# Management Discussion & Analysis

Source Brief: https://evesgoldminers.com/research/source-briefs/luca-mining-corp-2026-04-07-management-discussion-and-analysis-badcc739
Original source: https://lucamining.com/wp-content/uploads/2026/04/Luca-Q4-2025-MDA-FINAL.pdf
Original published: 2026-04-07
EGM generated: 2026-09-04
Company: Luca Mining Corp (LUCA)

## Use Note

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## Extracted Document Text

# Management Discussion & Analysis

Source: https://lucamining.com/wp-content/uploads/2026/04/Luca-Q4-2025-MDA-FINAL.pdf
Published: 2026-04-07T00:00:00+00:00
Fetched: 2026-05-12T15:21:11.239+00:00
Source artifact: badcc739-36ea-4752-a20a-16bb19514a50
Normalizer input: text

## Content

# Management Discussion & Analysis
Management’s Discussion and Analysis
For the year ended
December 31, 2025
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
This Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the annual audited consolidated financial
statements of Luca Mining Corp. (“Luca” or the “Company”), for the year ended December 31, 2025, and the related notes contained
therein (the “Financial Statements”) which were prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the
International Accounting Standards Board (“IASB”). The Company uses certain non-IFRS financial measures in this MD&A as described
under “Non-IFRS Measures”. Additional information relating to the Company is available on SEDAR at www.sedarplus.ca. All amounts are
expressed in thousands of United States (“US”) dollars except per share amounts, realized prices, tonnes and ounces or unless otherwise
stated. Certain amounts shown in this MD&A may not add exactly to total amounts due to rounding differences.
This MD&A contains “forward-looking statements” that are subject to risk factors set out in a cautionary note contained therein. All
information contained in this MD&A is current and has been approved by the Board of Directors of the Company as of
April 7, 2026, unless otherwise stated.
QUALIFIED PERSON
The scientific and technical information contained in this MD&A relating to the Company’s mines and mineral projects has been reviewed
and approved by Mr. Ramon Mendoza Reyes, P.Eng., a Qualified Person within the meaning of National Instrument 43-101, “Standards
for Disclosure of Mineral Projects.” The scientific and technical information contained in this MD&A relating to the Company’s geology and
exploration projects has been reviewed and approved by Mr. Paul D. Gray, P.Geo., a Qualified Person within the meaning of National
Instrument 43-101, “Standards for Disclosure of Mineral Projects”.
FORWARD-LOOKING STATEMENTS
Certain statements included in this MD&A may contain forward-looking statements that relate to future events or the Company’s future
performance. All statements other than statements of historical fact are forward-looking statements. These statements include, but are
not limited to, statements concerning: the future cash flows, profitability, financial and operating performance of the Company; estimated
future metals prices, cut-off grades, operating costs, capital costs, commodity prices, rates of inflation, metallurgical recoveries,
amenability of ore to mining and treatment, environmental considerations and labor availability; the estimation of reserves and resources;
expected benefits and outcomes of mine optimization activities; the realization of reserve estimates; timing of technical reports, scoping
studies, and preliminary economic assessments; expected content of scoping studies and preliminary economic assessments; anticipated
working-capital requirements; capital expenditures; costs and timing of future exploration; requirements for additional capital; government
regulation of resource operations; environmental risks; title disputes or claims; limitation of insurance coverage; and the maintenance of
permits, licenses and surface rights necessary for the Company’s operations.
Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “proposes”, “expects”, “is
expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative
variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken,
occur or be achieved.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results,
performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed
or implied by the forward-looking statements. Such factors include, but are not limited to: general business and economic uncertainties;
exploration and resource extraction risks; uncertainties relating to permits, licenses and surface rights; the actual results of current
exploration, development and mining activities; fluctuations in future metals prices; inherent risks of operating in a foreign jurisdiction;
climate-change related risks; changes in capital and operating costs for the Company’s properties; foreign exchange risks; changes in
mine plan and design and the mining methods employed on the Company’s properties; labor risks; lack of access to infrastructure, power
and water; changes in labor laws; counterparty risk; volatility in the price of the Company’s common shares; security risks; tailings pond
risks; the outcome of negotiations; conclusions of economic evaluations and studies; future prices of natural resource based commodities;
increased competition in the natural resource industry for properties, equipment and qualified personnel; risks associated with
environmental compliance and permitting, including those created by changes in environmental legislation and regulation; natural
disasters; the risk of arbitrary changes in law; title risks; and the risk of loss of key personnel.
The forward-looking statements contained herein are based on a number of assumptions that the Company believes are reasonable but
may prove to be incorrect. These assumptions include, but are not limited to, assumptions about: no material deterioration in general
business and economic conditions; favorable equity and debt capital markets; the ability to raise any necessary additional capital on
reasonable terms to advance the production, development and exploration of the Company’s properties and assets; future prices of gold,
silver, copper, zinc, lead and other metal prices; the timing and results of exploration and drilling programs; the accuracy of any mineral
reserve and mineral resource estimates; the geology of Tahuehueto and Campo Morado being as described in the respective technical
report for each property; production costs; the accuracy of budgeted exploration, development and construction costs and expenditures;
the price of other commodities such as fuel; future currency exchange rates and interest rates; operating conditions being favorable such
that the Company is able to operate in a safe, efficient and effective manner; work force continuing to remain healthy in the face of
prevailing epidemics, pandemics or other health risks; political and regulatory stability; the receipt of governmental, regulatory and third
party approvals, licenses and permits on favorable terms; obtaining required renewals for existing approvals, licenses and permits on
favorable terms; requirements under applicable laws; sustained labor stability; stability in financial and capital goods markets; availability
of equipment; positive relations with local groups and the Company’s ability to meet its obligations under its agreements with such groups;
and satisfying the terms and conditions of any debt obligations of the Company.
2
The foregoing lists of factors and assumptions are not exhaustive. The reader should also consider carefully the matters discussed under
the heading “Risks Factors and Uncertainties” elsewhere in this MD&A. Forward-looking statements contained herein are made as of the
date hereof (or as of the date of a document incorporated herein by reference, as applicable). No obligation is undertaken to update
publicly or otherwise revise any forward-looking statements or the foregoing lists of factors and assumptions, whether as a result of new
information, future events or results or otherwise, except as required by law. Because forward-looking statements are inherently uncertain,
readers should not place undue reliance on them. The forward-looking statements contained herein are expressly qualified in their entirety
by this cautionary statement.
The forward-looking statements and forward-looking information contained herein are based on information available as of
April 7, 2026.
Underground at Tahuehueto
3
TABLE OF CONTENTS
CORE BUSINESS & STRATEGY ............................................................................................................................................. 5
OPERATING AND FINANCIAL HIGHLIGHTS ..................................................................................................... 6
ANNUAL OUTLOOK .............................................................................................................................................................. 9
ENVIRONMENTAL, SOCIAL AND GOVERNANCE .................................................................................................................. 13
FINANCIAL PERFORMANCE ............................................................................................................................................... 45
LIQUIDITY AND CAPITAL RESOURCES .............................................................................................................................. 50
NON-IFRS FINANCIAL MEASURES..................................................................................................................................... 52
SUMMARY OF QUARTERLY RESULTS ................................................................................................................................. 58
OTHER FINANCIAL INFORMATION .................................................................................................................................... 60
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS ................................................................................................... 60
RISKS AND UNCERTAINTIES ............................................................................................................................................. 61
MATERIAL ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS ................................. 77
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS................................................................................... 79
MANAGEMENT’S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES ..................................................................... 79
4
CORE BUSINESS & STRATEGY
Luca is a polymetallic producer, producing gold, silver, copper, zinc and lead, and is focused on the operation, development and exploration
of mineral resource properties in North America. The Company currently operates two mines in Mexico: the Campo Morado Mine and Mill
Complex (“Campo Morado”) in the state of Guerrero and the Tahuehueto Mine and Mill (“Tahuehueto”) in the state of Durango. In early
2024, the Company was in the process of commissioning Tahuehueto and declared commercial production on March 31, 2025.
The Company is a publicly traded company on the TSX Venture Exchange (“TSX.V”) under the symbol “LUCA”, quoted on the OTCQX over-
the-counter market in the USA under the symbol “LUCMF” and quoted on the Frankfurt Stock Exchange under the symbol “Z68”. Additional
information relating to the Company is available on SEDAR+ at www.sedarplus.ca and the Company’s website www.lucamining.com.
The Company’s overall strategy is to grow its mining business through the advancement of existing mines and mineral concessions,
complemented by the acquisition and development of additional operations, resources, and reserves. Growth is driven by opportunity rather
than restricted by geography, with a focus on assets where the Company’s unique combination of political, exploration, operat

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