 2026 resulted in a decrease in revenue of $0.1 million (six months ended June 30, 2025 - increase in revenue of $9.9 million).

(b) Depreciation and amortization

Depreciation of property, plant and equipment and amortization of intangible assets are reflected in the condensed consolidated interim statements of income as follows:

(c) Other operating expenses

The Flin Flon concentrator and tailings impoundment is on care and maintenance to provide optionality should another mineral discovery occur in the Flin Flon area. During the three and six months ended June 30, 2026, care & maintenance costs were $3.7 million and $6.9 million, respectively (three and six months ended June 30, 2025 - $2.9 million and $6.3 million, respectively).

During the second quarter of 2026, a recovery of $11.5 million was recorded to reflect the business interruption insurance proceeds related to the wildfire evacuation and temporary suspension of operations at Manitoba. As of June 30, 2026, all of the proceeds related to this gain have been received.

During the second quarter of 2025, the Manitoba business unit incurred costs related to emergency and evacuation activities of $2.1 million as a result of regional wildfires in Snow Lake, Flin Flon and surrounding areas.

  (d) Other (income) expense

Other finance expense relates primarily to standby fees on Hudbay's revolving credit facilities.

  (e) Share-based compensation expense

Share-based compensation expense included within cost of sales, selling and administrative expenses, and other expenses relates to deferred share units, restricted share units, performance shares units and the Company's stock option plan. The increase in share-based compensation expense during the six months ended June 30, 2026 compared with the same period last year primarily relates to the change in the Company's share price, in addition to adjustments to the performance based multiplier on performance share units.

8. Cash and cash equivalents

Cash and cash equivalents balances represent demand deposits and deposits with an original maturity date of less than three months. Cash and cash equivalents balance includes $334.5 million of cash held at Copper World, which is designated for exclusive use by Copper World and is not available for general use by the Hudbay consolidated group.

9. Trade and other receivables

Trade receivables decreased to $163.1 million as at June 30, 2026 from $343.8 million as at December 31, 2025. The decrease was primarily due to a delay in scheduled shipments in Peru impacted by the temporary port closures as a result of ocean swells.

10. Inventories

The cost of inventories recognized as an expense, including depreciation and included in cost of sales, amounted to $315.9 and $644.7 million, respectively, for the three and six months ended June 30, 2026 (three and six months ended June 30, 2025 - $313.9 million and $630.3 million, respectively).

During the three and six months ended June 30, 2026, Hudbay recognized an expense of $0.9 million in cost of sales related to the writedown of certain non-current inventory supplies (three and six months ended June 30, 2025 - $2.4 million and $3.3 million, respectively).

During the three and six months ended June 30, 2025, Hudbay recognized an expense of $1.1 million and $1.5 million, respectively, in cost of sales primarily related to adjustments of the carrying value of copper concentrate inventory to net realizable value.

11. Other financial assets

As at June 30, 2026, current financial assets include $49.8 million of restricted cash held in a project trust account managed by U.S. Bank Trust Company. These funds represent proceeds from the issuance of 4.50% Arizona Industrial Development Authority Solid Waste Disposal Revenue Bonds (Copper World project), Series 2026A (the "Municipal bonds") which are legally earmarked for qualifying solid waste disposal expenditures at the Copper World project (note 17c). The Municipal bonds were issued by the Arizona Industrial Development Authority and have an initial mandatory tender date of July 2, 2036. During the second quarter of 2026, $1.0 million was released from the Municipal bonds. The Company expects to draw upon these proceeds within the next twelve months, as a result, this balance has been classified as a current asset. These funds are not available for general operational or debt service use by other entities within the Hudbay consolidated group.

Investments at fair value through profit or loss primarily relate to common shares held in various mining companies. For the six months ended June 30, 2026, the Company recorded additions of $39.3 million, unrealized mark-to-market gains of $112.2 million (note 7d), disposals of $0.6 million, unrealized foreign exchange losses of $4.8 million and cancellation of ASCU shares as part of an asset acquisition of $123.1 million (note 4).

12. Intangibles and other assets

Intangibles and other assets of $40.2 million (December 31, 2025 - $58.6 million) includes $32.4 million of other assets (December 31, 2025 - $51.5 million) and $7.8 million of intangibles (December 31, 2025 - $7.1 million).

Other assets include $32.4 million (December 31, 2025 - $42.8 million) of the carrying value of certain future community costs that relate to original agreements with communities for the Constancia operation which allow Hudbay to extract minerals over the useful life of the Peru operation. The liability remaining for these costs is recorded in agreements with communities recorded at amortized cost (note 15). Amortization of the carrying amount is recorded in the condensed consolidated interim statements of income within other expenses (note 7c) or exploration expenses, depending on the nature of the agreement.

Other assets also include $nil million related to cash advances and equipment financing advances made on long lease equipment (December 31, 2025 - $8.7 million).

Intangibles mainly represent computer software costs.

13. Property, plant and equipment

Exploration and evaluation assets increased to $1,465.7 as at June 30, 2026, from $108.9 million as at December 31, 2025. The increase was primarily related to closing of the ASCU Transaction (note 4).

14. Other liabilities

15. Other financial liabilities

Financing related to property, plant and equipment represents agreements that Hudbay has entered into to purchase mining equipment and land. Hudbay owns the assets and finances the payment of these assets over the specified term. These agreements expire between 2026 and 2032 with interest rates between 2.25% and 7.55% per annum. 

The following table summarizes changes in financing related to property, plant & equipment:

Agreements with communities recorded at amortized cost relate to agreements with communities near the Constancia operation which allow Hudbay to extract minerals over the useful life of the Constancia operation, carry out exploration and evaluation activities in the area and provide Hudbay with community support to operate in the region. During the six months ended June 30, 2026, there was a change in estimate related to amendments of life of mine agreements with respect to Constancia resulting in net reductions of $2.3 million. Payments will be made over the respective terms of the agreements, which have varying expiration dates ranging from 2026 to 2040.

As part of the CMBC Transaction, the Company recorded $16.6 million of deferred payment consideration and $13.3 million of contingent consideration as a financial liability at amortized cost on the closing of the CMBC Transaction. The deferred consideration will be settled over a period from 2026 to 2032, while the contingent consideration is payable between 2029 and 2033. During the three and six months ended June 30, 2026, accretion related to these liabilities were $0.4 million and $0.9 million, respectively (three and six months ended June 30, 2025 - $0.3 million) (note 7d).

As part of the ASCU Transaction (note 4), the Company recorded $5.0 million of current and $98.8 million of long term deferred land payments. The deferred land payments are associated with the Consortium Land purchase completed by ASCU in August 2025 which includes surface rights and mineral rights to such lands. The deferred land payments bear interest at 6% per annum and are payable in installments of $5.0 million each year from 2026 to 2028 with the remaining $82.2 million payable on maturity on August 28, 2029, with the rights to pre-pay in whole or in part, at any time, without penalty. The deferred land payments are structured as secured vendor carryback loans, pursuant to which certain deeds of trust were provided to the consortium vendors on their respectively sold portions of the land sold pursuant to the sale and on certain other properties already held by Cactus 110 LLC, a wholly-owned indirect subsidiary of ASCU.

As part of the streaming agreement for the 777 mine, Hudbay must repay, with precious metals credits, the stream deposit by August 1, 2052, the expiry date of the agreement. If the stream deposit is not fully repaid with precious metals credits from 777 production by the expiry date, a payment for the remaining amount will be due at the expiry date of the agreement. As the 777 mine has concluded all mining activities following the depletion of reserves and finalized the sales of produced concentrate, Hudbay concluded that the remaining stream deposit will not be repaid by means of precious metals credits from 777 production. The repayment amount is recorded as a Wheaton refund liability, which is and will be discounted at the 9.0% rate inherent in the original 777 stream agreement and accreted over the remaining term of the agreement.

16. Lease liabilities 

Lease liabilities are reflected in the condensed consolidated interim balance sheets as follows:

Hudbay has entered into leases which expire between 2026 and 2037. The interest rates on leases which were capitalized have interest rates between 2.50% and 8.49%, per annum. The range of interest rates utilized for discounting the lease depends mostly on Hudbay acting as a lessee and duration of the lease. For certain leases, Hudbay has the option to purchase the equipment and vehicles leased at the end of the terms of the leases. Hudbay's obligations under these leases are secured by the lessor's title to the leased assets. The present value of applicable lease payments has been recognized as an ROU asset, which was included as a non-cash addition to property, plant and equipment, and a corresponding amount as a lease liability.

There are no restrictions placed on Hudbay by entering into these leases.

The following outlines expenses recognized within the Company's condensed consolidated interim statements of income, relating to leases for which a recognition exemption was applied.

Payments made for short-term, low value and variable leases would mostly be captured as expenses in the condensed consolidated interim statements of income, however, certain amounts may be capitalized to PP&E for the Arizona segment during its development phase and certain amounts may be reported in inventories given the timing of sales. Variable payment leases include equipment used for heavy civil works at Constancia.

17. Long-term debt

(a) Senior unsecured notes

As at June 30, 2026, $542.4 million aggregate principal amount of senior notes were outstanding, consisting solely of a series of 6.125% senior notes due April 2029 ("2029 notes"). 

On April 1, 2026, the Company repaid in full the outstanding aggregate principal amount of $472.5 million of its 4.50% senior notes due April 2026 ("2026 notes") at maturity, using a combination of available cash on hand and a $272.0 million draw on its revolving credit facilities (note 17b). As a result, the 2026 notes were no longer outstanding as at June 30, 2026.

During the year ended December 31, 2025, the Company repurchased and retired a total of $102.5 million of the 2026 notes at a discount, prior to maturity. For the year ended December 31, 2025, the discount of $0.4 million was recorded as Other expenses in the consolidated statements of income. Upon the repurchase and retirement of $102.5 million of senior unsecured notes, the unamortized transaction costs related to this principal amount for the year ended December 31, 2025 of $0.2 million were recorded as a finance expense in the consolidated statements of income.

The senior notes are guaranteed on a senior unsecured basis by substantially all of the Company's subsidiaries, other than HudBay (BVI) Inc. and certain excluded or unrestricted subsidiaries, and subsidiaries that hold the Copper World, Mason and Cactus projects as well as any newly formed or acquired subsidiaries that primarily hold or may develop non-producing mineral assets that are in the pre-construction phase of development.

(b) Senior secured revolving credit facilities

Hudbay has two senior secured revolving credit facilities with total commitments of $450.0 million and substantially similar terms and conditions for its Canadian and Peruvian businesses. Hudbay's revolving credit facilities are secured against substantially all of the Company's assets, other than those associated with Copper World, Mason and Cactus projects. The two senior secured revolving credit facilities mature in November 2028. The revolving credit facility includes an accordion feature to increase the facility by an additional $150 million at Hudbay's discretion.

During the three months ended June 30, 2026, Hudbay drew $272.0 million under its Canadian revolving credit facility, which remains outstanding as of June 30, 2026.

As at June 30, 2026, there were nil draws under the Peruvian revolving credit facilities, other than letters of credit to support reclamation and pension obligations as described below.

As at June 30, 2026, the Peru segment had nil in letters of credit issued under the Peru revolving credit facility to support its reclamation obligations and the Manitoba segment had $24.3 million in letters of credit issued under the Canadian revolving credit facility to support its reclamation and pension obligations. As at June 30, 2026, the Company was in compliance with its covenants under the revolving credit facilities.

Surety bonds

The Arizona segment had $23.2 million in surety bonds issued to support future reclamation and closure obligations. No cash collateral is required to be posted under these surety bonds.

The British Columbia segment had $46.2 million in surety bonds issued to support future reclamation and closure obligations. The British Columbia segment had $1.5 million in surety bonds issued to BC Hydro in relation to the BC Hydro transmission system at the Copper Mountain Mine, and to Fisheries and Oceans Canada for fish monitoring. No cash collateral is required to be posted under these surety bonds.

The Peru segment had nil million in surety bonds issued to support future reclamation and closure obligations.

Other letters of credit

The Peru segment had $145.3 million in letters of credit issued with various Peruvian financial institutions to support future reclamation and other operating matters. No cash collateral is required to be posted under these letters of credit.

The British Columbia segment had $0.3 million in letters of credit issued to the Ministry of Finance and Ministry of Transport and Transit related to other operating matters. No cash collateral is required to be posted under these letters of credit.

Hudbay has a C$130.0 million bilateral letter of credit facility ("LC Facility") with a major Canadian financial institution. As at June 30, 2026, the Manitoba segment had $55.7 million in letters of credit issued under the LC Facility to support its reclamation and pension obligations.

(c)  Senior unsecured municipal bonds

On June 24, 2026, $52.0 million aggregate principal amount of Municipal bonds were issued by the Arizona Industrial Development Authority (note 11). The Municipal bonds carry a fixed interest rate of 4.50% per annum, payable semi-annually.

At inception, the carrying value of the Municipal bonds is $50.7 million, net of $1.3 million in transaction cost. This transaction cost is capitalized against the liability and amortized over the initial term interest rate period using the effective interest method.

The Municipal bonds are senior unsecured obligations of Copper World LLC and are guaranteed on a senior unsecured basis by the Company and its primary operating subsidiaries.

18. Deferred revenue

Peru Stream Agreement

For the three and six months ended June 30, 2026, the drawdown rates for the Peru stream agreement for gold and silver were $833 and $15.56 per ounce, respectively (year ended December 31, 2025 - $860 and $15.06 per ounce, respectively).

The following table summarizes changes in deferred revenue:

Consideration from the Company's stream agreement is considered variable. Gold and silver stream revenue can be subject to cumulative adjustments when the number of ounces to be delivered under the contract changes. As a result of changes in the Company's mineral reserve and resource estimate in the first quarter of 2026, the amortization rate by which deferred revenue is drawn down into income was adjusted and, as required, a current period variable adjustment was made for all prior period stream revenues since the stream agreement inception date. This variable consideration adjustment resulted in an decrease in revenue of $0.1 million and $nil impact to finance expense for the six months ended June 30, 2026 (year ended December 31, 2025 - an increase in revenue of $9.9 million and a decrease in finance expense of $0.6 million).

Deferred revenue is reflected in the condensed consolidated interim balance sheets as follows:

19. Environmental and other provisions

Reflected in the condensed consolidated interim balance sheets as follows:

Decommissioning and restoration obligations ("DRO") are remeasured at each reporting date to reflect changes in discount rates, exchange rates, and timing and extent of cash outflows which can significantly affect the liabilities. This provision has been recorded based on estimates and assumptions that management believes are reasonable; however, actual decommissioning and restoration costs may differ from expectations.

During the six months ended June 30, 2026, the Company recorded a non-cash loss of $7.6 million in the condensed consolidated interim statements of income mainly related to a revaluation adjustment to the Flin Flon environmental reclamation provision. The re-evaluation adjustment was impacted by the timing and extent of cash flows for Flin Flon's closed sites. The adjustment also reflects net changes in long term, risk-free real discount rates based on changes in Canadian bond yields as well as increases in inflation rates. Typically, an operating location will reflect any revaluation adjustments to the environmental reclamation provision against its reclamation assets. However, as the Flin Flon operations closed in June 2022, the corresponding Flin Flon assets have been fully depreciated and cannot be reduced below residual value resulting in the remaining impact being recorded as a loss in the condensed consolidated interim statements of income.

As at June 30, 2026, decommissioning, restoration and similar liabilities have been discounted to their present value at rates ranging from 2.37% to 5.03% per annum (December 31, 2025 - 2.41% to 4.95%), using pre-tax, nominal risk-free interest rates that reflect the estimated maturity of each specific liability.

During the six months ended June 30, 2025, the Company recorded a non-cash gain of $1.0 million in the condensed consolidated interim statements of income mainly related to a revaluation adjustment to the Flin Flon environmental reclamation provision.

20. Income and mining taxes

The tax expense is applicable as follows:

Adjustments in respect of prior years refers to amounts changing due to the filing of tax returns and assessments from government authorities as well as any change identified that would result in a difference to our current or deferred tax balances as reported in the prior fiscal year end.

21. Share capital

(a) Preference shares:

Authorized: Unlimited preference shares without par value.

Issued and fully paid: Nil.

(b) Common shares:

Authorized: Unlimited common shares without par value.

Issued and fully paid: