Financial Statements

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# Financial Statements

Source: https://lucamining.com/wp-content/uploads/2026/04/Luca-Q4-2025-FS-FINAL.pdf
Published: 2026-04-07T00:00:00+00:00
Fetched: 2026-05-12T15:21:36.883+00:00
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## Content

# Financial Statements
Consolidated Financial Statements
For the years ended
December 31, 2025 and 2024
KPMG LLP
777 Dunsmuir Street, 11th floor
Vancouver, BC V7Y 1K3
Canada
Tel 604 691 3000
Fax 604 691 3031
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Luca Mining Corp.
Opinion
We have audited the consolidated financial statements of Luca Mining Corp. (the Entity), which
comprise:
• the consolidated statement of financial position as at December 31, 2025
• the consolidated statement of loss and comprehensive loss for the year then ended
• the consolidated statement of changes in equity for the year then ended
• the consolidated statement of cash flows for the year then ended
• and notes to the consolidated financial statements, including a summary of material accounting
policies
(Hereinafter referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated financial position of the Entity as at December 31, 2025 and its consolidated financial
performance and its consolidated cash flows for the year then ended in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for
the Audit of the Financial Statements” section of our auditor’s report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to our
audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. KPMG Canada provides services to KPMG LLP.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements for the year ended December 31, 2025. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated
in our auditor’s report.
Evaluation of the fair value of the derivative liability associated with the silver stream
agreement with Empress Royalty Corp.
Description of the matter
We draw attention to Notes 4(b), 15 and 27(a) to the financial statements. On April 14, 2021, the
Entity entered into a silver stream agreement (the “Stream Agreement”) with Empress Royalty Corp.
(“Empress”). On August 13, 2024, the Entity and Empress amended the Stream Agreement. The
Entity has recorded a derivative liability of $53,769 thousand related to the Stream Agreement and
a loss on the change in fair value of the derivative liability of $38,935 thousand. The fair value of the
Stream Agreement was determined using a discounted cash flow model which included significant
assumptions related to the forecasted silver delivery schedule, the future silver price and the discount
rate.
Why the matter is a key audit matter
We identified the evaluation of the fair value of the derivative liability associated with the Stream
Agreement as a key audit matter. The matter represented an area of significant risk of material
misstatement given the magnitude of the balance and high degree of estimation uncertainty in
determining the fair value of the derivative liability. Significant auditor judgment and the involvement
of those with specialized skills and knowledge were required in performing and evaluating the results
of our procedures due to the sensitivity of the fair value of the derivative liability to changes in
significant assumptions.
How the matter was addressed in the audit
The following are the primary procedures we performed to address this key audit matter:
• We compared the mineral resources used in the discounted cash flow model to the mineral
resources prepared by independent qualified persons. We assessed the competence,
capabilities and objectivity of the qualified persons who prepared the mineral resources, including
the industry and regulatory standards they applied.
• We involved valuation professionals with specialized skills and knowledge, who assisted in (1)
evaluating the future silver price by comparing it to third party data, and (2) evaluating the
discount rate by comparing it to publicly available market data for comparable entities.
Comparative Information
We draw attention to Note 2(d) to the financial statements (“Note 2(d)”), which explains that certain
comparative information presented for the year ended December 31, 2024 has been adjusted.
2
Note 2(d) explains the reason for the adjustment and also explains the adjustments that were applied
to the comparative information.
Our opinion is not modified in respect of this matter.
The financial statements for the year ended December 31, 2024, excluding the adjustments that
were applied to certain comparative information, were audited by another auditor who expressed an
unmodified opinion on those financial statements on April 22, 2025.
As part of our audit of the financial statements for the year ended December 31, 2025, we also
audited the adjustments that were applied to certain comparative information presented for the year
ended December 31, 2024. In our opinion, such adjustments are appropriate and have been properly
applied.
Other than with respect to the adjustments that were applied to certain comparative information, we
were not engaged to audit, review or apply any procedures to the financial statements for the year
ended December 31, 2024. Accordingly, we do not express an opinion or any other form of assurance
on those financial statements taken as a whole.
Other Information
Management is responsible for the other information. Other information comprises the information
included in Management’s Discussion and Analysis.
Our opinion on the financial statements does not cover the other information and we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for
indications that the other information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis as at the date of
this auditor’s report. If, based on the work we have performed on this other information, we conclude
that there is a material misstatement of this other information, we are required to report that fact in
the auditor’s report.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with IFRS Accounting Standards as issued by the International Accounting Standards
Board, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
3
In preparing the financial statements, management is responsible for assessing the Entity's ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Entity or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity's financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of the financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Entity's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Entity's ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Entity
to cease to continue as a going concern.
4
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
• Provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the
financial information of the entities

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