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Item 7. Management’s Discussion and Analysis

2026-04-02 compared with 2025-04-07 · 778 added, 511 removed, 591 unchanged (69% of the section changed)

MANAGEMENT’S DISCUSSION AND A NALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company is a minerals investment, management, and exploration company, and currently advancing its high-grade San Jose de Gracia gold project in México through an operating subsidiary.

Activities are focused on exploration, technical evaluation, and project development in support of expanding the mineral resource base.

We currently conduct activities in México through our operating subsidiary DynaMéxico.

We currently own 100% of the outstanding shares of DynaMéxico, and DynaMéxico owns 100% of mining concessions, equipment, camp and related facilities which comprise the SJG.

In addition to investing in the continued advancement and development of its San Juan de Gracia Project, the Company has also focused on strengthening corporate governance practices, with the objective of meeting the listing requirements of additional exchanges in the US and/or Canada.

The Company is a minerals investment, production, and exploration company, currently advancing its high-grade SJG mine in Mexico through its operating subsidiary, DynaMéxico.

Activities are focused on exploration, technical evaluation, and project development aimed at expanding the mineral resource base.

The Company conducts operations in Mexico through its wholly-owned subsidiary, DynaMéxico.

As of the date of this Annual Report on Form 10-K, the Company owns 100% of the outstanding shares of DynaMéxico, which in turn claims an ownership interest in the mining concessions, equipment, camp, and related facilities which comprise the SJG mine.

In addition to advancing the SJG mine, the Company has also focused on strengthening its corporate governance practices, with the objective of meeting the listing requirements of additional stock exchanges in the United States and/or Canada.

Project Improvements, Expansion and Increased Output

Since 2015, the Company has carried out limited site-scale processing and operational activities at SJG in support of its exploration and evaluation programs.

These activities have been aimed at enhancing technical understanding of the deposit, optimizing on-site infrastructure, and supporting project advancement.

In 2022, the company expanded its focus on exploration efforts at SJG with the objective of increasing the project’s mineral resource base, primarily targeting gold.

From initial small-scale operations averaging of 100 tons per 24-hour operating day in 2015, throughput has steadily increased, reaching an average of approximately 700 tons per day in 2024.

In 2023 alone, daily processing volumes rose by 30%, from 550 to 700 tons.

For 2025, the Company expects to increase in daily throughput to an average of 800 tons, with installed capacity now in place to support up to 1,000 tons per day.

The Company remains classified as an exploration stage issuer under Regulation S-K 1300 and does not currently meet the criteria for designation as an operating stage issuer .

The Company is currently reporting all costs of mine operations, improvements, and expansion as expenses in accordance with United States Generally Accepted Accounting Principles (“GAAP”) The result of expensing all costs is that the Company has accumulated a net loss carry forward from México operations of approximately $18 million USD which is available to offset future taxable earnings.

Since 2015, the Company has carried out limited site-scale processing and operational activities at the SJG mine to support its exploration and evaluation programs.

These activities have been directed toward enhancing the technical understanding of the deposit, optimizing on-site infrastructure, and advancing project development.

In 2022, the Company expanded its exploration efforts at the SJG mine with the objective of increasing its mineral resource base, primarily targeting gold mineralization.

From initial small-scale operations averaging 100 tons per 24-hour operating day in 2015, throughput has steadily increased, reaching an average of approximately 700 tons per day in 2025.

In 2023 alone, daily processing volumes rose by 30%, from 550 tons to 700 tons per day.

In 2026, the Company expects to operate at an average daily throughput of approximately 800 tons per day, representing management’s target operating rate assuming approximately 90% availability.

The processing facility has a maximum instantaneous throughput capacity of approximately 900 tons per day.

As discussed above, on May 20, 2025, the Company filed with the SEC the TRS for the SJG mine in Sinaloa, Mexico.

The TRS includes the Company’s initial Mineral Reserve Estimate, which outlines a high-grade Proven and Probable Mineral Reserve of 250,000 gold ozs for the SJG mine.

This initial Mineral Reserve Estimate and TRS was prepared by the independent firm P&E Mining Consultants Inc (“P&E”), and process plant review and operations aspects by D.E.N.M.

Engineering Ltd.

Highlights Include:

• Proven & Probable Mineral Reserves of 1,607 k tonnes at 4.91 g/t gold, totaling 253,000 gold ounces (see Table 1).

• Indicated Mineral Resource of 286 k tonnes at 6.74 g/t gold and Inferred Mineral Resource of 97 k tonnes at 4.37 g/t gold.

(see Table 2).

• Life of Mine of 7-years based on current Mineral Reserves with excellent potential to extend along strike and adjacent to the existing underground mine infrastructure and in the wider SJG mine property.

• After-tax net present value (“NPV”) of the SJG mine is estimated at $84.4 million ($110.0 million pre-tax) under baseline scenarios of 5% discount rate and $2,500/oz Au.

At a $3,000/oz gold price the after-tax NPV is estimated at $133.3 million ($183.6 million pre-tax).

• An Operating Cash Cost of $1,327 (US$/oz Au Eq) and an All-in Sustaining Cost of $1,720 (US$/oz Au Eq).

• Significant Upside - Gold price sensitivity with conservative pricing assumption ($2,500 oz Au ~25% below current spot gold price) used in the TRS.

• Growth Potential – Mineral Reserves / Mineral Resources defined for only three of the mineralized structures in the SJG mine property, which historically hosted mining on a total of 20 discrete mineralized structures.

Mineral Reserves

The Mineral Reserves and Mineral Resource for the SJG mine are as follows;

Mineral Reserves

Mineral Reserve Estimate (1-9)

Reserve Class

Grade (g/t Au)

Contained Metal (koz Au)

Proven & Probable 9

Mineral Reserves are based on Measured and Indicated Mineral Resource Classifications only.

Mineral Reserves are reported using the 2014 CIM Definition Standards and 2019 Best Practices Guidelines and have an effective date of March 24, 2025.

Mineral Reserves are defined within mine plans and incorporate mining dilution and ore losses.

Underground Mineral Reserves are based on metal price of US$2,500/oz Au and are constrained within a mine design, and use process plant recoveries varying between 76-80% for Au

An Underground economic cut-off value of US$140/t is estimated to differentiate ore from waste and is based on cost assumptions of US$99/t for mining US$23/t processing, and US$18/t site general and administrative.

Mineralized material above a cut-off of $90/t that is planned to be mined adjacent to economic material is identified as Marginal ore, as the revenue it generates exceeds the additional costs associated with haulage, processing and backfilling the material versus leaving it in the stope as backfill.

Smelter terms result in an average value paid per ounce of gold of 90.53% of the value of the gold in concentrate, after accounting for all contract terms.

The provided LOM block models do not track deleterious elements noted in the smelter terms, which could reduce the payable value of the concentrate.

However, DynaResource asserts that no penalties of this nature have historically been assessed on any payment invoice from the existing concentrate buyer.

Totals may not sum due to rounding.

Mineral Reserves derived from marginal material total 312 kt at 2.03 g/t Au for a total contained metal content of 20.3 koz.

Mineral Resources

Mineral Resource Estimate at 2.0 g/t Au Cut-off (1-6)

Classification

Metallurgical

San Pablo/La Mochomera

The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve.

It can be reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.

The Mineral Resource is estimated using S-K 1300.

Mined areas as of December 31, 2024, were depleted from the block models.

Mineral Resources are exclusive of Mineral Reserves.

All numbers are rounded.

Economic Analysis

For the current 7 year mine life exploiting the Tres Amigos, San Pablo and La Mochomera ore bodies the following were the key economic results from the study.

Key Economic Parameters

KEY ECONOMIC PARAMETERS

Production mine life (years)

Production rate (tpd)

Production rate (ktpa)

Total production (kt)

Gold grade (g/t)

Gold process recovery (%)

Gold smelting/refining (%)

Gold payable (koz)

Gold Equivalent payable (koz)

Net Revenue ($M)

Sustaining Capital Costs ($M)

Operating Cost ($/t processed)

Operating Cost ($M)

Operating Cash Cost (US$/oz AuEq)

All-in Sustaining Cost (US$/oz AuEq)

Pre-Tax Cash Flow ($M)

Pre-Tax NPV (5% discount) ($M)

Income Taxes ($M)

After-Tax Cash Flow ($M)

After-Tax NPV (5% discount) ($M)

Sensitivity Analysis

The after-tax NPV sensitivities to ±20% changes in gold metal price, gold head grade, gold metallurgical recoveries, operaing expenses (“OPEX”) and capital expenses (“CAPEX”) are presented in Figure 1 and Table 4 below.

The after-tax base case NPV is most sensitive to the gold metal price, followed by gold metallurgical recoveries and gold head grades, followed by OPEX, and then CAPEX.

After-Tax NPV @ 5% Sensitivity Parameter Values

After-Tax NPV @5% Sensitivity Graph

EXTENDED GOLD PRICE AFTER-TAX NPV SENSITIVITY ANALYSIS

Gold Price (US$/oz)

After-Tax Project NPV @5% (in millions)

The SJG mine exhibits strong leverage to gold prices, especially with long-term gold price expectations exceeding the base case assumptions made in this Annual Report on Form 10-K.

At current spot prices above $3,200 per gold ounce, after tax NPV would be expected to materially exceed $133.3 million.

Results for the Years Ended December 31, 2025 and 2024

1 unchanged sentence

Reported Mill

In 2024, on-site operational activities at San Jose de Gracia resulted in the processing of 257,676 Tons and the production of approximately 25,677 gross Oz Au.

In 2025, on-site operational activities at SJG mine resulted in the processing of 260,694 tons of material and the production of approximately 21,393 gross Oz Au.

After dry weight adjustments at settlement terms with the buyer, approximately 20,848 Oz Au were sold.

10 unchanged sentences

Gold Ounces Sold

(1) Gold concentrate sold during the period is not equal to gold concentrate recovered during the period due to timing of shipments to buyer, and due to buyer’s payability discount for the purchase of gold concentrate, and due to any adjustment from dry weight and assay in provisional settlements with the final assays.

(1) Gold concentrate sold during the period is not equal to gold concentrate produced during the period due to timing of shipments to buyer, and due to buyer’s payability discount for the purchase of gold concentrate, and due to any adjustment from dry weight and assay in provisional settlements with the final assays.

Mill feed grades and recovery rates are based on internal estimates derived from assay data and estimated weights of material processed.

The drop in the feed grade at the pilot plant facility is a result of the planned reduction of certain high-grade zones in accordance with the mine plan, as well as higher dilution experienced in the processed material.

The increase in processed tonnage within SJG also contributed to lower grades ore being treated.

The drop in the feed grade at the processing facility is a result of the planned reduction of certain high-grade zones in accordance with the SJG mine plan, as well as higher dilution experienced in the processed material.

The increase in processed tonnage at the SJG mine also contributed to lower grades ore being treated.

To support throughput, the Company opened a new development area at San Pablo during the fourth quarter of 2023, and an additional target zone, La Mochomera, in May 2024, which is expected to yield higher-grade material at depth.

2025 HIGHLIGHTS

Operational Performance

Throughout the second half of 2024 (H2 2024), the Company has remained focused on developing and implementing the optimization program at the San Jose de Gracia mine aimed at increasing process plant throughput and recoveries, and improving maintenance and equipment usage with the goal of improving efficiencies and profit margins at the SJG Project level.

Operational results for the quarter demonstrated significantly improved efficiencies as a result of the ongoing optimization program with a steady improvement as the quarter proceeded with metal production of 2,626 ounces of gold in October, 2,182 ounces in November and 1,968 ounces in December.

In Q4 2024 total metal production of 6,776 ounces of gold was a 19% increase from 5,676 ounces the previous quarter and a 25% increase from 5,405 ounces in Q4 2023.

Production for the full year 2024 totaled 25,677 ounces of gold, which fell within the Company’s revised guidance.

Milled throughput for Q4 2024 was 67,670 tons, representing a 9% increase compared to 61,900 tones in Q3 2024 and a 50% improvement over 45,151 tones in Q4 2023.

Milled throughput for the full year 2024 was 256,676 tons representing a 30% increase over 2023 annual milled throughput of 198,518 tons.

The increase in ounces produced during the quarter was a result of the increase in feed grade from 3.78 g/t in Q3 2024 to 4.12 g/t in Q4 2024, compared to 4.71 g/t in Q4 2023.

The average head grade for the full year 2024 was 4.07 g/t.

Through significant capital investment made in Q2 and Q3 2024, the Company has made several upgrades to the plant, increase in capital underground development and increased access to working faces and improved the utilization and productivity of current infrastructure, which benefited Q4 2024 production

A new vibrating screen was installed in the crushing circuit in August 2024 which has resulted in a more consistent and overall improved mill performance which is demonstrated by September’s performance of an average of 770 tons per day produced.

Throughout October, production averaged 825 tons per day with further improvements expected.

Improvements to the flotation circuit have led to improvements in grades with steady month-over-month increases in the metallurgical results achieved.

At the plant level, metallurgical test work with new reagents also resulted in an optimized flow sheet and demonstrated the ability to deliver up to a 79% recovery, under certain conditions.

The Company is working to improve the consistency of plant recoveries.

The near completion of a new drift into a new working mining face that is expected to come into production in the La Mochomera deposit and the improved access to working faces through the completion of an access road to reach the San Pablo deposit have and should continue to contribute to improved throughput rates.

This will also have a positive impact on grades as better access to high-grade zones is gained.

Detailed activities from the three main deposits include:

At the Tres Amigos vein north zone a new ore drive was completed in the upper levels enabling further access to this high-grade vein via a new mining face.

Mining from this face was incorporated into Q3 2024 production and will continue throughout 2025 as mining this is currently one of the main sources of high-grade ore to the mill.

This newly gained access will also enable diamond drilling deeper with a lateral extension toward this untested north and south extension with the goal of increasing inventory.

Operational Performance Overview

During Q4 2025, the Company continued to advance the optimization program at the SJG mine.

This program is focused on increasing process plant throughput and recoveries, improving maintenance and equipment utilization, and ultimately enhancing operational efficiencies and profit margins at the SJG mine.

Operational results for Q4 2025 showed improved performance across several critical operational metrics (particularly in costs) due to the ongoing optimization program.

The average underground development was 1,057 meters per month in Q4 2025 (1,267 in Q3 2025), compared to 383 meters per month in Q4 2024.

This increase allowed the SJG mine to access over 20 production stopes.

Expanded development work also led to the discovery of two new mineralized veins – one at the Tres Amigos mine (named Victoria) and one at La Mochomera (named 532) which are currently being mined as additional high-grade ore sources.

Process plant reliability also improved.

Electrical refurbishment and preventative maintenance programs resulted in ball mill availability averaging 96% for Q4 2025 compared to 94% Q3 2025.

A construction work program to establish a primary gravity gold circuit with the installation of three new Falcon gravity concentrators (the “Falcon” units) was completed in Q3 2025 with commissioning completed in early Q4 2025.

These Falcon units were installed after the ball mills to recover the significant portion of free gold available in the San Pablo, San Pablo Sur and La Mochomera deposits.

In addition, the process plant at the SJG mine has another Falcon unit already installed on the tailings circuit.

The aim of the installation of these Falcon units is to boost gold recoveries improving operational efficiency and SJG mine’s economics, especially in the current higher priced gold environment.

Milled ore for Q4 2025 was 65,275 tons (approximately 710 tons per day), a 4% increase from the Q3 2025 production average of 682 tons per day.

With the current high ball mill availability, the Company is evaluating cost-effective strategies to utilize additional processing capacity of approximately 100 tons per day.

Gold metal recoveries for the quarter averaged 75.69%, an increase from the 73% gold recovery achieved in Q3 2025, primarily due to the installation and commissioning of the Falcon units.

During Q4 2025, metal production totaled 1,633 ounces of gold in October, 1,615 ounces in November, and 1,832 ounces in December.

Total metal production for Q4 2025 was 5,080 ounces of gold, above Q3 2025 production of 4,830 ounces.

The average gold feed grade was 3.20 g/t for Q4 2025, and for the full year 2025, the average gold feed grade was 3.46 g/t.

Mine development for Q4 2025 was on budget with 3,172 meters of development completed, compared to 3,013 meters in Q3 2025.

The completion of new development drifts enabled the Company to maintain more than 20 stopes in production by the end of the quarter and the end of the year.

This additional mining flexibility is expected to positively impact ore tonnage and grades in the coming months in 2026.

The Company has also completed a capital works program to enhance mine ventilation across all three mines which included connecting the La Mochomera and San Pablo Sur mines which has had an immediate impact on the working environment.

Improved ventilation time has resulted in an improvement in working conditions and faster re-entry times following blasting activities.

Planning for a central Raise Bore ventilation shaft was cancelled due to unfavorable geotechnical conditions and this planned ventilation location was moved to Palos Chinos.

This capital works program will involve approximately 100 meters of decline development which, in addition to helping ventilation will bring mine development closer to the Purisima historical works.

Numerous exploration targets have been identified in this southern area of the mineral field.

This ventilation development will also be a platform for underground exploration.

Detailed activities from the four main deposits include:

Original mine planning at Tres Amigos anticipated closure by the end of Q1 2025.

However, geological reinterpretations and targeted short exploration drifts identified two additional mineralized structures – the Victoria and Alexa veins – located within 40 meters of existing underground infrastructure.

To date approximately 40,000 tons of high-grade ore have been extracted from this high-grade structure.

In addition, a new ore drive was completed on the upper levels of the Tres Amigos North Zone which is an area well known for free gold occurrences, providing access to a new high-grade ore face.

Mining from this area in Tres Amigos totaled 17,000 tons contributing to Q4 2025 production and is expected to continue throughout 2026.

This new access will also enable future diamond drilling to test the north and south extensions of the deposit, with the goal of increasing inventory.

San Pablo Viejo and San Pablo Sur

Throughout the 3rd quarter of 2024 the Company continued active mining from multiple faces at the San Pablo deposit while continuing development work on the access to the San Pablo deposit.

San Pablo Viejo and San Pablo Sur are expected to remain the primary sources of gold production through 2025 and 2026, with continued potential beyond.

Additionally, the South Extension at the 500 level presents an exciting high-grade opportunity, potentially yielding “Bonanza” style gold grades in the short to mid-term.

The mine is well-positioned for the future, with a focus on developing new reserves and expanding deeper into the La Mochomera vein.

The La Mochomera vein is also expected to be an important source of gold production during 2025 and 2026 and with particularly interesting high-grade opportunities at depth which is also open.

OUTLOOK (SJG)

With a successful Q4 2024 demonstrating more normalized operations, the Company believes that San Jose de Gracia is well positioned for 2025.

The steady increased rate of production resulted in 2024 full year production meeting the Company’s updated guidance.

While the Company made significant headway in the last half of 2024, the continued effort to optimize operations will remain focused on improving ore to the mill, throughput rates, and recoveries.

San Pablo Sur, San Pablo, La Mochomera and the Tres Amigos ore bodies will continue to be the main contributors to production in the year ahead.

Development in these areas will also be a key focus for the Company to access high-grade zones and new mining faces.

As a result of the capital investments made to the mine and mill, exploration expenditure in Q4 2024 remained minimal, limiting available high-grade resources ready for short term mining.

In the near term, exploration will drill targets that are expected to continue to grow the existing high-grade ore resources and increase mineable inventory.

The Company has continued to invest exploration spending in both near-mine extensions and geological studies and interpretation.

The Company plans to complete an SK-1300 Mineral Resource Estimate Update in Q2 2025 at San Jose de Gracia to San Pablo Sur, San Pablo, La Mochomera and the Tres Amigos ore bodies which will include development proposals for additional exploration for ore veins in the short and mid-term.

The Company expects to start near-mine extension drilling on the property in July 2025 (Q3 2025) and expand to surrounding areas by year end.

Exploration will focus on growing the known resources at San Jose de Gracia.

The Company will prioritize drilling high grade underground targets that can readily be brought into the mine plan as well as the continued regional program to better understand the potential of the significant land package at San Jose de Gracia.

Additionally, planning for deeper and lateral drilling in between the San Pablo and Tres Amigos veins has highlighted the potential for extending the high-grade underground resource at San Jose de Gracia, especially in zones that were previously thought to be discontinuous such as near faulting, and has identified the opportunity to develop San Pablo, San Pablo Sur, La Mochomera and Tres Amigos exploration potential.

At the La Mochomera deposit, the Company seeks to explore high grade potential toward south to Palos Chinos and Purisima historical mines which operated over 100 years ago as high-grade mines.

A new tailings dam was completed during Q3 2024 with a total estimated storage capacity of 670,751 cubic meters distributed in two stages to hold additional future tailings for approximately 3.0 years.

The use of the third stage storage facility is underway and planning for the fourth stage is in process.

Throughout Q4 2025, the Company continued mining multiple faces at the San Pablo deposit while advancing development toward the deeper southern extensions.

San Pablo Viejo and San Pablo Sur are expected to remain the primary sources of gold production through 2026 and 2027, with additional upside potential beyond that horizon.

Particularly promising is the South Extension at the 500 level, which could yield high-grade (“Bonanza”-style) gold mineralization in the short to mid-term.

Ongoing development efforts are positioning the mine for continued growth, including expansion deeper into the La Mochomera vein system.

The La Mochomera vein is expected to be a significant source of gold production in 2026 and 2027, with especially promising high-grade potential at depth.

During Q1 2025, development activities intersected a previously unrecognized high-grade mineralized structure, now designated as the “532 Vein”.

The significance and potential of this new discovery are currently being evaluated with approximately 3,000 tons of high-grade material extracted from this vein.

Palos Chinos is an ore body which the Company exposed in January 2025 from the La Mochomera underground infrastructure with the first ore being extracted in January 2025.

By the end of Q4 2025, the Company had completed 4 development levels on this vein and mined 3,500 tons of ore.

In 2026, this ore body will be an important source of high-grade ore.

Results for the Years Ended December 31, 2025 and 2024

Revenue increased approximately 26% to $58,467,565 for the year ended December 31, 2025 from $46,503,016 for the year ended December 31, 2024.

This was primarily due to an increase in net revenue per ounce from $1,433 to $2,113.

MINE PRODUCTION COSTS :

Mine production costs for the years ended December 31, 2024 and 2023 were $15,090,417 and $11,156,677 respectively.

These costs were directly related to the extraction of mine tonnage to be processed at the mill.

The increase is primarily due to a 30% increase in mined tonnage.

MINE DEVELOPMENT AND STRIPPING COSTS :

Mine development and stripping costs for the years ended December 31, 2024 and 2023 were $11,809,670 and $8,311,027, respectively.

These include the costs of extracting waste material to reach the materials to be extracted for processing.

The increase was a result of the increase in volume.

PRODUCTION COSTS RELATED TO SALES :

Production costs related to sales for the years ended December 31, 2024 and 2023 were $6,046,714 and $6,669,568, respectively.

These are expenses directly related to the milling, packaging and shipping of primarily gold and other precious metals product.

CAMP, WAREHOUSE AND FACILITIES :

Camp, warehouse and facility cost for the years ended December 31, 2024 and 2023 were $5,527,949 and $5,453,778, respectively.

These were the support costs of the mining facilities including housing, food, security and warehouse operations.

The increase was a result of the increase in personnel from the increase in operations.

TRANSPORTATION:

Transportation costs for the years ended December 31, 2024 and 2023 were $4,971,128 and $4,484,766, respectively.

These were the costs of transporting material between the mine and the mill, and delivery of the concentrate to the customer for treatment and sale.

The increase was a result of the overall increase in volume transported and the general increase in fuel and trucking costs.

FACILITIES EXPANSION COSTS :

Facilities expansion costs for the years ended December 31, 2024 and 2023 were $2,548,899 and $2,554,505 respectively.

These were the costs associated with the expansion of the mining facilities.

Primary expenditures in 2024 was related to the opening of new mine access and continued upgrades to the ball mills.

Primary expenditures in 2023 were additional costs related to the new ball mills, including a new crusher, and concentrators on the front and the backs of the mill to aid in free gold recovery.

These are cost which would normally have been treated as capital expenditures under U.S.

GAAP but the Company is required to expense because of the lack of proven and probable reserves.

EXPLORATION DRILLING :

Exploration drilling expenses for the years ended December 31, 2024 and 2023 were $1,736,880 and $2,514,544, respectively.

The Company began a new drilling program in 2022 to update its mineral resource estimate under Regulation SK 1300.

The Company drilled 29 drill holes totaling 6,644 meters during 2024 and 48 drill holes totaling 14,009 meters in 2023.

PROPERTY HOLDING COSTS :

Property holding costs for the years ended December 31, 2024 and 2023 were $166,551 and $172,663, respectively.

These costs were concessions taxes, leases on land and other direct costs of maintaining the property.

This was primarily due to an increase in net revenue per ounce from $2,113 to $2,804, partially offset by a decrease in gold ounces sold.

OPERATING COSTS:

Operating costs for the year ended December 31, 2025 and 2024 were $40,223,275 and $47,898,208, respectively.

The cost decrease for year ended December 31, 2025 reflected $9.0 million in capitalized mine development costs, and $2.6 million in property, plant and equipment incurred beginning January 2025 following the issuance of the Company’s Maiden Mineral Reserve Estimate under Reg.

S-K 1300 and the resulting change to the Company’s capitalization policies.

These costs were expensed as operating costs during 2024.

DEPRECIATION AND DEPLETION:

Depreciation and depletion expense for the year ended December 31, 2025 and 2024 were $964,295 and $Nil, respectively.

With the Company’s transition from Exploration Stage to Production Stage under S-K 1300, the Company began capitalizing mine development costs and commenced depreciation and depletion charges on a units-of- production basis.

GENERAL AND ADMINISTRATIVE EXPENSES :

General and administrative expenses for the years ended December 31, 2025 and 2024 were $6,192,509 and $4,157,425 respectively.

These general and administrative expenses represent costs incurred in operating the Company that are not directly related to site-based processing or exploration activities, and include management,

accounting, and legal expenses.

The decrease in costs in 2024 was primarily a decrease in legal fees as discussed in the legal summary, including a non-recurring legal expense of $3,000,000 tied to the successful outcome of litigation paid in 2023.

These general and administrative expenses represent costs incurred in operating the Company that are not directly related to site-based processing or exploration activities, and include management, accounting, and legal expenses.

Increases to general and administrative expenses in 2025 primarily relate to an increase in consulting and professional fees related to the Company’s legal matters, together with increased bonus expense.

STOCK-BASED COMPENSATION EXPENSE:

Stock compensation expense was $1,219,062 and $881,250 for the years ended December 31, 2024 and 2023 respectively and was related to the vesting of restricted stock awards issued in 2022.

OTHER INCOME (EXPENSE):

Stock-based compensation expense was $1,249,459 and $1,219,062 for the years ended December 31, 2025 and 2024, respectively and was related to the vesting of restricted stock awards issued in 2024 combined with shares awarded in 2025.

ACCRETION EXPENSE:

Accretion expense for the year ended December 31, 2025 and 2024 was $42,004 and $18,260, respectively.

The Company began accreting its asset retirement obligation (“ARO”) on January 1, 2024, related to estimated costs to decommission the milling plant and tailings pond at the estimated life of the mines in operation at the establishment of the ARO in 2023 as a result of the expansion of the milling operation.

OTHER EXPENSE:

Other income (expense) for the years ended December 31, 2025 and 2024 was $471,590 and $1,247,352 respectively.

Included in 2024 was interest expense of $1,696,258, mark-to-market gain on the derivative liability of $905,174, currency translation loss of $506,439, and other income of $50,171.

Included in 2025 was interest expense of $1,613,836, mark-to-market loss on the derivative liability of $356,863, currency translation gain of $5,139,258, and other expense of $3,640,149.

Included in 2024 was interest expense of $1,696,258, mark-to-market gain on the derivative liability of $905,174, currency translation loss of $506,439 and other income of $50,171.

The primary reason for the increase in interest expense was the Company entering into a revolving credit line facility.

OTHER COMPREHENSIVE INCOME (LOSS):

Comprehensive income (loss) includes the Company’s net income (loss) plus the unrealized foreign currency translation gain for the period.

The Company’s other comprehensive loss for the years ended December 31, 2024 and 2023 consisted of unrealized foreign currency translation gains (losses) of $(2,486,399) and $585,622, respectively, of which $(715,913) of the 2024 loss and $383,604 of the 2023 gain related to a cumulative translation adjustment resulting from the unrealized gains (losses) on the Company’s deferred tax asset arising from the Mexico net operating loss.

The Company’s other comprehensive loss for the years ended December 31, 2025 and 2024 consisted of unrealized foreign currency translation gains (losses) of $(8,531,837) and $(2,486,399), respectively.

Liquidity and Capital Resources

As of December 31, 2025, the Company had negative working capital of $31,735,708, a decrease of $13,383,323 from the working capital maintained by the Company of negative $18,352,385, as of December 31, 2024.

The primary reasons for the decrease is related to a decrease in cash related to the Company’s net loss, reclassification a portion of the Company’s foreign tax receivable to long term and an increase in short term trade liabilities.

Net cash used in operations for the year ended December 31, 2024 was $8,014,004 compared to $17,659,661 during the year ended December 31, 2023.

This was primarily due to a decrease in the Company’s operating loss.

Net cash used in investing activities for the year ended December 31, 2024 was $6,755 for the purchase of computer equipment.

In 2024 and 2023, expenditures related to facilities expansion costs of $2,548,899 and $2,554,505 respectively, were expensed under subpart 1300 of Regulation S-K and not included in investing activities.

Net cash provided by financing activities for the year ended December 31, 2024, was $8,495,282 compared to $3,670,102 for the year ended December 31, 2023.

In 2024 the Company raised $2,500,000 from the sales of Series E Preferred Stock and $6,000,000 from a private placement of the Company’s common stock.

In 2023, the Company received proceeds of $5,000,000 from the sale of 1,000,000 shares of common stock offset by the purchase of the Company’s Series A Preferred Stock for $1,250,000 and repurchase of shares that were returned to treasury stock for $60,250.

The primary reasons for the decrease is related to a decrease in cash related to the Company’s net loss, reclassification of a portion of the Company’s foreign tax receivable to long term and an increase in short term trade liabilities.

Cash from operations for the year ended December 31, 2025 was $5,757,148 compared to net cash used of $8,014,004 during the year ended December 31, 2024.

The improvement in the cash flow from operations was primarily attributable to the Company’s income generated in 2025, driven by increased revenue and lower mine operating costs.

Cash used in investing activities for the year ended December 31, 2025 totaled $11,526,369 compared to $6,755 during the year ended December 31, 2024.

The increase reflected $9.03 million in capitalized mine development costs incurred beginning January

2025 following the issuance of the Company’s Initial Mineral Reserve Estimate under S-K 1300 and the resulting change to the Company’s capitalization policies.

Cash provided by financing activities for the year ended December 31, 2025 and 2024 was $5,059,294 and $8,495,282, respectively.

The net cash provided by financing activities during the year ended December 31, 2025 came from $17,650,000 of advances from the company’s Revolving Credit Line ("RCL”) offset by $12,500,000 in payments on the RCL and $90,706 in operating lease payments.

Through December 31, 2025, the Company’s available liquidity and operations have been financed primarily through its operations and the revenue generated from the sale of product.

The revenue from operations was supplemented by proceeds from the sale of common stock and customer advances as well as the cash flow from operations.

Although the Company has incurred net losses and net cash outflows from operating activities and investing activities for the year ended December 31, 2024, there were many expenses which were made that were not expended for the production of revenue, such as exploration drilling and mine expansion and non-recurring legal success fees paid.

Although the Company has incurred net losses and net cash outflows from operating activities and investing activities for the year ended December 31, 2025, there were many expenses which were made that were not expended for the production of revenue, such as exploration drilling and mine expansion costs.

If these expenses had not been made, the Company’s net loss would have been minimized.

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As of December 31, 2025, we did not have any off-balance sheet arrangements, which have or are reasonably likely to have a material adverse effect on our financial condition, results of operations or liquidity.

Plan of Operation

The Plan of operation for the next twelve months includes continued enhancement of site infrastructure and processing capabilities, along with expanded exploration drilling at SJG.

During 2024, the Company processed an average of approximately 700 tons of material per day.

For 2025, the Company anticipates increasing daily processing throughput to an average of 800 tons per 24-hour operating day, in.

support of its ongoing exploration and project evaluation activities at the SJG Project.

The Company now has processing capacity of up to a maximum of 850 tons a day.

The Company initiated development in additional target zones within the project area, which are anticipated to yield higher-grade material for processing as part of its ongoing exploration activities.

The Company expects that a combination of higher-grade feed material, increased processing throughput, and higher gold prices may produce a significant increase in revenue in 2025, as part of its ongoing exploration and project advancement efforts.

The Company plans to continue its exploration drilling program with two to three rigs on site.

Management and geologists will make decisions based on 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 in order to compile a formal Mineral Resource Estimate update in the second quarter of 2025.

Capital Expenditures

The Company’s primary capital expenditures at the SJG Project have supported ongoing site development and processing enhancements.

In 2024 the Company continued to refine its processing systems through the installation of front and back end concentrators and the repurposing of the original mill for grinding.

Additional equipment was acquired, and infrastructure was expanded to improve site access and increase operational capacity.

All capital expenditures are expensed, consistent with the Company’s classification as an exploration stage issuer under subpart 1300 of Regulation S-K.

Exploration Stage

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

In accordance with SEC rules and US GAAP, all costs related to site operations, development activities, and infrastructure improvements are expensed as incurred.

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

The Company has undertaken limited site-scale operational activities to support its exploration and evaluation efforts;

however, it has not yet determined mineral reserves, and no commercial production decision has been made.

Primary capital expenditures in 2025 have been directed toward increasing underground infrastructure development and enhancing processing capacity at the SJG mine.

Average underground capitalized development in Q4 2025 was 1,267 meters per month, compared to 380 meters per month in 2024.

Processing systems have been upgraded through the installation of new Falcon units and the repurposing of the original grinding mill.

Additional equipment acquisitions and infrastructure improvements have also enhanced site access and operational capacity.

Effective January 1, 2025, capital expenditures are capitalized in accordance with S-K 1300.

See Note 3 of the consolidated financial statements.

Total capital expenditures in 2025 were $11.5 million.

Exploration Activity

The Company continues to invest in exploration spending on near-mine extensions as well as geological studies and reinterpretations.

The Company completed a Mineral Resource Estimate under S-K 1300 in the second quarter of 2025 covering San Pablo Sur, San Pablo, La Mochomera and the Tres Amigos ore bodies which includes development proposals for additional exploration of ore veins in the short and mid-term.

The Company expects to start underground mine extension drilling at the start of Q2 2026 and expand exploration to surrounding areas by year-end.

Part of this activity will be a re-analysis of the previous surface geophysical surveys.

Exploration will focus on growing the known resources and increasing the reserve inventory at the SJG mine.

The Company intends to prioritize exploration of high-grade underground targets that can be readily incorporated into the SJG mine plan, as well continue the regional program to better understand the broader potential of the land package associated with the SJG mine.

Additionally, planning for deeper and lateral drilling between the San Pablo and Tres Amigos veins has highlighted the potential to extend high-grade underground resources at the SJG mine, especially in areas previously considered discontinuous due to faulting.

The Company has identified opportunities to develop San Pablo, San Pablo Sur, La Mochomera, and Tres Amigos exploration potential.

At the La Mochomera deposit, the Company plans to explore southward toward the historic Palos Chinos and Purisima mines, which operated over 100 years ago as high-grade producers.

Of note is the Palos Chinos exploration target, located within 40 meters of the existing La Mochomera mine infrastructure.

In June 2025, the Company provided an update on exploration activities at the SJG mine.

This update included the preliminary identification of two potential high-grade mineralized zones situated adjacent to existing mine infrastructure.

These zones are currently under evaluation for future exploration and development potential.

Assay results referenced in this Annual Report on Form 10-K are based on internal laboratory analyses conducted at the SJG mine plant.

They have not been verified by an independent third-party laboratory and do not conform to disclosure standards such as S-K 1300 or NI 43-101.

Over the past year, the Company has been compiling and interpreting geological, geochemical, geophysical, and historical mining data to support an exploration diamond drilling program planned for Q2/2026.

This review has led to the identification of the Victoria zone, a previously undocumented mineralized structure located approximately 40 meters from the upper-level development at the Tres Amigos mine (see Figures 1 and 2).

Similarly, analysis of historical workings mining activity has highlighted the potential of the Palos Chinos zone, situated near active workings at La Mochomera (see Figure 3).

Both zones are undergoing early-stage evaluation through exploration drifting, geological mapping, channel sampling, and internal bulk sampling.

Material is being processed at the SJG mine plant to assess mineralization, metallurgy, and gold recovery characteristics.

Victoria Target (Tres Amigos Mine Area)

Geological and structural analysis at the Tres Amigos working face has led to the identification of an exploration target in the previously underexplored hanging wall of the Tres Amigos vein system.

Subsequent development drifting toward this target has resulted in the discovery of a previously undocumented mineralized vein approximately 1.5 meters in width (see Figure 3).

To date, a total of 110 meters of drifting has been completed on two sublevels (550 and 540 levels, spaced 10 meters apart), alongside the collection and analysis of 1,069 channel samples.

In addition, the Company has mined and processed a bulk sample of approximately 10,000 tonnes, with internal assay results indicating an estimated average grade of 8 grams per tonne gold.

Based on the current exploration work, the Victoria zone is considered to have a conceptual exploration target of approximately 100,000 tonnes grading between 7 and 8 grams per tonne gold, representing a potential of ~25,000 ounces of contained gold.

The potential quantity and grade of the Victoria target are conceptual in nature.

There has been insufficient exploration to define a mineral resource, and it is uncertain if further work will result in the delineation of a mineral resource.

Plan view of the existing underground infrastructure at Tres Amigos, highlighting the location of the newly identified Victoria vein in the hanging wall zone.

Photograph of the Victoria vein, highlighting a vein width of 1.5 meters and abundant sulphide mineralization, including chalcopyrite, pyrite, galena, and sphalerite, characteristic of this high-grade gold-bearing structure.

Exploration drifting toward the historical Palos Chinos vein system has advanced to approximately 70 meters from current mine workings.

Observations from this development, combined with historical mapping from 1999-2000, suggest a second near-infrastructure exploration target.

Preliminary evaluation indicates a conceptual exploration target of approximately 90,000 tonnes grading 5 to 6 g/t per tonne gold, representing a potential of ~15,000 ounces of contained gold.

Cautionary Statement:

The potential quantity and grade of the Palos Chinos target are conceptual in nature.

There has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the delineation of a mineral resource.

The ongoing exploration drifts have encountered minor disseminated mineralized structures within the footwall of the Palos Chinos structure, supporting the potential for additional mineralization along the trend (see Figure 3).

Image showing existing underground infrastructure at the La Mochomera vein system, showing the special relationship to the newly identified Victoria vein and its proximity to the Palos Chinos exploration drift.

Photograph of a mineralized vein exposed in the drift development advancing toward the main Palo Chinos vein.

Detailed mapping and sampling conducted in 1999 and 2000 across multiple levels of the historical Palos Chinos workings confirmed that the mined-out section of the Palos Chinos vein generally averages between 1.0 and 1.5 meters in thickness, with a steep westerly dip ranging from 60° to 80°.

Along strike, several mineralized shoots were identified, displaying key structural and mineralogical characteristics, including:

A shift in strike orientation from south to southeast;

A localized shallowing of dip angles between 35° to 40°;

Vein thickening to between 2 and 4 meters;

Increased development of chlorite-rich stockwork adjacent to the vein;

Elevated gold grades, including individual samples grading up to 92.5 g/t Au over 0.7 meters;

A mineralized shoot transect averaging 7.6 g/t Au over 7.6 meters, including 13.4 g/t Au over 3.4 meters within the main Palos Chinos vein (see Table 1).

In total, 180 samples were collected along the Palos Chinos trend from both surface exposures and underground workings.

Of these, 74 samples were taken directly from the Palos Chinos vein and adjacent mineralized hanging wall and footwall zones.

Based on this dataset, the Palos Chinos vein returned an average grade of 11.4 g/t Au over an average width of 1.2 meters.

Additionally, mining above the Palos Chinos level exposed a parallel, laterally continuous hanging wall vein located approximately 4 to 5 meters above the main structure.

Three samples collected from this vein returned gold grades ranging from 11.3 to 18.5 g/t Au and also contained notable concentrates of copper, with localized lead and zinc values over narrow widths.

A summary of significant historical assay results from the Palos Chinos vein is provided in Table 1.

Summary of significant historical assay results samples from the Palos Chinos vein.

The reported average vein thickness of 1.2 meters is derived from the mean of all individual sample interval widths and does not reflect the full extent of the historically mined zone between the Palos Chinos and Saramiento levels.

To determine the broader mineralized envelope, a representative channel potential sample transect spanning the interval between the Palos Chinos vein and a parallel hanging wall structure returned an average of 7.4 g/t Au over 7.6 meters (see Table 1).

These results indicate that portions of the Palos Chinos trend may exhibit sufficient thickness, grade continuity, and structural geometry to be amenable to mechanized mining, subject to further drilling, geotechnical evaluation, and mine planning studies.

Assay results from a representative channel sample transect extending from the footwall contact, across the Palos Chinos vein and associated chlorite stockwork zone, to the hanging wall vein.

The composite interval averages 7.4 g/t Au over 7.6 meters (true width), with notable enrichment in gold, silver, and copper across discrete intervals

DynaMéxico General Powers of Attorney

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The President of DynaMéxico holds powers of attorney granted by the shareholders of DynaMéxico which give the current President significant and broad authority within DynaMéxico.

OUTLOOK (SJG MINE)

With the development progress achieved in Q4 2025 and the increase in mining faces now available to the Company, management remains confident in the ongoing progress and long-term performance of the SJG mine.

The Company’s focus for 2026 is to improve production and grade through the implementation of additional and ongoing operational enhancements and development work.

While the Company made significant headway in 2025, optimization efforts will continue to focus on improving gold ore grades to the mill, throughput rates, and recoveries.

San Pablo Sur, San Pablo, La Mochomera, Palos Chinos and the Tres Amigos ore bodies are expected to remain the main contributors to production in the year ahead.

Further development in these areas will also be a key focus to access additional high-grade zones and additional mining faces.

The capital works program to add a primary gravity gold circuit to the processing plant involved the installation of three new Falcon units installed downstream of the ball mills to recover the significant portion of the free gold present in the San Pablo, San Pablo Sur, Tres Amigos and La Mochomera deposits.

The three new Falcon units are performing as designed recovering approximately 30% of the gold in a specific gravity gold concentrate (average ~300 g/t Au) which achieves a higher payability factor.

The target for 2026 is for the process plant to achieve a processing rate between 750 to 800 tpd.

A new tailings dam was completed during Q3 2024, with an estimated storage capacity of 670,751 cubic meters, distributed over four stages to accommodate up to three years of additional tailings.

The third-stage facility is currently in use, and planning for construction of the fourth stage is underway.

The Company has also begun evaluating a potential location for a third tailings storage facility at the SJG mine.

These studies include environmental and geotechnical surveys to identify a preferred site.

Plan of Operation

The plan of operation for 2026 includes the continued enhancement of site infrastructure and processing capabilities, along with expanded exploration drilling at the SJG mine.

During 2025, the Company processed an average of approximately 700 tons of material per day.

For the first two months of 2026 an average of 755 tons of material was milled and the Company anticipates increasing daily processing throughput towards an average of 750 to 800 tons per day.

The Company has installed processing capacity of up to 900 tons per day (with three ball mills), with a target rate of achieving an average of 800 tons per day taking into consideration planned maintenance downtime.

The Company has continued underground development as part of its exploration activities on additional target areas (Vein 532, Victoria and Palos Chinos structures) which are anticipated to yield higher-grade material for processing.

The Company anticipates that a combination of higher-grade feed material, increased processing throughput, and higher gold prices will have the potential to significantly increase revenue in 2026, as part of its ongoing exploration and project optimization efforts.

The Company plans to commence its exploration drilling program from underground in Q2 2026 having already obtained firm quotes from contractors to undertake the work.

Ongoing decisions regarding the scope and direction of the program will be guided by drilling results, corporate strategy, market conditions, as well as surface mapping, sampling, and target generation.

QUANTITATIVE AND QUALIT ATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.

Not applicable to smaller reporting companies.

FINANCIAL STATEMENT S AND SUPPLEMENTARY DATA

The Company’s consolidated financial statements as of and for the year December 31, 2024 and 2023 included in this Form 10-K have been audited by Davidson & Company LLP, independent registered public accounting firm, as set forth in their report.

The Company’s consolidated financial statements as of and for the year December 31, 2025 and 2024 included in this Annual Report on Form 10-K have been audited by Davidson & Company LLP, independent registered public accounting firm, as set forth in their report.

Consolidated Financial Statements included in the Form 10-K:

Report of Independent Registered Public Accounting Firm PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statement of Changes in Stockholders’ Equity/(Deficit)

Consolidated Statements of Changes in Stockholders’ Equity/(Deficit)

Consolidated Statements of Cash Flows for the Years

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We have audited the accompanying consolidated balance sheets of DynaResource, Inc.

(the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the years ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows in the years ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”), as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (deficiency), and cash flows for the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of DynaResource, Inc.

as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024 in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, as of December 31, 2024, the Company had negative working capital of $15,278,780, an accumulated deficit of $66,705,019, and for the year ended December 31, 2024, had a net loss of $8,134,852.

As discussed in Note 1 to the consolidated financial statements, as of December 31, 2025, the Company had negative working capital of $31,735,708, an accumulated deficit of $65,353,966, and for the year ended December 31, 2025, had a net income of $3,817,103.

These matters raise substantial doubt about the Company’s ability to continue as a going concern.

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The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

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.

Our audits included performing procedures to assess the risks of material misstatements of the 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.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of this critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

The communication of these critical audit matters do not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Stage of Production of the San José de Gracia Mine

As described in Note 3 and Note 5 to the financial statements, the Company filed with the SEC a Technical Report Summary (“TRS”), for the San José de Gracia mine prepared in accordance with the requirements of S-K 1300.

The TRS includes the Company’s declaration of mineral reserves and supports the transition from an Exploration Stage issuer to a Production Stage issuer.

As a result of the declaration of proven and probable mineral reserves, the Company has revised certain accounting estimates prospectively, including the capitalization of certain development costs, and the commencement of systemic depletion of applicable assets

Our audit procedures included the following:

• Evaluating the appropriateness of management’s estimates, including the reasonability of additions made to the mineral property and the depletion recorded.

• Using an auditor expert to evaluate the Technical Report Summary, including the proven and probable reserves at the San José de Gracia mine to support the transition of the mining cycle stage.

Deferred Tax Asset

The Company has recognized significant deferred tax assets in respect of unused tax losses.

As described in Note 14 to the financial statements, the Company has recognized significant deferred tax assets in respect of unused tax losses.

The recovery of the deferred tax assets depends on achieving sufficient taxable profits in the future.

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There is inherent uncertainty involved in forecasting timing and quantum of future taxable profits, which support the extent to which tax assets are recognized.

Therefore, this is the key judgmental area our audit is concentrated on.

This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their taxable profits forecast model.

Our audit procedures included the following:

• Evaluating the appropriateness of management’s key assumptions and estimates used by management to allocate profit

between the Company’s entities, the likelihood of generating sufficient future taxable profits to support the recognition

of deferred tax assets.

• Using our in-house tax specialists, to evaluate the appropriateness of the application of relevant tax legislation by the

Company, in relation to the utilisation of tax losses.

• Evaluating the appropriateness of management’s key assumptions and estimates used by management to allocate profit between the Company’s entities, and the likelihood of generating sufficient future taxable profits to support the recognition of deferred tax assets.

• Using our in-house tax specialists, to evaluate the appropriateness of the application of relevant tax legislation by the Company, in relation to the utilisation of tax losses.

We have served as the Company’s auditor since 2023.

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DECEMBER 31, 2025 AND 2024

(Restated - Note 2)

Current assets

Accounts receivable

Inventories (Note 2)

Concentrate and ore inventories (Note 4)

Foreign tax receivable

Supplies inventory

Other current assets (Note 6)

Total current assets

Property and equipment (net of accumulated depreciation and amortization of $ 42,738 and $ 12,239 ) (Notes 3)

Mineral property interests, plant and equipment

(net of accumulated depreciation and depletion of $ 1,094,835 and $ 42,738 ) (Note 5)

Right-of-use assets, net

Mining concessions (Note 4)

Deferred tax asset (Note 14)

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Current liabilities

Accounts payable

Accrued liabilities (Note 6)

Accounts payable and accrued liabilities (Note 7)

Accrued mining taxes and other liabilities (Note 7)

Derivative liability (Note 8)

Notes payable (Note 8)

Credit line (Note 9)

Current portion of operating lease payable (Note 15)

Mining concession duties payable (Note 9)

Concession duties payable (Note 10)

Total current liabilities

Deferred tax liability (Note 13)

Credit line (Note 9)

Operating lease payable, less current portion (Note 15)

Deferred tax liability (Note 14)

Asset retirement obligation (Note 11)

Other liabilities

TOTAL LIABILITIES

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COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY (Note 11)

STOCKHOLDERS’ EQUITY (DEFICIENCY) (Note 12)

Common Stock, $ 0.01 par value, 40,000,000 and 40,000,000 shares authorized 29,315,726 and 23,371,708 issued and outstanding

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Accumulated deficit

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY

TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY)

TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIENCY)

The accompanying notes are an integral part of these consolidated financial statements.

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FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

OPERATING EXPENSES

Mine production costs

Mine development and stripping costs

Mill production cost applicable to sales

Camp, warehouse and facilities

Transportation

Property holding costs

Facilities expansion costs

Exploration drilling

(Restated - Note 2)

Operating costs

Depreciation and depletion

OTHER OPERATING EXPENSES:

General and administrative expenses

Stock-based compensation (Note 13)

General and administrative

Accretion expense (Note 11)

Right of use asset amortization

Depreciation and amortization (Note 3)

TOTAL OPERATING EXPENSES

NET OPERATING LOSS

Depreciation and amortization

OPERATING INCOME (LOSS)

OTHER (INCOME) EXPENSE:

Foreign currency loss

Interest expense (Notes 8 & 9)

Derivatives mark-to-market gain (Note 7)

TOTAL OTHER EXPENSE

NET LOSS BEFORE TAXES

Foreign currency losses

Interest expense

Derivative mark-to-market loss (gain) (Note 8)

Other expenses (income)

TOTAL OTHER (INCOME) EXPENSE

NET INCOME (LOSS) BEFORE TAXES

Mining tax expense (Note 14)

Income tax benefit (Note 13)

TOTAL TAX BENEFIT

Income tax expense (Note 14)

TOTAL TAX EXPENSE

NET INCOME (LOSS)

DEEMED DIVIDEND FOR SERIES C & D PREFERRED

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

LOSS PER SHARE ATTRIBUTABLE TO THE

EQUITY HOLDERS OF DYNARESOURCE, INC.

Basic loss per common share

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC.

Basic income (loss) per common share

Weighted average shares outstanding – Basic

Diluted earnings loss per common share

Diluted income (loss) per common share

Weighted average shares outstanding – Diluted

OTHER COMPREHENSIVE INCOME (LOSS)

Unrealized foreign currency translation gain (loss)

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)

OTHER COMPREHENSIVE LOSS

Unrealized foreign currency translation loss

TOTAL OTHER COMPREHENSIVE LOSS

TOTAL COMPREHENSIVE LOSS

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DYNARESOURCE, INC.

CONSOLIDATED STATEMENT S OF STOCKHOLDERS' EQUITY

CONSOLIDATED STATEMENT S OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)

YEARS ENDED DECEMBER 31, 2025 AND 2024

YEAR ENDED DECEMBER 31, 2023

Balance January 1, 2023

Balance January 1, 2024 (restated)

Issuance of Common Stock

Issuance of Non-Dilution Shares

Sales of Series E Convertible Preferred Stock

Stock Issued for Services

Stock Compensation - Vesting

Purchase of Series A Preferred Stock

Cancellation of Series A Preferred Stock

Acquisition of Treasury Stock

Cancellation of Shares

Other Comprehensive Income

Balance, December 31, 2024

YEAR ENDED DECEMBER 31, 2024

Balance January 1, 2024

Issuance of Common Stock

Sales of Series E Preferred Shares

Balance January 1, 2025 (restated)

Stock Issued for Services

Stock Compensation - Vesting

Cancellation of Shares

Stock-based compensation - Vesting

Other Comprehensive Income

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

Adjustments to reconcile net income to cash used in operating activities

Derivatives mark-to-market gain

Deferred tax asset

Depreciation and amortization

Accretion expense

Depreciation and depletion (Note 5)

Right-of-use asset amortization

Other expense

Stock-based compensation

Operating cash flows before changes in operating assets and liabilities

Foreign exchange

Operating cash flows before change in non-cash working capital items

Change in operating assets and liabilities

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Foreign tax receivable

Accounts payable

Accrued liabilities

Customer advances

CASH FLOWS USED IN OPERATING ACTIVITIES

Accounts payable and accrued expenses

Other liabilities

Change in non-cash working capital items

CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

Mine development

Purchase of equipment

CASH FLOWS USED IN INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowing (Note 8)

Proceeds from sale of common stock (Note 11)

Proceeds from sale of series E preferred stock (Note 11)

Purchase of series A preferred stock (Note 11)

Acquisition of treasury stock (Note 11)

Payments of notes payable (Note 8)

Lease Payments

Proceeds from credit line (Note 9)

Proceeds from sale of common stock

Proceeds from sale of Series E Convertible Preferred Stock (Note 12)

Payments of credit line (Note 9)

Operating lease payments

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

Effects of foreign currency exchange

NET DECREASE IN CASH

Effects of foreign currency in cash

NET INCREASE (DECREASE) IN CASH

CASH AT BEGINNING OF YEAR

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Cash paid for income taxes

NON-CASH TRANSACTIONS

Conversion of accrued expenses into common stock

Conversion of customer advance into note payable

The accompanying notes are an integral part of these consolidated financial statements.

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In 1998, the Company re-domiciled to Delaware and changed its name to DynaResource, Inc.

The Company is in the business of acquiring, investing in, and developing precious metal properties, and the production of precious metals.

As of December 31, 2023 the Company had one wholly owned subsidiary in the United States, DynaMéxico US Holding, LLC (“US Holding”) and three wholly owned subsidiaries in México, DynaResource de México, S.A.

The Company, including its subsidiaries, is in the business of acquiring, investing in, and developing precious metal properties, and the production of precious metals.

As of December 31, 2025 the Company had one wholly owned subsidiary in the United States, DynaMéxico US Holding, LLC (“US Holding”) and four wholly owned subsidiaries in México, DynaResource de México, S.A.

(“DynaMéxico”), Mineras de DynaResource S.A.

(“DynaMineras”), and DynaResource Operaciones de San Jose De Gracia S.A.

(“DynaOperaciones”).

In April 2024, as part of the Company’s organizational, operating and tax strategy in Mexico, the Company acquired Minera de Alica S.A.

de C.V., (“DynaAlica”) a Mexican corporation with no assets, liabilities or activity.

(“DynaMineras”), DynaResource Operaciones de San Jose De Gracia S.A.

(“DynaOperaciones”), and Minera de Alica S.A.

de C.V., (“DynaAlica”).

Although the Company considers the four Mexican subsidiaries to be wholly owned, each has issued one qualifying share to a second shareholder as required under Mexican law, with such qualifying shares held by US Holding.

DynaMéxico owns a portfolio of mining concessions that currently comprises its 100 % interest in the San José de Gracia Project (“SJG”) in northern Sinaloa State, México.

DynaMéxico owns a portfolio of mining concessions that currently comprises its interest in the San José de Gracia mine (“SJG mine”) in northern Sinaloa State, México.

Principles of Consolidation

The consolidated financial statements include the accounts of DynaResource, Inc., as well as the Company’s wholly owned subsidiaries DynaMéxico, DynaMineras, DynaOperaciones and DynaAlica.

The consolidated financial statements include the accounts of DynaResource, as well as its wholly-owned subsidiaries DynaMéxico, DynaMineras, DynaOperaciones and DynaAlica.

All significant intercompany transactions have been eliminated.

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Significant Accounting Policies

The Company’s management selects accounting principles generally accepted in the United States and adopts methods for their application.

The Company’s management selects accounting principles generally accepted in the United States (“GAAP”) and adopts methods for their application.

The application of accounting principles requires the estimating, matching and timing of revenues and expenses.

The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these consolidated financial statements.

The accounting policies used conform to GAAP which have been consistently applied in the preparation of these consolidated financial statements.

The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity.

Management acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.

The Company’s system of internal accounting control is designed to assure, among other items, that:

Management acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting controls and preventing and detecting fraud.

The Company’s system of internal accounting controls is designed to assure, among other items, that:

(1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods presented.

Basis of Presentation

The Company prepares its consolidated financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States.

The Company prepares its consolidated financial statements on the accrual basis of accounting in conformity with GAAP.

Going concern

These consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying value in the normal course of business for the foreseeable future.

As of December 31, 2024, the Company had negative working capital of $ 15,278,780 , an accumulated deficit of $ 66,705,019 , and for the year ended December 31, 2024, had a net loss of $ 8,134,852 .

As of December 31, 2025, the Company had negative working capital of $ 31,735,708 , an accumulated deficit of $ 65,353,966 , and for the year ended December 31, 2025, had a net income of $ 3,817,103 .

These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise additional capital as needed from the sales of stock, additional debt financing or debt refinancing as may be

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Exploration Stage Issuer (No Reserves Disclosed)

The definitions of Measured Mineral Resource, Mineral Reserve and Mineral Resource are set forth in SEC Regulation S-K, Item 1300 (“Reg.

S-K, Item 1300”).

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the financial statements and disclosures of contingent assets and liabilities.

Actual results could differ materially from those estimates.

Production Stage Issuer

The definitions of Measured mineral resource, Mineral reserve and Mineral resource are set forth in Regulation S-K, Item 1300 ("S-K 1300”).

Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling.

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It is not merely an inventory of all mineralization drilled or sampled.

As of December 31, 2024 , the Company continues to meets the definition of an exploration stage issuer which is defined as an issuer that has no material property with established proven and probable mineral reserves as defined by Regulation S-K, Item 1300.

In accordance with S-K 1300, the SJG mine was classified as an Exploration Stage Property prior to January 1, 2025.

This classification was based on the fact that the SJG mine had no Mineral Reserves as defined under S-K 1300.

Although the SJG mine engaged in the mining of Mineral Resources and production of gold-silver concentrate, such activities were not sufficient to alter its classification as an Exploration Stage Property.

Effective January 1, 2025, following the completion of a Mineral Reserve estimate in accordance with S-K 1300, the Company transitioned from an Exploration Stage issuer to a Production Stage issuer.

In connection with this transition, the Company updated its accounting estimates related to the capitalization of development costs and its depreciation and depletion methodologies.

This change is treated as a change in accounting estimate under Accounting Standards Codification ("ASC”) 250, and has been applied prospectively from January 1, 2025.

Segment Information

The Company operates as one reportable segment, focused on the exploration and evaluation of its gold-silver project in Mexico.

Limited site-scale processing activities are conducted in support of ongoing exploration efforts, consistent with the Company’s classification as an Exploration Stage issuer under Regulation S-K 1300.

The Company operates as one reportable segment, focused on the exploration, development, production and sale of gold and silver in Mexico.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

As of December 31, 2024 , the Company had $ 4,206,843 of deposits in United States banks in excess of the FDIC limit.

Cash balances may, at times, exceed the Federal Deposit Insurance Corporation ("FDIC”) insurance limits.

As of December 31, 2025 , the Company had $ 3,164,645 of deposits in United States banks, and $ 1,007,246 in Mexico banks.

In addition, the Company does no t have any cash equivalents as of December 31, 2025 and 2024 .

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Accounts receivable consists of trade receivables which are recorded net of allowance for doubtful accounts for the sale of metal concentrate, as well as net of an embedded derivative based on mark-to-market adjustments for outstanding provisional invoices based on forward metal prices.

The allowance for accounts receivable is recorded when receivables are considered to be uncollectible.

The allowance for accounts receivable is recorded when receivables are considered to be

uncollectible.

As of December 31, 2025 and 2024, no allowance has been made.

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Mined Tonnage Inventory

Mined tonnage inventory represents ore that has been mined and is available for further processing.

The stockpiles of mined tonnage are measured by estimating the number of tonnes added and removed from the stockpile, an estimate of the contained metals (based on assay data) and the estimated metallurgical recovery rates.

Costs are allocated to stockpiles based on the relative values of material stockpiled and processed using current mining costs incurred, including applicable overhead.

Material is removed at each

stockpile’s average cost per tonne.

Stockpiles are carried at the lower of average cost of net realizable value.

Net realizable value represents the estimated future sales price of the product based on current and long-term metal prices, less the estimated cost to complete production and bring the product the sale.

Mined tonnage inventory represents ore mined and stockpiled for further processing.

Stockpile quantities are estimated based on tonnes added and removed, contained metals (based on assays), and estimated metallurgical recovery rates.

Costs are allocated to stockpiles based on relative values and mining costs.

Stockpiles are carried at the lower of average cost or net realizable value, based on estimated future sales prices, less estimated costs to complete production and sale.

Concentrate Inventory

Concentrate inventory include metal concentrates located either at the Company’s facilities or in transit to its customer’s port.

Concentrate inventories are carried at the lower of cost of production or net realizable value based on current metals prices.

Concentrate inventory, consisting of metal concentrates located at the Company facilities or in transit to customers is carried at the lower of production cost or net realizable value, based on current metals prices.

Foreign Tax Receivable

Foreign tax receivable is comprised of recoverable value-added taxes (“IVA”) charged by the Mexican government on goods and services rendered.

Under certain circumstances, these taxes are recoverable by filing a tax return.

Amounts paid for IVA are tracked and held as receivables until the funds are received by the Company.

Property and Equipment

Substantially all property and equipment at the Company’s mines, including design, engineering, mine construction, and installation of equipment are expensed as incurred, as the Company has not established proven and probable reserves on any of its properties.

Only certain types of mining equipment which have alternative uses or significant salvage value, may be capitalized without proven and probable reserves.

Office furniture and equipment are depreciated on a straight-line method over estimated economic lives ranging from 3 to 5 years.

Leasehold improvements, which relate to the Company’s corporate office, are being amortized over the term of the lease which is 52 months.

Mine Development Costs

Mine development costs are expensed as incurred and include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines, and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines.

When proven and probable reserves (as defined by Reg.

S-K, Item 1300) exist, development costs are capitalized.

Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production would also be capitalized.

Costs of start-up activities and costs incurred to maintain current production or to maintain assets are charged to operations as incurred.

All capitalized costs would be amortized using the units of production method over the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves.

Certain costs to design and construct mining and processing facilities may be incurred prior to establishing proven and probable reserves.

As no proven and probable reserves have been established on any of the Company’s properties, the design, construction and development costs are not capitalized at any of the Company’s properties.

Mining Concessions

The Company’s mining concessions include acquired interests in development and exploration stage properties and are considered tangible assets.

The amount capitalized relating to the Company’s mining concessions represents its fair value at the time of acquisition.

If it is determined that the deferred costs related to a property are not recoverable over its productive life, those costs will be written down to fair value as a charge to operations in the period in which the determination is made.

The amounts at which mining concessions and the related costs are recorded do not necessarily reflect present or future values.

The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

Mineral properties are monitored for impairment based on factors such as mineral prices, government regulation and taxation, the Company’s continued right to explore the area, exploration reports, assays, technical reports, drill results and its continued plans to fund exploration programs on the property.

For operating mines, recoverability is measured by comparing the undiscounted future net cash flows to the net book value.

When the net book value exceeds future net undiscounted cash flows, an impairment loss is measured and recorded based on the excess

of the net book value over fair value.

Fair value for operating mines is determined using a combined approach, which uses a discounted cash flow model for the existing operations and a market approach for the fair value assessment of exploration land claims.

Future cash flows are estimated based on quantities of recoverable mineralized material, expected gold and silver prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans.

The term “recoverable mineralized material” refers to the estimated amount of gold or other commodities that will be obtained after considering losses during processing and treatment of mineralized material.

In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups.

The Company’s estimates of future cash flows are based on numerous assumptions, and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold, and silver, commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties.

The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following:

Foreign tax receivable is comprised of recoverable value-added taxes ("IVA”) paid to the Mexican government on goods and services.

Under certain circumstances, IVA is recoverable by filing a tax return.

Amounts paid are tracked and recognized as receivables until collected.

Proven and Probable Reserves

The definitions of proven and probable mineral reserves are set forth in S-K 1300.

A proven mineral reserve is the economically mineable part of a measured mineral resource.

The qualified person reflects a high degree of confidence in the results obtained from the application of modifying factors, as well as in the estimates of tonnage and grade or quality.

A proven mineral reserve can only result from the conversion of a measured mineral resource.

A probable mineral reserve is the economically mineable part of an indicated mineral resource and in some cases, a measured mineral resource.

The qualified person’s confidence in the modifying factors and in the estimates of tonnage and grade or quality is lower for a probable reserve than for a proven mineral reserve, but still sufficient to demonstrate that extraction is economically viable at the time of recording, based on reasonable investment and market assumptions.

The lower level of confidence associated with a probable reserve arises either from geologic uncertainty when converting an indicated mineral resource or from greater risks related to the modifying factors when converting a measured mineral resource.

A qualified person must classify a measured mineral resource as a probable mineral reserve if confidence in the application of the modifying factors is insufficient to support classification as a proven mineral reserve.

Mineral Property Interests, Plant and Equipment and Mine Development Costs

Mineral property interests:

Mineral property interests consist of capitalized expenditures related to the development of mineral properties and mining concessions arising from acquisitions.

The amount capitalized represents the fair value of the mineral property and associated mining concessions at the time of acquisition.

Development costs include engineering and metallurgical studies, drilling, and related costs to delineate an ore body, and the construction of access paths and other infrastructure to gain access to the ore body at underground mines.

Development costs are expensed as Development and Stripping Costs when incurred until an economically viable deposit has been delineated, at which point such costs are capitalized.

Where multiple open pits exist at a mine, pre-stripping costs are capitalized separately for each pit.

Production commences when saleable minerals, beyond a de minimis amount, are produced.

During the production phase of a mine, costs incurred to provide access to reserves and resources that will be produced in future periods and that would not have otherwise been accessible are capitalized and included in the carrying value of the related mineral property interest.

When proven and probable mineral reserves exist, development costs are capitalized.

Drilling and related costs are capitalized for an ore body where an economically viable deposit exists and the activities are directed at obtaining additional information, providing

greater definition of the ore body, or converting non-reserve mineralization to proven and/or probable reserves if the benefit is expected to be realized over a period beyond one year.

All other drilling and related costs are expensed as incurred as Exploration or Development and Stripping Costs.

Exploration costs include costs incurred to identify new mineral resources, evaluate potential resources, and convert mineral resources into proven and probable mineral reserves.

Drilling costs incurred for the purpose of operational ore control during the production stage, rather than for obtaining additional information about the ore body, are allocated to inventory costs and then expensed as a component of production costs applicable to sales once revenue from the sale of inventory is realized.

Mineral property interests are amortized upon commencement of production on a unit-of-production basis over proven and probable mineral reserves.

When a property does not contain mineralized material that satisfies the definition of proven and probable reserves, the amortization of the capitalized costs is charged to expense based on the most appropriate method, which includes the straight-line method and the units-of-production method over the total estimated production over the life of the mine, as determined by internal mine plans.

Plant and equipment:

For properties where the Company has established economically viable deposits, expenditures for plant and equipment are capitalized and recorded at cost.

The cost capitalized for plant and equipment includes borrowing costs that attributable to qualifying assets.

Plant and equipment are depreciated using the straight-line method over the estimated productive lives of the assets.

Construction-in-progress costs:

Assets under construction are capitalized as construction-in-progress until the asset is available for its intended use, at which point costs are transferred to the appropriate category of plant and equipment or mineral property interest and amortized.

Construction-in-progress costs comprise the purchase price of the asset and any directly attributable costs incurred to bring the asset into working condition for its intended use.

Office furniture and equipment are depreciated using the straight-line method over estimated useful lives ranging from three to five years .

Leasehold improvements related to the Company’s corporate office are amortized over the term of the lease, which is 52 months.

For properties where the Company has not established economically viable deposits, substantially all costs, including design, engineering, construction, and installation of equipment, are expensed as incurred unless the equipment has alternative uses, significant salvage value, or probable future benefit, in which case the equipment is capitalized at cost.

Impairment of Long-Lived Assets:

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

Mineral properties are monitored for indicators of impairment based on factors such as changes in mineral prices, government regulations and taxation, the Company’s continued right to explore the area, results from exploration activities (including assays, technical reports, and drill results), and the Company’s ongoing plans and ability to fund exploration programs on the property.

For operating mines, recoverability is assessed by comparing the undiscounted future net cash flows expected to be generated by the asset to its net book value.

If the net book value exceeds future net undiscounted future net cash flows, an impairment loss is recognized and measured as the excess of the asset’s net book value over its estimated fair value.

Fair value for operating mines is determined using a combined approach, which includes a discounted cash flow model for the existing operations and a market approach for the valuation of exploration land claims.

Future cash flows are estimated based on quantities of recoverable mineralized material, expected gold and silver prices (considering current and historical prices, trends, and relevant market factors), production levels, operating costs, capital requirements and reclamation obligations, all based on current life-of-mine plans.

The term "recoverable mineralized material” refers to the estimated quantity of gold or other commodities recoverable after accounting for processing and treatment losses.

In estimating future cash flows, assets are grouped at the lowest level for which there are separately identifiable cash flows that are largely independent of the cash flows of other asset groups.

The Company’s estimates of future cash flows involve significant judgments and assumptions.

Actual future results, including quantities of recoverable minerals, commodity prices, production levels, operating and capital costs, may differ materially due the inherent risks and uncertainties involved.

The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes

to any of the following:

• estimated recoverable ounces of gold, silver or other precious minerals

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Asset Retirement Obligation (“ARO”)

The Company records a liability based on the best estimate of costs for site closure and reclamation activities that the Company is legally or contractually required to remediate.

The provision for closure and reclamation liabilities is estimated using expected cash flows based on engineering and environmental reports and accreted to full value over time through periodic charges to income.

During 2023, a significant upgrade was made to the milling facility and therefore, an ARO has been established as of December 31, 2023 at the estimated costs to decommission the plant and tailings pond at the end of the estimated live of the mines in operation as of December 31, 2023.

As the Company is an exploration stage property that does not qualify for asset capitalization, the costs associated with the obligation are charged to operations.

Changes in regulations or laws, any instances of non-compliance with laws or regulations that result in fines, or any unforeseen environmental contamination could result in a material impact to the amounts charged to operations for reclamation and remediation.

Significant judgments and estimates are made when estimating the fair value of AROs.

Expected cash flows relating to AROs could occur over long periods of time and the assessment of the extent of environmental remediation work is highly subjective.

Considering all the factors that go into the determination of an ARO, the fair value of the AROs can materially change over time.

The Company recognizes asset retirement obligations (“AROs”) for the estimated future costs associated with the closure, dismantling, remediation, and post‑closure monitoring of its mining operations.

These obligations include, among other activities, the decommissioning and removal of infrastructure, stabilization and closure of tailings storage facilities, sealing of underground mine workings, management and disposal of residual materials, remediation of disturbed areas, and required post‑closure environmental monitoring.

AROs are recognized in the period in which a legal or constructive obligation associated with the retirement of a long‑lived asset is incurred and the obligation can be reasonably estimated.

Asset retirement costs are capitalized as part of the carrying amount of the related long‑lived asset when proven or probable mineral reserves exist or when the costs relate to an acquired mineral property interest.

Otherwise, such costs are expensed as incurred.

ARO liabilities are subsequently accreted over time, with accretion recognized as an operating expense.

Prior to January 1, 2025, the Company was classified as an Exploration Stage issuer and had not demonstrated proven or probable mineral reserves.

Accordingly, asset retirement costs did not qualify for capitalization and were expensed as incurred.

The fair value of the Company’s ARO is measured using an expected present value technique in accordance with ASC 410‑20.

Expected future cash flows are based on a comprehensive closure plan and reflect management’s best estimate of costs that a market participant would incur to perform the required closure and remediation activities.

These cash flows are discounted using a credit‑adjusted risk‑free rate that reflects the Company’s credit standing.

The Company records the fair value of a liability for an ARO in the period that it is incurred if a reasonable estimate of fair value can be made.

The Company prepares estimates of the timing and amounts of expected cash flows when an ARO is incurred, which are updated to reflect changes in facts and circumstances.

Estimation of the fair value of AROs requires significant judgment, including amount of cash flows, timing of reclamation, inflation rate and credit risk.

Accrued reclamation and closure costs can represent a significant and variable liability on our balance sheet.

The Company has estimated its liabilities under appropriate accounting guidance and reviews its liabilities on at least an annual basis.

However, the ranges of liability could exceed the liabilities recognized.

If substantial damages were awarded, claims were settled, or remediation costs were incurred in excess of our accruals, our financial results or condition could be materially adversely affected.

Property Holding Costs

Holding costs to maintain the property are expensed in the period they are incurred.

Holding costs to maintain the SJG mine property are expensed in the period they are incurred.

These costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs.

Exploration Costs

Exploration costs, including exploration, development, direct field costs and related administrative costs are expensed in the period incurred.

Exploration costs, including exploration, direct field costs and related administrative costs are expensed in the period incurred.

The Company adopted ASC 842, which requires recognition of a right-of-use asset and lease liability for all leases at the commencement date based on the present value of lease payments over the lease term.

Additional qualitative and quantitative disclosures regarding the Company’s leasing arrangements are also required.

The Company adopted ASC 842 prospectively and

elected the package of transition practical expedients that does not require reassessment of (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs.

In addition, the Company has elected other available practical expedients to not separate lease and non-lease components, which consist principally of common area maintenance charges, for all classes of underlying assets and to exclude leases with an initial term of 12 months or less.

The Company adopted ASC 842 prospectively and elected the package of transition practical expedients that does not require reassessment of (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs.

In addition, the Company has elected other

available practical expedients to not separate lease and non-lease components, which consist principally of common area maintenance charges, for all classes of underlying assets and to exclude leases with an initial term of 12 months or less.

Transactions In and Translations Of Foreign Currency

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Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts receivable, accounts payable, note payable and installment notes payable and derivative liabilities.

The carrying amount of cash, accounts receivable, accounts payable and note payable approximates fair value because of the short-term nature of these items.

The carrying amount of installment notes payable debt approximates fair value due to the relationship between the interest rate on installment notes payable debt and the Company’s incremental risk adjusted borrowing rate.

The fair value of derivative liabilities is based on the Black-Scholes model.

The Company’s financial instruments include cash, accounts receivable, accounts payable, credit line, installment notes payable and derivative liabilities.

The carrying values of cash, accounts receivable, accounts payable, and credit line approximate fair value due to their short-term nature.

Installment credit line also approximates fair value based on the relationship between stated interest rates and the Company’s risk-adjusted borrowing rate.

Derivative liabilities are measured using the Black-Scholes model.

Earnings (Loss) Per Share

Earnings (loss) per share attributable to the common equity holders of the Company are calculated in accordance with ASC 260 “ Earnings per Share ”.

The weighted average number of common shares outstanding during each period is used to compute basic

earnings (loss) per share.

The weighted average number of common shares outstanding during each period is used to compute basic earnings (loss) per share.

Diluted earnings per share are computed using the weighted average number of shares and potentially dilutive common shares outstanding.

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Potentially dilutive common shares consist of stock warrants and convertible preferred shares and are excluded from the diluted earnings per share computation in periods where the Company has incurred a net loss, as their effect would be considered anti-dilutive.

The Company’s Series C Preferred Stock and related outstanding dividends are convertible into 2,942,695 and 2,853,721 shares of Common Stock at December 31, 2024 and 2023 .

The Company’s Series D Preferred Stock and related outstanding dividends are convertible into 851,200 and 820,800 shares of common stock at December 31, 2024 and 2023.

The Company’s Series C Preferred Stock and related outstanding dividends were convertible into 2,942,695 and 2,853,721 shares of common stock at December 31, 2025 and 2024 , respectively.

The Company’s Series D Preferred Stock and related outstanding dividends were convertible into 851,200 and 820,800 shares of common stock at December 31, 2025 and 2024, respectively.

During the years ended December 31, 2025 and 2024, the Company had warrants outstanding to purchase 892,165 shares of common stock.

During the years ended December 31, 2024 and 2023 the Company has options outstanding to purchase 1,150,000 and nil shares of common stock.

During the years ended December 31, 2025 and 2024 the Company has options outstanding to purchase 1,150,000 and 1,150,000 shares of common stock.

These shares related to these potentially dilutive common shares are excluded from the weighted average diluted shares outstanding for the year ended December 31, 2025 and 2024, as including them would be anti-dilutive.

Years ended December 31,

Net loss attributable to common shareholders

Net income (loss) attributable to common shareholders

Weighted average number of common shares outstanding, Basic

Weighted average number of common shares outstanding, Diluted

Basic loss per share

Diluted loss per share

Basic income (loss) per share

Diluted income (loss) per share

Related Party Transactions

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Significant Judgments, Estimates and Assumptions

The preparation of financial statements in accordance with U.S.

GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period.

The preparation of financial statements in accordance with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period.

These judgments, estimates and assumptions are regularly evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances.

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which can impact the Company’s assessment of impairment, and provisions, if any, for environmental rehabilitation and restoration;

• The valuation of derivatives liabilities requires management to determine the most appropriate valuation model and inputs to the valuation model.

• the valuation of derivatives liabilities, which requires the selection of appropriate valuation models and significant judgment in determining input assumptions.

Reclassification

Certain prior period amounts in the Consolidated Balance Sheets have been reclassified to conform with current period presentation.

All amounts previously presented under "Mining Concessions” as of December 31, 2024, have been reclassified to "Mineral Property Interests, Plant and Equipment”.

Amounts relating to accrued interest on the Francisco Arturo mining concession duties payable (Note 11) that were previously included under "Accrued Liabilities” as of December 31, 2024 have been reclassified to "Mining concession duties payable”.

In addition, certain non-trade obligations previously included under accounts payable and accrued liabilities as of December 31, 2024 have been reclassified to "Accrued mining taxes and other liabilities”.

These reclassifications better reflect the nature of the liabilities and had no effect on current liabilities, net income or cash flows in any period reported.

Amounts in the Consolidated Statements of Operations and Comprehensive Income (Loss) related to mine development and stripping costs for the year ended December 31, 2025 have been included as part of mine production costs to conform to the current year presentation.

This reclassification better reflects the nature of the costs and had no effect on net income or cash flows in any period presented.

In addition, effective for the year ended December 31, 2025, the Company reclassified and consolidated previously reported cost categories—including Mine Production Costs, Mill Production Costs Applicable to Sales, Camp, Warehouse and Facilities, Transportation Costs, Property Holding Costs, Facilities Expansion Costs, and Exploration Drilling—into a single line item titled ‘Operating Costs.’ This reclassification has been applied retrospectively, and all prior period amounts previously disclosed under these categories have been adjusted to conform to the current period presentation.

Recently Adopted Accounting Pronouncements

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ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

The Company is currently evaluating the potential impact of the adoption of this new guidance on our Consolidated Financial Statements and related disclosures.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows, as the amendments primarily affect disclosure requirements.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The guidance enhances the transparency and decision usefulness of income tax disclosures by requiring, among other things, expanded disclosures related to the effective tax rate reconciliation and income taxes paid.

Adoption of ASU 2023-09 requires public entities to:

• Present a tabular reconciliation of the statutory federal income tax rate to the effective income tax rate using specified categories, including a requirement to disaggregate reconciling items that exceed a quantitative threshold;

• Disclose income (loss) before income taxes disaggregated between domestic and foreign operations;

• Disclose in the supplemental disclosures within the statement of cash flows, income taxes paid, net of refunds received, disaggregated by federal, state, and foreign jurisdictions, including further disaggregation for individual jurisidictions that are significant

The Company adopted ASU 2023-09 effective January 1, 2025 on a prospective basis.

Accounting Standards Update 2024-03 – Income Statement – Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40).

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The Company is currently assessing the impact of adopting ASU 2024-03 on the consolidated financial statements and related disclosures.

NOTE 2 – INVENTORIES

NOTE 2 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In August 2025, management determined that the Company had accounted for Special and Extraordinary Mining Duties in Mexico inaccurately in certain prior periods, and that, mining tax expense and mining tax liabilities were not recognized in connection with consolidated financial statements prepared for the fiscal years ended December 31, 2021, 2022, and 2023 contained in its Annual Reports on Form 10-K for those years.

As a result of these misstatements, the Company is restating certain financial information for the periods noted.

All restated financial information is included in this Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”), and the Company has not filed, and does not intend to file, amendments to any of our filings that the Company have previously filed with the SEC.

Restatement Background

In March 2025, the Mexican Tax Authority (Servicio de Administracion, “SAT”) issued a re-assessment for the 2021 tax year of DynaMexico.

Following receipt of such reassessment, the Company identified previously unrecognized liabilities related to Special and Extraordinary Mining Duties applicable to its mining operations in Mexico.

These duties, which are statutory and recurring in nature, were not fully recognized in the fiscal year ended December 31, 2021.

The Company undertook a thorough internal review of its tax filings from prior years to ensure compliance and completeness of any other potential liabilities.

As a result of the internal review, management identified unrecognized mining duties and corresponding liabilities from DynaMexico and DynaMineras, two of the Company’s subsidiaries that operated the SJG mine during the years reviewed.

The previously unrecognized liabilities total approximately $ 1.1 million, $ 0.9 million, $ 0.6 million, and $ 0.5 million for the fiscal years ended December 31, 2021, 2022, 2023 and 2024, respectively, inclusive of inflation adjustments, and penalties.

The internal review determined that restatement changes were necessary due to:

• an understatement of mining tax expense in each period of the consolidated statement of operations;

• an understatement of mining tax liabilities in each period of the consolidated balance sheets

Items Included in this Filing

This Form 10-K includes restated consolidated financial statements and related disclosures as of and for the years ended December 31, 2021, 2022, 2023 and 2024.

The impact of the correction of the misstatements on the consolidated financial statements related to the mining duties for the years ended December 31, 2021, 2022, 2023 and 2024, which have now been corrected, is summarized below.

The applicable accompanying notes to the consolidated financial statements have also been updated, as applicable.

The following amounts reflect the impact of the correction attributable to each individual reporting period;

the cumulative effect of the prior‑period misstatement is reflected in the revised comparative financial statements and is disclosed below for the most recently comparable prior period.

As previously stated

Consolidated Statements of Financial Position

Accrued expenses

Accumulated deficit

Consolidated statements of loss and comprehensive loss

Other income/(expenses)

Comprehensive income for the year

Income per share, basic and diluted

Consolidated statements of changes in equity

Income for the year

Deficit – December 31, 2021

As previously stated

Consolidated Statements of Financial Position

Accrued expenses

Deferred tax asset

Accumulated deficit

Consolidated statements of loss and comprehensive loss

Other income/(expenses)

Comprehensive income for the year

Income per share, basic and diluted

Consolidated statements of changes in equity

Income for the year

Deficit – December 31, 2021

Deficit – December 31, 2022

Consolidated statements of changes in assets

Deferred tax asset

Consolidated statements of changes in liabilities

Accrued expenses

Total liabilities

As previously stated

Consolidated Statements of Financial Position

Accrued liabilities

Deferred tax asset

Accumulated deficit

Consolidated statements of loss and comprehensive loss

Other income/(expenses)

Comprehensive loss for the year

Loss per share, basic and diluted

Consolidated statements of changes in equity

Loss for the year

Deficit – December 31, 2021

Deficit – December 31, 2022

Deficit – December 31, 2023

Consolidated statements of changes in assets

Deferred tax asset

Consolidated statements of changes in liabilities

Accrued expenses

Total liabilities

As previously stated

Consolidated Statements of Financial Position

Accrued mining taxes and other liabilities

Deferred tax asset

Accumulated deficit

Consolidated statements of loss and comprehensive loss

Other income/(expenses)

Comprehensive loss for the year

Loss per share, basic and diluted

Consolidated statements of changes in equity

Loss for the year

Deficit – December 31, 2021

Deficit – December 31, 2022

Deficit – December 31, 2023

Deficit – December 31, 2024

Consolidated statements of changes in assets

Deferred tax asset

Consolidated statements of changes in liabilities

Accrued mining taxes and other liabilities

Total liabilities

The cumulative effect of the correction through December 31, 2024 is reflected as an adjustment to opening retained earnings and agrees to the revised consolidated financial statements.

NOTE 3 - CHANGE IN ACCOUNTING ESTIMATE DUE TO TRANSITION TO PRODUCTION STAGE

On May 20, 2025, the Company filed with the SEC a Technical Report Summary ("TRS”) for the SJG mine prepared in accordance with the requirements of S-K 1300.

The TRS includes the Company’s first declaration of mineral reserves and supports the transition from an Exploration Stage issuer to a Production Stage issuer.

As a result of the declaration of proven and probable mineral reserves, the Company has revised certain accounting estimates prospectively, including the capitalization of certain development costs and the commencement of systematic depreciation of applicable assets.

These changes have been applied prospectively in accordance with ASC 250, with no restatement of prior periods.

Impact on Accounting Estimates

In connection with this transition, the Company revised its accounting estimates as follows:

Capitalization of Development Costs

Prior to January 1, 2025, all underground mine development costs were expensed as incurred, as the SJG mine was classified as

an exploration-stage property.

Effective January 1, 2025, mine development costs that are directly related to sustaining and production-related activities are capitalized as part of "Mineral Property Interests, Plant and Equipment.”

As a result capitalization of development costs during the year ended December 31, 2025 increased by approximately $ 8.9 million, compared to prior periods.

Depreciation and Depletion

Beginning in 2025, the Company commenced depletion of capitalized mine development costs and depreciation of mineral property interests (including mining concessions) using the Unit-of-Production ("UOP”) method, based on total proven and probable mineral reserves.

As a result depreciation and depletion expense during the year ended December 31, 2025 increased by approximately $ 1.4 million, compared to prior periods.

Financial Impact of the Change

The adoption of these revised estimates in 2025 had the following impact on the Company’s financial results:

Increase/(Decrease)

Capitalized Development Costs

$ 8.9 million

Depreciation and Depletion Expense

$ 1.4 million

This change in accounting estimate has been applied prospectively in accordance with ASC 250, Accounting Changes and Error Corrections , with no restatement of prior periods.

Forward-Looking Considerations

Management anticipates that these changes will result in increased capitalized costs and higher depreciation expense in future periods.

The Company will continue to review and update its reserve estimates and related accounting assumptions on an ongoing basis, consistent with GAAP.

NOTE 4 – CONCENTRATE AND ORE INVENTORIES

Inventories are carried at the lower of cost or fair value and consist of mined tonnage, gravity-flotation concentrates, and gravity tailings (or, flotation feed material).

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Total Inventories

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31, 2024 and 2023:

Leasehold improvements

Office equipment

Office furniture and fixtures

NOTE 5 – MINERAL PROPERTY INTERESTS, PLANT AND EQUIPMENT

Mineral property interests, plant and equipment consists of the following as of December 31, 2025 and 2024:

December 31, 2025

December 31, 2024

Mineral property interests, cost

Mining concessions

Mine development

accumulated depletion

Mineral property interests, carrying value

Plant and equipment, cost

Construction in progress

Plant and equipment

Accumulated depreciation and amortization

Plant and equipment, carrying value

Total Property and Equipment

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Depreciation and amortization expense was $ 31,625 and $ 30,499 for the years ended December 31, 2025, and 2024 respectively.

NOTE 4 – MINING CONCESSIONS

Mining properties consist of the SJG concessions.

Mining Concessions were $ 4,132,678 and $ 4,132,678 at December 31, 2024 and December 31, 2023 , respectively.

As the Company is an exploration stage company, there was no depletion expense for the years ended December 31, 2024 and 2023 .

ARO is included in Other.

NOTE 6 - OTHER CURRENT ASSETS

Other current assets consist primarily of warehouse supplies, advances to suppliers and prepaid assets.

NOTE 6 - ACCRUED LIABILITIES

Other current assets consist primarily of advances to suppliers and prepaid assets.

NOTE 7 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

As of December 31, 2025 and 2024, the Company had the following accrued liabilities:

Accounts payable

Accrued vendors

Accrued payroll and board fees

Accrued interest

Accrued mining expenses

Accrued taxes

Other accrued liabilities

Total accrued liabilities

Trade payables and accruals

Accrued mining taxes

Other liabilities

Accrued mining taxes and other liabilities

NOTE 8 - DERIVATIVE LIABILITIES

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The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The Company considered the inputs in this valuation to be level 3 in the fair value hierarchy under ASC 820 and used the Black-Scholes model to determine the value of conversion feature of the Warrants issued with the notes convertible into Series D Preferred Stock based on the assumptions below:

The Company classified the inputs in this valuation as Level 3 within the fair value hierarchy under ASC 820 and utilized an equity simulation model to determine the value of conversion feature associated with the 2020 Warrants issued in connection with the notes convertible into Series D Preferred Stock, based on the assumptions set forth below:

Annual volatility rate

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Fair value of derivative (warrants), end of year

NOTE 8 – NOTES PAYABLE

NOTE 9 – CREDIT LINE

(A) Advance Credit Line Facility/Customer Advances

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Under the terms of the ACL and Amendment:

• The Company will deliver 100 % of its produced concentrates to the buyer and provider of the ACL, through December 31, 2026, with evergreen annual extensions thereafter until either party terminates with at least 365 days’ notice;

• An initial ACL was established by the buyer in the amount of $ 3.75 M USD.

• On May 1, 2021, the ACL increased to an amount equal to 80 % of the prior 3 months’ revenue.

• Each successive month, the ACL shall be adjusted according to the Company’s prior 3 months’ revenue to a maximum advance line of $ 17.5 million as specified in the Amendment.

• The ACL shall never be less than $ 3.75 M USD.

• The ACL will be interest free for 45 days.

• The ACL is to be repaid through deliveries of concentrates or cash within 120 days.

• Beginning in September 2023, up to $10M of the ACL advance may be converted into a one-year installment loan (the “RCL”) bearing interest at 3M SOFR + 7.5% and amortized as follows:

• Beginning in September 2023, up to $ 10 million of the ACL advance may be converted into a one-year installment loan (the “RCL”) bearing interest at 3 month SOFR + 7.5 % and amortized as follows:

Month 1, interest only ;

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• If the ACL is converted into the RCL subsequent deliveries during the term of the loan will be paid in cash within ten days of delivery;

• The Amendment provides the buyer with a right of first refusal during the Commercial Offtake Agreement, to provide offtake financing and purchase other concentrates (zinc, silver, copper, etc) and doré from the Company’s open pit and underground operations.

The ACL was included under Customer Advances on the consolidated balance sheet, prior to December 1, 2023.

Deposits under the Advance Credit Line Facility

Under the terms of the ACL, the Company received the following advances from the buyer (in millions):

(1) $ 9.35 advance on December 28, 2022.

Settled on February 16, 2023 .

(2) $ 9.60 advance on February 21, 2023.

Settled on March 31, 2023 .

(3) $ 9.20 advance on March 31, 2023.

Settled on May 17, 2023 .

(4) $ 9.85 advance on May 18, 2023.

Settled on June 28, 2023 .

(5) $ 10.0 advance on June 29, 2023.

Settled on August 14, 2023 .

(6) $ 10.75 advance on August 17, 2023.

Settled on September 16, 2023 .

(7) $ 9.75 advance on September 29, 2023.

Converted to a one-year note payable on December 1, 2023.

• The Amendment provides the buyer with a right of first refusal during the Offtake Agreement, to provide offtake financing and purchase other concentrates (zinc, silver, copper, etc) and doré from the Company’s open pit and underground operations.

(B) Revolving Credit Line (RCL) & Temporary Advance Credit Line (TACL)

On December 1, 2023, the Company exercised its option under the ACL to convert the outstanding ACL balance of $ 9,750,000 into a one-year note payable (the “RCL”) bearing interest at 3M SOFR + 7.5%.

On December 1, 2023, the Company exercised its option under the ACL to convert the outstanding balance of $ 9,750,000 into an RCL.

The RCL is repayable as follows:

Month 1, interest only ;

Month 2-11, 5% principal plus interest;

Months 2-11, 5 % principal plus interest ;

and Month 12, final 50 % principal plus interest .

On June 20, 2024, the Company amended the terms of the RCL.

Under the amended agreement the Company may receive up to an additional $ 4,000,000 (the (“TACL”) at the same interest rate due on November 30, 2024 .

The Company also received a put option (the “Put Option”) to convert up to $ 9,000,000 of the RCL into common stock at $ 1.61 a share exercisable from November 1, 2024 until the November 30, 2024 maturity date.

If the TACL and the RCL are repaid in full on or prior to the maturity date, the maximum principal amount of the RCL will be increased to $ 12,500,000 .

If the Put Option is exercised for more than $ 4,000,000 , however, the maximum principal amount of the RCL will be reduced on a dollar-for-dollar basis by such excess.

As part of the June 20, 2024 amendment, the Company granted a security interest in the Company’s Mexican IVA tax claims to the holder of the RCL and TACL notes.

In November 2024 the Company paid off the TACL and renewed the RCL for one year.

Under terms of the renewal the TACL was discontinued and the put options was removed.

The $ 12,500,000 maximum principal amount, interest rate and payment terms remained the same.

Under the amendment, the Company could receive up to an additional $ 4,000,000 under a temporary advance credit line (the "TACL”) at the same interest rate, with the TACL maturing on November 30, 2024 .

As part of the amendment, the Company also received a put option (the "Put Option”) allowing it to convert up to $ 9,000,000 of the RCL into common stock at $ 1.61 per share, exercisable from November 1, 2024 until the November 30, 2024.

If both the RCL and the TACL were repaid in full on or before November 30, 2024, the maximum principal amount of the RCL would increase to $ 12,500,000 .

However, if the Put Option was exercised for an amount greater than $ 4,000,000 , the maximum principal amount of the RCL would be reduced on a dollar-for-dollar basis by the excess.

As part of the June 20, 2024 amendment, the Company granted a security interest in its Mexican IVA tax claims to the holder of the RCL and TACL notes.

In November 2024, the Company repaid the TACL in full and renewed the RCL for an additional one-year term.

Under the renewal, the TACL was discontinued, and the Put Option was removed.

The maximum principal amount of $ 12,500,000 , the interest rate, and repayment terms remained unchanged.

On August 22, 2025, DynaMexico entered into an amendment (the "Amendment”) to the Gold Concentrate Purchase Agreement originally dated February 1, 2021 (as amended, the "Offtake Agreement”), with MK Metal Trading Mexico S.A.

("Buyer”) and Ocean Partners UK Limited ("Ocean Partners UK”).

The Amendment:

Extends the term of the Offtake Agreement through December 31, 2030, with automatic annual renewals unless terminated by either party with 365 days’ notice;

Adds Ocean Partners UK as a joint buyer under the Offtake Agreement, with full rights and obligations;

Establishes a new $ 15 million Concentrate Credit Facility (the "Credit Facility”), replacing the prior $ 12.5 million facility, with principal repayable in equal monthly installments over months 7 through 24 , bearing interest at 3-month SOFR plus 6.75 %;

Introduces a $ 3 million termination fee payable by DynaMexico to Buyer under certain conditions;

Provides security for the Credit Facility, including a parent company guarantee from the Company, a general security agreement, and a pledge of DynaMexico shares.

The Credit Facility is structured as a 24 -month loan.

For the first six months of the loan tenor, DynaMexico is required to make interest-only payments.

Beginning in month 7 and continuing through month 24 , the loan is repayable in 18 equal monthly principal installments, plus interest.

Concurrent with the Amendment, DynaMexico and Ocean Partners UK entered into the Credit Facility, and the Company executed a Parent Company Guarantee in favor of Ocean Partners UK, guaranteeing DynaMexico’s obligations under the Credit Facility.

The following is a summary of the activity during the years ended December 31, 2025 and 2024:

Balance beginning of year

Conversion of ACL to Note Payable

Balance beginning of period

Principal Payments

Balance end of year

Interest expense for the year ended December 31, 2024 was $ 1,249,098 (2023- $ 108,098 ).

Balance end of period

Current liability

Non-current liability

Future payments (Principal and Interest):

Interest expense for the years ended December 31, 2025 and 2024 was $ 1,291,275 and $ 1,249,098 , respectively.

NOTE 10 – CONCESSION DUTIES PAYABLE

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At December 31, 2025, $ 2,642,464 (2024 - $ 2,221,219 ) of accrued interest on the notes was included in accrued liabilities on the accompanying consolidated balance sheet.

In October 2019, the Company entered into a financing agreement for unpaid mining concession duties on the San Jose de Gracia core mining concessions in the amount of $ 299,474 .

In October 2019, the Company entered into a financing agreement for unpaid mining concession duties on the SJG mine core mining concessions in the amount of $ 299,474 .

The Company paid an initial 20 % payment of $ 59,895 and financed the balance over 36 months at an interest rate of 22 %.

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Exchange rate adjustment

2023 Principal Payments

Balance December 31, 2023

Exchange Rate Adjustment

2025 Interest

2025 principal payments

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NOTE 11 - ASSET RETIREMENT OBLIGATION

During 2023, a significant upgrade was made to the milling facility and therefore, an ARO has been established as of December 31, 2023 at the estimated undiscounted costs totaling $ 316,800 to decommission the plant and tailings pond at the end of the estimated live of the mines in operation as of December 31, 2023, discounted using credit-adjusted, risk-free interest rate of 9.2 %.

As this is an exploration stage property that does not qualify for asset capitalization, the costs associated with the obligation were charged to operations.

Asset retirement obligation consists of the following as of December 31, 2024 and 2023:

The Company is responsible for the reclamation of certain past and future disturbances at its properties.

During 2023, a significant upgrade was made to the milling facility and therefore, an ARO was established as of December 31, 2023.

During the year ended December 31, 2025, the Company recorded a change in estimate related to its ARO as a result of completing an updated, comprehensive closure plan.

The increase in the ARO was recorded as an increase to mineral property, plant and equipment, with a corresponding increase to the ARO liability.

The Company measures AROs using an expected present value

technique in accordance with ASC 410‑20 and discounts expected future cash flows using a credit‑adjusted, risk‑free rate.

As of December 31, 2025, the discount rate used was 4.92 %.

The ARO represents estimated undiscounted future cash outflows of approximately $ 4.7 million, expected to be incurred over the closure and post‑closure periods.

A reconciliation of the Company’s reclamation and remediation liabilities for the years ended December 31, 2025 and 2024, is as follows:

Asset retirement obligation at beginning of year

Additions to ARO liability

Change in estimate

Asset retirement obligation at end of year

NOTE 12 – STOCKHOLDERS’ EQUITY

The total number of shares of all classes of capital stock which the Company has the authority to issue is 60,001,000 shares, consisting of (i) twenty million and one thousand ( 20,001,000 ) shares of Preferred Stock, par value $ 0.0001 per share (“Preferred Stock”), of which 1,734,992 shares are designated as Series C Preferred Stock, 3,000,000 shares are designated as Series D Preferred Stock, and 1,552,795 shares are designated as Series E Preferred Stock, and (ii) forty million ( 40,000,000 ) shares of Common Stock, par value $ 0.01 per share (“Common Stock”).

As of December 31, 2025 , 13,713,213 of Preferred Stock remain undesignated.

Series A Preferred Stock

The Company had designated 1,000 shares of its Preferred Stock as Series A Preferred Stock, having a par value of $ 0.0001 per share.

Holders of the Series A Preferred Stock had the right to elect a majority of the Board of Directors of the Company.

In 2007, the Company issued 1,000 shares of Series A Preferred Stock to its now former CEO.

On April 19, 2023 the Company repurchased the 1,000 shares of Series A Preferred Stock from the now former CEO for $ 1,250,000 .

On July 17, 2023 the Company amended its certificate of incorporation to cancel the Series A Preferred Stock.

Series C Senior Convertible Preferred Stock

As of December 31, 2024 and 2023 , there were 1,734,992 and 1,734,992 shares of Series C Preferred Stock outstanding, respectively.

These shares of Series C Preferred Stock are convertible to shares of Common Stock at $ 1.93 per share, redeemable on demand and include anti-dilution protection on both the shares of Series C Preferred Stock and the 2,655,361 of shares of Common Stock acquired through the exercise of the Series C stock warrants in June 2022.

The shares of Series C Preferred Stock may receive a 4 % per annum dividend, payable if available, and in arrears.

The dividend is calculated at 4.0 % of $ 4,337,480 payable annually on June 30.

As of December 31, 2025 and 2024, there were 1,734,992 shares of Series C Preferred Stock outstanding.

As of December 31, 2025, the Series C Preferred Stock is convertible to common stock at $ 1.95 per share or redeemable in cash at the shareholder’s option and include anti-dilution protection.

The Series C Preferred Stock may receive a 4 % per annum dividend, payable if available, and in arrears, calculated at 4 % of $ 4,337,480 payable annually on June 30.

As of December 31, 2025 , dividends for the years ending December 31, 2017 through 2025 totaling $ 1,574,274 were in arrears (2024 - $ 1,400,784 ).

(2023 - $ 1,227,276 ).

Due to the nature of this transaction as mandatorily redeemable by the Company at the election of the Series C Preferred Stock shareholder at maturity, the shares of Series C Preferred Stock are classified as “temporary equity” on the balance sheet.

Because the Series C Preferred Stock is mandatorily redeemable by the Company at the election of the holder upon maturity, it is classified as "temporary equity” on the consolidated balance sheet.

Series D Senior Convertible Preferred Stock

Financing Agreement with Golden Post Rail, LLC, a Texas Limited Liability Company, and with Shareholders of DynaResource, Inc.

Financing Agreement with Golden Post Rail, LLC, a Texas Limited Liability Company, and with Shareholders of DynaResource

On May 14, 2020, the Company closed an additional financing and related agreements with certain shareholders totaling $ 4,020,000 which was convertible into shares of Series D Preferred Stock.

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On October 7, 2021, the Company paid $ 2,500,000 to repurchase one note.

The remaining ten noteholders elected to convert their notes totaling $ 1,520,000 into shares of Series D Preferred Stock at $ 2.00 per share.

On October 18, 2021, the Company issued 760,000 shares of Series D Preferred Stock for these notes.

The shares of Series D Preferred Stock may receive a 4 % per annum dividend, payable if available, and in arrears.

The dividend is calculated at 4.0 % of $ 1,520,000 payable annually on October 18 th .

As of December 31, 2024 dividends for the years 2022 through 2024 totaling $ 182,400 were in arrears.

The remaining ten noteholders elected to convert their notes totaling $ 1,520,000 into Series D Preferred Stock at $ 2.00 per share.

Concurrently with the note conversion the noteholders exercised 368,468 of the 2020 Warrants to purchase 368,468 shares of the Company’s common stock at $ 0.01 per share.

Due to the nature of the Series D Preferred Stock, as mandatorily redeemable by the Company at the election of the Series D Preferred stockholders at any time following maturity, the Series D Preferred Stock is classified as “temporary equity” on the balance sheet.

The deemed dividends on the Series C and D Preferred Stock for the years ended December 31, 2024 and 2023 , were $ 234,299 and $ 234,299 , respectively.

As the Company has not declared these dividends, it is required as an item “below” the net income amount on the accompanying consolidated statements of income.

On October 18, 2021, the Company issued 760,000 shares of Series D Preferred Stock.

The Series D Preferred Stock may receive a 4 % per annum dividend, payable if available, and in arrears, calculated at 4.0 % of $ 1,520,000 payable annually on October 18 .

As of December 31, 2025 dividends for the years 2022 through 2025 totaling $ 243,200 were in arrears.

Because the Series D Preferred Stock is mandatorily redeemable by the Company at the election of the holder upon maturity, it is classified as "temporary equity” on the consolidated balance sheet.

Deemed dividends on the Series C and D Preferred Stock for the years ended December 31, 2025 and 2024 , were $ 234,299 and $ 234,299 , respectively.

As these dividends have not been declared by the Company, they are required to be presented as an adjustment "below” the net income (loss) line on the accompanying unaudited condensed interim consolidated statements of income.

Series E Convertible Preferred Stock

As of December 31, 2025 and 2024 there were 1,552,795 and nil shares of Series E Preferred Stock outstanding.

The shares of Series E Preferred Stock are convertible on a one-for-one basis into shares of Common Stock, subject to equitable adjustment.

shares of Series E Stock are eligible to receive the conversion equivalent of any Common Stock dividend declared but carry no preferred dividend and are not redeemable in cash.

The Series E Preferred Stocks is convertible on a one -for-one basis into shares of common stock, subject to equitable adjustment.

They are eligible to receive the equivalent of any common stock dividend declared but carry no preferred dividend rights and are not redeemable for cash.

Preferred Stock (Undesignated)

In addition to the 1,734,992 authorized shares designated as Series C Preferred Stock, the 3,000,000 authorized shares designated as Series D Preferred Stock and the 1,552,795 authorized shares designated as Series E Preferred Stock the Company is authorized to issue an additional 13,713,213 shares of Preferred Stock, having a par value of $ 0.0001 per share.

The Board of Directors of the Company has authority to issue the Preferred Stock from time to time in one or more series, and with respect to each series of the Preferred Stock, to fix and state by resolution the terms attached to the Preferred Stock.

In addition to the 1,734,992 shares designated as Series C Preferred Stock, the 3,000,000 shares designated as Series D Preferred Stock, and 1,552,795 such shares designated as Series E Preferred Stock, the Company is authorized to issue an additional 13,713,213 shares of Preferred Stock, each having a par value of $ 0.0001 per share.

The Company’s Board of Director (the “Board”) has authority to issue Preferred Stock from time to time in one or more series and, with respect to each series, to fix and determine by resolution the designations, powers, preferences, rights, qualifications, limitations, and restrictions of such series.

At December 31, 2025 and December 31, 2024 , there were no other shares of Preferred Stock outstanding.

Separate Series; Increase or Decrease in Authorized Shares .

The shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all of the foregoing respects and in any other manner.

The Board of Directors may increase the number of shares of Preferred Stock designated for any existing series by a resolution adding to such series authorized and unissued shares of Preferred Stock not designated for any other series.

Unless otherwise provided in the Preferred Stock Designation, the Board of Directors may decrease the number of shares of Preferred Stock designated for any existing series by a resolution subtracting from such series authorized and unissued shares of Preferred Stock designated for such existing series, and the shares so subtracted shall become authorized, unissued and undesignated shares of Preferred Stock.

The shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all these rights and terms.

The Board may increase the number of shares designated for any existing series by resolution, adding authorized but unissued and undesignated shares to that series.

Unless otherwise provided in a particular Preferred Stock designation, the Board may also decrease the number of shares designated for any existing series by resolution, returning such shares to the pool of authorized, unissued and undesignated Preferred Stock.

The Company is authorized to issue 40,000,000 common shares at a par value of $ 0.01 per share.

These shares have full voting rights.

These shares carry full voting rights.

At December 31, 2025 and December 31, 2024 , there were 29,315,726 and 29,315,726 common stock shares outstanding, respectively.

No dividends were paid for the years ended December 31, 2024 and 2023, respectively.

No dividends were declared or paid during the years ended December 31, 2025 and 2024, respectively.

Preferred Rights

In 2003, the Company issued “Preferred Rights” and received $ 784,500 for these rights.

This has been reflected as “Preferred Rights” in stockholders’ equity in accompanying consolidated balance sheets.

The Company issued "Preferred Rights” and received proceeds of $ 784,500 for these rights.

This amount is reflected as "Preferred Rights” within stockholders’ equity in the accompanying consolidated balance sheets.

As of December 31, 2025 , $ 744,500 had been repaid, leaving a current balance of $ 40,000 and $ 40,000 as of December 31, 2025 and 2024, respectively.

Stock Issuances

On August 4, 2023 the Company issued 1,000,000 shares of Common Stock for $ 5,000,000 cash consideration.

In connection with the sales the Company issued 125,054 shares to the Series C Preferred stockholder under the Series C Preferred Stock anti-dilution provision.

• On June 27, 2024 the Company issued 1,552,795 shares of Series E Preferred Stock for $ 2,500,000 cash consideration.

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Treasury Stock

During the year ending December 31, 2024, there were no treasury stock transactions.

During the year ended December 31, 2023, 25,000 shares of the Company’s Common Stock previously issued for services were returned to the Company as part of a settlement of fees.

At December 31, 2024 and 2023 , 37,180 and 37,180 treasury shares were held by the Company.

As of December 31, 2024 , the Company had outstanding warrants, which were a part of the issuance of notes convertible into Series D Convertible Preferred Stock in 2020, to purchase 892,165 shares of common stock:

There were no treasury stock transactions during the year ended December 31, 2025, or during the year ended December 31, 2024.

There were 37,180 shares of treasury stock outstanding as of December 31, 2025 and 2024.

As of December 31, 2025, t he Company had outstanding warrants to purchase 892,165 shares of common stock.

These warrants were issued as part of the 2020 financing transaction involving notes convertible into Series D Preferred Stock.

Balance at December 31, 2023

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Forfeiture of the warrants

Balance at December 31, 2023

Exercisable at December 31, 2024

Exercise of warrants

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Exercisable at December 31, 2025

A derivative liability was incurred at the issuance of the Series D warrants in 2020.

A derivative liability was recognized upon the issuance of the 2020 Warrants.

As of December 31, 2025 , the derivative liability totaled $ 1,249,030 .

See Note 8 above.

As of December 31, 2024 the Company had the following outstanding options, which were issued to Directors and Executive Officers as compensation to purchase 1,150,000 shares of Common Stock:

On February 16, 2024, in conjunction with joining the Board of Directors, Mr.

Quinton Hennigh was awarded options to purchase up to 400,000 shares of the Common Stock at an exercise price of $ 5.00 per share, with such options vesting in 25 % increments on each of the first four anniversaries of the date of the award.

On June 3, 2024, Mr.

Rohan Hazelton, in conjunction with accepting the position of Chief Executive Officer, was awarded options to purchase up to 750,000 shares of Common Stock at an exercise price of $ 1.75 per share, with such options vesting and becoming exercisable one-third per year on each of the first three anniversaries of the grant date and will be exercisable for a period of five years from the grant date.

As of December 31, 2025, the Company had outstanding options to purchase an aggregate of 1,150,000 shares of common stock, issued to directors and executive officers as compensation:

On February 16, 2024, in conjunction with joining the Board, Mr.

Quinton Hennigh was awarded options to purchase up to 400,000 shares of common stock at an exercise price of $ 5.00 per share.

The options vest in 25 % increments on each of the first four anniversaries of the grant date and expiring five years after the grant date.

On June 3, 2024, in conjunction with accepting the position of Chief Executive Officer, Mr.

Rohan Hazelton was awarded options to purchase up to 750,000 shares of common stock at an exercise price of $ 1.75 per share.

The options vest and become exercisable in one-third increments on each of the first three anniversaries of the grant date and expire five years after the grant date.

Balance at December 31, 2023

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Balance at December 31, 2025

As of December 31, 2025, the Company had 350,000 stock options outstanding that were vested and exercisable but not exercised.

The weighted‑average exercise price of these options was $ 2.68 , and the weighted‑average remaining contractual term was 2.97 years.

NOTE 13 – STOCK BASED COMPENSATION

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The shares were valued at the closing stock price of $ 2.35 on the date of issuance and accounted for under ASC 718.

Stock compensation expense for the years ended December 31, 2024 and 2023 was $ 1,219,062 and 881,250 representing the 25 % vested portion of the total stock value.

Stock compensation expense for the years ended December 31, 2025 and 2024 was $ 1,249,459 and $ 1,219,062 , respectively, representing the 25 % vested portion of the total stock value.

In addition the 2024 expenses included accelerated vesting of $ 327,813 due to terminations.

In addition to the accelerated vesting 112,500 shares under these awards were cancelled in December 2024.

As of December 31, 2024, deferred compensation totaling $ 297,063 remained unvested.

In addition to the

accelerated vesting 112,500 shares under these awards were cancelled in December 2024.

As of December 31, 2025, deferred compensation totaling $ nil remained unvested.

On June 3, 2024, Mr.

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Sotomayor that included a signing bonus of 225,000 restricted stock units vesting one-third per year on each of the first three anniversaries of the grant date.

On February 16, 2024, in conjunction with joining the Board of Directors, Mr.

Quinton Hennigh was awarded options to purchase up to 400,000 shares of Common Stock of the Company at an exercise price of $ 5.00 per share, with such options vesting in 25 % increments on each of the first four anniversaries of the date of the award and will be exercisable for a period of four years from the date of the grant.

On November 20, 2025, the Company and Mr.

Sotomayor entered into a new employment arrangement pursuant to an Offer of Continued Employment with the Company, which replaced the prior employment agreement.

In connection with this arrangement, the Company agreed to provide Mr.

Sotomayor with a retention award (the “Retention Bonus”), subject to his continued active employment and compliance with applicable laws, including securities laws.

The Retention Bonus is intended to be delivered in the form determined by the Board, in its discretion, of either (i) 225,000 restricted stock units (“RSUs”) or (ii) a number of RSUs having an aggregate value of C$ 470,000 , calculated at the time of issuance.

The RSUs were cancelled and are expected to be reissued at such time as issuance is permitted under applicable laws.

Sotomayor remains actively employed at the time of issuance, the RSUs will be issued promptly in compliance with applicable laws.

On February 16, 2024, in conjunction with joining the Board, Mr.

Quinton Hennigh was awarded options to purchase up to 400,000 shares of common stock of the Company at an exercise price of $ 5.00 per share, with such options vesting in 25 % increments on each of the first four anniversaries of the date of the award and exercisable for a period of four years from the date of the grant.

The inputs utilized in calculating the fair are as follows:

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On June 3, 2024, Mr.

Rohan Hazelton, in conjunction with accepting the position of Chief Executive Officer, was awarded options to purchase up to 750,000 shares of Common Stock of the Company at an exercise price of $ 1.75 per share, with such options vesting and becoming exercisable one-third per year on each of the first three anniversaries of the grant date and will be exercisable for a period of five years from the grant date.

Rohan Hazelton, in conjunction with accepting the position of Chief Executive Officer, was awarded options to purchase up to 750,000 shares of common stock of the Company at an exercise price of $ 1.75 per share, with such options vesting and becoming exercisable one-third per year on each of the first three anniversaries of the grant date and expiring five years after the grant date.

The inputs utilized in calculating the fair value are as follows:

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Fair Value of stock options

Hazelton also received 500,000 DSUs payable upon achievement of performance targets and 500,000 RSUs vesting in one-third increments on each of first three anniversaries of the grant date, with the terms and performance metrics to be determined by the Compensation Committee.

On June 2, 2025, the Company granted a total of 30,000 RSUs to an employee of the Company, holding a total grant date fair value of $ 40,500 , measured at US$ 1.35 /share restricted stock units vesting one-third per year on each of the first three anniversaries of

the grant date.

On August 12, 2025, the Company granted a total of 600,000 RSUs to executives of the Company, holding a total grant date fair value of $ 720,000 , measured at US$ 1.20 /share restricted stock units vesting one-third per year on each of the first three anniversaries of the grant date.

Management Bonuses

On March 28, 2025, the Compensation Committee approved bonus awards for the management team totaling $ 457,500 , consisting of $ 217,500 in cash and $ 240,000 in common stock.

The stock portion represents 263,736 shares, calculated based on the closing price of $ 0.91 per share on March 28, 2025.

Of these awards, $ 70,000 in cash and $ 125,000 in stock (equivalent to 137,363 shares) were allocated to directors and officers.

The Board ratified these awards on April 2, 2025.

Independent Director Compensation

Also on March 28, 2025, the Compensation Committee approved annual compensation for independent directors, consisting of a base cash component of $ 25,000 and an additional $ 50,000 to be paid in shares of common stock.

The equity portion of the compensation is subject to vesting as follows:

one-third vests immediately, one-third vests one year from the grant date, and the remaining one-third vests two years from the grant date.

This resulted in a total stock-based award of $ 250,000 for the five independent directors.

The Board approved this compensation on April 2, 2025.

This amount was classified as a liability as the Company has an obligation to settle the obligation by issuing a variable number of shares.

NOTE 14 – INCOME TAXES

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Lease liability

Accrued bonus

NQO & RSA Stock Options

Accruals & Reserves

Gross Deferred Tax Asset

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A reconciliation between the amount of reported income tax expense (benefit) and the amount computed by multiplying income from continuing operations before income taxes by the statutory federal income tax rate is shown below.

Income tax expense for the year ended December 31, 2024 includes state minimum taxes, permanent differences, and deferred tax assets for which the valuation allowance has been released.

Income tax expense for the year ended December 31, 2025 includes state minimum taxes, permanent differences, and deferred tax assets for which the

valuation allowance has been released.

A corresponding tax benefit is included for the year ended December 31, 2025 to reflect the release in the valuation allowance.

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Return to provision

NOL Expieration

NOL Expiration

Change in valuation allowance

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Income tax benefit

December 31, 2025

Federal tax at statutory rate

Nontaxable or Nondeductible Items

Section 951a inclusion - net of 250 deduction

Other differences

Foreign Tax Effects

Foreign Rate Differential

Special Mining Tax

Tax Inflation Effect

Statutory to GAAP

Special Mining Tax Deduction

Valuation Allowance

The net deferred tax asset and benefit for the current year is generated primarily from cumulative net operating loss carryforward, which totals approximately $ 26.5 million at December 31, 2025.

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The Company’s Mexico net operating losses of $ 10.9 million pre-tax are subject to a ten-year carryforward period and the Company anticipates utilizing its Mexico NOL in future years before expiration.

During the year ended December 31, 2022, the valuation allowance was released.

The Company believes a full valuation allowance against the net deferred tax asset is no longer warranted based on the positive evidence in recent years.

Such positive evidence includes no longer being in a three-year cumulative losses, the rising prices in gold, utilization of current year tax attributes, and projected taxable income in the future.

The Company’s practice is to recognize interest and penalties related to income taxes in income tax expense in continuing operations, as incurred.

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The Company is no longer subject to US federal, state, and local tax examinations by tax authorities for years prior to fiscal year 2022.

The Company began utilizing its NOL in 2021.

The statute of limitations began when the Company filed its 2021 US Federal Tax Return.

The Company is no longer subject to Mexican tax examinations for years prior to fiscal year 2017.

The Company is no longer subject to Mexico tax examinations for years prior to fiscal year 2018.

The Company has not provided U.S.

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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 & 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.

Consequences of the México legal ruling 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 3- 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 £ 376,232.

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.

Concession Taxes

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DynaMéxico retains sufficient carryforward amounts to cover over 10 years of the minimum expenditure (as calculated at the 2017 minimum, adjusted for annual inflation of 4%).

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

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

The 20 Year Land Lease Agreement with the Santa Maria Ejido Community surrounding San Jose de Gracía was dated January 6, 2014 and continues through January 2033.

It covers an area of 4,399 hectares surrounding the main mineral resource areas of SJG and provides for annual lease payments on January 1st each year by DynaMineras of $ 1,359,443 pesos adjusted for inflation based on the Mexico minimum wage increase commencing in 2014.

It covers an area of 4,399 hectares surrounding the main mineral resource areas of the SJG mine and provides for annual lease payments on January 1st each year by DynaMineras of $ 1,359,443 pesos adjusted for inflation based on the Mexico minimum wage increase commencing in 2014.

Rent was $ 5,932,583 Pesos (approx.

$ 304,000 USD) for the year ended December 31, 2025 .

The Land Lease Agreement provides DynaMineras with surface access to the core resource areas of SJG ( 4,399 hectares ), and allows for all permitted mining and exploration activities from the owners of the surface rights (Santa Maria Ejido community).

The Land Lease Agreement provides DynaMineras with surface access to the core resource areas of the SJG mine ( 4,399 hectares ), and allows for all permitted mining and exploration activities from the owners of the surface rights (Santa Maria Ejido community).

The Company leases office space for its corporate headquarters in Irving, Texas.

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The Company determines if a contract is or contains a lease at inception.

As of December 31, 2024, the Company has two operating leases - a fifty-two month lease for office space with a remaining term of thirty-five months and a twenty-year ground lease in association with its México mining operations with a remaining term of ten years.

Variable lease costs consist primarily of variable common area maintenance, storage parking and utilities.

As of December 31, 2025, the Company has two operating leases - a fifty-two month lease for office space with a remaining term of thirty-five months and a twenty-year ground lease in association with its México mining operations with a remaining term of eight years.

Variable lease costs consist primarily of variable

common area maintenance, storage parking and utilities.

The Company’s leases do not have any residual value guarantees or restrictive covenants.

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Operating Lease – Ground Lease

Short Term Lease Costs

Variable Lease Costs

Weighted average remaining lease term and weighted average discount rate are as follows:

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Weighted Average Discount Rate – Operating Leases

Estimated future minimum lease obligations are as follow for the years ending December 31:

Estimated future minimum lease obligations are as follows for the years ending December 31:

Less Imputed Interest

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NOTE 18 - SEGMENTED INFORMATION

The Company operates as one reportable segment focused on the exploration and evaluation of its gold-silver project in Mexico, The Company’s Chief Executive Officer (“CEO”) acts as the Chief Operating Decision Maker (“CODM”) and the CODM uses consolidated net income/loss as the measure of segment profit and loss to assess performance and allocate resources.

The Company operates as one reportable segment focused on the development and operation of its gold-silver project in Mexico, The Company’s Chief Executive Officer (“CEO”) acts as the Chief Operating Decision Maker (“CODM”) and the CODM uses consolidated net income/loss as the measure of segment profit and loss to assess performance and allocate resources.

The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets, with a majority of these assets located in Mexico and had the following geographic concentrations as of December 31, 2025 and 2024:

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December 31, 2025

Mining concessions

Property and equipment, net

Mineral property interests, plant and equipment, net

Current assets

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NOTE 19 – RELATED PARTY TRANSACTIONS

Management Bonuses

On March 28, 2025, the Compensation Committee approved bonus awards to the management team in cash and common stock.

The stock portion is based on the closing price of $ 0.91 per share on March 28, 2025.

Of these awards $ 70,000 in cash and $ 125,000 in stock (equivalent to 137,363 shares) were allocated to directors and officers.

The Board ratified these awards on April 2, 2025.

Independent Director Compensation

On March 28, 2025, the Compensation Committee approved annual compensation for independent directors, consisting of a base cash payment of $ 25,000 per director, plus additional cash compensation of $ 4,000 for each committee membership and $ 2,000 for each committee chairmanship held by the director.

In addition, each independent director was awarded $ 50,000 in equity compensation, to be paid in shares of common stock.

The equity awards are subject to a vesting schedule whereby one-third vests immediately, one-third vests one year from the grant date, and the remaining one-third vests two years from the grant date.

The Board approved this compensation on April 2, 2025.

During the years ended December 31, 2025 and 2024 , the Company paid or accrued $ 234,500 and $ 312,500 in management fees to its directors.

Included in accounts payable at December 31, 2025 is $ 278,600 (2024 - $ 412,500 ) due to related parties.

Restricted Stock Awards

During the year ended December 31, 2022 the Compensation Committee approved stock awards to employees, directors and consultants of the Company.

The stock awards approved were issued to each of the individuals/entities and vested 25 % immediately and the remainder vest 25 % each year on December 31 for the next three years, subject to resignation or termination provisions.

The awards totaled 1,500,000 shares of which 1,175,000 were awarded to officers and/or directors.

Total stock-based compensation recognized on awards granted to related parties totaled $ 690,313 for the years ended December 31, 2023 and $ 969,375 for the year ended December 31, 2024.

Due to a termination, 112,500 shares under these awards were cancelled in December 2024.

On June 3, 2024, Mr.

Rohan Hazelton was appointed as the Company’s new Chief Executive Officer.

In connection with Mr.

Hazelton’s appointment, the Company entered into an Employment Agreement with Mr.

Hazelton that included a signing bonus of 750,000 stock options as detailed below, 500,000 Restricted Stock Units vesting one-third per year on each of the first three anniversaries of the grant date, the terms of which are to be determined by the Compensation Committee and 500,000 Deferred Stock Units, the terms and metrics of which are to be determined by the Compensation Committee.

On July 22, 2024, Mr.

Alonso Sotomayor was appointed as the Company’s new Chief Financial Officer.

In connection with Mr.

Sotomayor’s appointment, the Company entered into an Employment Agreement with Mr.

Sotomayor that included a signing bonus of 225,000 restricted stock units vesting one-third per year on each of the first three anniversaries of the grant date, the terms of which are to be determined by the Compensation Committee.

Options Awarded

On February 16, 2024, in conjunction with joining the Board of Directors, Mr.

Quinton Hennigh was awarded options to purchase up to 400,000 shares of Common Stock at an exercise price of $ 5.00 per share, with such options vesting in 25 % increments on each of the first four anniversaries of the date of the award.

On June 3, 2024, Mr.

NOTE 20 – SUBSEQUENT EVENTS

The Company has evaluated events from December 31, 2024, through the date whereupon the consolidated financial statements were issued, and has described below the events subsequent to the end of the period:

In September 2024, the Company entered into a commodity pricing contract through its major purchaser.

The Company used a forward contract to lock in the price of recoverable gold from its deliveries of gold concentrates.

The contract was for 75 % of recoverable gold up to 9,000 ounces, at a price of $ 2,495 per ounce.

This means that if the price of gold decreases, the Company will still receive amounts based on the contract price.

In March 2025, the Company fulfilled its delivery obligations under the commodity pricing contract.

The Company has evaluated events from December 31, 2025, through the date the consolidated financial statements were issued.

No subsequent events were identified that required adjustment to or disclosure in the consolidated financial statements.

CHANGES IN AND DISA GREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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 7. Management’s Discussion and Analysis