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Item 2. Properties

2026-04-02 compared with 2025-04-07 · 99 added, 131 removed, 122 unchanged (65% of the section changed)

8 unchanged sentences

Mining Project Location

The San Jose de Gracia mining project (“SJG Project”) is located on map sheet G13-A81 in the Culiacan mining district of Sinaloa State, Mexico, at Latitude 26 ̊ , 9’ N, Longitude 107 ̊, 53’ W, approximately 120 kilometers east northeast of the coastal city of Los Mochis.

The property on which the SJG Project resides, straddles the border separating the Mexican States of Sinaloa and Chihuahua.

The SJG Project is located in the south-western portion of the property, and is located entirely within the State of Sinaloa, as shown in the maps below.

DynaMéxico owns the San Jose de Gracia mineral concessions, which are comprised of 33 distinct concessions covering an aggregate of approximately 9,920 hectares.

The concessions are held 100% by DynaMéxico and there are no royalty or other interests.

The property on which the SJG Project resides is located in and around the village of San Jose de Gracia, approximately 100 km northeast of Guamuchil, on the west side of Mexico.

The SJG mine is located on map sheet G13-A81 in the Culiacan mining district of Sinaloa State, Mexico, at Latitude 26 ̊ , 9’ N, Longitude 107 ̊, 53’ W, approximately 120 kilometers east northeast of the coastal city of Los Mochis.

The property on which the SJG mine resides, straddles the border separating the Mexican States of Sinaloa and Chihuahua.

The SJG mine is located in the south-western portion of the property, and is located entirely within the State of Sinaloa, as shown in the maps below.

DynaMéxico claims an ownership interest in the San Jose de Gracia mineral concessions, which are comprised of 33 distinct concessions covering an aggregate of approximately 9,920 hectares.

The property on which the SJG mine resides is located in and around the village of San Jose de Gracia, approximately 100 km northeast of Guamuchil, on the west side of Mexico.

The village of San Jose de Gracia has a small airstrip and can be accessed by a small airplane, or alternatively, by a dirt mountain road.

There are roads providing access to the property on which the SJG Project resides which are accessible throughout the year.

There are roads providing access to the property on which the SJG mine resides which are accessible throughout the year, with the possible exception of June and July when the rainy season sometimes causes flooding and runoff to make the roads too muddy to navigate.

Local Resources and Infrastructure

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The village of San Jose de Gracia maintains a few stores which offer essential goods and services.

The mine site area camp maintains facilities which can accommodate about 65 persons in 32 rooms.

Contractors manage their own camps for their personnel.

The Village of SJG has additional rooms via hotels and boarding houses.

Out of a total workforce of 223 employees, 143 reside in San Jose de Gracia.

A power line to the San José de Gracia Project has been installed by the Comisión Federal de Electricidad, the only authorized power producer in Mexico.

The camp site area, which is closer to the mining activities, maintains facilities of twelve rooms with additional lodging available in the village which can accommodate a total of about 238 persons.

A power line to the SJG mine has been installed by the Comisión Federal de Electricidad, the only authorized power producer in

The power line was installed in March 2012 from the La Estancia area of the municipality of Sinaloa de Leyva, a distance of approximately 75 kilometers.

The power line is currently 220 volts maximum capacity, which supplies the plant, including the office and camp facilities at SJG, such as water pump, air conditioning, refrigeration, lights, internet, and fans, as well as local residential use.

The SJG Project can produce its own diesel-generated power as a backup to the power grid in case of interruptions.

The power line is currently 220 volts maximum capacity, which supports domestic use only, including the office and camp facilities at the SJG mine, such as water pump, air conditioning, refrigeration, lights, internet, and fans, as well as local residential use.

The SJG mine produces its own diesel-generated power as a backup to the power grid.

Offices – Camp Facilities

The SJG Project sources many of its supplies from nearby towns, Guamuchil, Los Mochis and Culiacan.

There is a satellite dish installed at the SJG Project providing communications from the SJG Project.

At the SJG Project, DynaMéxico maintains a camp staff, including geologists, field helpers, consultants, security, cooks and cleaners.

The SJG mine sources many of its supplies from nearby towns, Guamuchil, Los Mochis and Culiacan.

There is a satellite dish installed at the SJG mine providing communications to and from the SJG mine.

At the SJG mine, DynaMexico maintains a camp staff, including geologists, field helpers, consultants, security, cooks and cleaners.

Most of these employees come from the local community.

Mining Concessions

The San José de Gracia Property consists of the following 33 contiguous mining concessions which covers an area of approximately 9,920 hectares (24,513 acres):

The SJG mine consists of the following 33 contiguous mining concessions which covers an area of approximately 9,920 hectares (24,513 acres):

Current Mining Concessions - San José de Gracia

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FRANCISCO ARTURO

Title to 32 of the 33 mining concessions is registered in the sole name of DynaMéxico.

Title of 32 of the 33 mining concessions is registered in the sole name of DynaMéxico.

The one exception is the San Miguel concession.

For the San Miguel concession, DynaMéxico has entered into transfer agreements with the registered owners of 50% of the concession title, and DynaMéxico has also entered into promise to sell and purchase agreements with registered owners of the balance of the concession title.

Under Mexican law, such agreements require the consent or relinquishment of first rights of refusal from the registered owners of 100% of the concession title, in order to have legal effect and be eligible for registration before the Mines Recorders’ Office.

Under amendments to the Mining Act of Mexico that came into effect in December 2006, the classifications of Mining Exploration Concessions and Mining Exploitation Concessions were replaced by a single classification of Mining Concessions valid for a renewable term of 50 years, commencing from the initial issuance date.

For the San Miguel concession, DynaMéxico has entered into transfer agreements with the registered owners of 50%

of the concession title, and DynaMéxico has also entered into promise to sell and purchase agreements with registered owners of the balance of the concession title.

Refer to Item 3.

Legal Proceedings for description of the current legal proceedings to confirm the Company’s right to nine of its concessions.

Under amendments to the Mining Law that came into effect in December 2006, the classifications of Mining Exploration Concessions and Mining Exploitation Concessions were replaced by a single classification of Mining Concessions valid for a renewable term of 50 years, commencing from the initial issuance date.

To be converted into Mining Concessions at the time these amendments came into effect, former mining exploration and mining exploitation concessions had to be in good standing at the time of conversion.

All of the SJG concessions were in good standing and consequently were converted to 50-year Mining Concessions in December 2006, at the time the amendments to the Mining Act came into effect.

All of the SJG mine concessions were in good standing and consequently were converted to 50-year Mining Concessions in December 2006, at the time the amendments to the Mining Law came into effect.

To renew the 50-year term, Mining Concessions must be in good standing at the time an application for renewal is filed, and an application for renewal must be filed within 5 years prior to expiration of the term.

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Surface Rights

In addition to the surface rights held by DynaMéxico pursuant to the Mining Act of México and its Regulations ( Ley Minera y su Reglamento ), the Company maintains access and surface rights for the SJG Project pursuant to a 20-year Land Lease Agreement.

In addition to the surface rights held by DynaMéxico pursuant to the Mining Law, the Company maintains access and surface rights for the SJG mine pursuant to a 20-year Land Lease Agreement.

This lease agreement with the Santa Maria Ejido Community (the owners of the surface rights) is dated January 6, 2014 and continues through 2033.

The lease agreement covers an area of 4,399 hectares surrounding the main mineral resource areas of SJG and provides for annual lease payments of $1,359,443 Pesos (adjusted for inflation).

The lease agreement covers an area of 4,399 hectares surrounding the main mineral resource areas of the SJG mine and provides for annual lease payments of $1,359,443 Pesos (adjusted for inflation).

The 2025 payment was $5,932,583 pesos (approx.

$304,000 USD).

The lease agreement provides the Company with surface access to the core resource areas of SJG (4,399 hectares), and allows for all permitted mining, pilot production and exploration activities.

Water Concession

The Company has secured the Water Rights Concession for the area surrounding SJG.

The lease agreement provides the Company with surface access to the core resource areas of the SJG mine (4,399 hectares), and allows for all permitted mining, production and exploration activities.

Water Rights Concession

The Company has secured the Water Rights Concession for the area surrounding the SJG mine.

The Director of Water Administration of the National Water Commission of México (“CONAGUA”) formally certified in writing the rights of DynaMéxico to legally “use”, exploit and extract 1,000,000 cubic meters of water per year from the DynaMéxico extraction infrastructure located within the perimeter of the mining concessions.

CONAGUA determined that the DynaMéxico water rights are not subject to any water rights

concession or any other water extraction restriction.

Water extracted by DynaMéxico will be subject to applicable levies imposed by the Mexican tax authorities in accordance with current Mexican tax laws.

The water concession provides sufficient water for current operations, and for the anticipated future needs of the project.

The Company recycles water from the tailings pond back through the test milling circuit, then back to the tailings pond.

CONAGUA determined that the DynaMéxico water rights are not subject to any water rights concession or any other water extraction restriction.

Water extracted by DynaMéxico will be

subject to applicable levies imposed by the Mexican tax authorities in accordance with current Mexican tax laws.

The water concession provides sufficient water for current operations, and for the anticipated future needs of the SJG mine.

The Company recycles water from the tailings pond back through the milling circuit, then back to the tailings pond.

Royalties, Encumbrances and Environmental Liabilities

The SJG Property is not subject to any royalties or encumbrances, other than in accordance with our Revolving Credit Line, and there are no known environmental liabilities.

The SJG mine is not subject to any royalties or encumbrances, other than in accordance with our Revolving Credit Line, and there are no known environmental liabilities.

Required Permits for Exploration, Drilling and Mining

In respect of permit requirements for mineral exploration and mining in Mexico, the most relevant applicable laws, regulations and official technical norms are the Federal Mining Act (plus its regulations), the Federal Environmental Protection and Ecological Equilibrium Act (plus its regulations), the Federal Sustainable Forestry Development Act (plus its regulations), the Federal Explosives and Firearms Act, the National Waters Act and the Mexican Official Norm 120.

In respect of permit requirements for mineral exploration and mining in Mexico, the most relevant applicable laws, regulations and official technical norms are the Mining Law, the Federal Environmental Protection and Ecological Equilibrium Act (plus its regulations), the Federal Sustainable Forestry Development Act (plus its regulations), the Federal Explosives and Firearms Act, the National Waters Act and the Mexican Official Norm 120.

To carry out mineral exploration activities, holders of mining concessions in Mexico are required to file at the offices of the Federal Secretariat of the Environment and Natural Resources ("SEMARNAT”) a "Notice of Commencement of Exploration Activities” or "Preventive Exploration Notice” in accordance with the guidelines of the Mexican Official Norm 120 ("NOM-120”).

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If the use of explosives materials is required for execution of mineral exploration or mining activities, an Application for General Permit for Use, Consumption and Storage of Explosive ("GPCSE”) is required to be filed at the offices of the Secretariat of National Defense ("SEDENA”) under the guidelines of the Federal Explosives and Firearms Act.

Under the Federal Mining Act, holders of mining concessions in Mexico have the right to the use of the water coming from the mining works.

Certification of water rights and/or issuance of water rights concessions are required from the National Water Commission (“CONAGUA”) under the guidelines of the National Waters Act.

Under the Mining Law, holders of mining concessions in Mexico have the right to the use of the water coming from the mining works.

Certification of water rights and/or issuance of water rights concessions are required from CONAGUA under the guidelines of the National Waters Act.

Fees or Bonding Requirements Necessary To Explore or Mine

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NOM-120 is a notice to SEMARNAT only and has no prescribed processing time.

Processing time for review and approval of a CSUP Application and Technical Justification Study varies depending on the workload of the SEMARNAT regional office where application is filed, but a processing time of four months is typical.

Processing time for review and approval of an Environmental Impact Assessment Study varies depending on workload of SEMARNAT regional office where application is filed, but a processing time of six months is typical.

Processing time for review and approval of a CSUP Application and Technical Justification Study varies depending on the workload of the SEMARNAT regional office where the application is filed, but a processing time of four months is typical.

Processing time for review and approval of an Environmental Impact Assessment Study varies depending on the workload of the SEMARNAT regional office where the application is filed, but a processing time of six months is typical.

Processing time for issuance of a GPCSE by SEDENA is approximately six months.

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Exploration Permit:

On June 28, 2010, DynaMéxico filed a Preventive Exploration Notice (Preventive Exploration Notice) at the office of SEMARNAT in connection with contemplated mineral exploration activities at the La Prieta, San Pablo, La Purísima, La Unión, Tres Amigos and La Ceceña areas of the SJG Project.

On July 21, 2010, SEMARNAT approved, for a term of 36 months, the execution of the mineral exploration activities at SJG set out in the Preventive Exploration Notice, as it determined that such activities fall within the framework of the NOM-120, subject to the following conditions:

(a) filing and approval by SEMARNAT of a CSUP with respect to SJG (see below), and (b) posting of a bond in the amount of $134,487 Pesos to guarantee remediation and rehabilitation measures following the conclusion of the mineral exploration activities.

On June 28, 2010, DynaMéxico filed a Preventive Exploration Notice (“Preventive Exploration Notice”) at the office of SEMARNAT in connection with contemplated mineral exploration activities at the La Prieta, San Pablo, La Purísima, La Unión, Tres Amigos and La Ceceña areas of the SJG mine.

On July 21, 2010, SEMARNAT approved, for a term of 36 months, the execution of the mineral exploration activities at the SJG mine set out in the Preventive Exploration Notice, as it determined that such activities fall within the framework of the NOM-120, subject to the following conditions:

(a) filing and approval by SEMARNAT of a CSUP with respect to the SJG mine (see below), and (b) posting of a bond in the amount of $134,487 Pesos to guarantee remediation and rehabilitation measures following the conclusion of the mineral exploration activities.

Change of Soil Use Permit

On August 9, 2010, DynaMéxico filed at the offices of SEMARNAT a CSUP Application and Technical Justification Study to carry out certain mineral exploration activities set out in the Preventive Exploration Notice approved by SEMARNAT on July 21, 2010 (see above) at the La Prieta, San Pablo, La Purísima, La Unión, Tres Amigos and La Ceceña areas of SJG).

On December 20, 2010, SEMARNAT approved the CSUP Application filed by DynaMéxico with respect to SJG and authorized DynaMéxico the execution of mineral exploration activities on 5,463 hectares of SJG for a term of 36 months, and it is continually renewed as required.

On December 20, 2010, SEMARNAT approved the CSUP Application filed by DynaMéxico with respect to the SJG mine and authorized the execution of mineral exploration activities by DynaMéxico on 5,463 hectares of the SJG mine for a term of 36 months, and it is continually renewed as required.

Water Rights Certification

On March 8, 2012 the Director of Water Administration of CONAGUA certified in writing the rights of DynaMéxico to use, exploit and extract 1,000,000 cubic meters of water per year from the Company’s extraction infrastructure located in SJG.

CONAGUA determined that DynaMéxico’s water rights are not subject to any other water rights concession or any other water extraction restriction.

Bonding Requirements

Under the CSUP issued to DynaMéxico on December 20, 2010, SEMARNAT imposed upon DynaMéxico the obligation to post a bond in the amount of $116,911 Pesos for reforestation and remediation measures in SJG.

The Company maintains a greenhouse of 10,000 trees which are used in the reforestation efforts as necessary.

Under Preventive Exploration Notice (Preventive Exploration Notice) approved by SEMARNAT on July 21, 2010, SEMARNAT imposed upon and DynaMéxico complied, the obligation to post a bond in the amount of $134,487 Pesos, to guarantee remediation and rehabilitation measures following the conclusion of the mineral exploration activities.

As required by US Generally Accepted Accounting Principles (“US GAAP”) the Company also has an asset retirement obligation recorded as of December 31, 2024 for the net present value of the cost to dismantle and dispose the plant and remove the tailings pond.

DynaMéxico has sought and obtained all required environmental permits, temporary land occupation rights and consent letters from the regulatory agencies, local municipalities and the State of Sinaloa, in order to conduct its mining, production, exploration and drilling activities on the four main deposit areas at SJG.

Under the Preventive Exploration Notice, SEMARNAT imposed upon and DynaMéxico complied with, the obligation to post a bond in the amount of $134,487 Pesos, to guarantee remediation and rehabilitation measures following the conclusion of the mineral exploration activities.

As required by generally accepted accounting principals generally in the United States (“GAAP”) the Company also has an asset retirement obligation recorded as of December 31, 2025 for the net present value of the cost to dismantle and dispose the plant and remove the tailings pond at the SJG mine.

DynaMéxico will be required to obtain further permits in order to conduct drilling in these four areas and the other areas, and in order to carry out future mining, milling, and production activities, and will timely obtain such permits, as and when required.

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Large-scale mining in the camp began in 1870 and ended in 1910 with the onset of the Mexican Revolution.

The majority of the production came from the Anglo, Rosario and La Cruz Mines on the Purisima Ridge trend, and from the La

Prieta Mine on the La Prieta trend (reference Fig.

The majority of the production came from the Anglo, Rosario and La Cruz Mines on the Purisima Ridge trend, and from the La Prieta Mine on the La Prieta trend (reference Fig.

The remainder of the production was derived from as many as 60 smaller mines throughout the 12 square kilometer area, including the Palos Chinos, San Pablo, Tres Amigos, La Ceceña, Los Hilos, Santa Rosa, Veta Tierra, La Union, Santa Eduwiges, La Mochomera and La Parilla Mines.

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La Prieta Trend (La Prieta Mine)

It was not until the 1970’s when mining could resume at San José de Gracia, when the first road to SJG was opened, allowing Compañia Rosarito to begin producing gold from the Palos Chinos, San Pablo, Tres Amigos and La Union mines.

It was not until the 1970’s when mining could resume at the SJG mine, when the first road to the SJG mine was opened, allowing Compañia Rosarito to begin producing gold from the Palos Chinos, San Pablo, Tres Amigos and La Union mines.

Recent Ownership of the Property

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In 1998-1999, Pamicon Developments Ltd., a Canadian company, examined the results of the 1997 drilling program, including PQM’s technical work, in order to calculate possible mineral reserves, and to review the general status of the property.

During the first half of 1999, DynaResource, Inc.

and its agents arranged to collect samples for metallurgical testing.

In June of 2000, DynaResource formed its subsidiary DynaMexico, in order to acquire and consolidate ownership of the San Jose de Gracia Project.

By December 2003, DynaMexico had completed the acquisition of and consolidation of 100% of the San Jose de Gracia Project from Golden Hemlock and Finisterre - with the sole exception of the San Miguel mining concession.

Infrastructure Improvements, Expansion and Increased Output

As part of its ongoing exploration and project advancement activities at San Jose de Gracia, the Company continues to upgrade the on-site infrastructure and processing facilities.

Significant improvements have been made such that the condition of the equipment is new, relatively new or in good condition.

The Company has four primary ball mills currently running 800 tons per 24-hour day at the end of 2024.

The Company’s exploration efforts at San Jose de Gracia are aimed at increasing the mineral resource base, with particular focus on gold.

Since initiating on-site processing activities in January 2015, the Company has expanded its throughput capacity from an initial 75 tons per 24-hour operating day to 800 tons per day by year-end of 2024.

In accordance with SEC requirements for an exploration stage issuer under S-K 1300, the Company expenses all costs related to site operations, project improvements, and development activities.

As a result these expenditures are not capitalized on the Company’s balance sheet.

Through December 31, 2024, this treatment has resulted in a net operating loss carry-forward which may be used to offset future taxable earnings.

The Company is currently classified as an exploration stage issuer under Section 1300 of Regulation S-K.

In accordance with SEC requirements all costs related to site operations, infrastructure improvements, and project expansion are expensed as incurred.

As such these costs are not capitalized as assets on the Company’s balance sheet.

During the first half of 1999, DynaResource and its agents arranged to collect samples for metallurgical testing.

In June of 2000, DynaResource formed its subsidiary DynaMexico, in order to acquire and consolidate ownership of the SJG mine.

By December 2003, DynaMexico had completed the acquisition of and consolidation of 100% of the SJG mine from Golden Hemlock and Finisterre - with the sole exception of the San Miguel mining concession.

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

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Access to the remainder of the large property at the current stage of development is difficult without the use of horse or helicopter.

The SJG Project can be accessed by road, from either the City of Culiacán or the City of Guamuchil.

The SJG mine can be accessed by road, from either the City of Culiacán or the City of Guamuchil.

Either route goes through the small town of Sinaloa de Leyva, then from Sinaloa de Leyva by gravel mountainous road to the village of San José de Gracia (population 750), which covers approximately 90 kilometers and is roughly a five-hour trip.

The SJG Project can also be accessed by air.

A gravel airstrip is located adjacent to the San Jose de Gracia Village.

The SJG mine can also be accessed by air.

A gravel airstrip is located adjacent to San Jose de Gracia.

The airstrip is suitable for light aircraft and charter flights of 45 minutes duration are available from the cities of Los Mochis or Culiacán.

Much of the labor for mining and production activities of DynaMéxico is provided by the local community of SJG.

Much of the labor for mining and production activities of DynaMéxico is provided by the local community of San José de Gracia.

Climate and Operating Season

The climate is semi-tropical with a rainy season dominating June and July.

For some activities on the SJG project, operations may be suspended during the rainy season.

MINERAL PROCESSING AND METALLURGICAL TESTING

Bulk Sample, Hazen Process Development Metallurgical Report

Ore and existing mill tailings samples were collected prior to DynaMéxico’s acquisition and consolidation of San Jose de Gracia.

The ore samples consisted of a bulk (about 500 kg) of stockpiled ore from the lower adit of the Tres Amigos mine (intercept of the Tres Amigos and Orange Tree veins).

In addition, approximately 100 kg of ore as a bulk sample was taken from the surface at the Gossan Cap area.

Three additional ore samples (approximately 5-15 kg each) were assembled from splits of the cores from several of the 1997 drilling program core holes to develop samples representing different ore types for testing.

These included:

1) composite drill cores from Palos Chinos, 2) massive sulfide from the Tres Amigos vein and 3) disseminated, nonsurprise mineralized zones at the bottom of several Tres Amigos core holes.

The logic was that major exploratory test work to define a metallurgical process would be done on the bulk sample from the adit at Tres Amigos and the other samples would have limited testing done at the selected metallurgical process conditions to verify the performance of the selected metallurgical process circuit on other types of San José mineralization.

Finally, several bulk samples (50-100 kg) of existing tailings from the Rosarito mill and the old Rosarito mill were collected and used to conduct flotation, gravity, and limited leachability test work on the tailings.” Samples were shipped to the laboratory of Carbonyx Carbon Technologies in Plano, Texas where in 2000 and 2001 two separate preliminary test programs were conducted, one for the tailings, and the other for a portion of the bulk Tres Amigos ore.

The Company developed a concept for the metallurgical processing to produce both gravity and flotation concentrates.

The tests confirmed a metallurgical flow sheet to be utilized at San José to recover up to 90% of the feed gold into the concentrates.

The above “in-house” testing established a preliminary flowsheet for a mill circuit for processing either primary ore or for reprocessing the existing tailings.

Subsequently Hazen Research Laboratories of Golden, Colorado (“Hazen”) was engaged to provide independent verification of the in-house work and carry out additional optimization test work.

Lockwood Greene Company and Mr.

Henderson prepared and verified completion of the scope of work.

In summary, various interim reports and the final metallurgical report, the Official Hazen Test Report, (“Hazen Report”)” provided results as follows:

The initial gravity beneficiation/flotation test work on the Tres Amigos and Gossan Cap bulk ore samples were very encouraging with up to 80% recovery of the feed gold into the gravity concentrates while maintaining a minimum concentrate grade of 100 g Au/t ;

The existing tailings samples (feed grades of 3 -8 g Au/t) returned similar recovery results, but had to be cleaned to produce a final concentrate with > 100 g Au/t ;

The overall gold recoveries into the gravity cleaner concentrate still were in excess of 50% of the total feed gold;

Flotation tests on primary ore samples resulted in recoveries of 85 - 90% of the feed gold into the rougher concentrates, however, recoveries after cleaning (to get > 100 g Au/t grade) dropped to the 65-75% range.

A combination circuit of a gravity pre-concentration stage with flotation on the gravity tailings indicated the potential to recover > 90% of the feed gold into the gravity concentrate, the rougher flotation and the cleaner flotation concentrates while maintaining a 100 g Au/t grade in all of the concentrates.

For some activities on the SJG mine, operations may be suspended during the rainy season.

DynaResource uses a multiple phase method of exploration.

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The Company’s internal controls are designed to provide reasonable assurance that information and processes utilized in assessing its exploration results and resource estimates are reasonable and in line with industry best practices.

These internal controls include QA/QC in the collection, analysis, verification, storage, reporting and use of drillhole, assay, metallurgical and other technical and scientific information, including the following internal control protocols in place for exploration data:

These internal controls include quality assurance and quality control (“QA/QC”) in the collection, analysis, verification, storage, reporting and use of drillhole, assay, metallurgical and other technical and scientific information, including the following internal control protocols in place for exploration data:

Written procedures and guidelines to support preferred sampling methods and approaches, with periodic compliance reviews of adherence to such written procedures and guidelines;

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EXPLORATION PLANS FOR 2026

The Company plans to continue its exploration drilling program with dedicated geologists currently mapping underground updating the structure interpretation of the mine.

Management and geologists will make decisions based on capital available, the drill results, corporate strategies and market conditions, surface mapping, sampling and target generation.

The Company has contracted with a “Qualified Person” within the meaning of subpart 1300 of Regulation S-K to interpret the data collected for a formal mineral resource analysis.

The Company plans to continue its exploration drilling program, supported by ongoing underground geological mapping to refine structural interpretations of the SJG mine.

Exploration priorities and timing will be determined by available capital, drilling results, corporate strategy, and market conditions, with data interpretation conducted by a “Qualified Person” within the meaning of S-K 1300 to support formal mineral resource analysis.

LEGA L PROCEEDINGS

From time to time, the Company is involved in legal matters in the ordinary course of its business.

From time to time, the Company becomes involved in legal matters in the ordinary course of its business.

The Company intends to defend itself vigorously against any such claims.

It is the Company’s policy to accrue for amounts related to lawsuits brought against it if it is probable that a liability has been incurred and an amount can be reasonably estimated.

Although the outcome of such matters cannot be predicted with certainty and no assurances can be given with respect to such matters, the Company believes that the outcome of those ordinary course matters in which it is currently involved will not have a materially adverse effect on its results of operations, liquidity, or financial position.

2014 Arbitration Proceeding Filed by Goldgroup Resources Inc.

On March 14, 2014, Goldgroup Resources, Inc.

("Goldgroup") filed for arbitration in the United States with the American Arbitration Association (“AAA”), seeking monetary and nonmonetary relief under an Earn In/Option Agreement.

On August 25, 2016, the AAA issued a ruling in favor of Goldgroup against the Company and DynaMéxico (the “Arbitration Award”).

On May 9, 2019, the United States District Court for the District of Colorado (the “Colorado U.S.

District Court”) confirmed the Arbitration Award.

The Company fulfilled its obligations under the Arbitration Award prior to the beginning of 2023.

On March 5, 2024, the Colorado U.S.

District Court issued an Order denying requests for additional relief by both the Company and Goldgroup and stating that the case is closed.

DynaResource de Mexico SA de CV Legal Update and Disclosure:

On March 3, 2023, Goldgroup Resources Inc.

(“Goldgroup”) filed a formal notice with the México Federal Legal Authorities, which confirmed Goldgroup’s complete withdrawal of all legal claims in Mexico and under Mexican law against DynaResource de México SA de CV.

Goldgroup’s complete legal withdrawal is the result and culmination of 7 years of legal actions undertaken in Mexico by DynaMéxico.

Accordingly, all matters before the courts in México with respect to DynaMéxico and Goldgroup Resources Inc.

are fully resolved and are no longer subject to appeal.

Consequence of the México legal rulings and the Goldgroup legal withdrawal:

• The $48,280,808 USD damages award (dated October 05, 2015) in favor of DynaMéxico and against Goldgroup Resources Inc., confirmed by Mexican courts in 2019, is final, conclusive, and enforceable under Mexican law.

Goldgroup Resources’ challenges to that award have been fully denied and the damages award is final.

• Goldgroup’s challenges to DynaMéxico’s share ownership have also been fully denied and consequently, under Mexican law, Goldgroup owns no shares in DynaMéxico.

Mercuria Energy Trading S.A vs Mineras de DynaResource S.A.

In 2020, Mercuria Energy Trading, S.A.

(“Mercuria”) initiated an arbitration proceeding against Mineras de DynaResource, S.A.

(“Mineras”), arising out of the earlier-terminated supply agreement between the parties.

In January 2022, the arbitration panel awarded Mercuria the sum of US$1,822,674, plus interest at 2% over the quarterly compounded USD three- month LIBOR rate, from February 2020 forward.

In August 2022, the panel also assessed costs of the arbitration proceeding against Mineras, in the aggregate amount of £ 376,233.

DynaResource has accrued $1,000,000 for the arbitration award and related costs.

The Company notes the following:

since Mineras is a company of Mexican nationality, under Mexican law Mineras has the right to legally oppose the recognition and enforcement of the award to Mercuria, the assessment of any costs, and any supplemental award.

MINE SAFE TY DISCLOSURES

Not applicable.

Although the outcome of such matters cannot be predicted with certainty, the Company believes that the outcome of those ordinary-course matters in which it is currently involved will not have a material adverse effect on its results of operations, liquidity, or financial position.

DynaMexico Tax Re-assessment

On March 3, 2025, the Mexican tax authority, Servicio de Administración Tributaria ("SAT”), issued a reassessment for the 2021 tax year of DynaMexico asserting an aggregate adjustment totaling approximately $19 million USD ($368 million MXN), inclusive of inflationary adjustments, surcharges, interest, and penalties, arising from a combination of tax basis adjustments, expense deductibility matters, mining duties, including mining concession fees, and related items.

Among other things, the Company believes that certain aspects of the reassessment do not appropriately reflect the application of an arm’s length transfer pricing methodology in connection with intercompany management fees.

On March 28, 2025, the Company submitted a request for a Conclusive Agreement (Acuerdo Conclusivo) with SAT through the Mexican Taxpayer Ombudsman, Procuraduría de la Defensa del Contribuyente ("Prodecon”), seeking to resolve the reassessment through an administrative dispute-resolution process.

Based on the most recent correspondence issued by SAT through Prodecon in January 2026, approximately $5.7 million USD ($112 million MXN) of the originally assessed amount has been successfully defended or otherwise resolved.

The remaining $13.3 million USD ($256 million MXN) continues to be under review within the Conclusive Agreement process.

The matters still under review primarily relate to the tax treatment of certain deposits, expense deductibility, mining duties, and the associated inflationary adjustments, surcharges, and penalties.

The Company continues to cooperate fully with SAT and Prodecon and is actively pursuing resolution of the remaining matters.

While the ultimate outcome cannot be predicted with certainty, management believes that the reassessment amount will be further reduced through the ongoing administrative process.

During the course of its review, the Company identified previously unrecorded obligations related to Special and Extraordinary Mining Duties for fiscal years 2021, 2022, 2023 and 2024.

As a result, a liability of $3 million USD has been recognized in the consolidated financial statements to reflect the Company’s current estimate of the amount owed in respect of these items.

See Note 2 to the consolidated financial statements.

Title of Properties

On July 17, 2025, the Company’s Board of Directors (the “Board”) authorized Company management to commence a legal process under Mexican law referred to as "amparo” in order to protect the Company’s rights with respect to the following nine mining concessions (the "Impacted Concessions”) related to the SJG mine:

LOS TRES AMIGOS

SAN SEBASTIÁN

NUEVO ROSARIO

PIEDRAS DE LUMBRE UNO

PIEDRAS DE LUMBRE 2

LA NUEVA ESPERANZA

FRANCISCO ARTURO

During a review by the Company’s executive management of information related to the Company’s mining concessions, the Company became aware that a public website hosted by the Mexican Secretariat of Economy (Secretaría de Economía) (the "Website”) includes information indicating that the Impacted Concessions are not currently active.

Although the Website also indicates that the published information is for informational purposes only and that such information is not officially valid, and the Company has not received any formal notification from any Mexican authority asserting adverse action that could result in the nullification or cancellation of the rights under any of the Impacted Concessions, the Board determined it prudent, as a precautionary measure, to authorize the Company to commence the amparo process to challenge the inactive status of the Impacted Concessions indicated on the Website and any related administrative action(s) taken in violation of the Company’s due process rights.

Notwithstanding the information on the Website, the Company has continued to comply with all obligations required under applicable Mexican law to maintain its concessions in good standing, and all corresponding payments have been duly made and accepted without objection by the applicable authorities.

The Company continues to review information available to it and intends to take appropriate action to protect its rights to the Impacted Concessions;

however, no assurance can be provided regarding the outcome of its actions or the availability of the Impacted Concessions to the Company in the future.

Environmental Fine and Installment Arrangement

On July 19, 2024, the Federal Attorney for Environmental Protection (“PROFEPA”) issued a resolution determining a fine of MXN $8,251,320 against DynaMexico, in connection with alleged irregularities in the construction and operation of the tailings dam and related facilities at the SJG mine.

The Company filed a nullity trial before the Federal Court of Administrative Justice, and on May 28, 2025, obtained a suspension of enforcement of the fine.

The Company continues to contest the PROFEPA assessment through all available legal remedies.

On September 11, 2025, the Mexican tax authority (“SAT”) notified the Company of the updated fine amount of MXN $8.7 million, inclusive of adjustments.

Pursuant to a Board resolution dated October 6, 2025, the Company authorized DynaMexico to enter into an installment arrangement with SAT, requiring a 20% upfront payment and the balance to be paid over thirty-six (36) monthly installments.

The total cost under the plan is approximately MXN $9.57 million, including principal of MXN $6.98 million and interest.

The Company expressly reserves its right to continue contesting the underlying PROFEPA fine and, if successful, to seek recovery of amounts paid under the SAT arrangement.

MINE SAFETY DISCLOSURES

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is not applicable to the Company because its mining operations are conducted exclusively in Mexico through its subsidiary DynaMéxico, and are not subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 2. Properties