Q4 2025 - Management’s Discussion and Analysis Download

Extracted Document Text

This is a readable excerpt of the EGM normalized Markdown text. It helps search engines and researchers understand PDF, filing, or company-document content while the original source remains authoritative.

# Q4 2025 - Management’s Discussion and Analysis Download

Source: https://www.lunrroyalties.com/_resources/financials/MDA_20251231.pdf?v=091207
Fetched: 2026-09-12T07:04:27.553+00:00
Source artifact: 3e73bc27-92d4-4235-ade4-939e03cb3ff0
Normalizer input: text

## Content

# Q4 2025 - Management’s Discussion and Analysis Download
LUNR ROYALTIES CORP.
(formerly 17156138 Canada Inc.)
Management’s Discussion and Analysis
From the Date of Incorporation on July 14, 2025
to December 31, 2025
LunR Royalties Corp.
Management's Discussion & Analysis
From the Date of Incorporation on July 14, 2025 to December 31, 2025
INTRODUCTION
The following management’s discussion and analysis (“MD&A”) is an overview of the activities of LunR Royalties
Corp. (“LunR” or the “Company”). LunR was incorporated on July 14, 2025, under the laws of the Canada Business
Corporations Act (the “CBCA”) as a wholly-owned subsidiary of NGEx Minerals Ltd. (“NGEx”), under the name
“17156138 Canada Inc.”. LunR was incorporated for the purpose of undertaking a share capital reorganization with
NGEx by way of a statutory plan of arrangement under the CBCA (the “Arrangement”) pursuant to an arrangement
agreement between LunR and NGEx dated July 21, 2025, as amended (the “Arrangement Agreement”), which, upon
its completion on October 23, 2025, resulted in 80.1% of the common shares of LunR (“LunR Shares”) being
distributed to shareholders of NGEx (“NGEx Shareholders”), with NGEx retaining a then 19.9% interest in LunR (see
“Description of Business and Overview” section below).
This MD&A is intended to help the reader understand LunR’s operation and financial performance, along with its
present and future business environment. This MD&A should be read in conjunction with the audited financial
statements of the Company for the period from July 14, 2025 to December 31, 2025, and related notes therein,
which have been prepared in accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board (“IFRS Accounting Standards”).
All currency amounts are stated in United States dollars ($), unless otherwise stated. References to C$ are to
Canadian dollars.
The date of this MD&A is March 16, 2026.
DESCRIPTION OF BUSINESS AND OVERVIEW
Following completion of the Arrangement on October 23, 2025, as further described below, LunR is now a standalone
royalty and streaming company, which will focus on growing and diversifying a portfolio of royalties and metals
purchase agreements (“Streams”) in the mining and mineral resource industry through acquisitions and strategic
investments, leveraging deep industry knowledge and expertise of its board of directors (the “LunR Board”) and
management. LunR intends to accumulate and manage a portfolio of diversified royalty and Stream interests that
may be acquired directly from mineral exploration companies or mine operators, as well as third-party holders of
existing royalties and Streams, across the spectrum of project stages, from grassroots exploration to production. As
at the date of this MD&A, LunR holds a 1.38% net smelter return (“NSR”) royalty on the mineral concessions
underlying NGEx’s Los Helados Project in Chile, and a 1% NSR royalty on the concession underlying NGEx’s Lunahuasi
Project (see below).
LunR was incorporated on July 14, 2025, as a wholly-owned subsidiary of NGEx, for the purpose of acquiring certain
royalty interests on NGEx’s mineral properties and spinning out such royalty interests to NGEx Shareholders by way
of a share capital reorganization with NGEx pursuant to the Arrangement.
Acquisition of NSR Royalties, Arrangement and Capital Contribution
On July 21, 2025, LunR entered into a royalty purchase agreement with another wholly-owned subsidiary of NGEx,
Pampa Exploración S.A. (“Pampa”), whereby Pampa agreed to sell a 1.0% NSR royalty on the Nacimiento I
concession, located in San Juan Province, Argentina, on which NGEx’s 100% owned Lunahuasi Project is currently
defined, to LunR (the “Lunahuasi Royalty”) in exchange for cash consideration of $700,000 (the “Lunahuasi Royalty
Purchase Agreement”).
In addition, on August 5, 2025, LunR entered into a royalty purchase agreement with another wholly-owned
subsidiary of NGEx, Minera Frontera del Oro SPA (“MFDO”), which holds the Los Helados Project, located in Region
2
LunR Royalties Corp.
Management's Discussion & Analysis
From the Date of Incorporation on July 14, 2025 to December 31, 2025
III, Chile, on behalf of an unincorporated joint venture between NGEx and Nippon Caserones Resources LLC (“NCR”),
a subsidiary of JX Advanced Metals Corporation, whereby MFDO agreed to sell a 1.38% NSR royalty to LunR on the
concessions underlying the Los Helados Project (the “Los Helados Royalty”) in exchange for cash consideration of
$938,400 (the “Los Helados Royalty Purchase Agreement”).
In connection with the foregoing, on July 21, 2025, LunR also entered into the Arrangement Agreement, pursuant
to which NGEx would undertake the Arrangement, resulting in, among other things, the LunR Shares being
distributed to the NGEx Shareholders.
The Arrangement Agreement described the terms of the Arrangement, which, among other things, included:
• Each common share of NGEx (each, a “NGEx Share”) outstanding at the close of business on the business
day immediately preceding the Effective Time (as defined below) was redesignated and exchanged as part
of a reorganization of the share capital of NGEx, and in accordance with section 86 of the Income Tax Act
(Canada), for (i) one (1) new common share of NGEx (each, a “New NGEx Share”), which such New NGEx
Share was identical to the NGEx Shares immediately prior to the Effective Time, and (ii) one-fourth (1/4)
of a LunR Share; and
• Each stock option of NGEx (each, a “NGEx Option”) that was outstanding immediately before the Effective
Time was exchanged for (i) one (1) replacement stock option of NGEx to purchase from NGEx one New
NGEx Share having an exercise price (rounded up to the nearest whole cent) equal to the product of the
exercise price of each NGEx Option so exchanged immediately before the Effective Time multiplied by the
fair market value of a New NGEx Share at the Effective Time divided by the total of the fair market value
of a New NGEx Share and the fair market value of one-fourth (1/4) of a LunR Share at the Effective Time,
and (ii) one (1) fully-vested stock option of LunR (each, a “LunR Option”) to acquire one-fourth (1/4) of a
LunR Share, each whole LunR Option having an exercise price (rounded up to the nearest whole cent)
equal to the product of the exercise price of the NGEx Option so exchanged immediately prior to the
Effective Time multiplied by the fair market value of one-fourth (1/4) of a LunR Share at the Effective Time
divided by the total of the fair market value of one New NGEx Share and one-fourth (1/4) of a LunR Share
at the Effective Time.
On September 11, 2025, LunR changed its name from “17156138 Canada Inc.” to “LunR Royalties Corp.”.
On October 15, 2025, prior to the completion of the Arrangement, LunR issued 13,370,107 LunR Shares to NGEx
for aggregate gross proceeds of C$4,350,000 ($3,097,188) (the “Capital Contribution”). Such Capital Contribution
was used to fund the acquisition of the Lunahuasi Royalty and the Los Helados Royalty and LunR’s working capital
requirements for at least 12 months following completion of the Arrangement. Following completion of the Capital
Contribution, LunR closed the transactions contemplated by the Lunahuasi Royalty Purchase Agreement and the
Los Helados Royalty Purchase Agreement.
The Company’s acquisition of the Lunahuasi Royalty and Los Helados Royalty were considered related party
transactions as the sellers in the respective transactions at the time the transactions were entered into and
completed were related to LunR by way of a common controlling shareholder, NGEx. On October 23, 2025,
following completion of the Arrangement, NGEx ceased to be a controlling shareholder of the Company.
The Arrangement was approved by the NGEx Shareholders at the special meeting of NGEx Shareholders held on
September 12, 2025, and a final order approving the Arrangement was obtained from the Supreme Court of
British Columbia on September 18, 2025. Subsequently, the Arrangement was completed and became effective
at 12:01 a.m. on October 23, 2025 (the “Effective Time”). Upon completion of the Arrangement, NGEx
Shareholders held an aggregate of 53,816,239 LunR Shares, representing a 80.1% ownership interest in LunR,
and NGEx held 13,370,107 LunR Shares, being the LunR Shares issued by LunR to NGEx pursuant to the Capital
3
LunR Royalties Corp.
Management's Discussion & Analysis
From the Date of Incorporation on July 14, 2025 to December 31, 2025
Contribution, representing a 19.9% ownership interest in LunR. In addition, immediately following the completion
of the Arrangement, LunR Options exercisable to acquire approximately 3.2 million LunR Shares at prices between
C$0.06 – C$0.08 per share were issued to former holders of NGEx Options.
Upon completion of the Arrangement, LunR became a reporting issuer in the provinces of British Columbia, Alberta,
Ontario and Québec.
Additional details with respect to the Arrangement, NGEx or LunR can be found on SEDAR+ at www.sedarplus.ca.
HIGHLIGHTS FROM JULY 14, 2025 TO DECEMBER 31, 2025, AND 2026 TO DATE
• On October 23, 2025, the Arrangement was completed and LunR became a standalone royalty and streaming
company. Details of the Arrangement are described in the “Description of Business and Overview” section
above.
• On December 17, 2025, the Company received final approval to list the LunR Shares for trading on the TSX
Venture Exchange (the “TSXV”). Trading of LunR Shares commenced on December 19, 2025 under the
symbol “LUNR”.
• On January 21, 2026, Peter Hemstead stepped down from his position as Chief Financial Officer and
Corporate Secretary of the Company. Effective the same day, Connor Mackay was appointed as the Chief
Financial Officer of the Company, Mr. Nevin Lau as Corporate Controller of the Company, and Judy A. McCall
as Corporate Secretary of the Company.
• On February 22, 2026, the Company announced that it had entered into a binding term sheet (the "Term
Sheet") with Lundin Gold Inc. ("Lundin Gold"), Aureliean Resources Inc. (“ARI”) and Surnorte Holdings I
PTE LTD. (“Surnorte” and together with ARI, the “Sellers”), each a wholly-owned subsidiary of Lundin
Gold, to acquire a life-of-mine silver stream (the "FDN Stream" or the “FDN Transaction”) on the Fruta
Del Norte gold mine ("FDN") in Ecuador, owned and operated by Lundin Gold.
Acquisition of the FDN Stream
On February 22, 2026, the Company entered into the Term Sheet with Lundin Gold and the Sellers to acquire
the FDN Stream. The FDN Stream will be effective March 1, 2026, and will initially encompass 100% of FDN's
payable silver production with staged reductions once certain delivery thresholds have been met. As
consideration, subject to the satisfaction of certain conditions as outlined below, the Company will issue
50,505,051 LunR Shares (the "Consideration Shares") to the Sellers (or to such person(s) as directed by the
Sellers), having a value of approximately $670 million based on the 20-day volume weighted average price of
the LunR Shares on the TSXV of C$18.18 as of February 20, 2026. Upon closing of the FDN Transaction, and
subject to compliance with all applicable laws, Lundin Gold will distribute all of the Consideration Shares to its
shareholders on a pro rata basis as a dividend in kind (the “Distribution”) and will not hold any LunR Shares
following completion of the Distribution. The Company will make ongoing payments equal to 10% of the spot
price of silver at the time of each delivery for ounces delivered, and payments will increase as a percentage of
the spot price of silver once certain delivery thresholds have been met. Closing of the FDN Trans

[Excerpt trimmed for readability. Open the original source for the complete filing or document.]