Highlander Silver Q3 net loss widens to $17.1M
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Highlander Silver Corp. (HSLV) reported $37.746 million of revenue for the three months ended September 30, 2026, compared with none in 2025, and a net loss of $17.137 million versus $3.107 million. For the nine months, revenue was $93.973 million and net loss was $8.462 million; revenue came from gold and silver sales following the February acquisition of Bear Creek Mining Corporation.
On February 26, 2026, Highlander acquired the remaining Bear Creek shares, issuing 36,225,457 Highlander shares and obtaining 100% ownership of Bear Creek, which holds the Mercedes Mine in Mexico and the Corani Project in Peru. Cash and cash equivalents were $68.093 million at September 30, compared with $78.942 million at December 31, 2025.
For Corani development and construction, Highlander executed a mandate letter for a $330 million project-finance facility, with a cost-overrun facility of up to $100 million to be provided by Highlander. The facility remains subject to definitive documentation, due diligence and credit approvals; closing is expected in the first quarter of 2027.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly revenue reached $37.746 million, compared with none in 2025.
Negative
- Moderate pointQuarterly net loss was $17.137 million, versus $3.107 million in 2025.
Filing Explained
At September 30, 2026, listed contractual cash commitments totaled $90,054 thousand, including $43,812 thousand scheduled during 2026.
Form 6-K is a foreign private issuer’s interim report for furnishing material information published in its home market; Highlander furnishes unaudited interim statements and MD&A for the three and nine months ended
The schedule includes
Key Figures
Key Terms
Net Smelter Returns financial
unit-of-production basis technical
concentration test technical
measurement period adjustment financial
net realizable value financial
Level 2 financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue did HSLV report for the third quarter of 2026?
How much was HSLV’s net loss in the third quarter of 2026?
What financing terms did HSLV announce for the Corani Project?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November 2026
Commission File Number 001- 43170
Highlander Silver Corp.
(Translation of registrant’s name into English)
2500 – 100 King Street West
Toronto, Ontario, M5X 1A9 Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40F:
Form 20-F ☐ Form 40-F ☒
The following documents are being submitted herewith:
| Exhibit | Description | |
| 99.1 | Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2026 and 2025 | |
| 99.2 | Management’s Discussion and Analysis for the three and nine months ended September 30, 2026 and 2025 | |
| 99.3 | CEO Certification of Interim Filings dated November 12, 2026 | |
| 99.4 | CFO Certification of Interim Filings dated November 12, 2026 |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Highlander Silver Corp. | ||
| (Registrant) | ||
| Date: November 12, 2026 | By: | /s/ Purni Parikh |
| Name: | Purni Parikh | |
| Title: | SVP Corporate Affairs and Corporate Secretary | |
2
Exhibit 99.1
Highlander Silver Corp.
Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited)
Highlander Silver Corp.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited – in thousands of United States Dollars)
| Note | September 30, 2026 | December 31, 2025 (Restated – Note 3) | October 1, 2024 (Restated – Note 3) | |||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 68,093 | $ | 78,942 | $ | 1,853 | ||||||||
| Short-term investment | 5 | 7,067 | – | – | ||||||||||
| Inventory | 6 | 5,762 | – | – | ||||||||||
| Accounts receivable | 7, 21 | 7,301 | 66 | 81 | ||||||||||
| Prepaids and other | 3,627 | 148 | 19 | |||||||||||
| Tax receivable | 8 | 11,006 | 156 | 134 | ||||||||||
| 102,856 | 79,312 | 2,087 | ||||||||||||
| Non-current assets | ||||||||||||||
| Deposits on non-current assets | 10 | 3,868 | – | – | ||||||||||
| Receivables | 7 | 1,164 | – | – | ||||||||||
| Reclamation deposits | 9 | 3,430 | 44 | 44 | ||||||||||
| Property and equipment | 10 | 62,878 | 210 | 70 | ||||||||||
| Mineral property interests | 11 | 421,774 | 8,892 | 7,970 | ||||||||||
| Right-of-use assets | 417 | 8 | – | |||||||||||
| Tax receivable | 8 | 2,345 | 247 | 66 | ||||||||||
| Total assets | $ | 598,732 | $ | 88,713 | $ | 10,237 | ||||||||
| Liabilities and Equity | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable and accrued liabilities | 12, 21 | $ | 38,806 | $ | 1,780 | $ | 269 | |||||||
| Community projects obligation | 13 | 1,164 | – | – | ||||||||||
| Consideration payable | 11 | – | 1,250 | 1,250 | ||||||||||
| Lease liabilities | 155 | 9 | – | |||||||||||
| Tax payable | 3,965 | 15 | 7 | |||||||||||
| Other liabilities | 34 | – | – | |||||||||||
| 44,124 | 3,054 | 1,526 | ||||||||||||
| Non-current liabilities | ||||||||||||||
| Community projects obligation | 13 | 8,762 | – | – | ||||||||||
| Consideration payable | 11 | – | – | 1,250 | ||||||||||
| Lease liabilities | 195 | – | – | |||||||||||
| Net smelter return royalty buy-back liability | 4, 11 | 22,896 | – | – | ||||||||||
| Reclamation provision | 14 | 16,069 | 475 | 365 | ||||||||||
| Deferred tax liability | 4 | 117,179 | – | – | ||||||||||
| Other liabilities | 1,850 | – | – | |||||||||||
| Total liabilities | 211,075 | 3,529 | 3,141 | |||||||||||
| Equity | ||||||||||||||
| Common shares | 15 | 400,128 | 100,291 | 14,575 | ||||||||||
| Reserves | 15 | 16,872 | 2,546 | 1,348 | ||||||||||
| Commitment to issue shares | 15 | – | 547 | 37 | ||||||||||
| Foreign currency reserve | (318 | ) | 2,363 | (364 | ) | |||||||||
| Deficit | (29,025 | ) | (20,563 | ) | (8,500 | ) | ||||||||
| Total equity | 387,657 | 85,184 | 7,096 | |||||||||||
| Total liabilities and equity | $ | 598,732 | $ | 88,713 | $ | 10,237 | ||||||||
Nature of operations and going concern (Note 1)
Commitments (Note 24c)
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Page 1
Highlander Silver Corp.
Condensed Consolidated Interim Statements of Net Loss and Comprehensive Loss
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, except share and per share amounts)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
| Note | 2026 | 2025 (Restated – Note 3) | 2026 | 2025 (Restated – Note 3) | ||||||||||||||
| Revenue | 16 | $ | 37,746 | $ | – | $ | 93,973 | $ | – | |||||||||
| Cost of sales | 17 | (24,010 | ) | – | (61,714 | ) | – | |||||||||||
| Depletion, amortization, and depreciation | 10 | 3,746 | – | (14,212 | ) | – | ||||||||||||
| Gross profit | 17,482 | – | 18,047 | – | ||||||||||||||
| Exploration expenses | 18 | (22,259 | ) | (2,103 | ) | (36,038 | ) | (5,019 | ) | |||||||||
| General and administrative expenses | 19 | (3,933 | ) | (1,093 | ) | (17,710 | ) | (3,327 | ) | |||||||||
| Loss before other items | (8,710 | ) | (3,196 | ) | (35,701 | ) | (8,346 | ) | ||||||||||
| Finance cost | 4b | (6,519 | ) | (4 | ) | (7,291 | ) | (164 | ) | |||||||||
| Interest and other income | 2,129 | 126 | 5,214 | 358 | ||||||||||||||
| Foreign exchange gain (loss) | (911 | ) | (33 | ) | 1,108 | 49 | ||||||||||||
| Remeasurement gain on previously held equity interest in Bear Creek | 4 | – | – | 28,466 | – | |||||||||||||
| Write-off of receivables | – | – | – | (127 | ) | |||||||||||||
| Other expenses | (1 | ) | – | (136 | ) | – | ||||||||||||
| Net loss before income taxes | (14,012 | ) | (3,107 | ) | (8,340 | ) | (8,230 | ) | ||||||||||
| Current income tax expense | (19 | ) | – | (1,067 | ) | – | ||||||||||||
| Deferred income tax recovery (expense) | (3,106 | ) | – | 945 | – | |||||||||||||
| Net loss | (17,137 | ) | (3,107 | ) | (8,462 | ) | (8,230 | ) | ||||||||||
| Other comprehensive loss | ||||||||||||||||||
| Items that may be reclassified to profit or loss: | ||||||||||||||||||
| Foreign currency translation | 224 | (164 | ) | (2,681 | ) | 1,314 | ||||||||||||
| Total comprehensive loss | $ | (16,913 | ) | $ | (3,271 | ) | $ | (11,143 | ) | $ | (6,916 | ) | ||||||
| Net loss per share attributable to: Shareholders of the Company | ||||||||||||||||||
| Basic and diluted | $ | (0.08 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.08 | ) | ||||||
| Weighted average number of shares outstanding | ||||||||||||||||||
| Basic and diluted | 203,603,853 | 105,733,266 | 194,292,932 | 99,292,523 | ||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Page 2
Highlander Silver Corp.
Condensed Consolidated Interim Statements of Cash Flows
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
| Note | 2026 | 2025 (Restated – Note 3) | 2026 | 2025 (Restated – Note 3) | ||||||||||||||
| Cash provided by (used in): | ||||||||||||||||||
| Operations | ||||||||||||||||||
| Net loss for the period | $ | (17,137 | ) | $ | (3,107 | ) | $ | (8,462 | ) | $ | (8,230 | ) | ||||||
| Adjustments for: | ||||||||||||||||||
| Accretion of community projects obligation | 13 | 176 | – | 411 | – | |||||||||||||
| Adjustment to other liabilities | (49 | ) | – | (23 | ) | – | ||||||||||||
| Depletion, amortization, and depreciation | 10, 18 | (3,635 | ) | 11 | 14,695 | 18 | ||||||||||||
| Deferred income tax recovery | 3,106 | – | (945 | ) | – | |||||||||||||
| Fair value gain on short-term investment | 5 | (19 | ) | – | (19 | ) | – | |||||||||||
| Finance cost | 6,392 | 4 | 6,903 | 164 | ||||||||||||||
| Foreign exchange | (203 | ) | (74 | ) | (1,553 | ) | (285 | ) | ||||||||||
| Interest income | (1,442 | ) | (126 | ) | (3,408 | ) | (324 | ) | ||||||||||
| Income taxes | 19 | – | 1,067 | – | ||||||||||||||
| Remeasurement gain on previously held equity interest in Bear Creek | 4 | – | – | (28,466 | ) | – | ||||||||||||
| Reclamation provision | 14 | 14 | 23 | 19 | 54 | |||||||||||||
| Share-based compensation | 15 | 1,771 | 350 | 5,783 | 1,019 | |||||||||||||
| Write-off of receivables | – | – | – | 127 | ||||||||||||||
| Net changes in non-cash working capital items: | ||||||||||||||||||
| Accounts payable and accrued liabilities | 12 | 11,225 | 300 | 9,890 | 822 | |||||||||||||
| Inventory | 6 | 626 | – | 4,965 | – | |||||||||||||
| Prepaid and other | (1,905 | ) | (49 | ) | (1,820 | ) | (139 | ) | ||||||||||
| Receivables | 7 | (5,962 | ) | (27 | ) | (7,004 | ) | (30 | ) | |||||||||
| Tax payable | (1,479 | ) | – | 2,142 | 5 | |||||||||||||
| Income tax paid | – | – | (1,342 | ) | – | |||||||||||||
| Tax receivable | 8 | (825 | ) | (150 | ) | (2,869 | ) | (247 | ) | |||||||||
| (9,327 | ) | (2,845 | ) | (10,036 | ) | (7,046 | ) | |||||||||||
| Financing | ||||||||||||||||||
| Proceeds from non-brokered private placement, net of share issue costs paid | 15 | – | – | 39,723 | – | |||||||||||||
| Proceeds from bought deal equity financing, net of share issue costs paid | 15 | – | 58,772 | – | 79,557 | |||||||||||||
| Finance costs paid | (94 | ) | (5 | ) | (129 | ) | (151 | ) | ||||||||||
| Payment of lease liabilities | (125 | ) | – | (275 | ) | – | ||||||||||||
| Proceeds from exercise of options and warrants | 15 | 91 | 12 | 2,650 | 138 | |||||||||||||
| Debt settlement | 4 | – | – | (10,352 | ) | – | ||||||||||||
| Share issuance costs paid | – | – | (183 | ) | – | |||||||||||||
| (128 | ) | 58,779 | 31,434 | 79,544 | ||||||||||||||
| Investing | ||||||||||||||||||
| Investment in Bear Creek | 4 | – | – | (13,219 | ) | – | ||||||||||||
| Cash acquired on acquisition of Bear Creek | 4 | – | – | 16,194 | – | |||||||||||||
| Deposits on non-current assets | 10 | (3,868 | ) | – | (3,868 | ) | – | |||||||||||
| Short-term investment | 5 | (7,048 | ) | – | (7,048 | ) | – | |||||||||||
| Mineral property interest | – | – | – | (16 | ) | |||||||||||||
| Milestone payment under acquisition agreement with SSR Mining | 11 | – | – | (1,250 | ) | (1,250 | ) | |||||||||||
| Interest and royalty income received | 1,715 | 126 | 3,935 | 323 | ||||||||||||||
| Payment of community projects and other liabilities | 13 | (9 | ) | – | (1,178 | ) | – | |||||||||||
| Property and equipment | 10 | (12,994 | ) | – | (24,941 | ) | (56 | ) | ||||||||||
| Proceeds from sale of Tassa Project | 7 | – | – | 500 | – | |||||||||||||
| (22,204 | ) | 126 | (30,875 | ) | (999 | ) | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 448 | (282 | ) | (1,372 | ) | 915 | ||||||||||||
| Increase (decrease) in cash and cash equivalents | (31,211 | ) | 55,778 | (10,849 | ) | 72,414 | ||||||||||||
| Cash and cash equivalents, beginning of the period | 99,304 | 17,798 | 78,942 | 1,162 | ||||||||||||||
| Cash and cash equivalents, end of the period | $ | 68,093 | $ | 73,576 | $ | 68,093 | $ | 73,576 | ||||||||||
Supplemental cash flow information (Note 22)
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Page 3
Highlander Silver Corp.
Condensed Consolidated Interim Statements of Changes in Equity
For the nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, except number of shares)
| Number of Shares | Amount | Reserves | Commitment to issue shares | Foreign currency reserve | Deficit | Total equity | ||||||||||||||||||||||
| Balance, December 31, 2025 (Restated)1 | 130,910,687 | $ | 100,291 | $ | 2,546 | $ | 547 | $ | 2,363 | $ | (20,563 | ) | $ | 85,184 | ||||||||||||||
| Shares issued on acquisition of Bear Creek (Note 4), net of share issue costs | 36,225,457 | 256,850 | – | – | – | – | 256,850 | |||||||||||||||||||||
| Bear Creek warrants (Note 15) | – | – | 8,610 | – | – | – | 8,610 | |||||||||||||||||||||
| Non-brokered private placement, net of share issue costs | 8,060,226 | 39,723 | – | – | – | – | 39,723 | |||||||||||||||||||||
| Shares issued on exercise of options and warrants | 23,977,048 | 2,717 | (67 | ) | – | – | – | 2,650 | ||||||||||||||||||||
| Share-based compensation | – | – | 5,783 | – | – | – | 5,783 | |||||||||||||||||||||
| Reclassification of commitment to issue shares to common shares | 5,000,000 | 547 | – | (547 | ) | – | – | – | ||||||||||||||||||||
| Net loss and comprehensive loss | – | – | – | – | (2,681 | ) | (8,462 | ) | (11,143 | ) | ||||||||||||||||||
| Balance, September 30, 2026 | 204,173,418 | $ | 400,128 | $ | 16,872 | $ | – | $ | (318 | ) | $ | (29,025 | ) | $ | 387,657 | |||||||||||||
| Balance, December 31, 2024 (Restated)1 | 81,720,985 | $ | 14,887 | $ | 1,531 | $ | – | $ | (418 | ) | $ | (9,672 | ) | $ | 6,328 | |||||||||||||
| Bought deal equity financing, net of share issue costs (Restated)1 | 46,000,000 | 79,354 | – | – | – | – | 79,354 | |||||||||||||||||||||
| Transfer on expired stock options (Restated)1 | – | – | (10 | ) | – | – | 10 | – | ||||||||||||||||||||
| Shares issued on exercise of stock options and warrants (Restated)1 | 859,702 | 178 | (40 | ) | – | – | – | 138 | ||||||||||||||||||||
| Share-based compensation (Restated)1 | – | – | 1,019 | – | – | – | 1,019 | |||||||||||||||||||||
| Net loss and comprehensive loss (Restated)1 | – | – | – | – | 1,314 | (8,230 | ) | (6,916 | ) | |||||||||||||||||||
| Balance, September 30, 2025 (Restated)1 | 128,580,687 | $ | 94,419 | $ | 2,500 | $ | – | $ | 896 | $ | (17,892 | ) | $ | 79,923 | ||||||||||||||
1 Refer to Note 3
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Page 4
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 1. | Nature of Operations and Going Concern |
Highlander Silver Corp. (the “Company” or “Highlander”) was incorporated under the laws of the Province of British Columbia, Canada. The Company’s head office is located at 2500 – 100 King Street West, Toronto, Ontario, Canada, M5X 1A9. Its records office is located at 1200 Waterfront Center, 200 Burrard Street, Vancouver, British Columbia, Canada, V6C 3L6. The Company’s principal business activity is the acquisition, exploration and development of mineral properties located in Peru, and the production and sale of gold and silver in Mexico. On February 26, 2026, the Company acquired Bear Creek Mining Corporation (“Bear Creek”), which holds the Corani Project in Peru and the Mercedes Mine in Mexico (Note 4). These condensed consolidated interim financial statements of the Company as at and for the three and nine months ended September 30, 2026 and 2025 comprise the Company and its subsidiaries. The Company’s common shares are traded on the Toronto Stock Exchange (“TSX”) and on the NYSE American LLC under the symbol HSLV.
With the exception of the Mercedes Mine, the Company has not yet determined whether its mineral property interests contain mineral reserves that are economically recoverable. The Company’s continued operations, and the underlying value and recoverability of the amounts shown for mineral properties, are dependent upon the existence of economically recoverable mineral reserves in the mineral properties in which the Company holds an interest. The continued exploration and development of projects will depend primarily on the Company’s ability to obtain financing, as required, and on its ability to generate cash flows from operations.
These condensed consolidated interim financial statements are prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of operations. The mining and exploration business involves a high degree of risk, and there can be no assurance that current mine production, exploration, and development projects will be profitable. The Company has historically relied on share capital financing, as well as property option or sale proceeds, to fund its property acquisition, exploration and evaluation expenditures, and operating expenses. On September 23, 2026, the Company executed a mandate letter with Natixis Corporate & Investment Banking to lead a fully underwritten seven-year senior secured project finance facility of $330,000 to fund the development and construction of the Corani Project, supported by a cost overrun facility of up to $100,000 to be provided by the Company (the “Facility”). The Facility remains subject to definitive documentation, due diligence and credit approvals, and closing is expected in the first quarter of 2027.
As at September 30, 2026, the Company had cash and cash equivalents of $68,093 (December 31, 2025 – $78,942). The Company has financed its operations primarily through the issuance of common shares.
| 2. | Basis of Preparation |
| a) | Statement of compliance |
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 (“IAS 34”), Interim Financial Reporting, and do not include all of the information required for annual financial statements prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual financial statements.
These condensed consolidated interim financial statements were approved and authorized for issuance by the Board of Directors on November 12, 2026.
| b) | Summary of material accounting policies |
These condensed consolidated interim financial statements follow the same accounting policies and methods of application as the Company’s most recent annual financial statements, except as described below, and should be read in conjunction with the annual audited consolidated financial statements of the Company for the fifteen months ended December 31, 2025.
Basis of consolidation
These condensed consolidated interim financial statements include the financial information of the Company and its subsidiaries.
Subsidiaries are entities controlled by the Company and are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries are amended as necessary to align with the policies adopted by the Company.
Page 5
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
The condensed consolidated interim financial statements include the following entities:
| Entity | Location | Ownership interest | Principal activity | |||
| Highlander Silver Corp. | Canada | 100% | Parent company | |||
| Bear Creek Mining Corporation | Canada | 100% | Holding company | |||
| Pacific West Exploration Services Inc. | Canada | 100% | Exploration company | |||
| Cappex Mineral Ventures Inc. | Canada | 100% | Holding company | |||
| Cappex Exploraciones S.A.C. | Peru | 100% | Exploration company | |||
| Reliant Ventures S.A.C. | Peru | 100% | Exploration company | |||
| San Luis Resource (BVI) Inc. | British Virgin Islands | 100% | Holding company | |||
| San Luis Minerals (BVI) Inc. | British Virgin Islands | 100% | Holding company | |||
| Silver Standard Peru (BVI) Inc. | British Virgin Islands | 100% | Holding company | |||
| BCMC Corani Holdings Ltd. | Canada | 100% | Holding company | |||
| Bear Creek Resources Company Ltd. | Canada | 100% | Holding company | |||
| Bear Creek Exploration Company Ltd. | Canada | 100% | Holding company | |||
| Bear Creek (BVI) Ltd. | British Virgin Islands | 100% | Holding company | |||
| Corani Mining Ltd. | British Virgin Islands | 100% | Holding company | |||
| Bear Creek Mining S.A.C. | Peru | 100% | Exploration company | |||
| Bear Creek Mining Company Sucursal del Peru | Peru | 100% | Exploration company | |||
| INEDE S.A.C. | Peru | 100% | Exploration company | |||
| Electro Antapata S.A.C. | Peru | 100% | Electrical power distribution | |||
| Minera Mercedes Minerales S. de R.L. de C.V. | Mexico | 100% | Production company | |||
| Mercedes Gold Holdings S. A. de C.V. | Mexico | 100% | Holding company | |||
| Premier Mining Mexico S. de R.L. de C.V. | Mexico | 100% | Services company | |||
| Premier Gold Mines (Netherlands) Cooperative U.A. | Netherlands | 100% | Holding company | |||
| Premier Gold Mines (Netherlands) B.V. | Netherlands | 100% | Holding company | |||
| 2536062 Ontario Inc. | Canada | 100% | Holding company |
Inter-company balances and transactions, and any unrealized income, loss and expenses arising from inter-company transactions, are eliminated in preparing these condensed consolidated interim financial statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
When control of a subsidiary is lost, the Company: (a) derecognizes the assets and liabilities of the former subsidiary from the consolidated statement of financial position; (b) recognizes any investment retained in the former subsidiary at its fair value when control is lost and subsequently accounts for it and for any amounts owed by or to the former subsidiary in accordance with the relevant provisions of IFRS; and (c) recognizes the gain or loss associated with the loss of control attributable to the former controlling interest.
Business combinations
A business combination requires that the assets acquired and liabilities assumed constitute a business. A business is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment income (such as dividends or interest) or generating other income from ordinary activities. A business consists of inputs and processes applied to those inputs that have the ability to create outputs. Although businesses usually have outputs, outputs are not required for an integrated set to qualify as a business as the Company considers other factors to determine whether the set of activities or assets is a business. The Company has an option to apply a ‘concentration test’ to assess whether an acquired set of activities and assets are not a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single, identifiable asset or group of similar identifiable assets, the concentration test is met, and the transaction is accounted for as an asset acquisition. In such cases, the acquirer identifies and recognizes the individual identifiable assets acquired and liabilities assumed. The cost of the net assets is allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction or event will not give rise to goodwill. Acquisition-related costs in an asset acquisition are recognized as part of the cost of the assets acquired.
Page 6
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
Business combinations are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the purchase consideration over such fair value being recorded as goodwill. Non-controlling interests in an acquisition may be measured at either fair value or at the non-controlling interest’s proportionate share of the fair value of the acquiree’s net identifiable assets. The excess of (i) total consideration transferred by the Company, measured at fair value, including contingent consideration, and (ii) the non-controlling interests in the acquiree, over the acquisition-date fair value of the net of the assets acquired and liabilities assumed, is recorded as goodwill.
If the fair value attributable to the Company’s share of the identifiable net assets exceeds the cost of acquisition, the difference is recognized as a gain in the consolidated statement of net income (loss) and comprehensive income (loss).
Should consideration be contingent on future events, the consideration for the acquisition recorded includes management’s best estimate of the fair value of the contingent amounts expected to be payable.
Provisional fair values allocated at the reporting date are finalized within one year of the acquisition date with retroactive restatement to the acquisition date as required.
Transaction costs, other than those associated with the issue of debt or equity securities, which the Company incurs in connection with a business combination, are expensed as incurred.
Property and equipment
The Company allocates the amount initially recognized for property and equipment to each asset’s significant components and depreciates each component separately. Property and equipment, other than mineral properties and deferred stripping costs, are depreciated on a straight-line basis over their estimated useful lives, typically ranging from 1 to 12 years.
Once a mineral property has been brought into commercial production, defined as the ability to consistently maintain production metrics, as determined by management for specific properties, the costs of any additional work on that property are expensed as incurred, except for exploration and development programs that constitute a betterment. Betterments are deferred and amortized over the remaining useful life of the related assets. Mineral properties include decommissioning and restoration costs related to the reclamation of mineral properties. Mineral properties are derecognized upon disposal or written off when no future economic benefits are expected to arise from the asset’s continued use or the cash-generating unit’s carrying value exceeds its recoverable amount. Any gain or loss on disposal of the asset, determined as the difference between the proceeds received and the carrying amount of the asset, is recognized in the consolidated statement of net income (loss) and comprehensive income (loss).
Mineral properties and deferred stripping costs are amortized on the unit-of-production basis using the mineable ore tonnes extracted from the mine in the period as a percentage of the total mineable ore tonnes to be extracted in current and future periods based on mineral reserves and units produced during the period. Mineral properties are recorded at cost, net of accumulated depreciation and depletion, and accumulated impairment losses and are not intended to represent future values. Recovery of capitalized costs depends on the successful development of economic mining operations or the disposition of the related mineral property. Residual values, depreciation and depletion methods, and useful lives are reviewed at each financial period end and adjusted on a prospective basis, if required.
Revenue
The Company follows a five-step process in determining whether to recognize revenue from the sale of precious metals:
| ● | identifying the contract with a customer, |
| ● | identifying the performance obligations, |
| ● | determining the transaction price, |
| ● | allocating the transaction price to the performance obligations, and |
| ● | recognizing revenue when performance obligations are satisfied. |
Revenue from contracts with customers is generally recognized on the settlement date when the customer obtains control of the delivered asset and the Company satisfies its performance obligations. The Company considers the terms of the contract in determining the transaction price. The transaction price is either fixed on the settlement date or based on the contract’s pricing terms.
Any Net Smelter Returns (“NSRs”) or royalties to which the Company is subject are considered as costs to the Company and are recorded in the consolidated statement of net income (loss) and comprehensive income (loss) in the period such NSRs or royalties are incurred.
Page 7
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
Inventory
Material extracted from the mines is classified as either ore or waste. Ore represents material that, at the time of extraction, is expected to be processed into a saleable form and sold at a profit. Ore is accumulated in stockpiles and subsequently processed into gold and silver in a saleable form. Work-in-process represents gold and silver in the processing circuit that has not completed the production process and is not yet in a saleable form. Finished goods inventory represents gold and silver in saleable form, respectively.
Mine operating supplies represent consumables and other raw materials used in the production process, as well as spare parts and other maintenance supplies that are not classified as capital items.
Inventories are valued at the lower of cost and net realizable value (“NRV”). Cost is determined on a weighted average basis and includes all costs incurred to bring each product to its present location and condition. Cost of inventories includes direct labor, materials, and contractor expenses, depreciation of property and equipment, including capitalized development costs.
Provisions to reduce inventory to NRV are recorded to reflect changes in economic factors that impact inventory value and to reflect present intentions for using slow-moving and obsolete supplies inventory. NRV is determined with reference to relevant market prices less applicable selling expenses. Provisions recorded also reflect an estimate of the remaining costs of completion to bring the inventory into its saleable form. Provisions are also recorded to reduce mine operating supplies to NRV, generally calculated by reference to salvage or scrap values when it is determined that the supplies are obsolete. Provisions are reversed to reflect subsequent recoveries in NRV where the inventory is still on hand.
Segmented information
The Company manages its segmented information and continuously reviews the information that aids the decision-making process for the officers of the Company.
The Company considers any component of the Company to be a segment:
| ● | that engages in business activities from which it may earn revenues and/or incur expenses; |
| ● | whose operating results are reviewed regularly by the entity’s chief operating decision maker; and |
| ● | for which discrete financial information is available. |
| c) | Material accounting judgments and significant estimates and uncertainties |
Other than the material judgments, estimates and uncertainties described below, the material judgments and estimates applied in the preparation of the Company’s condensed consolidated interim financial statements for the three and nine months ended September 30, 2026, are consistent with those applied in the Company’s annual audited consolidated financial statements for the fifteen months ended December 31, 2025.
Business Combinations
Business combinations are accounted for using the acquisition method of accounting. The allocation of the purchase price requires estimates as to the fair value of acquired assets and liabilities. The information necessary to measure the fair values as at the acquisition date of assets acquired and liabilities assumed requires management to make certain judgments and estimates, including but not limited to the most appropriate valuation methodology, estimates of mineral reserves and mineral resources and exploration potential of the assets acquired, value of resources outside life of mine plans including assumptions for market values per ounce, future production levels, future operating costs, capital expenditures and closure costs, discount rates, future metal prices and long term foreign exchange rates. These judgments and estimates also include the fair value of the NSRs granted on settlement of Bear Creek’s debt obligations, which also determines the fair value of the debt assumed, and the assessment of whether the portions of the NSRs subject to the Company’s buy-back options qualify for derecognition. The portion that does not qualify is recognized as an NSR buy-back liability initially measured at fair value and subsequently measured at amortized cost. Changes to the preliminary measurements of assets and liabilities acquired may be retrospectively adjusted when new information is obtained until the final measurements are determined within one year of the acquisition date. Refer to Note 4 for further details on the acquisition of Bear Creek.
Page 8
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
Assessment of impairment and reversal of impairment indicators for property and equipment
The application of the Company’s accounting policy for impairment of mineral properties, property and equipment requires significant judgment to determine whether indicators of impairment exist, or whether there’s an indication of a reversal of previously recorded impairments. The review of impairment and reversal of impairment indicators includes consideration of significant changes in both external and internal sources of information, including factors such as:
| ● | a significant decline in the market value of the Company’s share price; |
| ● | changes in quantity of the recoverable resources and reserves; |
| ● | market and economic conditions impacting the precious metals industry; |
| ● | metal prices and forecasts, capital expenditure requirements, expected future operating costs and production volumes; |
| ● | and site restoration costs to the end of the mine’s life. |
Uncertain tax positions
The Company’s operations involve the application of complex tax regulations in multiple international jurisdictions. Determining the tax treatment of a transaction requires the Company to apply judgment in its interpretation of the applicable tax law. These positions are not final until accepted by the relevant tax authority. The tax treatment may change based on the result of assessments or audits by the tax authorities often years after the initial filing.
The Company recognizes and records potential liabilities for uncertain tax positions based on its assessment of the amount, or range of amounts, of tax that will be due. The Company adjusts these accruals as new information becomes available. Due to the complexity and uncertainty associated with certain tax treatments, the ultimate resolution could result in a payment that is materially different from the Company’s current estimate of the tax liabilities.
Mineral reserves and resources
Mineral reserves are estimates of ore that can be economically and legally extracted from the Company’s mineral property. The Company estimates its mineral reserves and mineral resources based on information compiled by appropriately qualified persons. Such estimates require complex geological assessments to interpret the data. Additionally, the estimation of recoverable mineral reserves is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, metallurgical recoveries, permitting and production costs along with geological assumptions made in estimating the size and grade of the ore body. Changes in the mineral reserve or mineral resource estimates may impact the carrying value of mining interests, mine restoration provisions, depreciation and amortization charges and royalty obligations.
Value added taxes
The Company incurs indirect taxes, including value-added tax, on purchases of goods and services at its operating mines and exploration projects. Indirect tax balances are recorded at their estimated recoverable amounts within current or non-current assets, net of provisions, and reflect the Company’s best estimate of their recoverability and timing of receipt under existing tax rules. Management’s assessment of recoverability considers the probable outcomes of claimed deductions and/or disputes. The provisions and statement of financial position classifications made to date may be subject to change and such change may be material.
| d) | Accounting policies adopted during the current period |
Effective January 1, 2026, the Company has applied the following new accounting standard which was issued by the IASB:
The amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. The amendments include the clarification of the date of initial recognition or derecognition of financial assets and financial liabilities, including an optional exception that permits the early derecognition of certain financial liabilities settled through electronic payment systems earlier than the settlement date. The Company elected to apply the exception.
The adoption of this amended standard had no material impact on the Company’s condensed consolidated interim financial statements for the three and nine months ended September 30, 2026 and 2025.
Page 9
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| e) | New accounting policies issued but not yet effective |
Certain pronouncements have been issued by the IASB or International Financial Reporting Interpretations Committee that are not mandatory for the current period have not been early adopted. The Company has reviewed these pronouncements, and the amendments that are applicable to the Company are discussed below:
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company is currently assessing the impact of the new standard.
| 3. | Change in Presentation Currency |
On January 1, 2026, the Company elected to change its presentation currency from Canadian dollars to United States dollars. The change in presentation currency is to better reflect the Company’s business activities and to improve comparability of the Company’s financial results with peer companies in the mining industry, and management considers that it provides reliable and more relevant information. The functional currency of the parent company remains the Canadian dollar.
The change in presentation currency has been made in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, and has been applied on a full retrospective basis.
For periods prior to January 1, 2026, the statements of financial position for each period presented have been translated from Canadian dollars to United States dollars at the rate of exchange prevailing at the respective financial position date with the exception of equity items as described below.
The consolidated statements of net income (loss) and comprehensive income (loss) and the statement of cash flows were translated at the average exchange rates for the reporting period, or at the exchange rate prevailing at the date of the transactions. Exchange differences arising on translation from the Canadian dollar to the United States dollar presentation currency have been recognized in other comprehensive income (loss) and accumulated as a separate component of equity. Loss per share for comparative periods has been restated accordingly.
Equity has been restated using historical average exchange rates other than for significant transactions for which the actual historical rate was used with the difference being presented as an adjustment to the foreign currency reserve.
In addition to the comparative financial statements, the Company has presented a third statement of financial position as at October 1, 2024, being the beginning of the fifteen-month transition period ended December 31, 2025.
The exchange rates used to reflect the change in presentation currency in the accompanying condensed consolidated interim financial statements were as follows:
| Average rate (C$/US$) | Closing rate (C$/US$) | |||||||
| October 1, 2024 | N/A | 1.3499 | ||||||
| December 31, 2024 | N/A | 1.4389 | ||||||
| Three months ended March 31, 2025 | 1.4352 | 1.4376 | ||||||
| Three months ended June 30, 2025 | 1.3841 | 1.3643 | ||||||
| Three months ended September 30, 2025 | 1.3775 | 1.3921 | ||||||
| Three months ended December 31, 2025 | 1.3947 | 1.3706 | ||||||
Page 10
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 4. | Acquisition of Bear Creek |
On February 26, 2026 (the “Acquisition Date”), the Company acquired all of the issued and outstanding common shares of Bear Creek that it did not already own, by way of a court-approved plan of arrangement (the “Arrangement”) under an arrangement agreement dated December 18, 2025. Bear Creek shareholders received 0.1175 Highlander common shares for each Bear Creek share, resulting in the issuance of 36,225,457 common shares. Bear Creek holds the Mercedes Mine in Mexico and the Corani Project in Peru. Prior to closing, the Company held 50,000,000 Bear Creek shares, acquired through a C$18,000 private placement completed concurrently with the signing of the arrangement agreement.
Under the Arrangement, Bear Creek’s in-the-money stock options, RSUs and DSUs were exchanged for Highlander common shares, out-of-the-money options were cancelled, and Bear Creek’s outstanding warrants became exercisable for Highlander common shares, adjusted for the exchange ratio (Note 15).
The acquisition has been accounted for as a business combination under IFRS 3 using the acquisition method, with the Company identified as the acquirer, and Bear Creek has been consolidated from the Acquisition Date. As the Company held an interest in Bear Creek before obtaining control, the previously held interest was remeasured to its fair value of $41,685 at the Acquisition Date, resulting in a gain of $28,466 recognized in net loss.
| a) | Purchase consideration |
Total purchase consideration comprises the Highlander common shares issued, valued at the Company’s closing share price on February 25, 2026, and the fair value of the previously held interest in Bear Creek:
| Bear Creek outstanding common shares as at February 26, 20261 | 308,301,938 | |||
| Exchange Ratio | 0.1175 | |||
| Total Highlander shares issued | 36,225,457 | |||
| Highlander share price2 | C$ | 9.71 | ||
| Purchase consideration | 351,749 | |||
| Fair value of previously held interest in Bear Creek3 | 57,046 | |||
| Total purchase consideration | C$ | 408,795 | ||
| Total purchase consideration4 | $ | 298,718 |
| 1 | Immediately prior to closing of the Arrangement, Highlander Silver held 50,000,000 Bear Creek shares, representing approximately 13.95% of the outstanding shares. Pursuant to the Arrangement, Highlander Silver acquired the remaining 308,301,938 Bear Creek shares, resulting in 100% ownership of Bear Creek. |
| 2 | Closing price of Highlander’s common shares on the TSX on February 25, 2026. |
| 3 | Fair value of the previously held 50,000,000 Bear Creek Shares was determined based on the Exchange Ratio and the closing price of Highlander’s common shares on the TSX on February 25, 2026. |
| 4 | The exchange rate used to translate U.S. dollar amounts into Canadian dollars was US$1.00 = C$1.3685, based on the closing exchange rate effective as of February 25, 2026. |
Page 11
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
Preliminary Purchase Price Allocation
The following table summarizes the preliminary estimates of the fair values of the identifiable assets acquired and liabilities assumed. Final valuations are not yet complete, and the values assigned are preliminary and subject to change. The Company expects to finalize the determination of the fair values of the assets acquired and liabilities assumed, including deferred taxes, within 12 months of the Acquisition Date, which could result in material differences from the preliminary values presented in these condensed consolidated interim financial statements.
| Preliminary (June 30, 2026) | Adjustments5 | Revised (September 30, 2026) | ||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 16,194 | $ | – | $ | 16,194 | ||||||||
| Inventory | 13,412 | – | 13,412 | |||||||||||
| Receivables | 636 | (121 | ) | 515 | ||||||||||
| Prepaids and other | 1,623 | – | 1,623 | |||||||||||
| Tax receivable | 7,782 | 121 | 7,903 | |||||||||||
| Non-current assets | ||||||||||||||
| Receivables | 1,907 | – | 1,907 | |||||||||||
| Reclamation deposit | 3,385 | – | 3,385 | |||||||||||
| Property and equipment | 173,361 | (119,939 | ) | 53,422 | ||||||||||
| Mineral property interests | 311,136 | 126,558 | 437,694 | |||||||||||
| Right-of-use assets | 557 | – | 557 | |||||||||||
| Tax receivable | 2,175 | – | 2,175 | |||||||||||
| Total assets | $ | 532,168 | $ | 6,619 | $ | 538,787 | ||||||||
| Liabilities | ||||||||||||||
| Accounts payable and accrued liabilities | (b) | $ | (29,658 | ) | $ | – | $ | (29,658 | ) | |||||
| Community projects obligation | (1,190 | ) | – | (1,190 | ) | |||||||||
| Current portion of stream arrangements | (b) | (24,859 | ) | (2,743 | ) | (27,602 | ) | |||||||
| Lease liabilities | (254 | ) | – | (254 | ) | |||||||||
| Tax payable | (2,098 | ) | – | (2,098 | ) | |||||||||
| Other liabilities | (61 | ) | – | (61 | ) | |||||||||
| Short term loan | (b) | (383 | ) | (60 | ) | (443 | ) | |||||||
| Note payable | (b) | (8,885 | ) | (980 | ) | (9,865 | ) | |||||||
| Convertible debenture and notes | (b) | (16,273 | ) | (2,212 | ) | (18,485 | ) | |||||||
| Warrant liability | (8,610 | ) | – | (8,610 | ) | |||||||||
| Non-current liabilities | ||||||||||||||
| Accounts payable and accrued liabilities | (770 | ) | – | (770 | ) | |||||||||
| Community projects obligation | (9,728 | ) | – | (9,728 | ) | |||||||||
| Deferred tax liability | (117,500 | ) | (624 | ) | (118,124 | ) | ||||||||
| Lease liabilities | (244 | ) | – | (244 | ) | |||||||||
| Reclamation provision | (12,175 | ) | – | (12,175 | ) | |||||||||
| Other liabilities | (762 | ) | – | (762 | ) | |||||||||
| Total liabilities | $ | (233,450 | ) | $ | (6,619 | ) | $ | (240,069 | ) | |||||
| Net assets acquired | 298,718 | – | 298,718 | |||||||||||
| Total purchase consideration | $ | 298,718 | $ | – | $ | 298,718 | ||||||||
The cash outflow of $13,219 presented in investing activities is the cost of the 50,000,000 Bear Creek common shares held by the Company before the Acquisition Date, acquired through the C$18,000 private placement. The previously held interest was remeasured to its fair value of $41,685 at the Acquisition Date, resulting in the gain of $28,466. The Highlander common shares issued as consideration had a fair value of $257,033 (C$351,749). Cash acquired of $16,194 is presented separately in the consolidated statement of cash flows.
| 5 | During the three months ended September 30, 2026, the purchase price allocation was revised to reflect a reallocation between Corani’s and Mercedes’ mineral property interests, resulting in corresponding adjustments to the fair values of debt and the deferred tax liability. |
Page 12
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| b) | Debt Settlement Arrangements |
Concurrently with closing, the Company settled Bear Creek’s debt and stream obligations, as well as the Wheaton advance included in accounts payable (the “Debt Settlement Arrangements”). The Mercedes gold and silver stream was terminated.
| Royal Gold | Equinox | Wheaton | Total | |||||||||||||
| Cash paid | $ | 6,200 | $ | 1,600 | $ | 2,552 | $ | 10,352 | ||||||||
| NSR granted | 1.75% Corani (2.75% in total) and 2% Mercedes | 0.5% Corani | – | – | ||||||||||||
| Value of NSRs granted | $ | 39,372 | $ | 9,223 | $ | – | $ | 48,595 | ||||||||
The portion of the NSRs not subject to buy-back options was accounted for as a partial disposition of the underlying mineral properties: $24,603 was deducted from mineral property interests (Corani) and $7,092 from property and equipment (Mercedes) (Notes 10 and 11). The portion subject to the Company’s buy-back options of $16,900 did not qualify for derecognition and was recognized as an NSR buy-back liability, measured at amortized cost. The liability is accreted from its initial carrying amount of $16,900 to the exercise prices of the buy-back options ($30,000 for Royal Gold and $8,333 for Equinox) over the expected exercise period, using the effective interest method. Accretion of $5,996 was recognized in finance costs for the period from the Acquisition Date to September 30, 2026. As at September 30, 2026, the NSR buy-back liability was $22,896 (December 31, 2025 – $nil). The NSR buy-back terms are described in Note 11.
Acquisition-related costs of $29 and $4,166 for the three and nine months ended September 30, 2026 were expensed in general and administrative expenses (Note 19). From the Acquisition Date to September 30, 2026, Bear Creek contributed revenue of $93,973 and a net loss before income taxes of $18,212. Had the acquisition occurred on January 1, 2026, consolidated revenue and net loss before income taxes for the nine months ended September 30, 2026 would have been $116,165 and $19,011, respectively.
| 5. | short-term investment |
| September 30, 2026 | December 31, 2025 | |||||||
| Dual-currency deposit | $ | 7,067 | $ | – | ||||
Short-term investment consists of a one-month dual-currency deposit held with a Canadian bank. The deposit contains an embedded foreign exchange option (USD/CAD) and, as the host is a financial asset, is measured in its entirety at fair value through profit or loss. Fair value is classified within Level 2 of the fair value hierarchy and is based on observable inputs, being the USD/CAD spot and forward rates, volatility and the remaining term to maturity.
| 6. | Inventory |
| September 30, 2026 | December 31, 2025 | |||||||
| Materials and supplies | $ | 2,791 | $ | – | ||||
| Mineral inventory | 1,723 | – | ||||||
| Work in progress | 1,014 | – | ||||||
| Current ore stockpiles | 234 | – | ||||||
| $ | 5,762 | $ | – | |||||
During the three and nine months ended September 30, 2026, the Company recorded a reversal of previous NRV adjustment to inventory of $868 and $127, respectively (three and nine months ended September 30, 2025 – $nil).
Page 13
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 7. | Receivables |
| Note | September 30, 2026 | December 31, 2025 (Restated – Note 3) | ||||||||||
| Amount due from a related party | 21 | $ | – | $ | 20 | |||||||
| Other receivables | 2,855 | 46 | ||||||||||
| Trade receivables | 5,610 | – | ||||||||||
| Total | $ | 8,465 | $ | 66 | ||||||||
| Less: current portion | (7,301 | ) | (66 | ) | ||||||||
| Non-current portion | $ | 1,164 | $ | – | ||||||||
Other receivables include deferred consideration receivable of $2,075 from the sale of Tassa Project, assumed on the acquisition of Bear Creek (Note 4). The sale agreement was executed on December 10, 2025 for total consideration of $3,500, of which $1,000 has been received to date. The remaining $2,500 is receivable as $1,000 on or before June 10, 2027 and $1,500 on or before June 10, 2028, and is secured by a first-ranking security interest over the Tassa concessions. The receivable is carried at amortized cost using the effective interest method (undiscounted: $2,500). Colque or its successors granted Bear Creek a 2% NSR in respect of all minerals produced from Tassa, of which Colque may buy back 1% for an additional $2,500.
| 8. | Tax Receivable |
| September 30, 2026 | December 31, 2025 (Restated – Note 3) | |||||||
| Income tax prepayment | $ | 33 | $ | – | ||||
| Value-added tax receivables | 10,844 | 403 | ||||||
| Other tax receivables | 2,474 | – | ||||||
| Total | $ | 13,351 | $ | 403 | ||||
| Less: current portion | (11,006 | ) | (156 | ) | ||||
| Non-current portion | $ | 2,345 | $ | 247 | ||||
| 9. | Reclamation Deposits |
Reclamation deposits of $3,430 (December 31, 2025 – $44) consist of restricted cash held with financial institutions in Peru as collateral for environmental bonding requirements. This includes $3,385 pledged as collateral for a $3,983 surety bond posted in favour of the Peruvian Ministry of Energy and Mines for the Corani Project mine closure plan, and $45 related to the San Luis Project. The deposits will be released once the Company fulfils the applicable regulatory obligations. No reclamation provision has been recognized for the Corani Project as no significant environmental disturbance has occurred to date.
Page 14
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 10. | Property and Equipment |
| Note | Mineral Property | Mining and Other Equipment | Total | |||||||||||
| Balance, October 1, 2024 (Restated)1 | $ | – | $ | 70 | $ | 70 | ||||||||
| Additions (Restated)1 | – | 148 | 148 | |||||||||||
| Amortization and depletion (Restated)1 | – | (30 | ) | (30 | ) | |||||||||
| Foreign exchange adjustment (Restated)1 | – | 22 | 22 | |||||||||||
| Balance, December 31, 2025 (Restated)1 | $ | – | $ | 210 | $ | 210 | ||||||||
| Additions | 20,566 | 4,375 | 24,941 | |||||||||||
| Acquisition of Bear Creek (Note 4) | 1,394 | 52,028 | 53,422 | |||||||||||
| Issuance of NSRs pursuant to Debt Settlement Arrangements (Note 4) | (7,092 | ) | – | (7,092 | ) | |||||||||
| Change in estimate of reclamation provision | 14 | 3,072 | – | 3,072 | ||||||||||
| Amortization and depletion | (1,073 | ) | (10,736 | ) | (11,809 | ) | ||||||||
| Foreign exchange adjustment | – | 134 | 134 | |||||||||||
| Balance, September 30, 2026 | $ | 16,867 | $ | 46,011 | $ | 62,878 | ||||||||
1 Refer to Note 3
Deposits on non-current assets of $3,868 (December 31, 2025 – $nil) consist of advance payments made to suppliers for construction activities and the purchase of mining and other equipment. These deposits will be applied against future payments to those vendors.
Depletion, amortization and depreciation in the statement of net loss of $14,212 for the nine months ended September 30, 2026 comprises $11,527 recognized from property and equipment and $2,685 released from inventory. Of the $11,809 of amortization and depletion in the table above, $11,527 is included in depletion, amortization and depreciation in the statement of net loss and $282, relating to property and equipment not used in production, is included in exploration expenses (Note 18). As at September 30, 2026, inventory includes $498 of capitalized depletion and depreciation.
During the three months ended September 30, 2026, the Company recognized a reversal of depletion expense of $17,740 on the Mercedes Mine. The reversal was a measurement period adjustment resulting from revised fair values of the Bear Creek purchase price allocation (Note 4), which lowered the depletable carrying amount of the Mercedes Mine. It was recognized in the current period and included in depletion, amortization and depreciation expense.
| 11. | Mineral Property Interests |
| San Luis (Peru) | Corani (Peru) | La Estrella (Peru) | Total | |||||||||||||
| Balance, October 1, 2024 (Restated)1 | $ | 7,937 | $ | – | $ | 33 | $ | 7,970 | ||||||||
| Acquisition of concession (Restated)1 | 20 | – | – | 20 | ||||||||||||
| Transfer of concession (Restated)1 | 14 | – | (14 | ) | – | |||||||||||
| Foreign exchange adjustment (Restated)1 | 900 | – | 2 | 902 | ||||||||||||
| Balance, December 31, 2025 (Restated)1 | $ | 8,871 | $ | – | $ | 21 | $ | 8,892 | ||||||||
| Acquisition of Bear Creek (Note 4) | – | 437,694 | – | 437,694 | ||||||||||||
| Issuance of NSRs pursuant to Debt Settlement Arrangements (Note 4) | – | (24,603 | ) | – | (24,603 | ) | ||||||||||
| Foreign exchange adjustment | (209 | ) | – | – | (209 | ) | ||||||||||
| Balance, September 30, 2026 | $ | 8,662 | $ | 413,091 | $ | 21 | $ | 421,774 | ||||||||
1 Refer to Note 3
Page 15
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
The Company’s wholly-owned projects are comprised of the rights to explore the mineral claims and tenures at various stages of exploration. Unless otherwise noted they are not subject to any option or sale agreements. Certain of the claims are subject to an NSR, as detailed below.
| Project | Royalty holder | NSR | Buy-back option | |||
| San Luis(1) | SSR Mining | 4% | 2% for $15,000 at any time before the start of mine construction | |||
| San Luis (24 claims) | Esperanza Resources | 1% | – | |||
| San Luis (2 claims) | Metalla Royalty & Streaming | 1% | – | |||
| Corani | Royal Gold | 2.75% (secured) | 0.5% for $25,000(2), or 0.75% for $30,000 if a final investment decision (“FID”) is made before December 31, 2028 | |||
| Corani | Equinox Gold | 0.5% | 0.167% for $8,333(2) | |||
| La Estrella | Compañía Minera Ares | 2% | 50% for $200 and the remaining 50% for $300, at any time |
| (1) | The Company may pay up to $37,500 of contingent consideration to SSR Mining on the achievement of project milestones at the San Luis Project, of which $2,500 has been paid. The remaining milestones, related to the completion of a feasibility study and commercial production, have not been recognized as their achievement is not considered probable. |
| (2) | Exercisable until the earlier of January 1, 2033, and six months after an FID on the Corani Project. |
| 12. | Accounts payable and accrued liabilities |
| Note | September
30, 2026 | December
31, 2025 (Restated – Note 3) | ||||||||
| Amount due to a related party | 21 | $ | 10 | $ | 593 | |||||
| Trade payables | 35,287 | 858 | ||||||||
| Salaries payable | 2,335 | 309 | ||||||||
| Other payables | 1,174 | 20 | ||||||||
| Total | $ | 38,806 | $ | 1,780 | ||||||
| 13. | Community Projects Obligation |
In April 2013, Bear Creek entered into the Framework Agreement for the Sustainable Use of Natural Resources in the Mining Project Corani (the “Framework Agreement”) with the Corani District Municipality and surrounding communities. Under the Framework Agreement, the Company makes annual payments of 4 million Peruvian soles into a trust that funds community projects. The obligation was assumed on the acquisition of Bear Creek (Note 4). As at September 30, 2026, the total undiscounted obligation remaining under the Framework Agreement was $15,130 (December 31, 2025 – $nil).
Page 16
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
A continuity of the Company’s community projects obligation per the Framework Agreement is as follows:
| September 30, 2026 | ||||
| Balance, start of the period | $ | – | ||
| Acquisition of Bear Creek (Note 4) | 10,918 | |||
| Accretion | 411 | |||
| Payment | (1,158 | ) | ||
| Foreign exchange adjustment | (245 | ) | ||
| Balance, end of period | $ | 9,926 | ||
| Less: current portion | (1,164 | ) | ||
| Non-current portion | $ | 8,762 | ||
| 14. | Reclamation Provision |
| September 30, 2026 | December 31, 2025 (Restated – Note 3) | |||||||
| Balance, start of the period | $ | 475 | $ | 365 | ||||
| Acquisition of Bear Creek (Note 4) | 12,175 | – | ||||||
| Additions | – | 23 | ||||||
| Accretion | 686 | 23 | ||||||
| Settlement | – | (4 | ) | |||||
| Post-acquisition change in estimate | 3,387 | – | ||||||
| Change in estimate | (296 | ) | 33 | |||||
| Foreign exchange adjustment | (358 | ) | 35 | |||||
| Balance, end of the period | $ | 16,069 | $ | 475 | ||||
The Company initially recognized the provision for environmental rehabilitation related to the Mercedes Mine assumed on acquisition at its acquisition-date fair value, in accordance with IFRS 3. The provision was subsequently remeasured in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets, resulting in a $3,387 increase in the provision. The increase was attributable to the change in discount rate methodology applied in measuring the provision subsequent to the acquisition date. There were no changes to the underlying estimated reclamation and closure cash flows.
The net change in estimate of $3,091 (the post-acquisition change in estimate of $3,387 and the change in estimate of $(296)) was recognized as follows: $3,072 was capitalized to mineral property within property and equipment (Note 10), and $19, relating to the San Luis Project, was expensed in exploration expenses (Note 18) as all exploration and evaluation costs at San Luis are expensed.
The Company estimates that the undiscounted future cash flows required to settle the closure provisions at the Mercedes Mine and at the San Luis Project is $25,565 (December 31, 2025 – $481). The Company expects these liabilities to be settled between 2027 and 2034. In calculating the September 30, 2026, estimate, management used the risk-free interest rates ranging from 3.22% to 3.80% (December 31, 2025 – 4%), and inflation rates ranging from 4.20% to 9.00% (December 31, 2025 – 1.95%).
Page 17
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 15. | Share Capital |
| a) | Share Capital |
Authorized: Unlimited common shares, with no par value
Issued and fully paid: 204,173,418 (December 31, 2025 – 130,910,687)
| b) | Share placements |
On January 30, 2026, the Company issued 8,060,226 common shares at a price of C$6.80 for gross proceeds of $40,000 in a non-brokered private placement with Mr. Eric Sprott.
On March 11, 2025, the Company issued 23,000,000 common shares at a price of C$1.40 for gross proceeds of $22,282 in a bought deal private placement and on September 29, 2025, the Company issued 23,000,000 common shares at a price of C$3.75 for gross proceeds of $61,957 in a bought deal private placement.
| c) | Stock options |
For the three and nine months ended September 30, 2026, the Company recognized a share-based compensation expense included in general and administrative expenditures of $1,771 and $5,783, respectively (three and nine months ended September 30, 2025 – $350 and $1,019, respectively). The following table shows the change in stock options during the nine months ended September 30, 2026 and 2025:
| 2026 | 2025 | |||||||||||||||
| For the nine months ended September 30, | Number of options | Weighted average exercise price | Number of options | Weighted average exercise price | ||||||||||||
| Balance, start of the period | 6,720,000 | C$ | 0.83 | 5,595,000 | C$ | 0.75 | ||||||||||
| Granted | 5,710,000 | 6.37 | 1,650,000 | 1.07 | ||||||||||||
| Exercised | (50,000 | ) | 0.60 | (150,000 | ) | 0.58 | ||||||||||
| Forfeited | (800,000 | ) | 4.16 | – | – | |||||||||||
| Balance, end of the period | 11,580,000 | C$ | 3.33 | 7,095,000 | C$ | 0.83 | ||||||||||
The assumptions used in the Black-Scholes option pricing model for the options granted in the nine months ended September 30, 2026 and 2025 were as follows.
| Weighted average | 2026 | 2025 | ||||||
| Exercise price per share issuable | C$ | 6.37 | C$ | 1.07 | ||||
| Expected term (years) | 5 | 5 | ||||||
| Volatility | 88 | % | 93 | % | ||||
| Expected dividend yield | – | – | ||||||
| Risk-free interest rate | 2.93 | % | 2.95 | % | ||||
| Weighted average fair value per option | C$ | 4.22 | C$ | 0.73 | ||||
Page 18
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
The following is a summary of the Company’s outstanding and exercisable stock options as at September 30, 2026:
| Outstanding | Exercisable | |||||||||||||||||||
| Expiry date | Exercise price | Number of options | Weighted average remaining contractual life (years) | Number of options | Weighted average remaining contractual life (years) | |||||||||||||||
| November 3, 2026 | C$ | 0.60 | 25,000 | 0.09 | 25,000 | 0.09 | ||||||||||||||
| March 12, 2027 | 0.55 | 600,000 | 0.45 | 600,000 | 0.45 | |||||||||||||||
| March 3, 2028 | 0.42 | 175,000 | 1.42 | 175,000 | 1.42 | |||||||||||||||
| October 21, 2029 | 0.80 | 3,920,000 | 3.06 | 2,030,000 | 3.06 | |||||||||||||||
| January 2, 2030 | 1.04 | 1,600,000 | 3.26 | 400,000 | 3.26 | |||||||||||||||
| April 7, 2030 | 1.90 | 50,000 | 3.52 | 12,500 | 3.52 | |||||||||||||||
| January 15, 2031 | 6.17 | 4,610,000 | 4.30 | – | 4.30 | |||||||||||||||
| May 12, 2031 | 8.42 | 350,000 | 4.62 | – | 4.62 | |||||||||||||||
| September 1, 2031 | 7.66 | 250,000 | 4.92 | – | 4.92 | |||||||||||||||
| C$ | 3.33 | 11,580,000 | 3.50 | 3,242,500 | 2.49 | |||||||||||||||
| d) | Warrants |
As an incentive to complete a private placement, the Company may issue units which include common shares and common share purchase warrants. Using the residual value method, the Company determines whether a value should be allocated to the warrants attached to the private placement units. Finders’ warrants may be issued as a private placement share issuance cost and are valued using the Black-Scholes option pricing model.
Pursuant to the Arrangement, each Bear Creek warrant became exercisable for 0.1175 common shares of the Company. The exercise price of each Bear Creek warrant is C$0.42, which is the amount the Company will receive upon exercise of each Bear Creek warrant.
Upon completion of the acquisition of Bear Creek (Note 4), the Company reassessed the classification of the Bear Creek warrants from Highlander’s perspective. As the exercise price is denominated in Canadian dollars, Highlander’s functional currency, the Bear Creek warrants have been classified as equity instruments.
The continuity of the Company’s shares issuable pursuant to exercise of warrants is as follows:
| Shares issuable on exercise of warrants | Weighted average exercise price | |||||||
| Outstanding, September 30, 2024 | 29,975,000 | C$ | 0.15 | |||||
| Exercised | (734,702 | ) | 0.15 | |||||
| Outstanding, December 31, 2025 | 29,240,298 | C$ | 0.15 | |||||
| Acquisition of Bear Creek6 (Note 4) | 1,896,693 | 3.57 | ||||||
| Exercised | (28,915,298 | ) | 0.15 | |||||
| Exercised | (11,750 | ) | 3.57 | |||||
| Outstanding, September 30, 2026 | 2,209,943 | C$ | 3.07 | |||||
Of the 28,915,298 warrants exercised during the period, 5,000,000 were exercised in December 2025 at C$0.15 per share for proceeds of $547, which were received in 2025 and recorded as a commitment to issue shares at December 31, 2025. The related common shares were issued on January 6, 2026.
The remaining contractual lives of the outstanding warrants and Bear Creek warrants are 0.05 years and 2 years, respectively.
| 6 | Each Bear Creek warrant is exercisable for 0.1175 common shares of the Company at an exercise price of C$0.42 per Bear Creek warrant. This is equivalent to an implied exercise price of approximately C$3.57 per the whole issuable common share of the Company issuable. |
Page 19
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 16. | Revenue |
The Company’s revenues are primarily from sales of gold and silver from the Mercedes Mine, following the acquisition of Bear Creek on February 26, 2026. From the Acquisition Date to September 30, 2026, the Company sold gold and silver products to two customers. One customer contributed more than 90% to the total revenues from mining operations. However, the Company is not economically dependent on any specific customer for the sale of its products because gold and silver can be sold through numerous precious metals traders and refiners worldwide. Revenue by metal was as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||
| 2026 | 2026 | |||||||
| Gold | $ | 35,170 | $ | 87,613 | ||||
| Silver | 2,576 | 6,360 | ||||||
| $ | 37,746 | $ | 93,973 | |||||
| 17. | Cost of Sales |
The Company’s cost of sales from the Acquisition Date to September 30, 2026, is as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||
| 2026 | 2026 | |||||||
| Raw materials and consumables | $ | 6,476 | $ | 15,748 | ||||
| Salaries and benefits | 3,889 | 9,465 | ||||||
| Contractors and outside services | 8,839 | 22,377 | ||||||
| Other expenses | 3,925 | 9,368 | ||||||
| Changes in inventory | 881 | 4,756 | ||||||
| $ | 24,010 | $ | 61,714 | |||||
Page 20
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 18. | Exploration Expenses |
The Company’s exploration expenditures by activity are as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 (Restated – Note 3) | 2026 | 2025 (Restated – Note 3) | |||||||||||||
| Assay and analysis | $ | 537 | $ | 152 | $ | 721 | $ | 226 | ||||||||
| Community relations | 760 | 69 | 1,232 | 112 | ||||||||||||
| Concession fees | – | – | 2,166 | 1,484 | ||||||||||||
| Depreciation | 454 | 11 | 483 | 18 | ||||||||||||
| Drilling and drilling related costs | 4,839 | 200 | 7,719 | 339 | ||||||||||||
| Environmental, regulatory and permitting | 306 | 25 | 620 | 38 | ||||||||||||
| Geological and geophysical investigations | 320 | – | 839 | 26 | ||||||||||||
| Reclamation provision | 14 | 28 | 19 | 58 | ||||||||||||
| Salaries, contractors and project administration | 3,037 | 953 | 6,555 | 1,682 | ||||||||||||
| Site preparation, camp and field expenses | 9,224 | 658 | 11,654 | 1,024 | ||||||||||||
| Studies | 2,768 | 7 | 4,030 | 12 | ||||||||||||
| $ | 22,259 | $ | 2,103 | $ | 36,038 | $ | 5,019 | |||||||||
The Company’s exploration expenditures are incurred primarily in Peru. Depreciation of $483 for the nine months ended September 30, 2026 comprises $282 relating to property and equipment (Note 10) and $201 relating to right-of-use assets.
| 19. | General and Administrative Expenses |
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 (Restated – Note 3) | 2026 | 2025 (Restated – Note 3) | |||||||||||||
| Office and other | $ | 921 | $ | 190 | $ | 3,753 | $ | 700 | ||||||||
| Professional fees | 725 | 133 | 2,315 | 365 | ||||||||||||
| Salaries and benefits | 487 | 420 | 1,693 | 1,243 | ||||||||||||
| Share-based compensation | 1,771 | 350 | 5,783 | 1,019 | ||||||||||||
| Transaction costs | 29 | – | 4,166 | – | ||||||||||||
| $ | 3,933 | $ | 1,093 | $ | 17,710 | $ | 3,327 | |||||||||
| 20. | Mercedes Mine Tax Audits |
Bear Creek acquired the Mercedes gold mine from Equinox on April 21, 2022. The agreement governing the purchase of the Mercedes Mine includes tax indemnity provisions. Minera Mercedes Minerales S. de R.L. de C.V., the subsidiary of the Company that directly owns the Mercedes Mine, is currently under income tax audit by the Mexican Tax Authorities for the 2016 tax year. The primary issue under examination relates to income recognition and deductibility of certain expenses.
Since no final assessment has been issued by the Mexican tax authorities, the Company has determined that it is not possible to reasonably estimate the potential range of outcomes or determine if the Company has a present obligation related to this as of September 30, 2026. The amount and timing of any final assessment in the audit is uncertain, may be appealed, and subject to the tax indemnity provisions from Equinox as previously mentioned. Accordingly, no liability has been recorded in the financial statements for this matter. The Company will continue to monitor developments and will recognize a liability when the Company has a present obligation to pay income tax and the amount can be reliably estimated.
Page 21
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 21. | Related Party Transactions |
Key management personnel
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company, and comprises the Company’s President and Chief Executive Officer, Chief Financial Officer, Senior Vice President Corporate Affairs and Corporate Secretary and Directors.
Key management compensation for the three and nine months ended September 30, 2026 and 2025 is comprised of the following:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 (Restated – Note 3) | 2026 | 2025 (Restated – Note 3) | |||||||||||||
| Share-based compensation | $ | 1,174 | $ | 267 | $ | 4,136 | $ | 788 | ||||||||
| Salaries and benefits | 229 | 233 | 789 | 740 | ||||||||||||
| Professional fees | 38 | – | 105 | – | ||||||||||||
| $ | 1,441 | $ | 500 | $ | 5,030 | $ | 1,528 | |||||||||
As of September 30, 2026, there were no outstanding amounts receivable from or payable to the key management personnel noted above. As of December 31, 2025, accounts payable and accrued liabilities included $593 due to key management personnel referred to above.
Related party arrangement
On October 21, 2024, the Company entered into an arrangement to share office space, equipment, personnel, consultants and various services with other companies related by virtue of certain directors and management in common. A management company equally owned by each company party to the arrangement pays for these shared expenses as agent for the Company and the other companies. These costs incurred by the management company as agent are allocated and funded by the shareholders of the management company based on time incurred and use of services and goods. The management company recovers its costs incurred in managing expenses and procuring goods and services on behalf of the Company without a markup. If the Company’s participation in the arrangement is terminated, the Company will be obligated to pay its share of the rent payments for the remaining term of the office space rental agreement. The Company’s obligation for future rental payments if the Company’s participation in the arrangement was terminated on September 30, 2026, was approximately $923 (December 31, 2025 – $529), determined based on the Company’s average share of rent paid in the immediately preceding 12 months.
The Company was charged for the following with respect to these arrangements in the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 (Restated – Note 3) | 2026 | 2025 (Restated – Note 3) | |||||||||||||
| Salaries and benefits | $ | 469 | $ | 423 | $ | 2,326 | $ | 1,344 | ||||||||
| Office and other | 108 | 100 | 379 | 354 | ||||||||||||
| $ | 577 | $ | 523 | $ | 2,705 | $ | 1,698 | |||||||||
At September 30, 2026, amounts in accounts payable and accrued liabilities include $10 due to a related party (December 31, 2025 – included in receivables is an amount due from a related party of $20) with respect to this arrangement.
All related party balances are unsecured and are due within thirty days without interest.
Page 22
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 22. | Supplemental Cash Flow Information |
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 (Restated – Note 3) | 2026 | 2025 (Restated – Note 3) | |||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||||
| Reclassification of commitment to issue shares | $ | – | $ | – | $ | 547 | $ | – | ||||||||
| Transfer on expired stock options | – | – | – | 10 | ||||||||||||
| NSR royalties issued as part of debt settlement (Note 4) | – | – | 31,695 | – | ||||||||||||
| Shares issued on acquisition of Bear Creek (Note 4) | – | – | 257,033 | – | ||||||||||||
| Accrued share issuance costs | $ | – | $ | 203 | $ | – | $ | 203 | ||||||||
| 23. | Segmented Information |
The Company has determined that it has three reportable segments, consisting of Mercedes, comprising mining operations in Mexico; Corani, comprising mineral exploration and development activities in Peru; and San Luis and La Estrella, comprising mineral exploration activities in Peru. The other category primarily comprises corporate and unallocated items that are not considered reportable segments and is presented solely to facilitate reconciliation.
The following is an analysis of the total assets by geographical area:
| September 30, 2026 | December 31, 2025 (Restated – Note 3) | |||||||
| Current assets | ||||||||
| Peru | $ | 5,862 | $ | 495 | ||||
| Mexico | 21,406 | – | ||||||
| Canada | 75,588 | 78,817 | ||||||
| 102,856 | 79,312 | |||||||
| Non-current assets | ||||||||
| Peru | 440,316 | 9,392 | ||||||
| Mexico | 55,549 | – | ||||||
| Canada | 11 | 9 | ||||||
| $ | 598,732 | $ | 88,713 | |||||
The Company’s operating segments are managed and assessed separately, with each segment comprising a single mine or exploration projects that are exposed to similar operating, financial and regulatory risks. The following tables present information about the Company’s reportable operating segments:
| Total assets | Total liabilities | |||||||||||||||
| September 30, 2026 | December 31, 2025 (Restated – Note 3) | September 30, 2026 | December 31, 2025 (Restated – Note 3) | |||||||||||||
| Mercedes | $ | 76,955 | $ | – | $ | (44,583 | ) | $ | – | |||||||
| Corani | 436,400 | – | (48,703 | ) | – | |||||||||||
| San Luis and La Estrella | 9,778 | 9,887 | (966 | ) | (856 | ) | ||||||||||
| Other | 75,599 | 78,826 | (116,823 | ) | (2,673 | ) | ||||||||||
| $ | 598,732 | $ | 88,713 | $ | (211,075 | ) | $ | (3,529 | ) | |||||||
Page 23
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
Results for the three months ended September 30, 2026
| Revenue | Cost of Sales & other operational costs | Depletion, Depreciation & Amortization | Exploration expenses | Other income (expenses) | Net income (loss) | |||||||||||||||||||
| Mercedes | $ | 37,746 | $ | (24,491 | ) | $ | 3,746 | $ | (244 | ) | $ | (3,088 | ) | $ | 13,669 | |||||||||
| Corani | – | – | – | (20,935 | ) | 294 | (20,641 | ) | ||||||||||||||||
| San Luis and La Estrella | – | – | – | (841 | ) | (14 | ) | (855 | ) | |||||||||||||||
| Other | – | (202 | ) | – | (239 | ) | (8,869 | ) | (9,310 | ) | ||||||||||||||
| $ | 37,746 | $ | (24,693 | ) | $ | 3,746 | $ | (22,259 | ) | $ | (11,677 | ) | $ | (17,137 | ) | |||||||||
Results for the nine months ended September 30, 2026
| Revenue | Cost of Sales & other operational costs | Depletion, Depreciation & Amortization | Exploration expenses | Other income (expenses) | Net income (loss) | |||||||||||||||||||
| Mercedes | $ | 93,973 | $ | (63,439 | ) | $ | (14,212 | ) | $ | (244 | ) | $ | 1,337 | $ | 17,415 | |||||||||
| Corani | – | – | – | (30,528 | ) | 856 | (29,672 | ) | ||||||||||||||||
| San Luis and La Estrella | – | – | – | (5,136 | ) | (82 | ) | (5,218 | ) | |||||||||||||||
| Other | – | (3,663 | ) | – | (130 | ) | 12,806 | 9,013 | ||||||||||||||||
| $ | 93,973 | $ | (67,102 | ) | $ | (14,212 | ) | $ | (36,038 | ) | $ | 14,917 | $ | (8,462 | ) | |||||||||
Results for the three months ended September 30, 2025
| Revenue | Cost of Sales & other operational costs | Depletion, Depreciation & Amortization | Exploration expenses | Other expenses | Net loss | |||||||||||||||||||
| San Luis and La Estrella (Restated) | $ | – | $ | – | $ | – | $ | (2,103 | ) | $ | (1,004 | ) | $ | (3,107 | ) | |||||||||
| $ | – | $ | – | $ | – | $ | (2,103 | ) | $ | (1,004 | ) | $ | (3,107 | ) | ||||||||||
Results for the nine months ended September 30, 2025
| Revenue | Cost of Sales & other operational costs | Depletion, Depreciation & Amortization | Exploration expenses | Other expenses | Net loss | |||||||||||||||||||
| San Luis and La Estrella (Restated) | $ | – | $ | – | $ | – | $ | (5,019 | ) | $ | (3,211 | ) | $ | (8,230 | ) | |||||||||
| $ | – | $ | – | $ | – | $ | (5,019 | ) | $ | (3,211 | ) | $ | (8,230 | ) | ||||||||||
Page 24
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| 24. | Financial Instrument Risk Exposure and Risk Management |
The Company’s financial instruments are exposed to certain financial risks, including credit risk, interest rate risk, liquidity risk and currency risk.
| a) | Credit risk |
Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s financial assets.
The Company is primarily exposed to credit risk on its cash and cash equivalents, short-term investment, receivables and reclamation deposits. Credit risk exposure is limited through maintaining its cash with high-credit quality financial institutions. The carrying value of these financial assets of $87,055 represents the maximum exposure to credit risk.
| b) | Interest rate risk |
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company’s interest rate exposure mainly relates to interest earned on cash and term deposits. For the three and nine months ended September 30, 2026, every 1% fluctuation in interest rates up or down would result in an increase or decrease of approximately $205 and $711 to the Company’s income, respectively (three and nine months ended September 30, 2025 – $42 and $105, respectively).
| c) | Liquidity risk |
Liquidity risk is the risk that the Company is unable to meet its financial obligations as they come due. The Company manages this risk by careful management of its working capital to ensure its expenditures will not exceed available resources.
On September 30, 2026, the Company had contractual cash flow commitments as follows:
| 2026 | 2027 | 2028 | 2029 | 2030 and beyond | Total | |||||||||||||||||||
| Accounts payable and accrued liabilities (Note 12) | $ | 38,806 | $ | – | $ | – | $ | – | $ | – | $ | 38,806 | ||||||||||||
| Community projects obligations (Note 13) | – | 1,164 | 1,164 | 1,164 | 11,638 | 15,130 | ||||||||||||||||||
| Office and warehouse rent obligations | 221 | 605 | 378 | 388 | 159 | 1,751 | ||||||||||||||||||
| Other liabilities | 820 | 320 | 272 | 314 | 3,111 | 4,837 | ||||||||||||||||||
| Reclamation provision (Note 14) | – | 519 | – | 3,373 | 21,673 | 25,565 | ||||||||||||||||||
| Tax payable | 3,965 | – | – | – | – | 3,965 | ||||||||||||||||||
| $ | 43,812 | $ | 2,608 | $ | 1,814 | $ | 5,239 | $ | 36,581 | $ | 90,054 | |||||||||||||
Page 25
Highlander Silver Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2026 and 2025
(Unaudited – in thousands of United States Dollars, unless otherwise noted)
| d) | Foreign currency risk |
The Company is operating in Canada, Peru and Mexico and is exposed to currency risk on transactions and balances in currencies other than the functional currency, primarily with respect to Canadian dollars, Peruvian soles, Mexican pesos and US dollars. On September 30, 2026, the Company had not entered into any contracts to manage foreign exchange risk other than the short-term investment in Note 5.
As at September 30, 2026, the Company had C$10,000 of its Canadian dollar cash placed in a one-month dual-currency deposit with a Canadian bank. The Company deposits Canadian dollars for a month and earns a higher rate of interest than on a regular term deposit. In exchange, the amount repaid depends on the US dollar to Canadian dollar exchange rate at maturity date compared with a rate fixed at the start (the “strike rate”). If the rate is above the strike rate, the deposit is repaid in Canadian dollars, plus interest. If the rate is below the strike rate, the deposit is repaid in US dollars, converted at the strike rate, plus interest. The deposit is measured at fair value through profit or loss. As at September 30, 2026, it had a fair value of $7,067, and the Company recognized a fair value gain of $19 in the quarter. The deposit matured on October 14, 2026 and was settled in Canadian dollars. This is the only foreign exchange contract the Company has entered into, and it is not designated as a hedge.
As at September 30, 2026, the Company was exposed to currency risk through the following assets and liabilities denominated in Canadian dollars, Peruvian soles, Mexican pesos and US dollars.
| Canadian dollars (000’s) | Peruvian soles (000’s) | Mexican pesos (000’s) | US dollars (000’s) | |||||||||||||
| Cash and cash equivalents | $ | 179 | $ | 1,003 | $ | 2,123 | $ | 15,947 | ||||||||
| Receivables and tax receivable | – | 2,462 | 295,907 | 17 | ||||||||||||
| Reclamation deposit | – | – | – | 45 | ||||||||||||
| Accounts payable and accrued liabilities and tax payable | (130 | ) | (6,667 | ) | (491,438 | ) | (550 | ) | ||||||||
| Lease liability | – | (271 | ) | – | – | |||||||||||
| Community projects obligation | – | (36,722 | ) | – | – | |||||||||||
| Reclamation provision | – | – | (271,633 | ) | – | |||||||||||
| $ | 49 | $ | (40,195 | ) | $ | (465,041 | ) | $ | 15,459 | |||||||
For the nine months ended September 30, 2026, if the US dollar to Canadian dollar, Peruvian soles and Mexican pesos currency exchange rate changes by 10% with all other variables held constant, the impact on the Company’s net loss is $5,758 (nine months ended September 30, 2025 – $77).
| 25. | FAIR VALUE MEASUREMENTS |
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amounts of cash and cash equivalents, receivables, reclamation deposits, accounts payable and accrued liabilities and the NSR buy-back liability approximate their fair values. Financial instruments measured at fair value are categorized into the following three levels of the fair value hierarchy:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly, such as prices, or indirectly.
Level 3 – unobservable inputs for which market data are not available.
The short-term investment (Note 5) is measured at fair value through profit or loss based on observable foreign exchange rates and is classified as Level 2. There were no transfers between levels during the period.
Page 26
Exhibit 99.2
Highlander Silver Corp.
Management’s Discussion and Analysis
For the three and nine months ended September 30, 2026 and 2025
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
INTRODUCTION
This Management’s Discussion and Analysis (“MD&A”) of Highlander Silver Corp. (the “Company” or “Highlander”) provides information on the Company’s business activities, financial condition, financial performance, cash flows and outlook for the three and nine months ended September 30, 2026, with comparative information for the three and nine months ended September 30, 2025. This MD&A is dated November 12, 2026 and takes into account information available up to and including that date.
The Company reports its financial position, financial performance and cash flows in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). This MD&A should be read in conjunction with the Company’s condensed consolidated interim financial statements for the three and nine months ended September 30, 2026, and the annual consolidated financial statements for the fifteen months ended December 31, 2025, which are available on the Company’s website at www.highlandersilver.com and on the SEDAR+ website at www.sedarplus.ca and on EDGAR at www.sec.gov. Additional information relating to the Company, including the Company’s Annual Information Form, is also set out on the SEDAR+ website at www.sedarplus.ca and on EDGAR at www.sec.gov.
All dollar amounts reported herein are expressed in thousands of United States dollars (“US dollars”) unless otherwise indicated.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This document includes certain statements that constitute “forward-looking statements”, and “forward-looking information” within the meaning of applicable securities laws (collectively, “forward-looking statements”). Words such as “intends”, “expects”, “will be”, “underway”, “targeted”, “planned”, “objective”, “expected”, “potential”, “continue”, “estimated”, “would”, “subject to” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements herein include, but are not limited to: statements regarding the Company’s exploration and development plans, including timing, costs and expected results; the Company’s plan for the San Luis Project is to advance the project through integrated exploration, environmental and community development programs; intended use of proceeds from the Company’s offerings; the Company, upon approval from its Board of Directors, intends to balance its overall capital structure through a combination of equity financing and/or other forms of financing; that the Company’s planning and budgeting will ensure the Company has appropriate liquidity to meet its business activities, including planned corporate expenditures, exploration expenses, as well as the development activities for the San Luis Project, the Corani Project and the Mercedes Mine; the continued integration of the Corani Project and the Mercedes Mine into the Company’s business, including the implementation of the exploration plan for the Corani Project and the optimization plan for the Mercedes Mine; the scope, timing, costs and results of the Corani exploration drilling program, including timing of release of drill results; performance of site preparation activities at Corani; the timing, completion, scope, results and recommendations of the updated Feasibility Study at Corani; the establishment of a detailed go-forward plan at Corani; significant improvements at Mercedes across worker safety, production and operating costs expected in the coming years with a rejuvenated workforce, and all proposed work programs at Mercedes in connection therewith; the establishment of a bonding program at Mercedes; the Company’s plan to release an updated National Instrument 43-101 technical report for Mercedes and timing thereof; the Company believes its cash and cash equivalents, short-term investment and cash flow from the Mercedes Mine are sufficient to fund its planned activities and meet its obligations and commitments for at least the next twelve months.
Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, undue reliance should not be placed on forward-looking statements since the Company can give no assurance that such expectations will prove to be correct. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including risks related to the business of the Company; the ability of the Company to raise sufficient capital; general business, economic, competitive, political and social uncertainties; the Company’s ability to execute its exploration, development and operating plans on the anticipated timelines and budgets; the actual results of current exploration, drilling and operating activities; conclusions of economic evaluations, including the updated Corani Feasibility Study; changes in project parameters as plans and studies continue to be refined; future prices of precious and base metals; accidents; geopolitical risks; criminal activity and social unrest or instability; global outbreaks and contagious diseases (including COVID-19); business and economic conditions in the mining industry generally; supply chain risks including with respect to supply chain disruptions; the supply and demand for labour and other project inputs; the Company’s ability to maintain labour relations and avoid any disruptions related thereto; the Company’s ability to maintain community relationships and social license; changes in commodity prices; unanticipated exploration, development, construction and operating challenges (including failure of equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters); adverse weather conditions; political risk and social unrest; changes in interest and currency exchange rates; the ability to obtain, maintain or renew required permits, approvals and authorizations in Peru and Mexico (including the timing of any permitting processes); the Company’s ability to implement the planned improvements at Mercedes and generate anticipated production, cost savings and cash flow; the integration of the business, assets, operations, systems and personnel of Bear Creek, as well as the potential diversion of management attention; and the possibility of liabilities, obligations or risks (including operational, technical, environmental, reclamation, contractual, labour or regulatory matters) becoming known or crystallizing following the integration of Bear Creek; and the risks, uncertainties and other factors identified in the Company’s periodic filings with Canadian and United States securities regulators.
Page 1
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
These forward-looking statements were derived using numerous assumptions, including assumptions regarding general business and economic conditions; the Company’s ability to develop and maintain relationships with local communities; commodity prices; interest rates and currency exchange rates; anticipated costs, expenditures, schedules and results of exploration, drilling, site development and operating initiatives; the Company’s ability to advance exploration efforts at its properties and the results of such exploration efforts; the ability to obtain and maintain necessary permits and approvals; the updated Corani Feasibility Study being completed on the anticipated timeline and providing recommendations that support a viable go-forward plan; the Mercedes Mine continuing to operate and the planned initiatives producing the anticipated safety, production, productivity, cost and cash flow benefits; the Company’s ability to access capital (including through equity or other financings) and to deploy proceeds as intended; the Company’s ability to generate sufficient cash flow to continue operations, meet its obligations and fund planned growth and development activities; the successful integration of Bear Creek’s business, assets, operations, systems and personnel, including the realization and timing of anticipated benefits; and the due diligence conducted in connection with the acquisition of Bear Creek having identified all material risks or liabilities. While the Company considers these assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, the Company assumes no obligation to update or to publicly announce the results of any change to any forward-looking statement contained herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If the Company updates any forward-looking statements, no inference should be drawn that it will make additional updates with respect to other forward-looking statements. All forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.
DESCRIPTION OF BUSINESS
Highlander Silver is a high-quality silver-growth company developing a portfolio of advanced-stage assets in Peru, including the bonanza-grade San Luis gold-silver project, which ranks among the 10 highest-grade projects globally in both gold and silver categories (as per the S&P Global rankings including the San Luis gold-silver project), and the Corani Silver Project, the largest silver deposit in development globally. The Company also operates the Mercedes gold-silver mine in Mexico. Highlander Silver’s major shareholders include the Augusta Group, the Lundin family, and Eric Sprott. Highlander is listed on the Toronto Stock Exchange (the “TSX”) under the ticker symbol “HSLV” and on the NYSE American LLC (“NYSE American”) under the same symbol.
HIGHLIGHTS AND ACTIVITIES
The following activities and developments were achieved during the quarter:
On July 7, 2026, Highlander provided a photo update showcasing key milestones achieved in the site development of its Corani Silver Project in Peru.
On September 23, 2026, Highlander announced that it has executed a mandate letter with Natixis Corporate & Investment Banking to lead a fully underwritten 7-year senior secured structured project finance facility of $330 million (the “Facility”) to fund the development and construction of the Corani Silver Project in Peru. The financing will be supported by a cost overrun facility of up to $100 million to be established prior to first draw and provided by the Company; final facility amounts will be subject to due diligence. The Facility is subject to completion of definitive documentation, which will include customary project finance terms, fees and conditions, credit approvals, and the completion of ongoing detailed technical, financial, environmental and social due diligence. Closing is expected in the first quarter of 2027.
Subsequent event
On October 13, 2026, Highlander reported on a recent meeting with President Keiko Fujimori and Minister of Energy and Mines Guillermo Shinno Huamaní in Lima.
On November 4, 2026, Highlander provided a photo update showcasing development progress at its Corani Silver Project in Peru.
MINERAL PROPERTIES AND OUTLOOK
San Luis
The San Luis Project is a gold-silver exploration property located in the Ancash department of central Peru. SSR Mining and Esperanza Resources Corp. (“Esperanza”) jointly established Reliant Ventures S.A.C. to develop the project. In 2011, SSR Mining acquired Esperanza’s interest in the San Luis Project, consolidating full ownership of the project under SSR Mining.
On May 23, 2024, the Company announced closing of the acquisition of the San Luis Project from SSR Mining, pursuant to the share purchase agreement between the Company and SSR Mining dated November 29, 2023, as amended (the “SPA”). The project is located in the Ancash Department, which is well-known for mining in Peru with major past and present production from the Pierina gold mine and Antamina copper-zinc mine, respectively.
Page 2
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
The Company acquired the San Luis Project for upfront cash consideration of $5,000 and an additional $37,500 in contingent cash consideration (the “Contingent Consideration”) upon completion of the following milestones in relation to the San Luis Project pursuant to the SPA:
| (a) | $1,250 after the commencement of an initial drilling program (paid); |
| (b) | $1,250 after the first anniversary of the commencement of an initial drilling program (paid); |
| (c) | $5,000 after the completion of a feasibility study; |
| (d) | $10,000 after the beginning of commercial production; |
| (e) | $10,000 after the first anniversary of commercial production; and |
| (f) | $10,000 after the second anniversary of commercial production. |
The Contingent Consideration is only accrued and payable if and when the above milestones are achieved.
Pursuant to the SPA, a 4% net smelter return royalty (“NSR”) on the San Luis Project was granted to SSR Mining. At any time before the commencement of mine construction on the San Luis Project, the Company may buy back half of this royalty for $15,000, which if, exercised, would reduce SSR Mining’s royalty interest to 2%.
In addition to the 4% NSR granted to SSR Mining, the San Luis Project is also subject to a 1% NSR on 24 claims payable to Esperanza and a 1% NSR on 2 claims to Metalla Royalty & Streaming Ltd.
Exploration Plans
The Company’s plan for the San Luis Project is to advance the project through integrated exploration, environmental and community development programs. The goal is to surface the resource potential of the project through exploration and undertake environmental studies to support future technical studies, permitting and evaluations of economic potential for development.
Since the acquisition of the San Luis Project in May 2024, the Company has performed field work including geological mapping and geochemical sampling around the Ayelen vein system, in the Bonita vein system and in the Cerro Colorado (porphyry/breccia system). Results have identified new veins and refined the footprint of the porphyry-related hydrothermal alteration. Additionally, the Company completed a ~5,000 ha MAG drone survey covering the area between Bonita and Cerro Colorado (inclusive of both targets).
On March 14, 2025, the Company released an updated technical report titled “Technical Report for the San Luis Property” with an effective date of January 15, 2025, prepared by independent qualified person, Martin Mount, MSc MCSM FGS CGeol FIMMM Ceng.
The Technical Report recommends a two-phase exploration plan. The Company previously initiated Phase 1 of the exploration program with detailed mapping and systematic channel sampling of the known mineralized structures at the Bonita vein system. On June 9, 2025, Highlander announced that it had commenced its maiden drilling program targeting recently sampled but previously undrilled high-grade mineralization in outcrop at the Bonita vein system using one drill rig.
The Company then proceeded to map these areas with a drone-based geophysical survey, a technological breakthrough in high elevation settings. In addition, the Company has carried out prospecting, mapping and sampling at the adjacent areas to identify and follow up on additional veins, with the objective of defining further targets for drilling. The Company spent approximately $1.7 million to complete the Phase 1 activities.
The Company has incorporated the results of its Phase 1 exploration activities including the assay results of the drilling to-date, processed and analyzed the drone-based geophysical survey to identify permissive structural features across more than 5,000 hectares, and integrated the latest drilling and channel sample results collected in the Bonita area to design the optimal drilling campaign for the Phase 2 exploration activities.
In addition, the Company has developed a 3D geological model to define the shape and orientation of the targeted structures and detailed controls on mineralization for target refinement. During the three months ended September 30, 2026, the Company continued to advance studies in support of permitting.
Page 3
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
Community Relations
The San Luis property occupies community land and developing and growing social license is an important undertaking for Highlander. The Company is actively engaged with the communities in the direct area of influence of the San Luis Project by employing its participatory development model based on community capacity building through skill and safety training, employment, entrepreneurship, infrastructure development and environmental, cultural, health and education programs. The Company has made a notable contribution in the development of infrastructure to ensure sanitary and health benefits to the communities. Major road rehabilitation work has been completed, and the Company is committed to continue contributing long-term development programs in coordination with, and agreed on by, the communities, government and regional agencies.
Bear Creek Assets (Corani and Mercedes)
On February 26, 2026, Highlander and Bear Creek Mining Corporation (“Bear Creek”) announced closing of the Bear Creek transaction. On closing of the acquisition of Bear Creek, existing Highlander shareholders and former Bear Creek shareholders owned approximately 82% and 18% of the total issued and outstanding Highlander common shares, on an undiluted basis.
The Company continues to integrate the Corani Project and the Mercedes Mine into its business since the acquisition of Bear Creek. As part of this integration, the Company has developed an exploration and development plan for Corani and formulated an optimization plan for the Mercedes Mine.
Corani
The Corani open-pit silver project is located in province of Carabaya in the department of Puno in southern Peru.
Personnel
| ● | Carlos Ojeda was previously appointed Vice President & General Manager. Mr. Ojeda has held increasingly senior roles leading teams of up to 500 people in engineering, construction, ramp-up and optimization at Anglo American’s major Quellaveco open pit mine in Peru, with prior experience at other major open pit mines in the country, including Antamina, Mina Justa and Constancia. |
Exploration and Technical Drilling
| ● | First exploration drilling program in over a decade continues targeting high-impact exploration, resource growth, infill, as well as technical drilling to support studies. Drill results are expected to be released in Q4/26. |
| ● | Completed the first airborne magnetic survey and more extensive induced polarization-resistivity surveys than historically undertaken. Results support the interpretation that the Corani mineral system is far more extensive than historical drilling coverage with extensions concealed beneath shallow post-mineral cover. |
| ● | Target areas to the East, South and West from Corani project have been included in the drilling campaign. |
Site Development
| ● | 350-person workforce on site, hired preferentially from local communities |
| ● | 70-person technical services team led by Carlos Ojeda, Vice President & General Manager, spanning all aspects of project design, control and execution |
| ● | 600-bed camp and related facilities under construction |
| ● | Internal and external roads under construction, with 40km completed |
| ● | Earthworks for infrastructure, plant, pits and collection ponds continuing |
| ● | Substation and transmission line under construction, with 2km completed |
| ● | Long-lead-time equipment order process commenced |
| ● | Majority of work packages awarded to leading international, Peruvian and local firms |
Page 4
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
Studies, Consultants and Contractors
| ● | Updated Feasibility Study based on staged-development approach to be completed by year-end aiming to maximize returns on a per share basis while mitigating capital expenditure, funding, timeline and execution risks. |
| ● | Respected international and specialist Peruvian consultants and contractors appointed for the majority of the main work packages, with further appointments to follow: |
| o | Plant and Internal Infrastructure – Ausenco |
| o | Facilities Design, Geotechnical and Hydrology – Anddes |
| o | Resources/Reserves and Mine Planning – AMC and Minsys |
| o | Drilling – Xplomine and JRC |
| o | Earthworks – MUR |
| o | Technical Assistance – AtkinsRéalis |
| o | Power – Inducom and Hitachi |
| o | Permits – Insideo and JMF |
The updated Corani Feasibility Study is anticipated to set out recommendations that will establish the basis of the Company’s detailed go-forward plan at Corani.
Mercedes
The underground Mercedes Mine is located in the state of Sonora, within the Cucurpe municipality. The mine is located 250 km northeast of Hermosillo and 300 km south of Tucson, Arizona. Mercedes consists of 69,284 hectares of concessions and the mine has been in continuous operation since 2011, with the exception of a COVID-19 related mandatory closure.
Personnel
| ● | Orlando Chumpitaz was previously appointed Vice President & General Manager. Mr. Chumpitaz has held senior roles with leading companies operating major underground mines globally, including Senior Mine Manager for Lundin Gold at its 5,000 tpd Fruta del Norte gold mine in Ecuador, Project Manager for Endeavour Mining at its 6,000 tpd Mana Mine in Burkina Faso, General Manager for Minera Volcan at its 5,500 tpd Animon mine in Peru, and Operations Director for Fortuna Mining at its 3,000 tpd San Jose mine in Mexico. |
Recapitalization
Mercedes produced 30 koz of gold in 2025. Significant improvement across worker safety, production and operating costs are expected in the coming years with a rejuvenated workforce operating under the proven leadership of Mr. Chumpitaz, with the following programs planned:
| ● | Infill and definition drilling to support an improved reserve model. |
| ● | Accelerated mine development to improve access and enhance operational productivity. |
| ● | Upgrading critical infrastructure, including ventilation, electrical systems, surface water management and underground pumping capacity. |
| ● | Geotechnical drilling and implementation of support systems to improve safety and reduce dilution. |
| ● | Cost assessment and right-sizing mine contractor deployment to enhance productivity. |
| ● | Tailings Management Facilities expansion to support mine life extensions. |
| ● | Resumption of greenfield and brownfield exploration campaigns across extensive land packages in geologically favorable and prospective areas. |
These plans are based on new management’s oversight of Mercedes since the acquisition of Bear Creek on February 26, 2026, and is therefore not based on a technical report filed under National Instrument 43-101 – Standards of Disclosure for Mineral Projects. The Company plans to release an updated National Instrument 43-101 technical report for Mercedes in Q1/27.
Page 5
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
Operating Highlights
| Mercedes Mine | Unit | July 1, 2026 – September 30, 2026 | February 26, 2026 – September 30, 2026 | ||||||||
| Tonnes milled | kt | 123.18 | 265.30 | ||||||||
| Average gold grade milled | g/t | 2.03 | 2.31 | ||||||||
| Average silver grade milled | g/t | 23.90 | 24.48 | ||||||||
| Recovery rate gold | % | 94.50 | % | 94.50 | % | ||||||
| Recovery rate silver | % | 41.20 | % | 40.10 | % | ||||||
| Gold produced | oz | 7,605 | 18,680 | ||||||||
| Silver produced | oz | 37,176 | 81,846 | ||||||||
| Gold sold | oz | 8,368 | 19,570 | ||||||||
| Average realized gold price | $/oz | 4,203 | 4,477 | ||||||||
| Silver sold | oz | 41,829 | 92,390 | ||||||||
| Average realized silver price | $/oz | 62 | 69 | ||||||||
Mercedes was acquired as part of the Bear Creek transaction on February 26, 2026. As such, comparative figures to previous quarters are not presented. Operational results are for the three months ended September 30, 2026 as well as for the period from February 26, 2026 to September 30, 2026.
La Estrella
The La Estrella Project is located in the Huancavelica Department, Central Peru, about 250 km ESE of Lima, on the eastern slope of the Western Cordillera. It is within the prolific Miocene polymetallic belt, approximately 34 km NNE of the Julcani Mine, which has produced over 105 million ounces of silver from high grade vein mineralization averaging 16 ounces per ton since production started by Buenaventura in 1953.
During the three months ending September 30, 2026, the Company continued its community engagement by meeting with local authorities and collaborating on social programs. Exploration agreements with two of the three relevant communities were executed earlier this year, and final notarization was received this quarter.
EXPLORATION EXPENSES
As disclosed in Note 3 of the Company’s condensed consolidated interim financial statements for the three and nine months ended September 30, 2026, the Company has changed the presentation currency from Canadian dollars to US dollars to better reflect the Company’s business activities and to improve comparability of the Company’s financial results with peer companies in the mining industry. Prior period comparative figures have been restated to conform to the current period presentation.
The following tables summarize exploration expenses by activity and project.
For the three months ended September 30, 2026
| San Luis and La Estrella | Corani | Mercedes | Other | Total | ||||||||||||||||
| Assay and analysis | $ | – | $ | 530 | $ | 7 | $ | – | $ | 537 | ||||||||||
| Community relations | 92 | 668 | – | – | 760 | |||||||||||||||
| Depreciation | 17 | 437 | – | – | 454 | |||||||||||||||
| Drilling and drilling related costs | – | 4,839 | – | – | 4,839 | |||||||||||||||
| Environmental, regulatory and permitting | 30 | 276 | – | – | 306 | |||||||||||||||
| Geological and geophysical investigations | (3 | ) | 308 | 15 | – | 320 | ||||||||||||||
| Reclamation provision | 14 | – | – | – | 14 | |||||||||||||||
| Salaries, contractors and project administration | 601 | 2,163 | 213 | 60 | 3,037 | |||||||||||||||
| Site preparation, camp and field expenses | 89 | 8,947 | 9 | 179 | 9,224 | |||||||||||||||
| Studies | 1 | 2,767 | – | – | 2,768 | |||||||||||||||
| $ | 841 | $ | 20,935 | $ | 244 | $ | 239 | $ | 22,259 | |||||||||||
Page 6
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
For the nine months ended September 30, 2026
| San Luis and La Estrella | Corani | Mercedes | Other | Total | ||||||||||||||||
| Assay and analysis | $ | 13 | $ | 701 | $ | 7 | $ | – | $ | 721 | ||||||||||
| Community relations | 281 | 951 | – | – | 1,232 | |||||||||||||||
| Concession fee | 1,661 | 505 | – | – | 2,166 | |||||||||||||||
| Depreciation | 46 | 437 | – | – | 483 | |||||||||||||||
| Drilling and drilling related costs | – | 7,719 | – | – | 7,719 | |||||||||||||||
| Environmental, regulatory and permitting | 178 | 442 | – | – | 620 | |||||||||||||||
| Geological and geophysical investigations | 20 | 804 | 15 | – | 839 | |||||||||||||||
| Reclamation provision | 19 | – | – | – | 19 | |||||||||||||||
| Salaries, contractors and project administration | 2,282 | 3,983 | 213 | 77 | 6,555 | |||||||||||||||
| Site preparation, camp and field expenses | 630 | 10,962 | 9 | 53 | 11,654 | |||||||||||||||
| Studies | 6 | 4,024 | – | – | 4,030 | |||||||||||||||
| $ | 5,136 | $ | 30,528 | $ | 244 | $ | 130 | $ | 36,038 | |||||||||||
For the three months ended September 30, 2025
| San Luis (Restated)1 | La Estrella (Restated)1 | Total (Restated)1 | ||||||||||
| Assay and analysis | $ | 152 | $ | – | $ | 152 | ||||||
| Community relations | 67 | 2 | 69 | |||||||||
| Depreciation | 11 | – | 11 | |||||||||
| Drilling and drilling related costs | 200 | – | 200 | |||||||||
| Environmental, regulatory and permitting | 25 | – | 25 | |||||||||
| Reclamation provision | 28 | – | 28 | |||||||||
| Salaries, contractors and project administration | 896 | 57 | 953 | |||||||||
| Site preparation, camp and field expenses | 654 | 4 | 658 | |||||||||
| Studies | 7 | – | 7 | |||||||||
| $ | 2,040 | $ | 63 | $ | 2,103 | |||||||
For the nine months ended September 30, 2025
| San Luis (Restated)1 | La Estrella (Restated)1 | Total (Restated)1 | ||||||||||
| Assay and analysis | $ | 226 | $ | – | $ | 226 | ||||||
| Community relations | 102 | 10 | 112 | |||||||||
| Concession fees | 1,475 | 9 | 1,484 | |||||||||
| Depreciation | 18 | – | 18 | |||||||||
| Drilling and drilling related costs | 339 | – | 339 | |||||||||
| Environmental, regulatory and permitting | 38 | – | 38 | |||||||||
| Geological and geophysical investigations | 26 | – | 26 | |||||||||
| Reclamation provision | 58 | – | 58 | |||||||||
| Salaries, contractors and project administration | 1,569 | 113 | 1,682 | |||||||||
| Site preparation, camp and field expenses | 1,010 | 14 | 1,024 | |||||||||
| Studies | 12 | – | 12 | |||||||||
| $ | 4,873 | $ | 146 | $ | 5,019 | |||||||
1 Restated for the change in presentation currency
Page 7
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
The increase in exploration expenses to $22,259 and $36,038 for the three and nine months ended September 30, 2026, from $2,103 and $5,019 for the three and nine months ended September 30, 2025, was primarily attributable to the inclusion of the Corani Project following the acquisition of Bear Creek on February 26, 2026. Exploration expenses at the San Luis Project decreased in the three months ended September 30, 2026, following the completion of the Phase 1 drilling program in September 2025 and were consistent with the prior period for the nine months ended September 30, 2026.
Drilling and drilling related costs were higher for the three and nine months ended September 30, 2026, compared to the same periods in 2025, mainly due to the commencement of the Corani Project’s drilling program in April 2026. The program utilized up to six drill rigs focused on high-impact exploration, resource expansion, infill drilling, and technical drilling to support future studies.
Geological and geophysical investigations were higher for the three and nine months ended September 30, 2026, compared to the same periods in 2025, mainly related to the comprehensive geophysical program undertaken at the Corani Project, including the completion of airborne magnetic and induced polarization-resistivity surveys to support exploration targeting and resource development.
Salaries, contractors and project administration mainly relate to personnel costs including salaries for site-based employees and contractor fees. The increase in the expenses in the three and nine months ended September 30, 2026, compared to the same periods in 2025, was mainly due to the addition of personnel and contractors to support the increase in operating activities at the Corani Project. For the nine months ended September 30, 2026, salaries and contractor costs at the San Luis Project also increased to support permitting and project development activities.
The increase in site preparation, camp, and field expenses in the current periods compared to the same periods in 2025 is due to site development activities at the Corani Project, following the acquisition of Bear Creek on February 26, 2026. The increase was mainly attributable to higher site maintenance costs, supplies, camp operations and other general site-related expenditures.
Other expenses such as community relations and environmental, regulatory and permitting for the three and nine months ended September 30, 2026 have also increased from the prior periods as the Company continued to invest in the community with programs based on community capacity building through skill and safety training, employment, entrepreneurship, infrastructure development and environmental, cultural, health and education programs, as well as to diligently comply with environmental monitoring and reporting of its activities at site.
RESULTS OF OPERATIONS
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 (Restated)1 | 2026 | 2025 (Restated)1 | |||||||||||||
| Revenue | $ | 37,746 | $ | – | $ | 93,973 | $ | – | ||||||||
| Cost of sales | (24,010 | ) | – | (61,714 | ) | – | ||||||||||
| Depletion, amortization, and depreciation | 3,746 | – | (14,212 | ) | – | |||||||||||
| Gross profit | 17,482 | – | 18,047 | – | ||||||||||||
| Exploration expenses | (22,259 | ) | (2,103 | ) | (36,038 | ) | (5,019 | ) | ||||||||
| General and administrative expenses | (3,933 | ) | (1,093 | ) | (17,710 | ) | (3,327 | ) | ||||||||
| Loss before other items | (8,710 | ) | (3,196 | ) | (35,701 | ) | (8,346 | ) | ||||||||
| Finance cost | (6,519 | ) | (4 | ) | (7,291 | ) | (164 | ) | ||||||||
| Interest and other income | 2,129 | 126 | 5,214 | 358 | ||||||||||||
| Foreign exchange gain (loss) | (911 | ) | (33 | ) | 1,108 | 49 | ||||||||||
| Remeasurement gain on previously held equity interest in Bear Creek | – | – | 28,466 | – | ||||||||||||
| Write-off of receivables | – | – | – | (127 | ) | |||||||||||
| Other expenses | (1 | ) | – | (136 | ) | – | ||||||||||
| Net loss before income taxes | (14,012 | ) | (3,107 | ) | (8,340 | ) | (8,230 | ) | ||||||||
| Current income tax expense | (19 | ) | – | (1,067 | ) | – | ||||||||||
| Deferred income tax recovery (expense) | (3,106 | ) | – | 945 | – | |||||||||||
| Net loss | $ | (17,137 | ) | $ | (3,107 | ) | $ | (8,462 | ) | $ | (8,230 | ) | ||||
1 Restated for the change in presentation currency
Page 8
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
Three Months Ended September 30, 2026, compared to Three Months Ended September 30, 2025
The Company incurred net loss of $17,137 for the three months ended September 30, 2026 (September 30, 2025 – $3,107). The change in net loss is due to the following factors:
| ● | Revenue increased to $37,746 for the three months ended September 30, 2026 (September 30, 2025 – $nil) from the sales of gold and silver from the Mercedes Mine following the acquisition of Bear Creek on February 26, 2026. During the current period, the Company sold 8,368 oz of gold and 41,829 oz of silver. The Company is not economically dependent on any specific customer for the sale of its products because gold and silver can be sold through numerous precious metals traders and refiners worldwide. |
| ● | Cost of sales of $24,010 for the three months ended September 30, 2026 (September 30, 2025 – $nil), represents costs associated with gold and silver production at the Mercedes Mine following the acquisition of Bear Creek on February 26, 2026, including raw material and consumables, salaries and benefits, contractors and outside services, royalties and other related expenses. |
| ● | Depletion, amortization, and depreciation was a net recovery of $3,746 for the three months ended September 30, 2026 (September 30, 2025 – $nil). Depletion of mineral properties and depreciation of plant and equipment at the Mercedes Mine for the quarter was offset by a $17,740 reversal in the quarter of depletion previously recognized in the first half of 2026. The reversal was a measurement period adjustment resulting from revised fair values of the Bear Creek purchase price allocation (Notes 4 and 10 of the condensed consolidated interim financial statements). |
| ● | Exploration expenses increased to $22,259 for the three months ended September 30, 2026 (September 30, 2025 – $2,103), mainly driven by the activities at the Corani Project following the acquisition of Bear Creek on February 26, 2026. Expenditures at Corani were driven by the commencement of the project’s first exploration drilling program, utilizing five drill rigs targeting high-impact exploration, resource growth, infill and technical drilling. |
| ● | General and administrative (“G&A”) expenses increased to $3,933 for the three months ended September 30, 2026 (September 30, 2025 – $1,093). The increase was primarily driven by the following: |
| - | Office and other expenses: Increased to $921 (September 30, 2025 – $190), mainly reflecting higher insurance costs and the inclusion of Bear Creek’s office expenses following its acquisition on February 26, 2026. |
| - | Professional fees: Increased to $725 (September 30, 2025 – $133), mainly reflecting higher audit, legal and consulting costs during the period. Audit fees increased as a result of the Company’s growth, listing on the NYSE American, and the acquisition of Bear Creek, which expanded the scope and complexity of the audit requiring additional audit and review procedures. Consulting fees also increased, mainly due to transition and integration support following the Bear Creek acquisition, including assistance with aligning financial reporting processes, systems integration, and post-acquisition operational support and tax advisory services. Legal fees also increased, mainly due to increased general legal support services following the Bear Creek acquisition. |
| - | Share-based compensation: Increased to $1,771 (September 30, 2025 – $350), due to the recognition of share-based compensation expense associated with stock options granted during 2026. |
| ● | Interest and other income increased to $2,129 for the three months ended September 30, 2026, compared to $126 for the three months ended September 30, 2025. The increase was primarily due to interest earned on higher cash and short-term investment balances following the equity financings completed in September 2025 and January 2026, as well as royalty income following the acquisition of Bear Creek on February 26, 2026. The Company earns royalty income from the Maria Jose property in Peru through a royalty interest retained by its subsidiary, INEDE S.A.C., following the sale of the property. The royalty rate is determined monthly based on the annualized gold production level and the weighted average gold selling price, in accordance with the terms of the agreement. |
| ● | Finance cost increased to $6,519 for the three months ended September 30, 2026, compared to $4 for the three months ended September 30, 2025. The increase was primarily due to accretion of $5,996 on the net smelter return royalty buy-back liability, calculated from the Acquisition Date (Note 4 of the condensed consolidated interim financial statements) and accretion of $281 on the reclamation provision. |
| ● | Foreign exchange loss of $911 for the three months ended September 30, 2026 (September 30, 2025 – $33) relates to the weakening of the US dollar against the Canadian dollar, partly offset by its strengthening against Mexican peso and Peruvian soles. The higher foreign exchange loss in the current period was also attributable to the increase in the US dollar cash balance following the financing completed in January 2026. |
| ● | The Company recorded a current income tax expense of $19 for the three months ended September 30, 2026 (September 30, 2025 – $nil), reflecting the Special Mining Duty in Mexico, which is calculated at a rate of 8.5% on taxable mining profits in accordance with Mexican mining legislation. |
| ● | The Company recorded a deferred income tax expense of $3,106 for the three months ended September 30, 2026 (September 30, 2025 – $nil), primarily a catch-up of the deferred income tax recovery recognized in the first half of the year, following the revised fair values of the purchase price allocation for the acquisition of Bear Creek. |
Page 9
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
Nine Months Ended September 30, 2026, compared to Nine Months Ended September 30, 2025
The Company generated a net loss of $8,462 for the nine months ended September 30, 2026 (September 30, 2025 –$8,230). The change in net loss is due to the following factors:
| ● | Revenue increased to $93,973 for the nine months ended September 30, 2026 (September 30, 2025 – $nil) from the sales of gold and silver from the Mercedes Mine following the acquisition of Bear Creek on February 26, 2026. During the period of February 26, 2026 to September 30, 2026, the Company sold 19,570 oz of gold and 92,390 oz of silver. The Company is not economically dependent on any specific customer for the sale of its products because gold and silver can be sold through numerous precious metals traders and refiners worldwide. |
| ● | Cost of sales of $61,714 for the nine months ended September 30, 2026 (September 30, 2025 – $nil), represents costs associated with gold and silver production at the Mercedes Mine following the acquisition of Bear Creek on February 26, 2026, including raw material and consumables, salaries and benefits, contractors and outside services, royalties and other related expenses. |
| ● | Depletion, amortization, and depreciation was $14,212 for the nine months ended September 30, 2026 (September 30, 2025 – $nil), reflecting the depletion of mineral properties and depreciation of plant and equipment at the Mercedes Mine following the acquisition of Bear Creek on February 26, 2026, net of the $17,740 reversal in the third quarter of depletion previously recognized in the first half of 2026. The reversal was a measurement period adjustment resulting from revised fair values of the Bear Creek purchase price allocation (Notes 4 and 10 of the condensed consolidated interim financial statements). |
| ● | Exploration expenses increased to $36,038 for the nine months ended September 30, 2026 (September 30, 2025 – $5,019), mainly driven by the activities at the Corani Project following the acquisition of Bear Creek on February 26, 2026. Expenditures at Corani were driven by the commencement of the project’s first exploration drilling program, utilizing up to six drill rigs targeting high-impact exploration, resource growth, infill and technical drilling. The increase also reflects the continued advancement of the San Luis Project, including higher personnel and contractor costs to support ongoing operating activities. |
| ● | G&A expenses increased to $17,710 for the nine months ended September 30, 2026 (September 30, 2025 – $3,327). The increase was primarily driven by the following: |
| - | Office and other expenses: Increased to $3,753 (September 30, 2025 – $700), mainly reflecting higher insurance costs and the inclusion of Bear Creek’s office expenses following its acquisition on February 26, 2026. |
| - | Professional fees: Increased to $2,315 (September 30, 2025 – $365), mainly reflecting higher audit, legal and consulting costs during the period. Audit fees increased as a result of the Company’s growth, listing on the NYSE American, and the acquisition of Bear Creek, which expanded the scope and complexity of the audit requiring additional audit and review procedures. Consulting fees also increased, mainly due to transition and integration support following the Bear Creek acquisition, including assistance with aligning financial reporting processes, systems integration, and post-acquisition operational support and tax advisory services. Legal fees also increased, mainly due to increased general legal support services following the Bear Creek acquisition. |
| - | Salaries and benefits: Increased to $1,693 (September 30, 2025 – $1,243), mainly due to the inclusion of Bear Creek’s salary expenses following its acquisition on February 26, 2026. |
| - | Share-based compensation: Increased to $5,783 (September 30, 2025 – $1,019), due to the recognition of share-based compensation expense associated with stock options granted during 2026. |
| - | Transaction costs: Amounted to $4,166 (September 30, 2025 – $nil), reflecting expenses incurred in connection with the Bear Creek acquisition. These costs primarily consist of professional advisory fees, legal expenses, and other transaction-related services necessary to support and complete the Bear Creek transaction. They also include compensation payments made to former Bear Creek executives in accordance with the terms of the Bear Creek transaction. |
| ● | Interest and other income increased to $5,214 for the nine months ended September 30, 2026, compared to $358 for the nine months ended September 30, 2025. The increase was primarily due to interest earned on higher cash and short-term investment balances following the equity financings completed in September 2025 and January 2026, as well as royalty income following the acquisition of Bear Creek on February 26, 2026. The Company earns royalty income from the Maria Jose property in Peru through a royalty interest retained by its subsidiary, INEDE S.A.C., following the sale of the property. The royalty rate is determined monthly based on the annualized gold production level and the weighted average gold selling price, in accordance with the terms of the agreement. |
Page 10
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
| ● | Finance cost increased to $7,291 for the nine months ended September 30, 2026, compared to $164 for the nine months ended September 30, 2025. The increase was primarily due to accretion of $5,996 on the net smelter return royalty buy-back liability, calculated from the Acquisition Date and accretion of $686 on the reclamation provision. |
| ● | Foreign exchange gain of $1,108 for the nine months ended September 30, 2026 (September 30, 2025 – $49) relates to the strengthening of the US dollar against Canadian dollar, Mexican pesos and Peruvian soles. The gain was partially offset by a foreign exchange loss in the third quarter, resulting primarily from the weakening of the US dollar against Canadian dollar. The higher foreign exchange gain in the current period was also attributable to the increase in the US dollar cash balance following the financing completed in January 2026. |
| ● | The Company recorded a current income tax expense of $1,067 for the nine months ended September 30, 2026 (September 30, 2025 – $nil), reflecting the Special Mining Duty in Mexico, and a net deferred income tax recovery of $945 (September 30, 2025 – $nil), arising from purchase price allocation adjustments related to the acquisition of Bear Creek. |
| ● | Remeasurement gain on previously held equity interest in Bear Creek amounted to $28,466 (September 30, 2025 – $nil), reflecting the adjustment of the Company’s previously held interest in Bear Creek to its fair value at the completion of the Bear Creek transaction on February 26, 2026. |
SUMMARY OF QUARTERLY RESULTS
The Company’s quarterly financial statements are reported under IFRS as issued by the IASB, as applicable to interim financial reporting. The following table provides highlights from the quarterly results of the Company’s unaudited condensed consolidated interim financial statements for the past eight quarters.
| 2026 Q3 | 2026 Q2 | 2026 Q1 | 2025 Q5 (Restated)1 | |||||||||||||
| Revenue | $ | 37,746 | $ | 37,897 | $ | 18,330 | $ | – | ||||||||
| Loss before other items | (8,710 | ) | (16,996 | ) | (9,995 | ) | (3,296 | ) | ||||||||
| Net income (loss) | (17,137 | ) | (11,733 | ) | 20,408 | (2,784 | ) | |||||||||
| Total comprehensive income (loss) | (16,913 | ) | (13,062 | ) | 18,832 | (1,317 | ) | |||||||||
| Net income (loss) per share – basic | (0.08 | ) | (0.06 | ) | 0.14 | (0.02 | ) | |||||||||
| Net income (loss) per share – diluted | $ | (0.08 | ) | $ | (0.06 | ) | $ | 0.13 | $ | (0.02 | ) | |||||
| 2025 Q4 (Restated)1 | 2025 Q3 (Restated)1 | 2025 Q2 (Restated)1 | 2025 Q1 (Restated)1 | |||||||||||||
| Loss before other items | $ | (3,196 | ) | $ | (3,749 | ) | $ | (1,401 | ) | $ | (1,096 | ) | ||||
| Net loss | (3,107 | ) | (3,585 | ) | (1,538 | ) | (1,172 | ) | ||||||||
| Total comprehensive loss | (3,271 | ) | (2,382 | ) | (1,263 | ) | (1,227 | ) | ||||||||
| Net loss per share – basic and diluted | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.01 | ) | ||||
1 Restated for the change in presentation currency. Q5/25 is the three months ended December 31, 2025, the final quarter of the 15-month financial year ended on that date.
The revenue in Q1/26 to Q3/26 was generated from the sales of gold and silver from the Mercedes Mine following the acquisition of Bear Creek on February 26, 2026. Revenue in Q2/26 and Q3/26 reflected a full quarter of gold and silver sales, whereas Q1/26 reflected sales from February 26, 2026, the acquisition date, through March 31, 2026.
The decrease in loss before other items in Q3/26 compared to Q2/26 was mainly driven by the reversal of depletion following the revised fair values of the Bear Creek purchase price allocation for the Mercedes Mine, partially offset by the increase in exploration and operating activities at the Corani Project.
The increase in loss before other items in Q1/26 to Q2/26 was mainly driven by the incorporation of the operating expenditures at the Corani Project and Mercedes Mine, reflecting the inclusion of these assets following the Bear Creek acquisition on February 26, 2026. G&A expenses also increased in Q1/26 primarily due to transaction costs related to the Bear Creek acquisition, as well as higher share-based compensation expense recognized during the period.
Page 11
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
The successive increase in loss before other items from Q1/25 to Q3/25 was mainly related to the increased exploration and operating activities at the San Luis Project following its acquisition by the Company in May 2024. These included costs related to concession fees, drilling and drilling related costs, salaries, contractor fees, project administration and site preparation costs, as well as expenses on camp and field operations. The commencement of the drilling program at the Bonita vein system at the San Luis Project in June 2025 further contributed to the increase.
The decrease in loss before other items in Q4/25 from the previous quarter was mainly due to timing of incurring certain exploration expenses to align with operational planning. The slight increase in loss before other items in Q5/25 from the previous quarter is attributable to higher G&A expenses, including salaries and benefits and legal costs. This was partially offset by lower exploration expenses resulting from the completion of Phase 1 drilling program at the San Luis Project in September 2025 prior to the commencement of the rainy season.
The increase in net loss in Q3/26 compared to Q2/26 was mainly due to the accretion on the net smelter return royalty buy-back liability, higher exploration and operating activities at the Corani Project, an income tax expense of $3,125 in Q3/26 (Q2/26 – recovery of $3,082) and a foreign exchange loss of $911 in Q3/26 (Q2/26 – gain of $998), partially offset by the reversal of depletion following the revised fair values of the purchase price allocation for the Mercedes Mine.
The change from net income of $20,408 in Q1/26 to a net loss of $11,733 in Q2/26 was mainly due to the $28,466 remeasurement gain on previously held equity interest in Bear Creek recognized in Q1/26 and a full quarter of expenses related to the Mercedes Mine and Corani Project in Q2/26, compared to expenses recognized only from February 26, 2026, the acquisition date, through March 31, 2026, in Q1/26. The change was also driven by higher exploration activities at the Corani Project. These impacts were partially offset by higher revenue and interest and other income, lower general and administrative expenses, and a deferred income tax recovery in Q2/26.
An increase in net income in Q1/26 compared to all preceding quarters was mainly due to the remeasurement gain on previously held equity interest in Bear Creek, reflecting the adjustment to its fair value at the completion of the Bear Creek transaction on February 26, 2026.
The change in total comprehensive income / loss was related to the foreign currency translation for the respective periods.
LIQUIDITY AND CAPITAL RESOURCES
| September 30, 2026 | December 31, 2025 (Restated)1 | |||||||
| Cash and cash equivalents | $ | 68,093 | $ | 78,942 | ||||
| Short-term investment | 7,067 | – | ||||||
| Inventory | 5,762 | – | ||||||
| Accounts receivable, current | 7,301 | 66 | ||||||
| Prepaids and other | 3,627 | 148 | ||||||
| Tax receivable, current | 11,006 | 156 | ||||||
| Accounts payable and accrued liabilities, current | 38,806 | 1,780 | ||||||
| Community projects obligation, current | 1,164 | – | ||||||
| Consideration payable, current | – | 1,250 | ||||||
| Lease liabilities, current | 155 | 9 | ||||||
| Tax payable | 3,965 | 15 | ||||||
| Other liabilities | 34 | – | ||||||
| Total current assets | 102,856 | 79,312 | ||||||
| Total current liabilities | $ | 44,124 | $ | 3,054 | ||||
1 Restated for the change in presentation currency
Page 12
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
On January 30, 2026, the Company closed a non-brokered private placement with Mr. Eric Sprott (the “Sprott Offering”), pursuant to which the Company issued 8,060,226 common shares of the Company at a price of C$6.80 per common share for aggregate gross proceeds of $40,000. The Company incurred total share issuance costs of $277, for net proceeds of $39,723.
Cash used during the three and nine months ended September 30, 2026, from operating activities were $9,327 and $10,036, respectively (September 30, 2025 – $2,845 and $7,046, respectively). The increased use of cash is primarily attributable to the increase of the Company’s operating activities, including the incorporation of the net operating expenditures at the Corani Project and Mercedes Mine following the acquisition of Bear Creek on February 26, 2026, offset by the timing of payments affecting changes in non-cash working capital items such as accounts payable and accrued liabilities and inventory.
Cash used during the three months ended September 30, 2026, from financing activities was $128 (cash generated during the three months ended September 30, 2025 – $58,779). The change primarily reflects $58,772 in proceeds from the bought deal equity financing completed in the comparative quarter. Subsequent to September 30, 2026, the Company issued 625,000 common shares upon the exercise of options and warrants for aggregate proceeds of $166.
Cash generated during the nine months ended September 30, 2026, from financing activities was $31,434 (September 30, 2025 – $79,544). The decrease was primarily attributable to lower equity proceeds, with net proceeds of $39,723 from the Sprott Offering in January 2026 compared to $79,557 from the bought deal equity financing in the prior period, and the $10,352 debt settlement (September 30, 2025 – $nil), partially offset by proceeds of $2,650 from the exercise of warrants and options (September 30, 2025 – $138).
Cash used during the three and nine months ended September 30, 2026, from investing activities was $22,204 and $30,875, respectively (cash generated during the three months ended September 30, 2025 – $126 and cash used during the nine months ended September 30, 2025 – $999, respectively).
The increased use of cash from investing activities for the three months ended September 30, 2026 was primarily attributable to the purchase of property and equipment of $12,994 (September 30, 2025 – $nil), short-term investment of $7,048 (September 30, 2025 – $nil) and deposits made on non-current assets of $3,868 (September 30, 2025 – $nil), offset by the interest and royalty income received of $1,715 (September 30, 2025 – $126).
The increased use of cash from investing activities for the nine months ended September 30, 2026 was primarily attributable to the acquisition of Bear Creek on February 26, 2026: investment in Bear Creek shares of $13,219 (September 30, 2025 – $nil), purchase of property and equipment of $24,941 (September 30, 2025 – $56), short-term investment of $7,048 (September 30, 2025 – $nil) and deposits made on non-current assets of $3,868 (September 30, 2025 – $nil), payment of community projects at Corani of $1,178 (September 30, 2025 – $nil), offset by cash acquired on acquisition of Bear Creek of $16,194 (September 30, 2025 – $nil), as well as higher interest and royalty income of $3,935 received in the current period (September 30, 2025 – $323) earned from higher cash balances, and the proceeds from the sale of Tassa Project of $500 (September 30, 2025 – $nil).
As at September 30, 2026, the Company had working capital of $58,732 (December 31, 2025 – $76,258). The Company believes its cash and cash equivalents, short-term investment and cash flow from the Mercedes Mine are sufficient to fund its planned activities and meet its obligations and commitments for at least the next twelve months. The development and construction of the Corani Project will require additional financing, including the Facility described under “Highlights and Activities”, which remains subject to definitive documentation, due diligence and credit approvals. The Company also holds options to buy back portions of the Corani NSRs for up to $38,333, which are exercisable at the Company’s discretion and are reflected in the net smelter return royalty buy-back liability of $22,896 (Note 4 of the condensed consolidated interim financial statements).
Page 13
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
FINANCING USE OF PROCEEDS
Net proceeds from the March 11, 2025 private placement offering of $20,785 (C$30,037), have been deployed to fund the advancement of exploration activities at the Company’s San Luis Project, as well as for working capital and general corporate purposes, consistent with the disclosed use of proceeds at the time of the private placement.
Net proceeds from the public offering completed on September 29, 2025, including proceeds raised on the exercise of the over-allotment option, were $64,441 (C$89,777). A comparison of the originally disclosed use of proceeds to the actual use of proceeds through to September 30, 2026, is below.
| Use of Net Proceeds | Planned | Actual | ||||||
| Exploration, prospecting and project studies | $ | 21,534 | (965 | ) | ||||
| Environmental, regulatory and permitting | 2,871 | (5 | ) | |||||
| Property maintenance, concession fees and community relations and development programs | 5,742 | (125 | ) | |||||
| Infrastructure and road development | 2,153 | (170 | ) | |||||
| Property investigation and acquisitions | 17,945 | (30,552 | ) | |||||
| General corporate and working capital | 14,240 | – | ||||||
| Additional share issuance costs | (44 | ) | – | |||||
| Total | $ | 64,441 | (31,817 | ) | ||||
The actual use of proceeds of $30,552 in property investigation and acquisitions is related to the Bear Creek transaction including the private placement in Bear Creek. The Company has $32,624 remaining from this public offering.
The Company’s originally disclosed use of proceeds from the Sprott Offering was to fund the advancement of the Company’s mineral projects and for working capital and general corporate purposes. Of the net proceeds of $39,723, the Company has spent $7,996 as originally disclosed, with $31,727 remaining.
COMMITMENTS AND CONTINGENCIES
At September 30, 2026, the Company had contractual cash flow commitments as follows:
| 2026 | 2027 | 2028 | 2029 | 2030 and beyond | Total | |||||||||||||||||||
| Accounts payable and accrued liabilities | $ | 38,806 | $ | – | $ | – | $ | – | $ | – | $ | 38,806 | ||||||||||||
| Community projects obligations | – | 1,164 | 1,164 | 1,164 | 11,638 | 15,130 | ||||||||||||||||||
| Office and warehouse rent obligations | 221 | 605 | 378 | 388 | 159 | 1,751 | ||||||||||||||||||
| Other liabilities | 820 | 320 | 272 | 314 | 3,111 | 4,837 | ||||||||||||||||||
| Reclamation provision | – | 519 | – | 3,373 | 21,673 | 25,565 | ||||||||||||||||||
| Tax payable | 3,965 | – | – | – | – | 3,965 | ||||||||||||||||||
| $ | 43,812 | $ | 2,608 | $ | 1,814 | $ | 5,239 | $ | 36,581 | $ | 90,054 | |||||||||||||
Page 14
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
SHARE CAPITAL INFORMATION
As at November 12, 2026, the Company had the following securities issued and outstanding:
| ● | 204,798,418 common shares |
| ● | 11,230,000 shares issuable pursuant to exercise of stock options |
| ● | 1,884,943 shares issuable pursuant to exercise of warrants |
As at November 12, 2026, no common shares were issued under the Company’s at-the-market program announced on April 10, 2025.
PROPOSED TRANSACTIONS
There are no undisclosed proposed transactions as of the date of this MD&A.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any material off-balance sheet arrangements, other than the Company’s obligation for future rental payments described in “Related Party Transactions”.
RELATED PARTY TRANSACTIONS
Key management personnel
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company, and comprises the Company’s President and Chief Executive Officer, Chief Financial Officer, Senior Vice President Corporate Affairs and Corporate Secretary and Directors.
Key management compensation for the three and nine months ended September 30, 2026 and 2025 is comprised of the following:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 (Restated)1 | 2026 | 2025 (Restated)1 | |||||||||||||
| Share-based compensation | $ | 1,174 | $ | 267 | $ | 4,136 | $ | 788 | ||||||||
| Salaries and benefits | 229 | 233 | 789 | 740 | ||||||||||||
| Professional fees | 38 | – | 105 | – | ||||||||||||
| $ | 1,441 | $ | 500 | $ | 5,030 | $ | 1,528 | |||||||||
1 Restated for the change in presentation currency
Page 15
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
As of September 30, 2026, there were no outstanding amounts receivable from or payable to the key management personnel noted above. As of December 31, 2025, accounts payable and accrued liabilities included $593 due to key management personnel referred to above.
Related party arrangement
On October 21, 2024, the Company entered into an arrangement to share office space, equipment, personnel, consultants and various services with other companies related by virtue of certain directors and management in common. A management company equally owned by each company party to the arrangement pays for these shared expenses as agent for the Company and the other companies. These costs incurred by the management company as agent are allocated and funded by the shareholders of the management company based on time incurred and use of services and goods. The management company recovers its costs incurred in managing expenses and procuring goods and services on behalf of the Company without a markup. If the Company’s participation in the arrangement is terminated, the Company will be obligated to pay its share of the rent payments for the remaining term of the office space rental agreement. The Company’s obligation for future rental payments if the Company’s participation in the arrangement was terminated on September 30, 2026, was approximately $923 (December 31, 2025 – $529), determined based on the Company’s average share of rent paid in the immediately preceding 12 months.
The Company was charged for the following with respect to these arrangements in the three and nine months ended September 30, 2026 and 2025:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2026 | 2025 (Restated)1 | 2026 | 2025 (Restated)1 | |||||||||||||
| Salaries and benefits | $ | 469 | $ | 423 | $ | 2,326 | $ | 1,344 | ||||||||
| Office and other | 108 | 100 | 379 | 354 | ||||||||||||
| $ | 577 | $ | 523 | $ | 2,705 | $ | 1,698 | |||||||||
1 Restated for the change in presentation currency
At September 30, 2026, amounts in accounts payable and accrued liabilities include $10 due to a related party (December 31, 2025 – included in receivables is an amount due from a related party of $20) with respect to this arrangement.
All related party balances are unsecured and are due within thirty days without interest.
MATERIAL ACCOUNTING POLICIES AND ESTIMATES
In preparing the accompanying condensed consolidated interim financial statements in conformity with IFRS, management has made judgements, estimates and assumptions that affect the application of the Company’s accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ. All estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognized in the period in which the estimates are revised and in any future periods affected. Information about material judgements and estimates in applying accounting policies that have the most significant effect on amounts recognized in the condensed consolidated interim financial statements are the same as those described in the consolidated annual financial statements for the fifteen months ended December 31, 2025, except as described in Note 2 of the condensed consolidated interim financial statements for the three and nine months ended September 30, 2026.
Accounting policies adopted during the current period
Effective January 1, 2026, the Company has applied the following new accounting standard which was issued by the IASB:
The amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. The amendments include the clarification of the date of initial recognition or derecognition of financial assets and financial liabilities, including an optional exception that permits the early derecognition of certain financial liabilities settled through electronic payment systems earlier than the settlement date. The Company elected to apply the exception.
The adoption of this amended standard had no material impact on the Company’s condensed consolidated interim financial statements for the three and nine months ended September 30, 2026 and 2025.
Page 16
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
New accounting policies issued but not yet effective
Certain pronouncements have been issued by the IASB or International Financial Reporting Interpretations Committee that are not mandatory for the current period have not been early adopted. The Company has reviewed these pronouncements, and the amendments that are applicable to the Company are discussed below:
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows. IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date. The Company is currently assessing the impact of the new standard.
Change in presentation currency
On January 1, 2026, the Company elected to change its presentation currency from Canadian dollars to US dollars. The change in presentation currency is to better reflect the Company’s business activities and to improve comparability of the Company’s financial results with peer companies in the mining industry. Refer to Note 3 of the condensed consolidated interim financial statements for further details, including the exchange rates used.
The financial results disclosed in this MD&A from prior periods that have been affected as a result of the change in the accounting policy will be indicated as such with “Restated.”
FINANCIAL INSTRUMENT RISK EXPOSURE AND RISK MANAGEMENT
The Company’s financial instruments are exposed to certain financial risks, including credit risk, interest rate risk, liquidity risk and currency risk.
Credit risk
Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s financial assets.
The Company is primarily exposed to credit risk on its cash and cash equivalents, short-term investment, receivables and reclamation deposits. Credit risk exposure is limited through maintaining its cash with high-credit quality financial institutions. The carrying value of these financial assets of $87,055 represents the maximum exposure to credit risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company’s interest rate exposure mainly relates to interest earned on cash and term deposits. For the three and nine months ended September 30, 2026, every 1% fluctuation in interest rates up or down would result in an increase or decrease of approximately $205 and $711 to the Company’s income, respectively (three and nine months ended September 30, 2025 – $42 and $105, respectively).
Liquidity risk
Liquidity risk is the risk that the Company is unable to meet its financial obligations as they come due. The Company manages this risk by careful management of its working capital to ensure its expenditures will not exceed available resources.
Foreign currency risk
The Company is operating in Canada, Peru and Mexico and is exposed to currency risk on transactions and balances in currencies other than the functional currency, primarily with respect to Canadian dollars, Peruvian soles, Mexican pesos and US dollars. On September 30, 2026, the Company had not entered into any contracts to manage foreign exchange risk other than the short-term investment as disclosed in note 5 to the condensed consolidated interim financial statements for the three and nine months ended September 30, 2026.
Page 17
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
As at September 30, 2026, the Company had C$10,000 of its Canadian dollar cash placed in a one-month dual-currency deposit with a Canadian bank. The Company deposits Canadian dollars for a month and earns a higher rate of interest than on a regular term deposit. In exchange, the amount repaid depends on the US dollar to Canadian dollar exchange rate at maturity date compared with a rate fixed at the start (the “strike rate”). If the rate is above the strike rate, the deposit is repaid in Canadian dollars, plus interest. If the rate is below the strike rate, the deposit is repaid in US dollars, converted at the strike rate, plus interest. The deposit is measured at fair value through profit or loss. As at September 30, 2026, it had a fair value of $7,067, and the Company recognized a fair value gain of $19 in the quarter. The deposit matured on October 14, 2026 and was settled in Canadian dollars. This is the only foreign exchange contract the Company has entered into, and it is not designated as a hedge.
As at September 30, 2026, the Company was exposed to currency risk through the following assets and liabilities denominated in Canadian dollars, Peruvian soles, Mexican pesos and US dollars.
| Canadian dollars (000’s) | Peruvian soles (000’s) | Mexican pesos (000’s) | US dollars (000’s) | |||||||||||||
| Cash and cash equivalents | $ | 179 | $ | 1,003 | $ | 2,123 | $ | 15,947 | ||||||||
| Receivables and tax receivable | – | 2,462 | 295,907 | 17 | ||||||||||||
| Reclamation deposit | – | – | – | 45 | ||||||||||||
| Accounts payable and accrued liabilities and tax payable | (130 | ) | (6,667 | ) | (491,438 | ) | (550 | ) | ||||||||
| Lease liability | – | (271 | ) | – | – | |||||||||||
| Community projects obligation | – | (36,722 | ) | – | – | |||||||||||
| Reclamation provision | – | – | (271,633 | ) | – | |||||||||||
| $ | 49 | $ | (40,195 | ) | $ | (465,041 | ) | $ | 15,459 | |||||||
For the nine months ended September 30, 2026, if the US dollar to Canadian dollar, Peruvian soles and Mexican pesos currency exchange rate changes by 10% with all other variables held constant, the impact on the Company’s net loss is $5,758 (nine months ended September 30, 2025 – $77).
CAPITAL MANAGEMENT
The Company’s primary objective when managing capital is to ensure that it will be able to continue as a going concern and that it has the ability to satisfy its capital obligations and ongoing operational expenses, as well as having sufficient liquidity to fund suitable business opportunities as they arise.
The capital of the Company includes the components of equity attributable to shareholders of the Company, net of cash and cash equivalents. Capital is summarized in the following table:
| September 30, 2026 | December 31, 2025 (Restated)1 | |||||||
| Equity attributable to shareholders of the Company | $ | 387,657 | $ | 85,184 | ||||
| Less: Cash and cash equivalents | (68,093 | ) | (78,942 | ) | ||||
| $ | 319,564 | $ | 6,242 | |||||
1 Restated for the change in presentation currency
The Company manages its capital structure and makes adjustments to it as necessary in light of economic conditions. In order to maintain the capital structure, the Company may, from time to time, issue or buy back equity, or sell assets. The Company, upon approval from its Board of Directors, intends to balance its overall capital structure through a combination of equity financing and/or other forms of financing.
The Company did not have any externally imposed restrictions as at September 30, 2026. To effectively manage its capital requirements, the Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has appropriate liquidity to meet its business activities, including planned corporate expenditures, exploration expenses, as well as the development activities at the Mercedes Mine and for the Corani Project and the San Luis Project.
Page 18
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
RISKS AND UNCERTAINTIES
The Company is exposed in varying degrees to a variety of financial instrument related risks as discussed in the Company’s 2025 annual MD&A dated March 30, 2026 which is available on SEDAR+ at www.sedarplus.ca.
Highlander’s business activities are subject to significant risks, including, but not limited to, those described in previous disclosure documents. Any of these risks could have a material adverse effect on Highlander, its business and prospects, and could cause actual events to differ materially from forward looking statements related to Highlander.
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING
The Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) have designed or caused to be designed under their supervision the Company’s disclosure controls and procedures (“DC&P”) to provide reasonable assurance that material information regarding the Company is accumulated and communicated to the Company’s management, including its CEO and CFO, in a timely manner. In addition, the CEO and the CFO have designed or caused to be designed under their supervision internal control over financial reporting (“ICFR”) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, as well as an evaluation on whether there were changes to its ICFR during most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR.
The control framework used to design the Company’s ICFR is based on the 2013 control framework developed by the Committee of Sponsoring Organizations of the Treadway Commission.
For the three months ended September 30, 2026, except for the limitation of scope as described below, the DC&P have been designed effectively to provide reasonable assurance that material information relating to the Company is made known to the CEO and the CFO, particularly during the period in which the relevant interim filings are prepared and the information required to be disclosed by the Company in its filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified. In addition, except for the limitation of scope as described below, the ICFR has also been designed effectively to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Due to inherent limitations in all such systems, no evaluations of controls can provide absolute assurance that all control issues, if any, within a company are detected on a timely basis. Accordingly, our DC&P and ICFR are effective in providing reasonable, not absolute, assurance that the objectives of our control systems have been met.
Page 19
| Highlander Silver Corp. Management’s Discussion and Analysis For the three and nine months ended September 30, 2026 and 2025 (Expressed in thousands of US dollars, unless otherwise noted) |
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”) requires Canadian public companies to disclose any changes in ICFR during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, ICFR. No material changes were made to internal controls in the three months ended September 30, 2026.
Limitation on scope of design
The Company completed the acquisition of Bear Creek during the nine months ended September 30, 2026, on February 26, 2026. Financial information for this acquisition is included in this MD&A and in Note 4 of the Company’s condensed consolidated interim financial statements for the three and nine months ended September 30, 2026. NI 52-109 permits a non-venture issuer to limit its DC&P or ICFR to exclude controls, policies and procedures of a business that the issuer acquired not more than 365 days before the end of the financial period to which its certification relates. Due to the complexity associated with assessing internal controls during integration efforts, the Company has excluded controls, policies and procedures of Bear Creek in its management report on DC&P and ICFR for the three months ended September 30, 2026.
The tables below set out summary financial information for Bear Creek that is included in the Company’s condensed consolidated interim financial statements for the nine months ended September 30, 2026. Results of operations from Bear Creek have been consolidated with those of the Company from February 26, 2026.
| From February 26, 2026 to September 30, 2026 | ||||
| Revenue | $ | 93,973 | ||
| Net loss before income taxes | (18,212 | ) | ||
| As at September 30, 2026 | ||||
| Total assets | $ | 519,796 | ||
| Total liabilities | 208,804 | |||
QUALIFIED PERSON
Except as otherwise disclosed, the scientific and technical information in this document related to San Luis is derived from the technical report titled “Technical Report for the San Luis Property” with an effective date of January 15, 2025, prepared by independent qualified person (“QP”), Martin Mount, MSc MCSM FGS CGeol FIMMM Ceng., who is a QP as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). Remaining scientific and technical information in this document related to San Luis was based upon the Company’s news releases dated July 29, 2025, September 16, 2025, October 6, 2025, and December 1, 2025, which disclosure was approved by Dr. Sergio Gelcich, a QP under NI 43 101 and Vice President, Exploration of the Company. Scientific and technical information in this document related to Corani and Mercedes was based upon the Company’s news release dated April 7, 2026, which disclosure was approved by Dr. Sergio Gelcich, a QP under NI 43 101 and Vice President, Exploration of the Company.
Page 20
Exhibit 99.3
Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Daniel Earle, President and Chief Executive Officer of Highlander Silver Corp., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Highlander Silver Corp. (the “issuer”) for the interim period ended September 30, 2026. |
| 2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
| 3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
| 4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. |
| 5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings |
| (a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
| (i) | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
| (ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
| (b) | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
| 5.1 | Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). |
| 5.2 | ICFR – material weakness relating to design: N/A |
| 5.3 | Limitation on scope of design: The issuer has disclosed in its interim MD&A |
| (a) | the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of |
| (i) | N/A |
| (ii) | N/A |
| (iii) | a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings; and |
| (b) | summary financial information about the business that the issuer acquired that has been consolidated in the issuer’s financial statements. |
| 6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2026 and ended on September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
| Date: November 12, 2026 | |
| /s/ Daniel Earle | |
| Daniel Earle | |
| President and Chief Executive Officer |
Exhibit 99.4
Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Sunny Lowe, Chief Financial Officer of Highlander Silver Corp., certify the following:
| 1. | Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Highlander Silver Corp. (the “issuer”) for the interim period ended September 30, 2026. |
| 2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
| 3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
| 4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. |
| 5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings |
| (a) | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
| (i) | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
| (ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
| (b) | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
| 5.1 | Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). |
| 5.2 | ICFR – material weakness relating to design: N/A |
| 5.3 | Limitation on scope of design: The issuer has disclosed in its interim MD&A |
| (a) | the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of |
| (i) | N/A |
| (ii) | N/A |
| (iii) | a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings; and |
| (b) | summary financial information about the business that the issuer acquired that has been consolidated in the issuer’s financial statements. |
| 6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2026 and ended on September 30, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
| Date: November 12, 2026 | |
| /s/ Sunny Lowe | |
| Sunny Lowe | |
| Chief Financial Officer |
Filing Exhibits & Attachments
4 documentsPress Releases
- EX-99.1 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTH 584.0 KB
- EX-99.2 MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND NINE MONTHS ENDED SEPTEMB 352.9 KB
- EX-99.3 CEO CERTIFICATION OF INTERIM FILINGS DATED NOVEMBER 12, 2026 19.7 KB
- EX-99.4 CFO CERTIFICATION OF INTERIM FILINGS DATED NOVEMBER 12, 2026 12.7 KB